Health Impact Assessment: Repealing the Louisville Metro Abandoned Urban Property Tax

CENTER FOR HEALTH EQUITY, LOUISVILLE METRO DEPARMENT OF PUBLIC HEALTH & WELLNESS

Repealing the Louisville Metro Abandoned Urban Property Tax Health Impact Assessment Prepared by Center for Health Equity at the request of the Vacant & Public Property Administration

September 20, 2018

Contents Introduction…………………………………………………………………………………………………………………………………………4 Background…………………………………………………………………………………………………………………………………………5 Vacant and Abandoned Properties (VAPs) in Louisville ........................................................................ 5 Louisville and Redlining ......................................................................................................................... 6 Taxing VAPs Across the Nation.............................................................................................................. 7 Georgia ............................................................................................................................................... 8 Pittsburgh ........................................................................................................................................... 9 Washington, D.C................................................................................................................................. 9 Conclusion ............................................................................................................................................. 9 Methodology……………………………………………………………………………………………………………………………………..10 Initial HIA Steps .................................................................................................................................. 10 Research Questions ............................................................................................................................ 10 Literature Review and Focus Groups .................................................................................................. 10 Limitations........................................................................................................................................... 11 Results………………………………………………………………………………………………………………………………………………11 Reasons Properties Become Vacant and/or Abandoned .................................................................... 12 Title Issues ........................................................................................................................................ 12 Issues Related to Total Tax Levied .................................................................................................... 12 Categories of Property Owners ........................................................................................................ 12 Reasons Properties Remain Vacant and/or Abandoned .................................................................... 13 Consequences of Persisting VAPs ....................................................................................................... 13 Fear for Safety .................................................................................................................................. 13 Pest Infestation ................................................................................................................................. 14 Depressed Property Values (both of abandoned and surrounding properties)................................ 14 AUP Impact on Reducing VAPs ........................................................................................................... 15 Permit Data Analysis ........................................................................................................................ 15 Work Order Analysis......................................................................................................................... 16 Cost Benefit Analysis ........................................................................................................................ 16 Health Outcomes of Living Near VAPs………………………………………………………………………………………….…..17 Impact of VAPs as Structural Racism on Resident Health and Wellness ........................................... 17 1

Quality of Life ...................................................................................................................................... 17 Recommendations………………………………………………………………………………………………………………………………19 Reallocation of Staff and Resources……………………………………………………………………………….………………..19 Improve the Use of Data to Formulate, Implement, and Administer Programs .................................. 20 Third-Party Liens and Amnesty Pilot .................................................................................................... 21 Monitoring and Evaluation………………………………….……………………………………………………………………………..24 Conclusion…………………………………………………………………………………………………………………………..…………....25 REFERENCES…………………………………………………………………………………………………………………………………….……26 APPENDIX .................................................................................................................................................... 28 Appendix A .............................................................................................................................................. 29 Appendix B .............................................................................................................................................. 30 Appendix C .............................................................................................................................................. 32 Appendix D .............................................................................................................................................. 33

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Authors: Aja Barber, M.S. Community Health Manager, Center for Health Equity Louisville Metro Department of Public Health & Wellness Prasanthi Persad, JD, MPH Health Impact Analyst, Center for Health Equity Louisville Metro Department of Public Health & Wellness Clayton Oeth, MSPPM Management Analyst, Center for Health Equity Louisville Metro Department of Public Health & Wellness Monica Leslie Community Engagement Coordinator, Center for Health Equity Louisville Metro Department of Public Health & Wellness

The authors gratefully acknowledge the input from Vacant & Public Property Administration stakeholders we met with in focus groups, and individually. We would also like to thank Laura Grabowski, Mary McGuire, Dr. Sarah Moyer, T. Gonzales, Elise Bensman, Rebecca Hollenbach, Dr. Lauren Heberle, Jeana Dunlap, and countless others for their help with the development of this assessment.

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Introduction

The Abandoned Urban Property Tax (AUP) was established in July 1990 as a property tax at three times the normal rate to be levied against abandoned1 properties in the Urban Services District2 of Louisville, KY (Kentucky Legislature, 2015). Similar taxes, colloquially called blight taxes, have also been enacted in various states and localities (Povich, 2017; Pinho, 2013). These additional fines and fees were designed to incentivize property owners to maintain or sell their properties and prevent the deterioration resulting from vacancy and abandonment. The goal of Louisville’s tax was for property owners to make the more cost-effective choice of upkeep rather than paying the steep tax. The belief was this would lead to action from the owner, including keeping the property up to code, selling to a more attentive owner or taking the steps to have the property demolished.

However, the Office of Vacant & Public Property Administration (VPPA) believes the AUP to be ineffective, inefficient, and applied disproportionately, as most vacant and abandoned properties are concentrated within neighborhoods in the western area of the county. VPPA is one of many offices housed within the hub of economic development and community development and oversees administration and strategy related to vacancy, abandonment, and public properties. The administration of the AUP tax is coordinated within this office. According to its website, VPPA “recognizes that a healthy city is dependent upon healthy neighborhoods. By reducing the number of vacant and abandoned properties, we can improve the vibrancy, safety, and value of our existing neighborhoods, making Louisville a better place to live, work, and play” (Vacant & Public Property Administration, 2018).

In 2016, VPPA conducted an evaluation of data related to the tax implementation which revealed the additional fines and fees from AUP tax administration have resulted in taxed properties quickly going underwater, or owe more in taxes than their sales value (McGuire & Deobhakta, 2016). These property taxes are designated by liens on the property’s title which must be paid to clear before it is able to be sold. Properties that are underwater have a lien burden exceeding the value of the property and are extremely difficult to sell on the private market, leading to lengthier vacancies and requiring legal action to remedy. Additionally, this study showed the administration of the AUP tax is a time and laborintensive process with unclear benefits, particularly considering the significant staff time required in order to attempt to collect taxes from individuals who have truly abandoned their properties (McGuire & Deobhakta, 2016). This led VPPA to pause the administration of the AUP program in 2014 and reassess whether to move forward with steps to repeal it. In November 2017, VPPA requested a Health Impact Assessment (HIA) be conducted by the Center for Health Equity (CHE) within Louisville Metro

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According to the Internal Revenue Service, abandonment is a voluntary and permanent disposition of property “with the intention of ending your ownership but without passing it on to anyone else” (IRS Tax Map, 2017).

2 The Urban Services District marks the former borders of the city of Louisville prior to its shift into a consolidated city-county government in 2003.

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Department of Public Health and Wellness (LMPHW),3 on the decision to repeal the AUP. While VPPA staff members are the subject matter experts on the AUP program and its administration, staff wanted to understand the health impacts of the AUP and its possible repeal.

This HIA will present the current landscape of vacant and abandoned properties (VAPs) in Louisville Metro as well as the history of VAP concentration within the Urban Services District. The document then explores ways other U.S. cities have attempted to reduce VAPs through taxation. Through literature review and qualitative focus group research, the analyst gained valuable information regarding the creation and persistence of VAPs, the impact of VAPs’ prolonged existence, and the effectiveness of the AUP in reducing the number of VAPs in Louisville.

