Decatur Receives More Annexation Requests, Will Consider Large Parkwood Annexation in April

The annexation requests keep rolling in.

There are two new annexation requests on the Decatur City Commission’s agenda for this evening.

The first is a partial parcel annexation in the Parkwood neighborhood.  The second is an annexation request for seven parcels along Conway Road, including the Waldorf School at 1151 Conway Road.

Also of note, annexation-wise, it looks like the Decatur Planning Commission is scheduled to take up the larger scale annexation request of the Parkwood neighborhood at their next meeting on Tuesday, April 8th.  Their agenda is included in tonight’s Decatur City Commission meeting packet.

66 thoughts on “Decatur Receives More Annexation Requests, Will Consider Large Parkwood Annexation in April”

  1. Wow, the Parkwood neighborhood annexation sure did whip through impact analysis in record time.

  2. Interesting to look at the Zillow or Trulia history on 202 E Parkwood., which has been listed for sale repeatedly over the last couple of year before the listing was removed 3 days ago.

    1. Trulia and Zillow are not very reliable sources for that kind of information. The home was listed in September for $775K and the listing was withdrawn in November. It was listed again on January 4 for $779K and was sold in March for $700K.
      Doesn’t the city line run through that property?

      1. Looks like the sale didn’t go through. Perhaps they’ll have more luck if it’s City of Decatur schools

      2. Looks like the sale did not go through. I suppose they’ll have more luck if the home is in City of Decatur schools.

        1. No, that partial parcel was annexed in january, it is not part of this proposed annexation. And it looks like the property was sold very recently for $700K as fmfats mentions. It is on realtordotcom under sold properties if you are interested.

          1. The big question is, who the hell can afford a $700,000 house? I know I can’t. Let’s do the math, with the following assumptions:

            20% ($140,000) down payment
            Financed $560,000
            At 3.5% interest
            For 30 years

            Monthly costs would be
            $2,500 mortgage and interest
            $1,000 property taxes (total shot in the dark)
            $150 insurance (another shot in the dark)

            So just the house alone (not including utility bills) is costing them over $3,600 per month.

            I say again, who has that kind of money, and how long can Decatur sustain that level of home pricing?

            1. I think the most likely answer would be a two-earner family, with each person making around 125-150k a year. They could, by the standard rule of thumb ratio, “afford” it. WHY they would want to pay that much for a house is another question, however.

              1. Also, they may well engage in creative financing to squeeze into the home. The WSJ ran an article yesterday about how ARMs have come back big-time, especially in the jumbo market (i.e., mortgages over $417,000). It’s as if both borrowers and banks learned absolutely nothing from 2007-08.

                1. you’re assuming a bad economy is the lesson. i’m not sure that’s the only outcome that was felt by the bankers and borrowers involved. or that the jumbo mortgages to prime borrowers were the big problem. a 9% unemployment rate/crashed real estate market is not much of a disincentive to a banker who keeps his job and gets his yearly bonus. if getting to the bad economy got him bigger bonus, it’s actually an incentive.

                  1. Part of the lesson was that unconventional mortgages can be very risky for all involved. When your ARM resets to a higher rate and your payments goes way up, that’s when defaults start to happen. This time around, the banks say they are extending ARMs mostly to premium borrowers (high credit scores), so it is safer than the bubble days of liar loans and subprime. Color me skeptical. In my old-fashioned book, if you can’t afford the 30 year fixed, you can’t afford the house.

              2. What if one of the 2 people gets laid off or physically can’t work anymore? A decent rule of thumb for a mortgage my mom instilled in me, is that if one person can’t cover the mortgage payment, it’s too high for you. There will always be a segment of people this doesn’t apply to (rich), but it’s a decent rule to use if both actually have to work to pay the bills.

                1. Agreed. That’s what we base our decisions on, one income, knowing that could become a reality at any time.

            2. I think your numbers are actually low. Current mortgage rates are around 4.5%, so the payment would be a little over $2,800.00, and the taxes on a $700k house would be closer to $14k. So, the monthly payments using your numbers would be approx. $4,100.00.

              1. Yeah, I figured I was erring on the lower side of things. Your more realistic numbers are even scarier.

                Are there that many households that bring in $300,000 per year in salary, as brianc mentions? Or trust fund babies, as J_T would like to be?

