NEW: Council Overrides Affordable Housing Veto by Taveras
Tuesday, March 04, 2014
The ordinance reaffirms State law -- and the City’s past practice up until at least 2012 -- of applying the 8% tax treatment to both new and rehabilitated, deed restricted affordable housing projects.
"The Council’s priority is to ensure the continued development of affordable housing in Providence," said Council President Michael Solomon. “Jobs, investment in our neighborhoods, and providing safe, healthy, affordable housing to our residents—these are what this ordinance is all about."
Solomon said that as a result of the ordinance, Providence community development agencies will be able to continue to rely on the eight percent tax treatment for affordable housing projects for both new and rehabilitated developments.
Multiple mayoral administrations routinely issued letters from the tax assessor which applied this tax rate to newly constructed, deed-restricted affordable housing projects, including the current administration up until at least 2012.
Majority Leader Seth Yurdin said the Council was surprised to learn of the City’s change in policy. “The Council’s understanding is that community development agencies rely on predictable property taxes, since their property deeds are restricted in the amount of rent they can charge, and the amount of income tenants can earn. Without confirmation from the City that it will apply the eight percent tax treatment to these properties, affordable housing developments like the two recently approved by Rhode Island Housing may not occur.”
Rhode Island Housing informed the Council that based upon the City’s confirmation of the eight percent tax treatment for deed-restricted affordable housing, its Board of Commissioners already approved two community revitalization developments in Providence’s West End. The two projects together represent a $23 million investment, will add 107 affordable housing units to the community, create approximately 125 construction jobs, and generate more than $75,000 annually in property tax revenue. By comparison, the same properties paid a total combined amount of less than $13,000 for the 2013 tax year.
“With the approval by RI Housing of financing for two major affordable housing developments, the positive fiscal impact of this ordinance will be significant. The improved properties—with the eight percent tax treatment applied—are projected to bring in close to six times the amount of tax revenue they did in 2013,” said Councilman David A. Salvatore, Chairman of the Special Committee on Ways and Means. “This is a win-win situation for the City and for Providence residents.”
On the Record
Councilman Aponte, Vice-Chairman of the Special Committee on Ways and Means, said, “Rather than create barriers for affordable housing developers to bring these projects to fruition, the City needs to identify opportunities to simplify the process, and lower the cost of providing affordable homes Providence residents. The Council’s ordinance keeps the City on the path of supporting affordable housing developments with a measure of predictability in operating costs.”
Aponte noted that the Ways and Means committee heard detailed and informative testimony from local community development corporations, affordable housing experts and City officials, and based on this testimony and the committee’s deliberation, members voted to approve the ordinance “thereby reaffirming state law and the City’s own past practice.”
In addition to Solomon, Aponte, Salvatore and Yurdin, members voted affirmatively for the affordable housing ordinance were: Carmen Castillo, Kevin Jackson, Wilbur W. Jennings, Jr. Sabina Matos, Bryan Principe, and Davian Sanchez.
- City Council Looks to Override Taveras Veto on Affordable Housing
- Housing Groups: Proposed Tax Changes Could Hurt Prov. Development
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