Results from this assessment include the recommendation to repeal the AUP and stress the importance of reallocating resources to practices grounded in racially equitable efficiency. Three recommendations were developed to complement the repeal of the AUP tax administration; identify specific programs for continued development, suggested improvements in the use of data, ensure that financial resources are dedicated to protecting residents. The HIA offers some initial steps for launching into this work and ends with guidelines for monitoring and evaluating the newly implemented program to reduce VAPs in Louisville.

Background

Vacant and Abandoned Properties (VAPs) in Louisville As of 2017, there are 5,100 total parcels within Figure 1. McGuire and Deobhakta, Louisville deemed vacant and abandoned (VAPs). Of 2016 these parcels, 3,600 have structures on them in various conditions. Under the current Louisville Metro Government (LMG) designation, a property is deemed vacant by Codes and Regulations when it reaches a full year with a consistent open code violation (Vacant & Abandoned Properties, 2018a).

It is deemed a VAP once it has been designated vacant and is referred to LMG for abatement action, such as lawn-mowing or boarding. The proposal to reinstate or repeal the AUP would only affect properties given the “abandoned urban property” designation, which includes the conditions for vacancy but also must have at least one of the following additional conditions:

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In November 2017, the Health Impact Analyst was part of the Office of Policy, Planning and Evaluation (OPPE) at LMPHW. She began working within Center for Health Equity (CHE) when the department reorganized in December 2017.

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• • •

“Unfit for its intended use because it is dilapidated, unsanitary, unsafe, vermin-infested, or poses a danger to public health and safety” “By reason of neglect or lack of maintenance has become a place for the accumulation of trash and debris” “Has become tax delinquent for a period of at least three years” (Vacant & Public Property Administration, 2018b).

It is important to contextualize that, while the AUP is levied only within the Urban Services District (USD) because of the limited authority permitted to Louisville Metro Council under the Kentucky Revised Statutes (KRS), abandonment occurs throughout Jefferson County (Figure 1). However, VAPs in Louisville Metro are disproportionately concentrated within the western areas of the USD, in Metro Council Districts 1, 3, 4, 5, 6, and 15. This includes the neighborhoods of California, Park Hill, Portland, Chickasaw, Shawnee, Phoenix Hill, Smoketown, and Shelby Park. According to the 2017 Health Equity Report (Center for Health Equity, 2017), these areas are also navigating inequitable rates of adverse health outcomes resulting from their experiences with root causes of health, including housing and neighborhood development. It is not uncommon to see a relationship between high rates of vacancy and adverse health outcomes among community residents (Garvin 2013). In particular, high rates of vacancy are often a consequence of concentrated poverty, correlate with increased rates of crime, and impact the housing stability for residents in that community. It is for this reason the Center for Health Equity accepted the request to conduct an HIA, to ensure the residents of these neighborhoods are protected within the decision-making process so they can live in communities in which they thrive.

Louisville and Redlining The geographic distribution of VAPs, poverty, and neighborhood development in Louisville can be directly traced to the impact of racism, both explicit and implicit, on the laws, policies, and practices guiding community development and cohesion. In particular, the neighborhoods experiencing the highest rates of VAPs were targeted by the historical practice of redlining, or the systemic denial of loans and investment in certain areas and neighborhoods due to geographic concentrations of Black residents (Poe, 2017). Though housing and banking discrimination existed previously, redlining institutionalized such practices into a sweeping policy enforced at every level of government. Redlining was nationally implemented with the advent of the Federal Housing Administration (FHA) in 1934 as well as the Home Owners’ Loan Corporation (HOLC) creation of “residential security maps” designating predominantly Black neighborhoods as red or yellow categories to encourage banks to deny loans within these areas (Mitchell and Franco, 2018). Louisville’s corresponding residential security map specifically named neighborhoods, including Chickasaw, Russell and Algonquin, and noted their “negro populations” (Poe, 2017). By doing so, they established a precedent grounded in racism against both lending and investing in those neighborhoods.

The structural exclusion of the West End of Louisville from investment and development continued throughout the 20th century and persists today. Other driving factors were as intentional as redlining, such as city planner Harland Bartholomew’s comprehensive plan and publishing of “The Negro Housing Problem” in 1932, which absolved the institutions of their role in creating poverty within these 6

neighborhoods and, instead, blamed Black residents. This led to demolition of housing in the Russell neighborhood. Additionally, the 1956 Interstate Highway Act created geographic divisions across the country between communities of color, particularly those living in the poverty created by institutional policies, and communities in major cities who were largely White and middle to upper-class. This Act had a specific intention to prevent “the expansion of undesirable entities into adjacent areas” (Poe, 2017). In Louisville, this unfolded with the Roy Wilkins/9th Street elevated expressway which divided the downtown business district from the majority-Black neighborhoods west of 9th street. Through these intentional policies, segregation by race, geography, and income became entrenched into Louisville’s development, a result we still see the consequences of as Louisville remains one of the most segregated cities in the nation (Mock, 2017).

When segregation laws were changed in the 1960s and 70s, a common fear for many White homeowners was that property values would markedly decrease when neighborhoods desegregated, a narrative shaped by the consequences of racist practices. Many White homeowners were also convinced that, with desegregation, downtown and urban areas would quickly “deteriorate” (Jacobs, 2018). As a result, White, middle-class residents left cities for the suburbs, also known as “white flight,” and de facto segregation continued as businesses, including grocery stores, followed (ACLU & New York Law School, 2012). The consequences of this history, including concentrated poverty and limited neighborhood investment, have led to disproportionate rates of VAPs within communities west of 9th street and continue to be a reality.

In response to an increasing number of vacant properties, Louisville enacted the AUP tax in 1990. To analyze the impact of the AUP, the HIA team considered the effect of similar blight taxes throughout the U.S as well as conditions that led either to the taxes’ success or failure.

Taxing VAPs Across the Nation Louisville’s history with housing and community development mirrors patterns across the nation. Since 2005, VAPs in cities around the United States have reached crisis proportions despite efforts to coordinate other uses for the properties (Brachman, 2005). Factors including deindustrialization, population shifts from urban and rural to suburban communities, and the increasing numbers of residents living in poverty over time have led to the decline in real estate demand (Brachman, 2005).

These trends have resulted in various conditions leading to property abandonment, including multiple liens from local municipalities and/or third-parties, as well as liens that exceed property value (Brachman, 2005). As a result, properties that may already be difficult to sell, due to issues with the individual property or its place within the market, are weighed down further by liens that require significant financial means to resolve. This epidemic of abandonment can lead to detrimental impacts, including health and wellness concerns for neighbors, increased illegal activity, and lower property values (Brachman, 2005).