                I’m with DEM. Creative financing is back, and that’s not a good thing.

                1. My recollection is that the much-loathed top 1% of incomes starts at about $350,000 per year. So families with incomes over $300k are in the top 2-3% in the nation, easily, making them relatively rare. But those families are concentrated in large cities, and within those cities they’re further concentrated in a few select areas. Decatur is one of them, so yes, relatively speaking, you’ll find a “lot” of $300k incomes around here. As ma matter of fact, within the last 2 weeks I have seen 2 Ferraris driving around Decatur. So maybe $300k is on the low end!

                  1. Well we also have loads of finance/business, law and medical academics who work just to the north of Decatur — those salaries are often over $200,000.

            3. Meanwhile, NPR is going to have a piece on how most Americans are not saving enough to get the retirement they say they want. And given the poor math skills of most high school and college graduates for the past several decades (don’t get me started….our international baccalaureate students not able to do arithmetic operations without a device that requires constant charging and I don’t mean the brain), it’s not surprising that current generations are not planning well, but rather are going on the assumption that their current state of entitlement will result in a future state of entitlement.

              1. There is still an attitude, though arguably not as prevalent as 7 years ago, that people should borrow as much as they are told they can “afford”, whether it be for a car (behold, the 72 and even 84 month car loan), an engagement ring and wedding (something I can’t even imagine borrowing money for, and don’t even get me started on those so-called rules-of-thumb about how much one should spend on a ring), or a house (seems people always get steered toward houses that are just a bit more than the mortgage they “qualify” for).
                What these formulas of “affordability” never seem to include is the need for a significant portion of remaining income that needs to go to retirement savings.
                Oh, and let’s not forget the loans people take out with little regard for affordability: student loans.

                1. Banking household here (though no one in real estate). While realtors are the culprits in pushing people into more expensive houses (for the commission), banks do encourage you in the pre-qualification stage. A household with ok to great credit can prequalify for a mortgage up to 3 times salary. The $700k example would mean total income of $233k, which a certain amount of families can afford. The banks make money from fees and interest payments. Regarding affordability, I agree, hence our moderate, affordable house bought at the bottom of the market. But keeping up with the Jonses is heavily entrenched. House rich and cash poor.

                  ARM’s have been back for 2 years or so and are currently marketed around 1-1.25% lower than 30 year fixed. Mortgage news daily is a good site to watch for trends. Another product that’s come back swiftly is bundling. Right now it’s in the rental sector (private equity buying tons of foreclosures), but will likely be reintroduced on the mortgage side. Google Wells Fargo for the amount they own. Jumbo mortgages are a separate world, but can be watched as an indicator of a local market’s health. When they take off, banks are more willing to lend. Miami is a good example.

                  Contrary to popular belief, most bankers don’t make $300k or receive 6 figure bonuses. The investment side (Capital Markets, etc) does and is increasing again with confidence, but they’re also the main thing keeping banks alive nowadays and allow banks to afford making loans at low rates. I led the branch realignment team in a large merger a few years back; branches are going the way of the dodo bird due to technology. There has been a lot of consolidation to the tune of more than 500k jobs the last 10 years, many lower end (call centers, ops centers, etc.)

                  I’m 33 and, therefore, defined as a Millennial. There are many different factors, but I kind of fear for many in my generation. Aside from student debt, not being able to find jobs (Baby Boomers still working, transitioning job sectors, etc), and older generations instilling the “I got mine” attitude, I don’t get the impression that a lot of them know how to save money and are drifting. Coupled with the fact that Americans in general don’t seem to want to pay for anything, it’s going to be interesting.

                  There are tons of trust fund babies (many international), though that will die out in the US because banks don’t make money from trusts and have been phasing out the product for years.

                  1. Re trust funds: If they die out, won’t the super-rich find other ways to transfer their assets to others without paying much tax?

                    1. No, because over their lifetimes they’ve almost certainly paid many millions in taxes. If you mean they might find ways to avoid yet another confiscatory tax at death, then yes, they almost certainly will. And not necessarily through what we normally consider loopholes. Remember that Warren Buffet will avoid any estate tax by donating the vast bulk of his wealth to a foundation established and run by the richest person on Earth, Bill Gates.

