Advocates and developers hope to mitigate the impact of a new Ohio law that affects affordable housing
Housing advocates and developers say they’re working with Ohio officials to correct problems in a bill Gov. Mike DeWine recently signed into law. Amendments to the bill could mean less funding and increased costs for affordable housing developments, and could make millions of dollars in rent assistance impossible to distribute.
Tax incentives for housing projects
One change prevents a housing project from getting both federal Low Income Housing Tax Credits and state Historic Tax Credits. It’s possible the rule is retroactive, which could halt some projects already in progress.
“We have spoken to staff at the Statehouse and they have assured us that there is not a retroactive clause to the provision,” Amy Riegel, executive director of the Coalition on Homelessness and Housing in Ohio, told WVXU. “But I think this is a gray area and being able to definitively tell developers and communities which side they landed on is imperative at this point.”
If the law is retroactive, developers in Cincinnati could lose more than $1.3 million in state Historic Tax Credits on projects already under construction.
Either way, some developers say losing the ability to stack LIHTC and historic credits will be a big barrier to future projects. And, Riegel says, it takes away one of the incentives for communities to revitalize a building with historic value.
DeWine announced last week he wants to establish a state version of LIHTC that will make up for the loss.
CEO of The Model Group Bobby Maly says it's not an ideal change, but, “In my opinion, the ability to pair the state historic credit with LIHTC really is not as important as having a [state] sustainable workforce and affordable housing tax credit.”
Riegel isn’t as optimistic — she says the state needs more funding, which should still include historic tax credits.
“We need to not take options off the table, but keep those options on the table and bring more options,” she said.
Property valuation for affordable housing
Another concern in Ohio House Bill 45 is a change allowing county auditors to change the way they determine property value for affordable housing projects, which could mean a much bigger tax bill.
Previously, the property value would be determined based on the development's actual income. The recent change allows a county auditor to assess the value of the property as if rent restrictions were not in place.
Riegel says some state lawmakers have tried to make this change in the past but faced pushback from hundreds of organizations across the state. And she says it contradicts a recent compromise between the Ohio Housing Council and the County Auditors Association of Ohio.
The Ohio Supreme Court has ruled on this issue in the past, and Riegel says she’s hopeful that means it won’t be enforced.
“Yet this bill still included the unconstitutional methodologies, creating an appearance to county auditors that those are still ways that they could conduct business,” Riegel said. “There is a chance that it will once again get wrapped up in court, and that we'll just spend a lot of people's time and money and energy on an issue that's already been settled.”
Maly is also confident the Supreme Court’s previous rulings will take precedence over the new law.
“I think the onus is going to be on the development community to communicate proactively with auditors to make sure that they're using the income approach appropriately,” he said.
Deadline for new rental assistance
Riegel says COHHIO is also communicating with state lawmakers about new funding for rental assistance.
HB 45 included $161 million in new rental assistance, but they said it could only be used for late payments incurred through the end of 2021.
“We talked to the Community Action Agencies around the state, and they confirmed that they did not have any applications sitting on their desks at this time that would have qualified for these funds,” Riegel said. “So it made it, for all intents and purposes, useless in the state of Ohio.”
Riegel says she’s hopeful leaders in the House and Senate will work to remove that language with a new bill in the next the General Assembly session, which begins Jan. 25.
“So that we can still spend those dollars and help individuals facing eviction or who have seen significant increases in their rent over the last year and are just struggling to make ends meet,” she said.