Vacancy and abandonment became rampant in the wake of the 2008 housing and financial crisis. To find policy solutions to address this issue, Dean Baker, economist and co-founder of Center for Economic and Policy Research, examined reasons to consider a tax with goals similar to Louisville Metro’s AUP (Baker, 2011). In this article, Baker describes an over-abundance of both residential and commercial property 7

being built. However, because the crash created a lack of investment and a confused market environment, those who owned property were not using it for investment because they were waiting for prices to return to pre-crash prices. By taxing unused property, Baker believed local tax revenue could cumulatively increase anywhere from $18 billion to $36 billion a year on properties left vacant.

And those who did act to rent or sell their property, rather than leave it vacant, would bring down the cost of both residential and commercial rent by doing so. Baker (2011) editorially proposes this idea of a blight tax as a “tax without a serious downside”, since it would be “taxing nothing – valuable property being left idle.”

Policies described by Baker were already in place in some cities. The following sections describe prominent blight taxes and their results in the state of Georgia, Pittsburgh, PA, and Washington, D.C. Although the terms “blight tax” and “vacancy tax” are used interchangeably in the literature to represent the taxing of unoccupied properties, note that there is a difference in meanings. A vacancy tax is usually assessed on properties with no tenants/no one leasing (usually applied to large commercial properties) whereas a blight tax is assessed on “blighted property” (legal term for land that is in a dilapidated, unsafe, and unsightly condition). Each state uses different criteria to determine whether property should be classified as blighted. Common criteria include being unsafe, uninhabitable, and/or abandoned for a specified time period or presenting imminent danger to other property or people (Legal Match, 2018).

Georgia While Baker provides little empirical evidence as precedent for his proposal, policy he was suggesting existed in Georgia years before his article was published. In 2002, an amendment was added to the Georgia state constitution allowing for localities to establish what they called a “community redevelopment tax incentive program” (Pinho, 2013). While this program taxes blighted properties, it also includes tax credits on the property upon remediation of the blight issues. The amendment establishes local control over both what constitutes abandoned or blighted property as well as the process available to tackle “blight” (Pinho, 2013).

Different Georgia localities have proposed codifying their own version of the Community Redevelopment Tax Incentive Program, including larger cities such as Savannah, Albany (Cohilas, 2010), and Cobb County in the Atlanta metro area (Lutz, 2017). Although the state constitutional amendment was added in 2002, these localities have been slow to adopt the program. Other localities have proposed the tax but ultimately have not adopted the program, such as Macon-Bibb consolidated citycounty (Stucka, 2009).

Despite little evaluation data within Georgia and its localities, Rute Pinho (2011) provided speculations in the report on the tax. In addressing possible advantages, Pinho reflects on many of the talking points proposed by Baker in his own proposal; specifically, that property owners would be motivated to make use of the property and the extra taxes would cover the costly burden incurred by the cities from vacant properties. Pinho also analyzes the possible unintended outcomes of implementing the tax. The tax may be especially burdensome for individuals and families who are navigating poverty, whether they are directly taxed or a property owner from whom they are renting passes on the cost of the tax to them.

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Moreover seniors, individuals with disabilities, and small businesses could be unduly burdened by the tax, especially during times when they cannot afford to address blight issues. Both situations would increase financial burdens on many already facing health risks from living in homes considered blighted.

Additionally, Pinho states the tax could be ineffective in addressing blight by instead encouraging property demolition, which could be a loss to the community, especially with historically significant property. The tax would also be inefficient in addressing blighted properties, such as churches and charitable organizations that are not subject to taxation (Pinho, 2013).

Pittsburgh Georgia and its cities are not the first to try to tax away blight to spur development. Since 1913, Pennsylvania allowed municipalities to establish a two-tiered property tax system which more heavily taxed land than improvements to land. This meant that land not in productive use would get more heavily taxed than properties in use. The system was used in over 20 localities across the state but many, including Pittsburgh, eventually chose to end it. In Pittsburgh, the tax was used citywide until 1981 when it was downsized to be levied only in the city’s “improvement district” (Povich, 2017). The goal of levying the tax was to encourage development in the downtown area and the program was ended once officials considered this goal accomplished. However, there has been criticism that taxing abandoned property in a city with thousands of vacant parcels, like Pittsburgh, does not reliably lead to development, but rather perpetuates a property’s neglect until the city is forced to seize it. (Povich, 2017).

Washington, D.C. It is helpful to compare outcomes of the tax in Pittsburgh to the similar tax in Washington D.C., which also more heavily taxed property not in productive use, but did so in a more active housing market. This high demand for housing encourages owners to productively use their property as opposed to leaving it abandoned. This is due to the immediate and hefty potential profit from sale of the property in this “sellers’ market” (Povich, 2017). However, this situation creates unintended consequences, including property owners who are willing to pay the tax but choose to wait for the property value to continue to increase, also known as speculation. While this speculation by property owners has increased revenue for D.C. from collected taxes, the practice also results in properties remaining unused and still burdensome to their communities despite the higher revenue (Povich, 2017).

Conclusion Given these disparate impacts in different area markets, the tax can be controversial (Povich, 2017).

Critics argue the taxes could be helpful in a city where land values are increasing, such as Washington D.C., but not so much in cities where land values are stagnant (Pew, 2017). Furthermore, the taxes can be difficult to implement (Povich, 2017). On the other hand, proponents see the tax as spurring land use, improvement and redevelopment. However, there is little proof in Louisville Metro that the AUP encourages property improvements and discourages abandonment. The AUP’s triple taxation of abandoned property, instead of serving to reduce blight, might promote abandonment if the property owners are unable to afford the high tax rate or if paying the assessed tax is not a sufficient disincentive.

As pointed out in a report by U.S. Department of Housing and Urban Development (HUD), “it is critical

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to match strategies for combating vacancy to neighborhood market conditions” (U.S. Department of Housing and Urban Development, 2014).

Methodology

This section details steps taken by LMPHW staff to conduct an assessment on the health impacts of repealing the AUP tax.

Initial HIA Steps The Health Impact Analyst at Center for Health Equity (CHE) was contacted in November 2017 by the Director of the Vacant & Public Property Administration (VPPA) regarding the feasibility of a Health Impact Assessment (HIA) on repeal of the Abandoned Urban Property tax (AUP). After a preliminary assessment, the analyst deemed this an appropriate topic for an HIA (see Appendix A for screening questions). The project scope was defined to create an initial plan for the assessment (Appendix C).

Research Questions The goal of this HIA was to examine the health consequences, both intended and unintended, of repealing the AUP. In understanding the goal of the AUP is to address vacancy, a larger examination of this problem was included to consider the full scope. The AUP was designed to reduce the number of VAPs in the Urban Services District of Louisville so we considered the health impacts of VAPs on community health and wellbeing in order to fully understand potential positive and negative health outcomes. Our research questions centered on: • • •

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Health consequences of living near VAPs Efficacy and results of the AUP program in achieving its goal Examining the void remaining upon repealing the AUP o Consider benefits of the AUP o Consider drawbacks of the AUP Exploring programs already in place in addition to innovative, novel programs to replace AUP o Would replacement program maintain the health benefits generated by the AUP? o Would replacement program not result in the negative health outcomes of the AUP

Literature Review and Focus Groups The analyst examined existing research documenting the impact of VAPs on public health and neighborhood development. Recognizing community engagement as an integral component of health impact assessments, the CHE team prioritized primary qualitative data collection through the development of focus groups. Because those who would be most impacted by a decision are often wellpositioned to describe structural barriers or unintended consequences of a process, it was necessary to engage the appropriate stakeholders. After an initial stakeholder assessment, three priority audiences were identified for focus groups: (1) non-profits and businesses that purchase VAPs, (2) residents living in neighborhoods with high concentrations of VAPs, and (3) property owners who have been directly 10

taxed under the AUP (see questions for each audience in Appendix D). For residents who were unable to attend a focus group but wished to share their narrative, the analyst scheduled individual interviews as well.

