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Scores of Ohio business and social service organizations are voicing opposition to a move by Senate President Matt Huffman to raise taxes on housing for the state’s poor.
A spokesman for Huffman didn’t respond to a request for comment. But a measure that Huffman placed in the state budget would require county auditors to value properties receiving federal tax credits and other subsidies at market rates without considering that they’re limited in how much rent they can charge.
The measure would dramatically increase property taxes on low-income properties and force many into foreclosure, said Hal Keller, the former executive director of the Ohio Capital Corporation for Housing, a nonprofit which has secured $5 billion in low-income housing investment in Ohio since 1989.
“We bought 250 buildings around Columbus — 200 buildings from a slumlord who was one of the worst owners — rehabbed them and now we’ve got social services, a whole variety of things; a thousand units scattered around the city,” said Keller, who now consults for the Ohio Housing Council. “If our property taxes go up, or double, we’ve got problems.”
More than 200,000 Ohio families are potentially affected by Huffman’s measure.
One hundred sixty nine organizations last week signed a letter arguing that the move is bad for people and bad for business. They range from the Ohio Association of Food Banks to the Ohio Bankers’ League.
“I’m not sure there’s any organizational support for it,” Keller said.
In a report, opponents of Huffman’s budget amendment used a hypothetical to explain how it would work.
Say you buy a housing unit that after improvements will fetch $1,600 a month in rent.
Now assume you want a federal low-income subsidy to buy and improve the property. Assume also that you have to promise that you’ll rent it to somebody earning no more than 60% of the local median income and you can’t charge more than $800 a month.
Currently, the county auditor can use the “income” approach when appraising the house for tax purposes. That means the auditor would consider the capped rent the property can generate when deciding what the property’s worth.
Under Huffman’s measure, the auditor would be required to discard that evaluation method and instead consider only what the property would generate each month if it weren’t subject to the rent caps — or $1,600.
“You’ll essentially be paying taxes on income you’ll never receive,” Keller said, explaining that money-losing landlords might initially be forced to defer maintenance and eventually into foreclosure, displacing the families the low-income housing programs are meant to help.
Keller said that after similar legislation was introduced in 2019, opponents began working with Ohio’s 88 county auditors to come up with a standard method of valuing affordable housing in Ohio. The latest amendment undercuts that process, he said.
For the 169 groups opposing the Huffman amendment, the problem is clear. It “would hinder efforts to end homelessness and expand access to safe, decent, affordable housing at a time when so many Ohioans are struggling to keep a roof over their heads.”
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