This newest property tax measure that passed has been deemed the most controversial in the US. What was in the new measure? What state (hint it wasn’t a far right or left state)passed a controversial law to protect private property rights by lowering taxes. Will other states use this new law as a template for their city/state?
What was in the controversial tax measure?
Should property owners get a tax break to refund them for mitigating the effects of homelessness?
The Arizona Legislature added this measure to amend state law in 2024. The proposed statutory amendment was supported only by Republicans and opposed by Democrats. This measure was passed by voters in the last election cycle.
Proposition 312 allows Arizona property owners to apply for a property tax refund for private mitigation efforts if their city does not curb homelessness by enforcing laws pertaining to public camping, blocking roads, panhandling, urinating or defecating in public, consuming alcohol in public or using illegal substances.
This Measure Would
- Allow property owners to apply for a property tax refund equal to documented and reasonable expenses incurred to mitigate the effects of homelessness on their property
- Permit the refunds if a city, town or county does not enforce existing laws prohibiting illegal camping, obstructing a public thoroughfare, loitering, panhandling, urinating or defecating in public, consuming alcoholic beverages in public or possessing or using illegal substances and the property owner incurs documented expenses to mitigate the effects of the policy, pattern, practice or public nuisance on their real property
- Require the Arizona Department of Revenue to notify the appropriate city, town or county of a refund request, which would then accept or reject the refund; if the refund is rejected, the property owner could file a lawsuit to determine whether they are entitled to a refund
- Limit approved property tax refunds to the amount of taxes the owner paid on the property for that year, but allow the owner to apply in subsequent years to receive any remaining balance of the refund
Why is a measure like proposition 312 even needed?
If you don’t live in a major city or haven’t seen the impacts of homelessness you are probably wondering why proposition 312 was even proposed. In every major city from coast to coast the homeless population has skyrocketed (see chart below by state) leading to conflicts with property owners. Cities throughout the country are enabling homeless encampments that ultimately impact commercial and residential property owners. At the same time cities have not compensated owners for the impacts until the law passed in AZ.
Denver is a prime example of impacts to property owners
The impacts of homelessness to property owners are immense. Look no further than Denver whose homelessness population has surged with homeless encampments popping up throughout the city on the doorsteps to numerous residential and commercial properties. The police do very little if anything unless there is an imminent threat. Here is an excerpt from one business:
A restaurant/bar owner talked to a local news station about the decision to close a nationally known location in Denver:
Newman said the venue is used to welcoming in all types, but lately, bringing those folks in has gotten harder because of what’s happening outside their doors.
“I would say the last year, but even more so the last six months, it became something different,” Newman said. “It was more aggressive, just scarier.”
Homeless encampments have long been a frequent sight in this stretch of downtown Denver. But suddenly, the sidewalks in front of Newman’s business and others began to see a different crowd: drug dealing, prostitution and other illegal activities.
Long and short this business owner was forced to shut his location due to the decisions the city has made on not enforcing/enabling behaviors.
Blue states much larger homeless impacts than red states
Regardless of your political affiliation or thoughts on homelessness, it is clear that the issue of homelessness is impacting blue states considerably more than red states. Take FL for example, it has a temperate climate and high housing prices and yet it has a very low homelessness rate per capita. On the flip side, take Vermont which is very cold and has lower costs of living than many FL cities and yet has considerably higher homelessness.
Big theme in Prop 312 is to enforce property rights
Regardless of your political affiliation or views on homelessness anyone who owns real estate can be empathetic to other property owners that are impacted by the decisions of their local governments. In the case of homelessness many cities have chosen to ignore all property owners’ rights in the name of helping the homeless population.
The news gives huge coverage when a homeless camp is moved and yet very little coverage to the person who is forced to live adjacent to the property or work in a building where drug deals, overdoses, shootings, etc… occur. This huge disparity in how property owners have been treated led to the AZ law. The basic theme of proposition 312 is to enforce property rights and ensure that if they are not enforced then property owners at a very minimum can be reimbursed for their expenses.
Summary
Although the media has constantly talked about the “controversial” new law in AZ, it doesn’t appear that controversial as it is simply clarifying basic property rights and solidifying that private property owners should be compensated for impacts of homelessness based on city/state decisions.
It is unfortunate that a law like the one passed in AZ was even needed as property rights are a fundamental constitutional right that needs to be respected. Cities and states should not be able to push societal burdens onto private property owners without compensation as they continue to do in cities like Portland, Denver, San Francisco, etc…
As we can see in AZ, property owners are finally pushing back and demanding a better balance between homelessness and private property rights. Although AZ is the first state to pass legislation regarding homelessness, I can guarantee it will not be the last one as voters demand the respect of private property rights.
Additional Reading/resources
- https://azmirror.com/ballot-measures/2024-proposition-312/
- https://coloradohardmoney.com/where-do-you-want-a-homeless-camp-next-to-your-house-in-denver/
- https://econofact.org/why-has-the-us-homeless-population-been-rising
- https://www.9news.com/article/news/local/downtown-denver-businesses-strained-homeless-encampments/73-9d5285fa-f40d-4882-ab29-d45778cef16a
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