The focus group for nonprofits and businesses explored whether the AUP was successful in achieving its objective and related reasons. Questions probed the organizations’ familiarity with VAPs, the AUP, and the impact the AUP and other taxes have on attempts to buy and sell VAPs. In the second focus group, with residents living near VAPs, the research objective was to better understand effects of numerous VAPs within communities on the health and wellness of neighboring residents. To present a fully-developed picture of the issues arising from VAPs, it was important to understand the challenges VAPs presented to community from their own perspective.

The final focus group was designed to engage those who were directly taxed under the AUP, including reasons the tax was levied as well as the consequences, if any, of the AUP on the health status of those taxed (See questions in Appendix D). However, due to limited contact information available (CHE only had addresses to the vacant, taxed properties), the mailers sent by CHE did not yield contact with anyone who could be directly linked to the AUP tax. As a proxy for this data, the researchers modified the research strategy to learn of the tax’s impact in community and within government from VPPA frontline staff, people involved with administering the AUP and other VPPA programs. Individual interviews were scheduled to learn from these subject matter experts, of the effectiveness of the AUP and other methods in place to reduce the number of VAPs in the city.

The collected literature and focus group data were valuable in better understanding the issues surrounding VAPs from various stakeholders, an understanding which expanded upon the initial research conducted by VPPA. The HIA team recorded the sessions and then transcribed the focus group discussions. The HIA team then launched into the steps of “coding” and “theming” the transcriptions, which revealed the major and recurring topics. From the focus groups and individual conversations, the qualitative data gained could be classified into four groups: (1) Reasons properties become vacant and/or abandoned (2) Reasons properties remain vacant and/or abandoned (3) Consequences of persisting VAPs (4) AUP’s impact on reducing VAPs

Limitations Unfortunately, despite efforts to reach individuals taxed under the AUP, the HIA team was unable to contact these residents. Although both qualitative and quantitative data were collected to understand the consequences of this tax, we recognize having no communication with those taxed under the AUP creates a limitation to the data and resulting analysis. We are confident in the analysis completed but advise decision-makers to proceed with caution and build evaluative processes into their next steps to

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ensure the protection of those who may have been harmed by the structural issues of the AUP tax. For more information, see the Recommendations section.

Results

Reasons Properties Become Vacant and/or Abandoned This theme revealed three sub-categories, including title issues, issues related to the total tax levied, and categories of property owners.

Title Issues Recurring stories among the focus groups were those of the former owner who passed away and left the property to family members who were either absent or unable to maintain the property. In those cases, the property is often abandoned. In other circumstances, people die and leave property behind with no known heirs. This results in lack of clarity around who holds the legal title to the property (that is, there is a cloud on title). Potential buyers are then discouraged from purchasing the vacant property as ownership of the property is unclear and a distant relative of the deceased may appear at any time and lay claim to it. Clouds on title are routinely discovered in a title search and present a problem, as resolution is a difficult and time-intensive process. In a small number of cases, clouds on the title may be resolved by initiating a quitclaim4 deed or by starting an action to quiet title.

Issues Related to Total Tax Levied In both the focus groups and individual interviews, many were frustrated by the amount billed for property taxes as homeowners. Stories were shared describing the financial strain on the household budget of many residents and a clear link was made to people abandoning property because they cannot afford the costs of upkeep and taxes. In these examples, the property taxes in conjunction with maintaining property are burdensome on community members, particularly those with a combination of limited income and disability who are already navigating the structural barriers of limited income.

However, community also expressed concerns over people who own property in the eastern, predominately White areas of Louisville Metro or who live out of state and fail to care for property they own in neighborhoods with high rates of vacancy. Commonly shared results of this included overgrown lawns and bushes, pest infestation (mice, snakes, and squirrels), people who are homeless finding refuge in the vacant property, and a fear that these circumstances and obvious abandonment of the property would encourage illegal activity. For this group of “negligent� property owners, the taxes are neither high enough nor sufficiently punitive to deter neglect by owners or encourage property maintenance (which would prevent the punitive tax).

Categories of Property Owners

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Quitclaim deeds transfer or "quits" any interest in real property. The grantor may not be in title at all, so the grantee cannot assume that the grantor has any real interest to convey. It could transfer an acquired interest.

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The focus groups identified three categories of property owners involved with VAPs. These groups were discussed previously but will be explicitly named and defined now. The first category includes property owners who have limited income and cannot afford either the upkeep or the taxes placed on their property. The second category is comprised of owners who are absent, often due to either death, or living out of state. These property owners are often identified as being unaware of the property or of the existing liens levied during its vacancy. By the time these owners become aware, the property is underwater and difficult to sell. The third category of property owners includes owners who are not acting in the best interest of the community in which their property is located, whether or not their buildings are occupied. This includes predatory owners who are profiteering by renting poorly maintained properties at unfair rates, as well as property owners living outside of the impacted community, who are failing to maintain their property (possibly arising from the practice of speculation).

This differentiation among types of property owners became a critical component in both focus groups when discussing appropriate measures moving forward.

“And then I noticed…I feel it’s predatory. People come in and buy the houses to rent out and I don’t see anyone move in immediately…I think that a lot of people are coming to buy cheaper houses in the west [to rent out]” – focus group participant

Reasons Properties Remain Vacant and/or Abandoned Most VAPs have already accrued taxes and fines because the properties fell below standard. An unpaid tax, including the AUP, creates a lien on the property. Liens are legal claims against a property to secure payment of the debt and are generally recorded so other creditors and potential future buyers can be aware. However, with the AUP, there was no publicly available record of the tax. Moreover, the AUP was levied retroactively based on the property being deemed abandoned during the previous fiscal year.

If a new property owner purchased a VAP and is working to rehabilitate the property, they become aware of the AUP (resulting from property’s status in the previous tax year, before purchase) only when they receive a triple property tax bill or see their tax escrow account payments increase. Focus group participants made clear this level of taxation on a property was a disincentive for those who would otherwise purchase and rehabilitate, causing abandoned properties to remain on the market.

Consequences of Persisting VAPs This theme demonstrates the lived reality for residents living near VAPs, including fear, pest infestation, and decreased property values.

Fear for Safety Many focus group participants mentioned that an obviously abandoned property often leads to crime.

