No University Terrace Overlay

University Terrace – Neighborhood Overlay: Myths & Realities

1. What’s happening in our neighborhood? Neighborhood Stabilization Overlay

There has been a call to action by a few residents in our neighborhood to move the Dallas City Council to hear and vote on a “re-zoning issue,” which is a voluntary limitation to your rights as a property owner in the University Terrace neighborhood.

• This is over and above the existing deed restrictions.
• This is over and above the existing zoning restrictions

If this passes, these restrictions CANNOT be undone. You WILL BE STUCK with whatever effect they have on the value of your home and future generations of homeowners in University Terrace.

This is a tremendously important issue as it affects the value and marketability of your home; your largest asset. Many people don’t completely understand what an overlay will do, or have only heard one side. It is in your interest to educate yourself and fully understand what is being discussed.

2. What is an overlay? Legal Zoning Restriction On you Deed

An overlay is a zoning restriction applied over the existing zoning restrictions. It limits what you can do with your property and has the force of law behind it.

Simply put, an overlay is a SURRENDER of some of your property rights.

The City of Dallas describes this ordinance on their website at
http://www.dallascityhall.com/development_services/neighborhood_overlay.html

The ordinance can be found at http://www.dallascityhall.com/pdf/DevSvcs/Ordinance_26161.pdf

An overlay can regulate how close to the boundary of your lot your house or any structure can be placed. It can also regulate whether your garage is attached or detached, where your garage is placed relative to your house and how you can enter your garage. However, in this instance the NSO revolves around regulating the height of any structure built on your lot through a complicated mechanism called the "Height Plane".

Once applied, an overlay cannot be removed.

It may be possible to create a replacement overlay with fewer restrictions, but only after a two year waiting period. This would require repeating the entire application process including forming a committee, the petition, the public meetings, the balloting, the zoning hearing and the council hearing. Even then it would still need the city council to approve the replacement.

3. How will this affect the value of my home? Unknown!!!

The truth is that nobody knows, but many real estate professionals have weighed-in on the subject:

Ms. Tama Cole of Briggs-Freeman states: “,,,When you buy property, much like a car, the house immediately begins to depreciate because of age. The only appreciation is in the land. If the land is restricted, making it hard for builders to construct new houses and make a profit, then your land will not appreciate. ,,,”

All experts agree, this type of ordinance is too new to provide any meaningful statistics. However, the overlay ordinance has no procedure for withdrawal or reversal. This means that if it succeeds, whatever effect it does have on the value of your home, you will have no way of stopping it other than starting an entirely new overlay petition. Therefore; logically, what is likely to happen?

If a buyer has a choice between two similar houses and one has a restriction placed on it, that buyer knows that if he buys the house with the restriction, he will have bought the house that is more difficult to sell. It is logical to assume that he will either offer a lower price to offset the restriction or simply buy the unrestricted house.

Simply put, the market value of the house is a function of the ability to sell that house. If it becomes more difficult to sell a house, its value will go down.

Read what the Dallas Central Appraisal District says about calculating Fair Market Value:

The buyer will also be looking at different neighborhoods and comparing them. He will seek out vibrant ones and avoid stagnant ones because stagnation is the start of decline.
• Would YOU buy a house with extra restrictions placed on it?
• Would YOU move into an area where your neighbors knew it didn't make sense to invest money in home improvements?
• Would YOU move into an area of old houses that were unlikely to be updated?
If you wouldn't do these things, then why would a potential buyer do them? It's logical therefore to assume that if this overlay gets passed, your house will lose value, it will become difficult to sell and you will see the neighborhood start to deteriorate around you.

It's getting more and more difficult to sell houses, mortgage lenders are tightening their requirements, housing starts are down, foreclosures are up, prices are flattening or falling, so why would you want to make your position in the market any more difficult than it already is!

4. Won’t this help keep my taxes down? Maybe, but not the way you would hope!

In fact, if you are an owner/occupant your house and are claiming a homestead exemption your taxes are already limited in the amount they can go up.

If you are 65 or over and are claiming the Over 65 exemption, the DISD portion of your property taxes (by far the largest part of your tax bill) cannot be increased.

The Texas Property Tax Code provides that the maximum increase in a home owner's assessed value is 10% per year times the number of years since the property has been appraised. If you protest your assessment, the property is considered to have been reappraised. In short, protesting your Property Tax Assessment every year will ensure that your taxable value will only rise by a maximum of 10% every year. No overlay necessary.

Remember: Taxes are not an issue in whether or not an overlay is beneficial for our neighborhood. The only way an overlay can lower your taxes is by drastically reducing the value of your property.

5. What should I do? Act as you believe by voicing your position.

PLEASE take the position that YOU believe will be the best for your situation! But On/around April 20th, homeowners (on Dallas County Tax records) will be asked to return a Green Ballot to the City Planning Commission signifying your support/rejection of this proposal. If you don’t respond, you are allowing a minority to determine your future rights.

Please understand that this vote is not about “McMansions,” as our current set-back and existing deed restrictions prohibit the dreaded “Zero-lot”/”Garden-style” homes that tower over their neighbor. It is also not about saving our trees. Again, the existing set-backs protect the trees that were planted in accordance with the zoning.

Rather, this is an attempt to keep the University Terrace neighborhood “status-quo.” Supporters of the NSO state they are not attempting to limit growth and that additions can be made to your home. But the reality is that many of our foundations can’t support cost-effective vertical growth and first-floor extensions would consume the little backyards that our families and children presently enjoy.

The reality is that no successful builder will be interested in demolishing the existing structure and rebuild it to the standards of the 1950’s budget-Fox & Jacobs specifications. Therefore, our neighborhood will be locked in the 1950’s with no hope of revitalization, growth or improving the tax base.