When property valuation notices landed in mailboxes, Carol Davidson’s phone began to ring.
Clients of Habitat for Humanity of Hood County were confused and distressed. Suddenly, their modest Habitat homes were valued significantly higher than before, which would likely mean more taxes to pay. They called Davidson, Habitat’s executive director, to ask what they should do.
“This impacts them so much,” said Davidson, who has been affiliated with Hood County Habitat for years. Her husband, Steve, is construction chairman.
Homeowners across the state are facing the probability of higher tax bills due to an increase in the appraised value of their homes, but Habitat clients and other low-income individuals and families are among the most vulnerable.
“When we realized what was happening, we started kind of monitoring,” Davidson said.
The Davidsons, along with Habitat board member Wendy Rape, assisted about a half dozen clients in protesting their property appraisals, even going with them to hearings before the Appraisal Review Board.
The board was “very kind,” Davidson said, and lowered the valuations of some homes “considerably.”
However, not every Habitat client is so lucky. There are no provisions under the law to shield Habitat for Humanity chapters or their clients from dramatic land and home valuation increases.
Habitat Texas hopes that might change, not just for Habitat clients but for everyone impacted by higher property valuations and higher property tax bills.
“Stress on any level, including property taxes, pushes down to the lowest income Texan,” said Chief Executive Officer Amy Ledbetter Parham. “So, I wouldn’t be supportive of something that just made a carve-out for Habitat homeowners. We need a solution for the state because otherwise it’s a short-sighted solution.”
Ledbetter Parham said that Habitat Texas will work to raise awareness among legislators before and during the 2023 legislative session.
She said she hopes that legislators will agree to a revolving $25 million loan to Habitat Texas. The money would help fund expenditures for the state’s 60 chapters, such as large tracts of land for the creation of neighborhoods like the one in Rancho Brazos in Hood County.
“We’ll be able to make loans to local Habitats, and they will pay those loans back and as long as we continue to build and work on affordable housing in communities, then (the loan) doesn’t come due,” Ledbetter Parham said. “It’s a win-win because it’s not just poofing money into the air. The state, if (lawmakers) agree, will loan us $25 million, and we can just keep making expenditures, getting expenditures back in, but it’s not money that just disappeared for the state.”
ROOFS OVER HEADS
Some people think that Habitat for Humanity is free housing, but it isn’t.
Clients pay for the homes, but they are able to buy them at a much lower cost, thanks to volunteer labor and tax-deductible donations of money and materials. Homes are sold to partner families at no profit and are financed by Habitat with affordable, no-interest loans.
There is an application and selection process, and each homeowner family is required to invest 300 hours of their own labor in the building of their house and the houses of others.
Monthly mortgage payments go into a revolving fund that is used to build more Habitat houses.
The client family pays a down payment of $700 and must make monthly payments toward the 20-year mortgage.
Currently, 82 Habitat homes are on the county’s tax rolls, according to Davidson. She noted that an additional 10 or more Habitat homes are on the tax rolls but their owners have paid off the mortgages.
Davidson stated that the Habitat organization is being affected by rising land and home values just like client families.
She said that sometimes houses are taken back by Habitat because of certain circumstances such as a death but, with the current housing market, “We can’t even afford to buy them back.”
Ledbetter Parham stated, “I think Texas is one of the more extreme examples of the challenges that Habitat faces because of the high, high growth and population. A lot of Habitats, especially in this time with supply chain issues and really crazy land costs, have started to do a lot more repair and rehab work to keep people safely in their homes for now until the market can stabilize.”
The CEO referred to Hood County Habitat as one of the “top affiliates in the whole state,” an assessment that she said was based on the chapter’s sustained efforts, its leadership and professionalism, and the way the community responded when a deadly F-4 tornado struck Rancho Brazos and some of the Habitat homes in May 2013.
“It’s just really, really well run,” she said.