They recounted people stealing pipes from an abandoned house to resell as well as abandoned properties used as a secluded place from which to sell drugs or as an unsafe gathering place for young people with few, safe recreation options. Additionally, community members feared living next to an 13

obviously abandoned property. Research shows vacant and abandoned properties become spaces for illegal activity because of the “broken windows theory” — that one sign of abandonment or disorder (for example, a broken window) will encourage further disorder (Kelling & Wilson, 1982). Increased vacancies also translate to fewer neighbors available to monitor and prevent criminal activity. The presence of boarded doors, unkempt lawns, and broken windows can signal availability of an unsupervised, safe haven for illegal activity (Arnio, 2012). Additionally, there is an association between vacant properties and the risk of assault. Vacancy was found to be the strongest predictor of risk of assault, among almost a dozen indicators, after controlling for other demographic and socioeconomic variables (Branas, 2012). For residents, unmowed lawns, boarded windows and no lighting readily signal that an adjacent property is unoccupied. The neighboring property owners expressed concerns that not only would a VAP become a haven for illegal activity but also that there is little preventing their own homes from being broken into or themselves being put into danger. The fear that vacant and / or abandoned properties would encourage crime is a commonly held fear of community that was repeatedly expressed both in focus groups and in one-on-one conversations.

“I was afraid to walk around, but you can’t be afraid. Because I’ve dealt with the drug houses and the crack houses and you know, kids breaking in ‘em... I pay too much taxes every year, you are not going to come in here…and destroy the neighborhood that I grew up in. I am not afraid.” – focus group participant

Pest Infestation Another recurring theme among residents living near VAPs was the increase in pests or “critters” in their own homes as a direct result of nearby VAPs. The focus group participants mentioned contending with infestations of rats, mice, cockroaches and even snakes. Community identified this escalation to pest infestation as arising from lack of a robust system holding irresponsible property owners accountable to their neighbors.

Depressed Property Values (both of abandoned and surrounding properties) In the focus groups, community expressed concerns over VAPs’ potential to depreciate their property values. These fears are not unfounded, as research shows that VAPs are associated with increased rates of crime (particularly arson) and declining property values (PD&R, 2014). Furthermore, the maintenance or demolition of vacant properties is a major expense for many cities (PD&R, 2014). VAPs are more than just a symptom of larger economic forces at work in the community. Association of these properties with crime, increased risk to health and welfare, plunging property values, and escalating municipal costs make them problems, contributing to overall community decline and disinvestment (PD&R, 2014).

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Research supports the idea that VAPs have detrimental spillover effects, significantly impacting neighboring properties and sometimes, when the VAPs are concentrated, entire communities (PD&R, 2014). Studies quantifying the effect of foreclosures on surrounding property values revealed that foreclosures lowered the sales prices of nearby homes by 0.9 percent to 8.7 percent (Frame, 2010). One study found that vacant properties have a more severe impact on their immediate surroundings than do foreclosures (Mikelbank, 2008). Research also suggests that the longer a property remains vacant, the greater an impact on surrounding property values and the larger the area affected (Han, 2013). A study in Baltimore finds this negative impact occurs within 250 feet of properties that have been abandoned for less than 3 years (Han, 2013). However, after 3 years, the impact can extend as far as 1,500 feet, although to a lesser magnitude (Han, 2013).

Properties remaining vacant and abandoned for extended periods of time lose substantial value, but losses on neighboring properties are even greater than that suffered by the abandoned property itself (Klein, 2017). Property abandonment involves not only the individual property owner but also neighbors and communities at large. Homes are the major financial asset for most Americans and are instrumental in generational wealth building (Klein, 2017). Furthermore, the value of the typical home is approximately four times as large as that family’s annual income (Klein, 2017). Stabilizing homeownership improves overall economic stability by safeguarding and preserving the average family’s largest source of equity. Moreover, it is in a community’s best interest to eliminate VAPs as everyone benefits from improved health and wellbeing.

AUP Impact on Reducing VAPs Properties that are not up to standards set by codes and regulations in Louisville Metro are fined and taxed. For VPPA, the division of Louisville Metro Government (LMG) implementing the AUP, the tax would have been deemed successful (i.e. reduce VAPs) if: 1. The property owner requests a permit, as this presumably signals the property owner is resolving the property issues and it will fall of the AUP tax list.

2. The number of work orders on a property stops or declines – again, this is presumably a signal that the property owner is taking care of the property and it will fall off the AUP tax list.

3. The revenue generated from the tax exceeds the cost of administering the tax. Under this cost-benefit analysis, the tax is working and should continue to be assessed.

The VPPA conducted an independent analysis of the assumptions above prior to the HIA process and found the following: Permit Data Analysis (Permit Types: electrical, wrecking, asbestos, HVAC, building, fire suppression and structural) There is, in fact, a low correlation between the number of permits issued for abandoned properties and the number of abandoned properties that fell off the AUP tax list (McGuire & Deobhakta, 2016). That is, 15

there is no clear relationship showing that the Figure 2. McGuire and Deobhakta, 2016 issuance of permits for improvement results in a property’s falling off the AUP tax list. While a property with one or more issued permits has a slightly better chance of falling off the AUP tax list, permit data is not a good indicator of whether a property will fall of the list.

Work Order Analysis (Work Order Types: Boarding and Cleaning) The data from work orders shows a strong correlation to a property’s falling off the AUP tax list (McGuire & Deobhakta, 2016). Work orders are issued by Louisville Metro to address issues with abandoned properties (for instance, with overgrown grass the city issues a work order for staff to mow the lawn). 100% of properties with no work orders in 2015, that had been included on the AUP tax list because of work orders on the properties in the previous year, fell off the AUP tax list. 94.59% of properties with one work order fell off the list. In fact, having three or fewer work orders is a good indicator that the property will fall off the AUP tax list (McGuire & Deobhakta, 2016).

Cost Benefit Analysis The AUP is cost prohibitive to implement, requiring 12 staff from 4 agencies (2 Metro and 2 non-Metro) in addition to the 5-member Vacant Property Review Commission. However, approximately 75% of the AUP taxes levied remain unpaid each year which indicates properties remain vacant despite AUP administration.

The graph below shows that the financial outlay needed to collect taxes far outpaces the revenue generated from the AUP triple tax.

The combined results of the focus groups, literature reviews, and VPPA analysis demonstrate that the AUP model is not effective in Louisville Metro. This is due to costs to administer the AUP program, limited tax collection under the program, and its lack of success in reducing the number of VAPs in Louisville Metro.

Health Outcomes of Living Near VAPs

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Addressing vacant properties is an imperative public health issue. There is a proven correlation between living near VAPs and negative impacts on both physical and mental health. Moreover, the awareness that structural racism largely contributes to the presence of VAPs in their neighborhood also has adverse effects on residents’ physical and mental health. Reducing VAPs would not only eliminate many nuisances cited above, such as pest infestation, but would also spur economic development and encourage housing stability in neighborhoods with a high VAP concentration. This would lead to an improved quality of life for all neighborhood residents.

