Big TAX problem for House Corps

[Tom Earp]

Originally Posted by EE-BO

Regarding the first piece of your post that I have quoted above- I think that is the ultimate solution for many chapters down the road. Buy a small piece of land, put in a level or two of parking, have common areas on floor 2 or 3, and then either bedrooms or apartments for 3-4 floors more.

As for the second part- don't sell that house if you can help it. You will never again have a property like that if you do.

The zoning between the Drag and San Antonio and going back to Rio Grande beyond 26th is mostly 60-75 feet max. height. This gives you and 4 of the major sororities the best protection you have against an increase in the speculative and appraised value of your land.

Beyond that zone is pretty much 4 solid blocks of 90-175 foot zones which is being torn up daily to make room for new apartments. So if you sell where you are now, your only shot at another piece of land is to go way to the back of West Campus along Lamar- and even back in there already there are many new high rises.

When it comes to large Greek Houses with big yards like Sigma Chi, I think within 20 years there will be 2-3 such houses left- if that- in West Campus.

It is a hard reality, but we have to fundamentally rethink our long term housing at Texas.

And it's not just about property values- but noise ordinances and privacy. A 2 story fraternity house with a fenced in yard that is surrounded by high rise condos is just going to have trouble existing. Already in the wake of a lot of citations last fall, fraternities (and other campus organizations which have been targeted) are learning that loud music and parties have to happen indoors now.

In the past, West Campus was small and expensive enough that a significant number of the residents- especially right around the fraternity houses- were either Greek or Greek-friendly. With a larger and more diverse population coming in, that is going to change.

Greeks used to essentially rule West Campus. It was our playground. That is just not the case anymore.

From A Poster who knows his stuff, heed and listen!

Land is dirt, well, dirt is getting expensive as I know and EE-OB know only to well!

If your school and many others like mine were built near campus with no problem, but, schools expand and where do they look? Not to upset the local Citizens so, then where next? Greeks!

[Texas Sig]

If your fraternity no long owns property or you are trying to buy property near campus your issues are not the same as those of us who now own property.

I think this is the Beta's situation and will be yours if you sell your property.

You won't be able to afford the purchase or the taxes that go with it.

[EE-BO]

I am not going to discuss our current situation on a message board, but the property tax issue affects us all.

As you surely have sorted out- it makes occupancy more expensive and diverts rent revenues towards taxes that need to be saved for repairs and renovations over time.

[Tom Earp]

Originally Posted by Texas Sig

If your fraternity no long owns property or you are trying to buy property near campus your issues are not the same as those of us who now own property.

I think this is the Beta's situation and will be yours if you sell your property.

You won't be able to afford the purchase or the taxes that go with it.

Well, the thing is as EE-OB said The owning of a house paying all of the bills falls on the House Corporation, of course it also falls on the chapter. They have to pay the bills to the HC?

If the House is owned, the appraisesel will still go up!

But, taxes are a small part of the toatal outlay. While it may seem small, it is still a cost.

The costs of repairs or fix ups that are need are extreemly expensive.

If you have a H C they get bunt out. They then get tired of seeing Chapters act silly and tear things up! They then leave and then the chapter wonders why?

Too will offer you to PM me!

[Texas Sig]

Divide $61,000 by your active bill payers over 9 months.
What do you get for your APO chapter?

[EE-BO]

No doubt- it is a scary cost.

For any non-UT folks reading this- it is important to note that West Campus has always been very expensive. When a fraternity buys a large house on a decent sized piece of land, it is almost always necessary to raise the entire purchase price since it is not economically feasible to carry a mortgage. This is not only true now- but it was true 20 years ago.

Guys living in the house paying rent are not paying off a mortgage- they are paying property taxes, maintenance, utilities and- sometimes- money towards a fund for periodic major renovations.

So a 400% jump in property taxes can easily double or triple the rent you would have to charge residents in a Greek house in West Campus. And good luck getting guys to pay $500-600 a month to share a bedroom and be in the house when that would be the going rate for your own room in a 2 bedroom apartment. This is what makes this whole situation scary.

Looking over your earlier posts Texas Sig- I like the idea of somehow aiming for relief under a different IRS tax setup if possible as you noted. There is legislation somewhere in Congress that could potentially allow capital donations to Greek organizations to be tax deductible. Do you see a way a positive outcome there could be used to our advantage in dealing with property tax?

I am a CPA, but not a tax expert- so I am not sure what kinds of property tax concessions, if any, are available to IRS-exempt organizations.

[grayback]

Originally Posted by EE-BO

So a 400% jump in property taxes can easily double or triple the rent you would have to charge residents in a Greek house in West Campus. And good luck getting guys to pay $500-600 a month to share a bedroom and be in the house when that would be the going rate for your own room in a 2 bedroom apartment. This is what makes this whole situation scary.

I am not so sure about that. If you divide our housing bill up over 9 months in the SAE house at SMU, we pay about 800 a month, not including meal plan. I wish we could own our own property, but as it is the school owns 51% and we own 49%, which means it is technically theirs. Police can come & go as they please, etc. etc. However, the school does take care of all the maintenance.

[Tom Earp]

Originally Posted by Texas Sig

Divide $61,000 by your active bill payers over 9 months.
What do you get for your APO chapter?

You cannot figure over a 9 month period as the cost of the house runs for 12 months.
Yes, the payment still continues and the bed cost still goes on , along with utilities, along with insurance, taxes, rent or house payments!

But, the members forget about the summer months. Do the H Corp. not have to worry about that? Hell Yes!

$$$ Oh Yes!

[EE-BO]

Tom,

Just to clarify- he is talking about something most of us do here. People living in the house get the room for 12 months, but the total cost for the year is spread over 9 months so that everything gets paid up before the guys go home for the summer. It can be very difficult to track down 30-50 rent checks each month during summer break.

[Tom Earp]

Originally Posted by EE-BO

Tom,

Just to clarify- he is talking about something most of us do here. People living in the house get the room for 12 months, but the total cost for the year is spread over 9 months so that everything gets paid up before the guys go home for the summer. It can be very difficult to track down 30-50 rent checks each month during summer break.

Excellent post and while we would love to do that, the cost of our new house would really add on costs as we are below house full.

When we get the beds full, I am sure that will change as you and I have discussed this.

Parlor fees do not cover the full costs as it would take away from so many other parts of the budget.

While one would think each school is different, I guess it really isnt in the big picture.

But, as long as Greeks have houses near campus and the school wants to buy them, we are in the squeeze.