Action Alert: Indiana General Assembly Continues Efforts to Increase Property Taxes on Affordable Housing
On February 21, 2012, the Senate Tax and Fiscal Policy Committee amended House Bill (HB) 1072 to include language requiring local assessors to include the value of Section 42 low income housing tax credits (LIHTC) in the property assessment of affordable housing developments.
Your immediate action is required to protect the development of affordable housing in Indiana. Additional updates on this issue are provided below the ACTION MESSAGE!
Take Action Now!
The Indiana Association for Community Economic Development (IACED) is encouraging all members to contact their State Senators in the Indiana General Assembly and oppose the inserted language in HB 1072 requiring inclusion of the low income housing tax credits in the property assessment.
Use the following link to find your State Senators phone and/or email address: http://district.iga.in.gov/DistrictLookup
If your State Senator is any of the following, they are members of the Senate Tax and Fiscal Policy Committee: Hershman, Mishler, Buck, Delph, Head, Holdman, Kenley, Landske, Walker, Skinner, Breaux, Broden, or Randolph, IACED member outreach to them is even more important.
(Senator) ____________, thank you for speaking with me. I am contacting you to OPPOSE the language inserted in House Bill 1072 and any efforts to repeal existing state law and include the value of low income housing tax credits in determining assessed value.
The result of undoing the current settled law on this issue will be to invite numerous assessment appeals and litigation thereby jeopardizing millions of dollars of investment in Indiana. The Indiana General Assembly in 2004 created the consistency needed for private equity and lenders to finance thousands of affordable housing units for Hoosiers with the current IC 6-1.1-4-40.
Current law makes sense because of the unique characteristics of low income tax credit property including that the properties: relieve government burden by increasing supply of safe, decent, affordable housing, have tenant income level restrictions and rents restricted by the federal government, and have higher operating costs due to federal regulatory compliance and higher intake costs than typical market-rate properties.
The development of affordable housing is important to providing quality shelter and supporting the Indiana economy. In Indiana, the low income housing tax credit program is a proven job producer and workhorse program for creating affordable housing. Since 2006, the Indiana Housing and Community Development Authority has awarded allocations for 12,568 affordable rental housing units. In 2011, those awards created 1,620 units.
According to a 2010 study by the National Association of Home Builders, the one-year local impact of building 100 units of LIHTC-financed housing results in 122 jobs related to the construction of the property. Moreover, every 100 units of LIHTC property produces $7.9 million in local income tax revenue and $827,000 in property tax revenue for local governments. It also results in an additional 30 jobs on an ongoing basis. In Indiana this is an annual impact of 15,322 construction jobs.
The inserted language in HB 1072 will repeal existing state law which presently prohibits inclusion of the value of federal low income income tax credits for the purpose of determining assessed value. Repealing this provision will increase the cost of providing affordable housing in Indiana and put low-income families at risk.
In additional updates, last week IACED Executive Director Andy Fraizer and numerous IACED members and allies testified before the Indiana House Ways and Means Committee on Senate Bill 344 (SB). At this hearing, IACED presented a letter signed by more than 50 members and supporters opposing SECTION 3 of SB 344 with the language requiring the inclusion of the tax credit value. Read this letter on the IACED blog here.
Your advocacy is working. The House Ways and Means Committee removed SECTION 3 from SB 344 on February 22, 2012.