Impact of VAPs as Structural Racism on Resident Health and Wellness The communities in which people live have a significant impact, positive or negative, on their health and wellness. In this case, vacant, deteriorating properties impact both physical and mental health through injury, the buildup of trash, and attraction of rodents as well as creating anxiety and stigma (Garvin, 2013).

Additionally, many residents were very familiar with redlining as well as other ways racism shaped their opportunities to build wealth and understand the high concentration of VAPs in their neighborhood as a manifestation of racism. It was often remarked that abandoned properties would not persist if their abundance was an issue plaguing the predominately-White, eastern area of the county instead of the predominately-Black western area of the county.

“We encourage people that come from the East End and buy all the property in the West End and become slumlords and they make all the money and the neighborhoods just keep falling down” – focus group participant Experiencing structural discrimination is a form of stress that can negatively impact mental and physical health in the forms of depression, anxiety, post-traumatic stress disorder, all-cause mortality and hypertension (Lewis, 2015). Research has also linked discrimination to “silent indicators of poor health and premature aging” (Lewis, 2015). These consequences are often compounded by the reality of navigating inequitable access to the root causes of health, including human and health services, quality food, and environmental health. It is necessary to experience these root causes of health in a way that improves individual health, rather than results in adverse health outcomes. Health equity research has been dedicated to studying the impact of racism on health outcomes outcomes ranging from mental disorders such as depression and anxiety, to chronic illnesses such as heart disease and breast cancer (Quereshi, 2015). Studies have repeatedly shown that experiencing discrimination is associated with poorer overall health outcomes (Quereshi, 2015).

Quality of Life According to the US Conference of Mayor’s Report from 2006, both residential and commercial VAPs, “create costly problems for cities… are a drain on city budgets…detract from the quality of life.” Quality of life is in large part determined by root causes to health, such as housing, neighborhood development, built environment and environmental quality among other factors. Systems of power, including racism, shape policies and practices of the institutions responsible for each root cause. Thus systems of power mold an individual experience of root causes and their subsequent health outcomes. The history of the 17

Louisville housing landscape reveals the presence of VAPs in marginalized neighborhoods is a direct result of systemic racism. A concentration of VAPs in a neighborhood negatively affects the quality of life of those residents, particularly through experiences with housing, built environment and neighborhood development. By reducing the VAP concentration in the most impacted neighborhoods, residents will be able to thrive. Furthermore, the reduction of VAPs will spur neighborhood development and housing stability within a community, particularly when development is designed for the existing residents. Not only would this lead to an improved quality of life through physical health for residents but neighbors are also likely to experience a renewed sense of pride as they are able to develop and be part of the neighborhood they desire. This would encourage the protective factors of hope, optimism and resilience.

But then those who have never been there, they’re just thinking what we need. But then they don’t really know, so if they don’t ask us, they bring in what they want to bring or they just open the door for anybody [liquor stores] to come in…where they can make quick money – focus group participant

Recommendations

It is helpful to reflect on the goals of the AUP to analyze the potential health outcomes from its repeal.

While its aim was to reduce VAPs in Louisville Metro, collected data demonstrated its ineffectiveness and literature revealed little evidence of success among various versions of a “blight tax.” Although the HIA team believes the tax should be repealed, particularly to prioritize the valuable administrative resources for use elsewhere, gentrification as an unintended consequence should be a significant concern. Gentrification is defined as “the buying and renovation of houses and stores in deteriorated urban neighborhoods by upper- or middle-income families or individuals, raising property values but often displacing low-income families and small businesses” (Dictionary.com, 2018). The compounding components of the likelihood of revitalization efforts in these areas and the repeal of the triple property tax could create conditions for speculators to sell to the highest bidder, who are rarely people of color due to the impact of racism on wealth building and access to low-interest loans. It becomes critical to carefully replace the efforts once devoted to the AUP towards practices that will prioritize the highest benefit to be experienced by the current residents.

The lessons learned from initiating, administering and implementing the AUP can be used to create a more effective method for addressing VAPs. The recommendations outlined below acknowledge this and outline initial steps for creating robust initiatives to address VAPs and to improve the quality of life for Louisville residents. Most importantly, these should be considered as a starting point for VPPA in creating programs, initiatives, and policies to replace the AUP with more effective approaches. From the administrative difficulties with AUP program, the HIA team recognizes the importance of subject matter

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experts carefully considering, on an ongoing basis, the consequences of a program designed to reduce VAPs. Considering the collected data, the impact of racism, and potential unintended consequences, the HIA team has developed three recommendations to complement the repeal of the AUP program. These recommendations would (1) reallocate the resources formerly dedicated to the AUP program, (2) improve the use of data, (3) prioritize financial resources and utilize a racial equity lens to imagine a different approach to reducing VAPs.

Reallocation of Staff and Resources To develop an appropriate, targeted solution, it is critical to understand why a property initially became vacant or abandoned. This requires differentiation between a property owner with numerous VAPs and a person without the financial capital to maintain upkeep and property taxes. While the AUP was designed as a disincentive for the former property owners, the staff time needed to verify uninterrupted vacancy for one year is an inefficient use of resources. The resources needed to reliably monitor properties in this way far exceed the benefit of doing so. However, there are other ongoing initiatives in which VPPA could utilize part of this reallocated time, as they have the potential to more efficiently address the challenges of vacant property ownership. One especially promising program is the Tax Delinquency Diversion Program (TDDP).

The Tax Delinquency Diversion Program (TDDP) is directed at blighted property, under KRS 99.700 to 99.730. This program prevents Louisville Metro, through the authority of the Land Bank, from selling delinquent tax certificates in designated areas for up to five years (applicable census tracts determined by the Land Bank). Under state law, Louisville Metro is required to offer delinquent tax certificates for sale. The TDDP allows Louisville Metro to bar sales of delinquent tax certificates for up to five years in designated areas. The goal of the TDDP is to prevent third parties from buying delinquent tax certificates from the city. City taxes and liens on property donated to the Land Bank can be extinguished but the Land Bank is powerless to forgive third party liens. Generally, this means properties with a third-party lien are not eligible for donation. Not only does the TDDP prevent purchase of delinquent tax certificates from the city, but it also grants the city more control over and a greater stake in blighted property within the designated area.

It should be noted that VPPA established a Blighted Property Action Team (BPAT) in Fall 2017. BPAT includes government representatives from the Jefferson County Attorney’s Office, Historic Preservation, Codes and Regulations, VPPA, OMB and Fire Department & LMPD as needed. For fiscal year 2018, VPPA has several initiatives which can serve as options for resolution to VAPs for the BPAT. These options include: cut and clean, board or clearboard, Civil collection suit, criminal prosecution, lien waiver to help private market transfer, public nuisance violation, increased LMPD presence, property donation to land bank, legal action (foreclosure, spot condemnation, etc.), and demolition. Since the work of BPAT was only recently begun it is not yet possible to gauge the team’s success at reducing VAPs. However, the individual VPPA initiatives should be carefully considered before implementation in order to achieve success and avoid unintended negative consequences. This will require intentional thought and effort

by VPPA when determining which combination of these initiatives, in addition to the TDDP, could serve 19

as a replacement for the AUP. While the AUP has not been levied for a few years, within the interim Louisville Metro Government staff and resources have been devoted to efforts to assess the AUP’s efficacy and gather data on the program. Thus, with the elimination of the AUP, staff resources and time could now be focused on other VPPA initiatives aimed at reducing VAPs.

