Concerned that skyrocketing property tax bills are jeopardizing the preservation and development of affordable rental housing, NAHB is urging state and local governments across the country to adopt more appropriate ways for assessing property taxes on rental apartment communities financed with Low Income Housing Tax Credits (LIHTC) and other government subsidy programs. 

“Soaring property values are pushing up property tax bills for all commercial properties owners; however, owners of tax credit and other subsidized affordable properties cannot recoup these costs by raising their rents, which is what the owners of market-rate properties do,” explained Lance Swank, chief operating officer of The Sterling Group and chairman of NAHB’s Multifamily Housing Credit Group. “Assessing properties that have rent-restricted units or that are subject to income limitations, at the same rate and in the same manner as market-rate properties is putting thousands of affordable units at risk.”

This includes a significant number of LIHTC units. The LIHTC program, which Congress created in 1987 as a funding source for low- and moderate-income housing, is the primary catalyst for affordable housing in the United States, producing almost 100,000 units annually. The program works by allowing federal tax credits to offset development costs for new construction or rehabilitation of affordable housing projects. In exchange for the credits, property owners agree to rent restrictions that are affordable to people whose incomes are 60 percent or lower than the area median.

Tax credit owners and developers worry that rising operating costs — including high tax assessments — will impact not only the properties already in service, but also the financial feasibility of all affordable housing produced with tax credits in the future.

To protect the financial viability of affordable housing properties, NAHB is urging states legislators across the country to adopt an income-approach to their tax assessment methodology. Such an approach would mean that tax assessors would be required to consider restrictions on rental income when appraising affordable housing properties. Currently only 14 states require tax assessors to use the income methodology or a similar approach when addressing the valuation of affordable properties.

 

Builders Support President's Call For Comprehensive Immigration Reform, Urge Senate To Act

NAHB applauded President Bush for speaking directly to the American people on enacting comprehensive immigration reform that would secure the nation’s borders and recognize the need to have an available labor supply that would meet housing demand and sustain economic growth in this country.

“President Bush outlined several important objectives on immigration policy that we believe the Senate should consider as it debates this important legislation,” said  Jerry Howard, executive vice president and CEO of NAHB. “These include protecting and securing our borders, establishing a guest worker program that would meet the needs of our economy, helping employers to verify the legal status of their employees and creating a legal path for foreign workers to apply for citizenship.”

Comprehensive immigration reform is critical to our country’s safety and economic health, Howard added. While the nation’s home builders continue to support strong border security measures, it is also vital that immigration legislation include a system by which immigrants can legally enter the country to work.

It is estimated that the residential construction industry will need to build 18 million new homes during the next decade, generating over 1 million new jobs in our industry.

Recognizing that foreign workers are essential to sustaining our nation’s workforce, President Bush said that a temporary worker program “would ease the financial burden on state and local governments, by replacing illegal workers with lawful taxpayers.”

In opposing amnesty, the President proposed a rational middle ground between granting an automatic path to citizenship for every illegal immigrant and a program of mass deportation.

“I believe that illegal immigrants who have roots in our country and want to stay should have to pay a meaningful penalty for breaking the law, to pay their taxes, to learn English, and to work in a job for a number of years,” Bush said. “People who meet these conditions should be able to apply for citizenship, but approval would not be automatic, and they will have to wait in line behind those who played by the rules and followed the law.”

“The President has consistently called for passage of a comprehensive immigration reform policy that addresses the future needs of the U.S. economy, as well as how to handle the millions of undocumented workers currently in the U.S.,” said Howard. “This approach is similar to legislation pending in the Senate authored by Sens. Chuck Hagel (R-Neb.) and Mel Martinez (R-Fla.).  We urge the Senate to move quickly on the Hagel-Martinez bill.”