Well, kinda, mostly.
Yesterday afternoon, news spread throughout the community that the State was going to fix the property tax exemption in the omnibus bill, the Mayor congratulated himself and others before it even passed Joint Finance, let alone the legislature, and last night the omnibus package passed. Since its been less than 2 hours since it passed, I don’t have a detailed analysis of what it means, but as of yesterday afternoon, an analysis, by those smarter and paying closer attention than me, resulted in these comments:
A. The motion is okay for low-income housing, but not as good as hoped. For low-income, it’s basically the vetoed language except for #1 below and rent can be used for any purpose.
1. The acreage limitation is increased from 10 to 30 acres, but extended to all low-income property under common control. This was the basic issue in the Future Madison case. This seems to change the law to side with the city’s position and to reverse the court decision in the Attic Angel’s Prairie Point case. So, if a corporation has several subsidiaries under common control, together they could own up to 30 acres instead of each one being able to own 30 acres. This won’t affect most nonprofits, except to the extent some organizations choose to consolidate as MDC and MMHA did. Two separate organizations could own 60 acres, while one consolidated one could only own 30 acres.
2. Market rate units in a mixed income housing project will be fully taxed, instead of exempt as they have been in the past. This does not apply to WHEDA financed housing that exists today if owned by a nonprofit. It is unclear what will happen if the project is owned by an LLC that is wholly owned by a nonprofit.
3. To be exempt, single family houses and condominiums must be occupied by households at or below 60% county median income, instead of the 80% generally applicable in the past.
4. If several condominium units are owned by a nonprofit in a larger condominium project, apparently the units won’t be considered together as a single project. So, none could be occupied by households above 60%. If a project consists of 2 buildings on separate parcels, generally they will apparently be considered as 2 separate projects instead of as one.
5. Annual reports must be filed with the assessor stating how many units in a project are low-income & providing other information. There’s a fine if the report is not filed.
B. Property that is not residential is not addressed (Social Justice Center), nor is housing authority owned rental property.
C. The jackpot (as compared to the vetoed language) goes to elderly housing that is not low-income.
a. 30 acres exempt, but no expansion to property under common control.
b. If licensed, certified, or registered as a care and service residential facility, housing for people with SSI disability or hospice, then rent can be used for any purpose.. My understanding is that this covers most of the projects for the wealthy.
c. No requirement for annual reporting.
d. If the unit is of a very high value, then taxed. (Simplified, units in excess of 160% of the average value of residential property in the county.) The formula is long, but appears to allow exemption for most units. If 50% of the units are exempt, then all common space is exempt. If less than 50% of the units are exempt, then a percentage of the common space taxed.
D. Retroactively effective for low-income to 1/1/09. For elderly, effective 1/1/10.
It doesn’t appear that this was discussed at all. So I think the above analysis stands, tho it was done on the fly. I guess the question now is, who will the City tax? And what do we do so that they don’t take more cases to court to further whittle away at these protections?