                    2. They already do via private wealth managers, which every large bank and investment firm has. It’s a lucrative niche.

                  2. “don’t get the impression that a lot of them (Millienials) know how to save money and are drifting”

                    On the other hand, there does seem to be less of a tendency to go for the “toys in the garage”, i.e. flashy big ticket purchases like cars and boats. Though some would say that’s simply because they can’t afford it, I think there’s more to the story than that. For example, among millennials there definitely seems (from surveys I’ve seen) to be less interest in spending much money on cars. So maybe they will turn out to be more frugal than their parents.

                    1. That’s true. The common thread seems to be a prioritization of personal freedom and experiences over material goods, and that’s being manifested in things like unconventional/entrepreneurial career pursuits, preference for smaller rental housing in walkable locations, disinterest in cars, etc.

                      Whether these interests are tied to their immediate economic prospects or to deeper shared experiences remains to be seen. But it’s definitely a measurable phenomenon and the choices these young folks are making are having significant impacts on the redevelopment of our cities.

              2. It’s not just the “kids these days.” There was a report a few years ago that pre-2008, only a crazily small number of those 50+ had any retirement savings. People have gone from assuming social security will supplement their retirement to social security is their retirement. Not a good plan.

            4. You’re assuming that people have to “earn’ the money to pay for it. You’d be amazed at the number of trust fund babies and people with other family money around here for whom that analysis is irrelevant. [Disclosure: I am not one of them. Damnit.]

              1. So not only did I forget to marry rich, I forgot to be born rich too. Well, come the revolution….

                1. ….speaking of which is a reason to keep income disparities from getting too great, whether your motive be idealism or self-preservation. Downwardly mobile folks are not happy campers. We don’t have religions, social class structures, racism, or dress codes anymore to keep people in their place or placated. History shows us that even veterans will march on Washington if they don’t think they are getting a fair deal.

  3. From a purely what’s in it for me viewpoint – how do I (a current CoD homeowner) benefit from annexation?

    1. The analysis is simple, until it isn’t. That is, certain annexed property will bring in a predictable amount of tax revenue, based on current assessments. Since the same tax assessor (DeKalb County’s) performs the appraisal, the taxable value is a known quantity. This is aside from the high likelihood that residential property annexed into Decatur will increase in value over time.

      This tax revenue can be contrasted with the increaed cost of services. Because the highest-cost service we have is schools, the number of school-aged kids in the annexed area is the main determinant of extra cost. If that number is low, you, a current CoD homeowner, theoretically get the commensurate tax relief. Though city services, like trash collection, also rise in cost, there are some economies of scale that mitigate the impact.

      Where things are not simple is the point at which an additional house and/or school-aged kids make it necessary to hire the extra teacher or build the extra classroom. Speaking in classic economic terms, this is the point of diminishing returns. But it is not a rigid calculation.

      Similar break-points occur when considering at what point a new garbage collector or truck is needed, but school costs always drive the calculation, because that is by far our most expensive public service.

      A final comment from experience–new tax revenue like this hardly ever gives existing homeowners tax relief, but it does tend to reduce the rate of taxation growth for a period of time.

      1. The other thing to think about is whether many of the homes that currently do not have children will turn over to families that do once those homes belong to our popular school district. There’s a lot of folks actively seeking housing in COD. I get regular emails from realtor friends who wonder if we’re ready yet to downsize. A higher proportion of families with children in the neighborhood will change the relationship of tax-revenue to school costs. Hence, one of my favorite Decatur Metro monikers–Revenue-Neutral Household.

        I’m not necessarily against this annexation; this neighborhood has always felt to me like it should be in COD, rather than Druid Hills. I just think that we should count on more CSD students whenever there’s an annexation. Whether’s it’s just a few students or a lot more, it’s not status quo. A lot of “few” eventually adds up to “a lot more”.

        1. I agree. This neighborhood seems totally logical for annexation. Decatur Police have to drive though a short section of unincorporated DeKalb to reconnect with city streets.

