City’s Revitalization Plan: Squeeze Out Rentals

landlord helpA plan to revitalize aging neighborhoods in Tupelo, Mississippi– the birthplace of Elvis, has landlords there all shook up.

Central to the controversy are  findings by the Community Development Foundation, which has been instrumental in developing the Tupelo Neighborhood Reinvestment Plan.  The CDF is recommending that the city reduce rental housing by at least 10% if it wants to lower crime, and expand its property tax base, according to a report by

The reasons given by the CDF for reducing rentals include a finding that once rental properties reach 25% or so of available housing, crime statistics go up,  and the flight of middle class families to the suburbs lowers the property tax base.  Tupelo rental market already surpasses 25%.
To discourage rental property owners from doing business in Tupelo, the city is pushing forward a measure that could sharply escalate licensing fees, and require all rental property owners to post a bond to cover future infractions.  That may not sound disturbing, until you see the math.
The goal is to generate around $1 million in city revenues. Some of that money will go to beef up code enforcement, but some will go to pay for the actual revitalization efforts in neighborhoods.  Individual rental property owners are looking at increases from the current $10 per structure to as much as $240 per structure. They also would be required to post bonds of $10,000 for single-family houses, and as much as $100,000 for owners of large complexes.
Landlords fear the only way to cover the increased costs will be to increase rents.
The head of CDF has told the city that’s because landlords have it too good, according to reports.
Others in the community are not so convinced.  One suggestion is for the city to refine the plans so that only those landlords who are in violation of building codes have to pay the higher fees.  Otherwise, the city is throwing the baby out with the bath water.
Another suggestion is hiring contract inspectors rather than full-time workers to cut down on the city’s costs.  Some have raised suspicions that the overall logic is flawed, because rental property owners pay property taxes just like middle class homeowners, so there should not be a reduction in the property tax base if a property is converted to a rental.
The plan may exempt Section 8 rentals. One councilman expressed concerns that by exempting Section 8 and forcing significant rent increases on all others, the city will soon have defeated its purpose by driving out the middle class families and creating even more rentals, or worse–vacant properties.
While the council members hash it out, those who oppose the rules don’t want anything to be rammed through without careful consideration. The city has opened the subject to public debate over the next several weeks.
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