Improve the Use of Data to Formulate, Implement, and Administer Programs While VPPA took an evidence-based approach to assess the efficacy of the AUP tax, there were gaps in data discovered as CHE conducted this assessment. Lack of data-informed knowledge presents significant challenges as it is impossible to have a full understanding of the scope of the issue. This recommendation will focus on two key ways to improve the use of data. We believe improving the use of data helps to align staff knowledge with the existing reality and allows for initiatives to be prioritized toward the greatest impact.

Establish a searchable database, accessible to the public, which lists all fines, taxes and liens attached to a property and property owner. This database should also provide environmental information on the property, particularly as it relates to the land.

Currently, we are aware of no searchable, public database to show the comprehensive history of the property and property owner. Developing such a database would establish consistency and transparency with the public by creating the ability to learn of liens and taxes attached to property, including the previously-levied AUP tax. Furthermore, this resource could significantly benefit the VPPA staff, in light of the limited data available, at present, regarding the owners of VAPs. In our research, we learned of the Louisville Environmental and Property Search (LEAPS) accessible on the ‘Brownfield Redevelopment’ website within the Advanced Planning office in LMG (City of Louisville Kentucky, 2018). It appears the LEAPS search was designed to allow developers, citizens and other interested parties access to information about (1) publicly reported environmental data related to properties across Louisville Metro, and (2) properties owned or controlled by Louisville Metro Government, including those available for purchase and redevelopment. Ideally the recommended searchable database will combine easy access to information on fines/taxes/liens with the environmental information of a property. This would allow LMG staff, residents, and buyers to make an informed decision when considering approaches to VAPs. Improve the Lien Waiver Process at LMG Office of Management and Budget (OMB) Within the Office of Management and Budget (OMB), there is a lien waiver process designed to address the financial limitations residents may have in paying city liens. After speaking with lien waiver staff, it appears there is not an objective, standardized process in place for determining whether a lien waiver is granted by OMB. Additionally, there is limited data on the efficacy of the lien waiver program, particularly a lack of accessible information about quantity of waivers requested, approved, and denied.

This is not to say that no data is collected at all around the lien waiver program. For example, data is currently being collected to assess monetary collection as a measurement of success. We challenge this metric, particularly as it is used in relation to residents requesting waivers. While it may be unintended, this approach punitively pits LMG against residents requesting waivers, framing the process in a way that reduces its effectiveness. This is particularly important because, regardless of whether individuals 20

are requesting a waiver, millions of dollars in property liens owed to Louisville Metro remain uncollected each year, resulting in prolonged vacancies or foreclosures on homes requiring significant and costly rehabilitation. A successful waiver process, particularly in combination with TDDP, can assist getting properties onto the market sooner to become beneficial spaces to the surrounding community.

Recognizing the extremely limited staff time available, we recommend putting a 60-day hold on the program and work alongside Louisville Metro Office for Performance Improvement to conduct preliminary, cross-sector assessments on both the process and results.

Third-Party Liens and Amnesty Pilot The previous recommendations focused on the expansion of existing initiatives to leverage the greatest impact. The following recommendation is grounded in a vision for equitable approaches to VAPs in which financial resources are reallocated to remove critical barriers.

Develop a Fund for Third-Party Liens Regardless of the stakeholder we spoke with, third-party liens on property were routinely characterized as the greatest barrier to the elimination of VAPs, one for which there was no solution. However, we know racism as a system of power frames solutions as impossible, a false narrative which reinforces the negative impact of racism in policies and practices. Currently, there are more than enough resources in Louisville Metro for every resident to enjoy an improved quality of life and have the opportunity to thrive; those resources just need to be prioritized to create the most impact. For this reason, it is critical to ground the complex work surrounding VAPs in racial equity and recognize, through an equity lens, that a solution to third-party liens on VAPs is possible.

Systems of power, discussed earlier, generated conditions encouraging both the formation and the persistence of VAPs. This historical, intentional disinvestment requires intentional efforts toward solutions. We believe developing a budget to clear third-party liens from property is the commitment needed to reduce VAPs. However, we recognize this will require dedicated planning to determine the details of this process, such as any requirements related to paid or delinquent property taxes, length of liens’ existence, and the strategic approach. This approach could include directing the budget to aid property owners who would benefit most.

Parameters would have to be established for this budget dedicated to eliminating third party liens to work. This may be achieved through approaches such as limiting who is eligible for funds from this thirdparty lien budget – perhaps by focusing on properties with third-party liens under a designated threshold amount, prioritizing neighborhoods, or prioritizing properties which have been vacant for a period of time. Thought must also be given to which lien holders would be eligible – that is, while it may be possible to generate support for this program as a remediation measure for previous racist practices with regard to mortgages, land ownership, financing, etc. it will be difficult to make a case for paying off debts owed to private banking organizations who may be holding the mortgage on someone’s property.

Perhaps the budget could be directed solely to paying off the tax liens that were sold by Louisville Metro to third parties. It is imperative that these details be considered and worked out before implementation.

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We recommend redistributing city funds to create a budget for purchasing third-party liens. Such a budget has the potential both to reduce VAPs by allowing Louisville Metro to gain control of abandoned property and to acknowledge the persistent racial inequities that have been created.

“We’re spending money in a lot of areas to bring things into the city and pushing other things out because we want this nice face put on…I’m just saying there is money that could be allocated for certain things to cut away at some of the problems, but it’s all in the priorities” - focus group participant Develop a Pilot Amnesty Program to Forgive Metro Liens From speaking to various stakeholders, a recurring shared narrative of owners who wish to sell their property but have fines, taxes, and liens they cannot afford. We propose an amnesty program as a solution. Potentially, this model could prioritize property owners with city liens, who wish to sell their property but cannot afford to clear liens. These owners can approach LMG within a specified time and have those liens forgiven, no questions asked. We recognize the details of how to approach this amnesty program would have to be carefully considered. This includes potentially limiting the lien waiver to owner-occupied properties, and considering whether to complement the dedicated budget for thirdparty liens by focusing on properties already selected for that initiative, or to instead open the amnesty program only to property owners without third party liens.

Monitoring and Evaluation

Conducting a process and outcome evaluation on each recommendation is critical and should be done by a cross-sector team, including VPPA, LMPHW, Codes & Regulations, Office of Management and Budget (OMB) and community residents. Additionally, continuous evaluation of these recommendations, through measurable metrics, is needed. In particular, a racial equity analysis should be conducted to gauge the impact of existing initiatives as well as the amnesty pilot programmatic impact in comparison to the current OMB waiver program. With the help of a health economist, a return on investment (ROI) for Louisville Metro could also be done through a health equity lens. This ROI could potentially document the resources, staff and financial, being expended by the city and what the return is (that is, how many VAPs were eliminated).

