It’s Carrboro’s conundrum.
The town’s success in attracting tolerant, creative residents and its “feel free” marketing plan are leading to a higher cost of living here.
As the Board of Aldermen heard a presentation from Annette Stone, the town’s economic development director, Alderwoman Jacquie Gist interrupted after Stone mentioned that the town had not raised its tax rate in several years.
“Taxes are going up even as the rate is not,” Gist said.
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Carrboro’s property tax rate is 58.94 cents for every $100 of assessed property value. Town Manager David Andrews’ proposed budget will maintain that rate for 2015-16. The owner of a house valued at $300,000 will pay $1,768.20 in town taxes.
Carrboro’s real estate tax rate is higher than Chapel Hill’s 52.4 cents per $100 of assessed value.
Chapel Hill and Carrboro residents also pay a county tax rate of 87.8 cents and a special city schools district tax rate of 20.84 cents per $100 in assessed property tax value. The county manager is expected to present a budget plan May 19.
Like Chapel Hill, Carrboro has been able hold the line on the property tax rate thanks to increased sales tax revenue, which is up by 13.5 percent.
Gist said Carrboro faces a delicate balance in preserving those qualities that make it a desirable place to call home while allowing for responsible growth.
Keeping Carrboro affordable for longtime residents as retire was the focus of Gist’s most direct comments: “I’m serious when I say I probably will not be able to afford to live here when I retire – and I’ve spent my whole life making this place cool,” she said.
On Wednesday, Gist backed away from that assertion, saying she was trying to illustrate the problem that many of her neighbors face.
The affordability of Gist’s Maple Avenue home is subject to market forces like any other. Originally built as workforce housing for Carr Mill employees, Maple Avenue has many homes built in the 1920s and 30s. Their iconic appearance is valued as historically significant.
That translates to market value, too. The house next door to Gist’s – a 1,477 square foot, two-bedroom house built in 1932 – sold last month for $550,000. Its assessed value on Orange County tax records is $271,252. The sale will almost certainly drive up the assessed value for Gist’s property and that of her neighbors.
That house’s tax history illustrates Gist’s point on how deceptive it can be to look only at the tax rate.
In 2004, the owner of that house paid $1,183 in town taxes, at a rate of 71 cents per $100 of value on the assessed value of $165,600.
In 2014, the town taxes were $1,598.76 (36 percent higher) at the substantially lower rate of 58.94 cents per $100 of the assessed value of $271,252.
In 2000, the aldermen set a 2020 goal of doubling the commercial square footage in its downtown area to ease the tax burden on homeowners. Gist cited the top floor of the Fleet Feet building remaining vacant as an example of the problem the town faces. There is more commercial space available, but it costs more than some businesses can pay.
Gist wants to study communities elsewhere that have experienced similar problems. “I want to look at Blowing Rock and Boulder to see what they’re doing,” she said.
Alderwoman Michelle Johnson asked Stone to bring back some information to help the board understand why businesses leave Carrboro.
Alderwoman Bethany Chaney wants to look in greater depth at what can be done with potential light manufacturing sites that are just a few blocks from downtown.