Voice Owner’s Network (VON) Program
Equal Treatment for Multi-Unit Rental Properties in Community Land Trusts
In recent years, and with the Cook County Assessor’s commitment to transparency and collaboration, there has been improved communication between local community land trusts, primarily encompassing residential and condo ownership housing, to periodically adjust valuations based on “limited equity resale” requirements. When these affordability requirements are considered, property values and taxes are reduced. A leader in making this kind of relief more systemically and predictably possible has been the quasi-governmental Chicago Community Land Trust agency, now called the Chicago Housing Trust.
Voice is in conversation with the Assessor’s Office to begin treating multi-unit rental or shared equity housing in community land trusts the same way.
Assessment Policy on Permanently Affordable Housing
In general, assessments are typically made at the “market value”, essentially the highest estimated reasonable re-sale price for the property, considering income potential or comparable sales data. Voice’s efforts are to instigate valuations as “affordable housing” documenting fully about how the property is regulated as affordable, via government funding and subsidy contracts (like HAP or HUD agreements). The Assessor has been gathering financial information i.e. RPIE System, from property owners to better understand and document the affordable housing that is in Cook County. However, many developments are affordable, but treated as market rate, including buildings that have mostly rent-subsidized tenants, or have residents that are intentional communities, or projects that have purposeful mixed-incomes.
Voice is in conversation with the Assessor’s Office, the Board of (Tax Appeals) Review and prospectively with the State Department of Revenue to have “Land Leases” or Covenants of Affordability, with requirements that run with the deeds to property, be verification of “affordable housing status” in valuation and appeals. Such covenants or leases are a qualifying component for properties to be included in the new Dovie Thurman Affordable Housing Trust.
Social Cost Accounting to Inform Valuations and Tax Appeals
Affordable housing providers know that a variety of costs is absorbed in the management, support and preservation of affordable housing properties. The labor and cost intensity of projects is much higher than for peers in private sector, market-rate housing. Many of these costs, including in-kind contributions to project or residents, resident services funded separately via non-profit or social service agencies, or added compliance costs included in property management fees (from everything from tenant selection to lease enforcement) – are not reflected in Income Statements used as a primary point of reference for property valuations and appeals. Voice has been meeting with commissioners of the Cook County Board of (Tax Appeals) Review during the last two years about supplementing evidence normally submitted for property tax appeals with social costs data that can be properly backed-up and documented, including some “unrealized revenues” that cannot be normally classified as expenses using GAAP accounting standards. Voice piloted this approach in 2022 appeals successfully. Voice has been working with the new board commissioner for District 2 (Northside), Samantha Steele, to conduct training and follow-up technical support, in tandem with Sen. Michael Simmons and representatives who are seeking to collectively support affordable housing providers in their districts.
The knowledge of using social costs in valuations and appeals can be shared by Voice more broadly as a Chicago “technical assistance” delegate agency, and the policy and procedural work will be continuous under the label of the “Social Cost Appeals Project.”
Expanded Eligibility for Charitable Tax Exempt Status
There is a way to achieve property tax exemption for properties for housing sponsor deemed “charitable” by the Illinois Department of Revenue. This is a very bureaucratic and expensive process. It is recommended primarily (but not exclusively) for projects that have HUD/HAP contracts and project based rental assistance units. Voice is pursuing such property tax exemptions on pilot properties slated for inclusion in the Dovie Thurman Affordable Housing Trust. The precedents and parameters of acceptable documentation to demonstrate “charitable use” is too narrow and Voice seeks to broaden that to include Covenants or Land Leases that are not “subordinated” in other ways. In addition, affordable properties within Tax Increment Financing (TIF) districts that utilize TIF funding, are ineligible for property tax exemptions. Given all the contradictions between original intent and actual applications of priorities, this is but one prohibition that should be set aside.
Voice’s agenda here is to expand eligibility for property tax exempt status to properties deemed service-enriched and “permanently affordable”.