Another method of gauging the effectiveness of the pilot amnesty program combined with the establishment of a dedicated city budget for purchase of third-party liens on property is to track the number of VAPs that exist under present programs employed by VPPA and OMB, and compare to the number of VAPs after the amnesty pilot program is implemented and a dedicated city budget for thirdparty liens is established. Success of these recommendations can be measured by the rate of decrease in VAPs.

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Conclusion

Through an extensive literature review, qualitative research through focus groups, and cost-benefit analysis, this HIA assessed the health impact of repealing the Abandoned Urban Property tax. Results demonstrated reasons for the creation and persistence of VAPs, the impact of VAPs’ prolonged existence, and the ineffectiveness of the AUP in reducing VAPs in Louisville Metro. The AUP did not accomplish its intended goal. However, to repeal the triple property tax while revitalization is simultaneously occurring creates space for gentrification to displace existing residents. Three recommendations are proposed to protect residents, complement the repeal of the AUP tax, and serve as the foundation for developing a robust program to address VAPs. The importance of implementing a replacement program for the triple tax is stressed. Success of a replacement program requires careful thought and planning, as well as collaboration with all stakeholders. The HIA also gives guidelines for monitoring and evaluating the newly implemented program to reduce VAPs in Louisville.

“It’s kind of insulting for somebody to come from somewhere else to say ‘I’m going to help

your neighborhood’…you want to ask them what their experience is and what they need to help their experience to be what they want it to be, instead of telling them ‘I’m gonna go in and help you,’ that their area is bad, or what you have going on is bad, or you’re this and you’re that. I’m gon’ change you into what is deemed good. You have to listen to the experience of the people and put what they need there to be able to help them be as much of a participant as possible so they can feel like they own… some self-worth” – focus group participant

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Stucka, M. (2009, December 30). Bibb County landowners could face 'blight tax'. Retrieved 2018, from http://www.macon.com/news/article28577401.html 26

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APPENDIX

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Appendix A

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Appendix B HIA Screening Worksheet: The Special Project Project and Timing Has a project, plan or policy been proposed? o Yes – Proposed is the repeal of the Abandoned Urban Property Tax. The Abandoned Urban Property Tax is a triple tax levied against presumably abandoned properties in the Urban Services District. The tax appears to be ineffective, inefficient, and is applied disproportionately in Louisville neighborhoods. The benefits of the tax to both the city and to the neighborhood need to be examined.

Is there time to conduct an analysis before the final decision is made? o Yes. The HIA is being done before the request for repeal of the Abandoned Urban Property Tax is presented to Metro Council. The HIA is therefore timely as it is being prepared before a decision is made.

Health Impacts Is the decision likely to affect environmental or social determinants that impact health outcomes? If so, which determinants and which health outcomes?

Yes, the project may affect the following social determinants of health (and health outcomes): o Protective Factors – Hope, Optimism, Resilience o Community conditions o Civic Engagement o Discrimination o Quality of Housing o Crime and Violence o Economic Stability – Housing Stability Equity Impacts Is the decision a priority for a community facing inequities? What evidence do you have for this? o Yes. The Abandoned Urban Property (AUP) Tax disproportionately affects people in certain neighborhoods. Furthermore, the benefits of levying the tax seem nonexistent.

In what ways would health inequities be impacted? o The Abandoned Urban Property Tax affects the chance of the triple taxed properties of coming out of abandonment.

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Potential Impact of HIA Findings Is the decision-making process open to input from a health perspective? o Yes. Representatives from VPPA will present the findings of the HIA to Metro Council as they consider whether or not to repeal the AUP Tax Is health already being considered in the proposal or as part of the decision-making process? o At present, health effects of the AUP tax are not being considered. However, the potential health impacts of this tax are the focus of this HIA and the determining factor in Develop Louisville’s seeking the assistance of Louisville Metro Department of Public Health & Wellness (LMPHW) in conducting the HIA Potential Impact of the HIA Process What are the potential impacts of the HIA process? (e.g., building relationships, empowering community members) o Work with LMPHW on the HIA process will widen the scope of Develop Louisville and bring a new lens to developmental policy o Reduce the number of vacant and abandoned properties in the Urban Services District, currently impacted by the triple tax – without the burden of the triple tax, it may be easier for clear title to a property to pass to a new owner Stakeholder Interest and Capacity Which stakeholders are involved in the decision-making process?

Do stakeholders have the interest and capacity to participate in the HIA? How would stakeholders use the HIA to influence the decision-making process? o Develop Louisville will make recommendations to the Louisville Leadership Team (LLT) and the Mayor’s office based on the findings of the HIA o Metro Council will listen to Develop Louisville’s arguments as to why the triple tax should be repealed – these arguments may be bolstered by the findings of this HIA

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Appendix C

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Appendix D Questions for Nonprofits and Businesses that Purchase Vacant and Abandoned Properties (VAPs)

March 30, 2018 Focus Group • • • • • • •

Tell me about the work your organization does in relation to VAPs? What are your reasons for attempting to purchase VAPs? What has been your experience with purchasing VAPs and describe what’s gone well and any challenges with attempting to purchase VAPs? Describe any specific / direct experience with the AUP tax or fines levied on VAPs? How have additional taxes, i.e. AUP, impacted your attempt to transfer VAPs? What would expedite the process for you in purchasing VAPs? Have we missed anything?

Questions for people living in neighborhoods with a high Vacant and Abandoned Property (VAP) concentration April 10, 2018 Focus Group

• • • • • • •

Tell us about the neighborhood you live in?

What do you like about your neighborhood?

Tell us about your experience of living near a VAP Describe the opportunities and challenges of having VAPs in your neighbor Describe the effects of VAPs on your health (both physical and mental health) Describe the impact of VAPs on your neighborhood Have we missed anything?

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Questions for people directly impacted by Abandoned Urban Property tax (AUP)

April 12, 2018 Focus Group

• • • • • • • •

What neighborhood do you live in now? What do you think of this neighborhood?

What neighborhood did you live in when the AUP tax was levied?

What was your experience with the AUP tax?

What were the reasons given for why the tax was levied?

Describe any challenges in keeping up your property that you think may have led to the AUP tax being levied?

What was your health status when the AUP tax was levied?

What was your health status after the AUP tax was levied?

Have we missed anything?

Questions for city employees working with Vacant and Abandoned Properties (VAPs) One-on-one Conversations

1. What has been your experience, if any, working to administer the AUP? a. In your experience had the AUP been effective in achieving its goal?

2. What has been your experience in working with VAPs in Louisville? a. Have taxes / liens been effective in reducing VAPs (and perhaps putting the properties to productive use)? b. Are the current methods of dealing with VAPs effective, from your observations? c. Of the methods in place at present, which are working best? d. Of the methods in place at present, which are least effective e. In an ideal world, what would be your vision of a method to decrease VAPs and revitalize the properties / communities in which they are located? i. What are the barriers to that vision?

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