Should A Hurricane Tax Zone Benefit Luxury Condos?
Filed under: Real Estate Developments
A luxury condo project in Galveston, Texas is causing controversy. Last year we mentioned the Palisade Palms project, a pair of new towers on the beach that are selling for premium prices up to over $1.5 million. The project has sold well but as the Houston Chronicle reports, some want to know why the developers of the project were able to take advantage of the Tax Increment Reinvestment Zones (TIRZ) meant to bring jobs to the area after Hurricane Ike. Critics say that the TIRZ laws were meant to help the poor and not provide incentives for luxury businesses.
The article in the Chronicle lays out the arguments with strong words on both sides. Greg Leroy, the head of Good Jobs First, a Washington, D.C., group that promotes corporate accountability calls using zones to build luxury homes "just another extreme example of the perversion of the program." Also two developers chair TIRZ boards that oversee the expenditure of tax money on their developments and control a majority on their board, a situation that one of the Houston Chronicle commenters referred to as the fox guarding the henhouse. Construction of luxury condo projects does bring money to an area and upscale buyers do stimulate the local economy but should the developers be able to take advantage of these types of programs to create properties that serve the upper tier of the community?