          A favorite story from history (and totally believeable, though I do not have personal knowledge) is about the house on the SE corner of Upland at East Parkwood. The city-limit line bisects that house, and I often heard about a family who lived there being sure their daughter’s bedroom was the one in the NE corner, since that is the only bedroom in the house that lies inside the city, and they wanted her to go to city schools.

          Whether or not that story is true, having property like that, where the dwelling is not totally within the city or within the unincorporated county, is kind of ridiculous. And there are other properties around where “squaring off the corners” seems to be a logical, and long overdue, action to take.

  4. Annexation is necessary , without annexation Decatur will be surrounded by other cities ,
    with no future annexation possible. To remain a vibrant city you need to increase Decatur’s population

    1. “without annexation Decatur will be surrounded by other cities ,with no future annexation possible.”

      There’s at least some reprieve on that, in DeKalb anyway. Just heard on WABE that cityhood bills are dead for this year.

    2. Annexation is necessary because without annexation annexation might be impossible in the future? I’m not following the logic.

        1. That addresses the timing, but doesn’t make any case for why it’s beneficial, let alone necessary.

          “Here, take this pill.”
          “It’s the last one.”

          1. The County is the dying parent and we the cities and proposed cities are the kids. There’ll be spoils inherent in DeKalb’s demise and it’s up to us: We can fight and connive and bully our way to getting the choice assets or we can equitably work it out to the best possible level of mutual agreement. But either way, some pretty good stuff’s gonna get divvied up.

            If Decatur leadership can navigate these previously uncharted waters in a morally-defensible way, while still working to secure the best possible long-term prospects for the city, they’ll have my support.

    3. That makes absolutely no sense. We are going to be surrounded by other cities regardless of whether we annex, and the only question is where will the city limits end. That doesn’t change the fact that residential annexation will be revenue negative for CoD.

      1. Residential annexation is not inherently revenue negative. There are many revenue positive single family homes in Decatur. Even large chunks of a neighborhood can be positive.

        The rub is that single family homes carry the highest likelihood of becoming negative because they are the most attractive housing type for families with children. That possibility alone can be a reason for refusing annexation. It’s just important, from a policy perspective, to be clear about the definite benefits and/or impacts vs. the speculative ones.

        1. can we just ban kids in the city limits? where’s J_T when you need him? is trackside open this early?

    1. I think it depends on how their business is set up, i.e. non-profit status. But I think generally, yes, they pay commercial property taxes.

  5. According to the state of Georgia:

    Limited exemptions from the payment of Georgia’s sales and use tax are available for qualifying nonprofit organizations including:

    • Nonprofit private schools any combination of grades 1-12

    Even more contentious in Georgia is the private school scholarship tax credit. Plenty of newspapers have covered it in the last year.

    1. That’s sales tax though. I checked a few private schools’ property tax bills around the metro area and some had amounts owed/paid and some did not. It depends.

  6. What I do not understand is the speed with which this is being decided. Decatur’s crisis of the moment is really about students. Not dollars. Decatur’s desirability is not going to go away anytime soon, especially considering the current state of greater Atlanta school systems. The commission can afford to take all the time it needs to decide issues like this. And, I might add, get as much feedback from their constituents as possible.

    1. For some Decatur residents, the crisis of the moment most certainly is about dollars. In any case, annexation is a zero-sum game with a clock on it. (See Scott’s more eloquent, more patient remarks above.)

  7. A few factors worth rementioning in annexation conversations: according to the CoD site, our tax revenues are split 85% residential, 15% commercial. The average, healthy portfolio is 60/40. Decatur currently does not have enough commercial land to rebalance that portfolio. Period. Even the East Decatur-Avondale Station development doesn’t call for that much commercial space. About half of our property taxes go to the charter school system and only approx. 25% of Decatur households have kids in the school system. If these numbers have been updated, please correct me. The schools are pushing to expand, which requires money and space. There are other long-term strategy implications for annexation, like controlling the type of growth around you, but ultimately, in our current scenario, this about funding large projects without major property tax increases.

    Annexation, both residential and commercial, should definitely be on a case by case basis. I understand Parkwood’s reasons for wanting in, including city limits running through a house and being hit by many car break-ins over the last year (source: Nation of Neighbors). If ultimately, they’re going to expand the schools anyway, what’s the real reason to push back? If the number of total households in strictly residential annexations adding kids to the system remains at 25% or lower, I could see more people accepting them.

    Re: cityhood bills, it seems very likely to happen in the next 2 years. The last 2 revised maps show that existing cities like Decatur and Avondale have come to a gentlemen’s agreement about how to divvy up the coveted commercial land. They’ll probably regroup and come out as a unified force next year or so. Decatur would now have claim to Suburban Plaza and the Publix area. Yes, there is some residential involved, but nothing’s perfect. As a CoD resident, I welcome it for a variety of long-term reasons, yes, including not increasing property taxes on my no kid household. Change is inherent and necessary for cities, but we aren’t losing anything. The square, downtown Oakhurst, etc will still be there and a focal point. I can certainly understand why residents of those neighborhoods would hesitate, but it seems they’ll have to pick the lesser of the evils or move. Otherwise, Decatur’s only option for commercial annexation (read tax relief) is south to Memorial.

    We can’t control everything and resisting change for the sake of it (which I get the impression from some in recent proposals) leads to serious negative implications down the road.

    1. One thing that might skew the numbers, Peter. At least the last time this came up, it was suggested/determined that centrally managed apartment–based residential (as opposed to condos) would be taxed as commercial enterprises. So that has the potential to affect the balance considerably more than whatever street-level retail is envisioned in our redevelopment plans. Had you considered this?

      1. That could be helpful, if passed, for existing apartment building projects being built in downtown and Avondale station. That would require a lot of apartments to add 25% to commercial tax revenues, though. If you have numbers, I’d be interested in their forecasted impact, but I don’t see it. Also, if people become resistant to actual commercial development and start suggesting building apartment buildings as a tax revenue replacement, you then run into another scenario where the bigger the building, the better, which will significantly increase the population (fears of cramped schools, burdened city services, etc) and which many will resist for a variety of reasons.

    2. Without drawing some loopy boundary, just how much residential would have to go along with Suburban Plaza? I know this was discussed a while back, but I can’t remember the numbers. Also, how might that affect the redevelopment there?

      1. Annexation would have no effect on Selig’s already approved redevelopment plans. Should Selig want to do something different in the future, their plans would be reviewed by whatever government is in charge and any needed variances would have to go through the same processes as any other developers’ plans.

        Not directed at you at all, Brian, but this seems a good time to clear something up: there’s this odd notion by some folks that governments can tell commercial property owners who their tenants can be. Unless there’s something on the books restricting a certain type of business, that’s pretty much not the case. (Well, they could try but the government would likely find themselves in court.)

        1. I was actually thinking more about whether Walmart would choose to walk away if annexed or if they would not care. And I agree about not prohibiting businesses that comply with zoning.

          1. Walmart’s a signed tenant and ready and rarin’ to go when Selig is. What Walmart’s opinion is of City of Decatur’s annexation attempts, I could not say. I could certainly make a strong guess, though..!!. ;0)

      2. Brian: according to the DM post: Decatur: Meet the proposed annexation areas from 12/5/12, the 2 considered areas are 97% and 62% commercial and would add 511 residents to the city, 42 of whom are under 16 and eligible for CSD schools. Those were 2012 numbers and maybe not completely apples to canteloupes, so no idea as of now, but best I could find. The revenues exceeded the expenditures for both areas in that post and Wal-Mart was already a consideration at that point, but again, those were 2012 numbers.

        Deanne is right, Wal-Mart smells money and will not be dissuaded, regardless of who controls the land. They’ll make a mint, which their financial model can validate. As a former cart guy and cashier at Sam’s Club (my father also worked claims for 7 years), I have a defined opinion, but, to quote Taoism, we’ll see. Re: that strip mall in general, I think people would gain more benefit &/or control by pushing for the Clifton corridor or other transit than trying to influence which brands open up shop there.

  8. Wondering why Decatur residents love the fact that Parkwood wants to be annexed? When amy mention of neighborhoods like Forrest Hills want in, there is an uproar by DM bloggers. Just wondering.

    1. It’s not love & kisses across the board. Check the archive for the lengthy and lively discussion about this a few weeks ago. You’ll see there are plenty of folks whose hair catches on fire whenever they hear of even one house with kids (or with the potential to attract kids) being brought into Decatur’s school orbit.

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