Emotions high at program

The issue of affordable housing in Columbus evoked passions among nearly 50 people attending a community program.

A market rate comparison based on current real estate listings shows three-bedroom homes in Bartholomew County rent for $750 to $1,100 a month, people learned during the Sustained Community Dialogue session Thursday at the Doug Otto Center in Columbus.

Using a methodology developed for a 2012 United Way study of local working households, data was provided that determined a three-member family with a $36,000 annual income cannot pay more than $663 a month for rent and utilities before they find themselves struggling financially.

At the heart of Thursday’s discussion was whether Housing Partnerships Inc., a nonprofit in Columbus that has developed more than 300 affordable homes over the past 27 years, can effectively continue its work.

“We continue to struggle to keep our clients served, our properties out of foreclosure, our neighborhoods out of further decline and our agency alive,” said Mark Lindenlaub, executive director of Thrive Alliance, which operates Housing Partnerships.

The organization’s mission has been stuck since 2006, when the Bartholomew County Property Tax Board of Appeals broke years of precedent by denying property tax exemption for HPI-managed properties.

Under the guidance of then-Bartholomew County Auditor Tom Owens, HPI was informed that homes it created did not meet the definition of a charitable purpose because they did not relieve government of a burden.

Since the board decision went into effect in 2007, HPI said it has paid $313,000 to cover property tax payments. However, the nonprofit is still facing assessments of $234,000 in penalties and fees, Lindenlaub said. It has also accumulated about $100,000 in legal costs to appeal the tax board determination, the statement said.

While the matter was in appeal, the organization was denied credit by two local banks, faced delays in receiving state grants and struggled with tax liens that restricted its ability to sell property to pay off those liens, Lindenlaub said.

The legal appeal process ended in 2015 when the Indiana Supreme Court declined on a 3-2 vote to hear the organization’s case. Declared ineligible to bid on tax sale properties, HPI was forced to raise rents significantly, “making our housing unaffordable,” Lindenlaub said.

Proposed legislation in Senate Bill 559, introduced in this session of the Indiana General Assembly, would essentially reverse the 2006 decision against HPI by the local tax board, Columbus attorney Michael A. Mullett said Thursday.

Noting that HPI has federal and state income tax exemptions, as well as a state sales tax exemption, Mullett said any claim that Housing Partnerships is not a charitable purpose “is utter nonsense,” Mullett said.

Sen. Greg Walker, R-Columbus, said that if property taxes collected from homes managed by affordable housing organizations are reduced, it will also reduce taxes needed to pay for schools, busing, construction, and fire and police protection.

Job growth in the Columbus is a significant part of the affordable housing problem, Walker said.

“It’s a blessing and a curse,” Walker said. “Rents are much higher than neighboring communities. We’ve been squeezed out.”

After Walker explained that legislators must work in established definitions regarding charitable purposes, Bartholomew County Assessor Lew Wilson provided some elaboration.

When federal and state governments provide income tax breaks, they are exempting money obtained for charitable purposes, Wilson said. But in contrast, property tax exemptions are determined by how a property is used, he said.

If a church stages activities or a school teaches classes on a property, a property tax exemption is granted, Wilson said. But no charitable activity is being conducted on a family dwelling managed by HPI, so it should not be considered exempt, he said.

“If they have (the exemption), they will drive some of the lower-priced landlords out of business,” Wilson said. “Right now, those landlords have to pay income and property tax, which will average about 15 percent of their rental income.”

But Thrive Alliance volunteer and grants coordinator Tracy Heaton Di Martinez said that argument doesn’t make sense to her.

“Bartholomew is one of the very few counties in Indiana that assesses organizations like HPI,” Di Martinez said.

Although people attending the program said they felt both sides presented valid points on a complex issue, participant Jim Lowney warned that other influences likely will impact affordable housing in the future.

For example, President Donald Trump’s fiscal 2018 budget calls for a $6 billion (13 percent) reduction for the Department of Housing and Urban Development, which provides rental assistance programs.

“If all we’re doing is discussing the status quo, what’s going to happen when this hits?” Lowney asked.

A Mead Village couple, Tom and Merry Carmichael, both gave examples of how housing has become not only prohibitively expensive but often simply unavailable.

Market-rate landlords are currently getting up to $1,250 a month in rent for two- or three-bedroom homes built before WWII, Tom Carmichael said.

His wife, who moderated Thursday’s event, said her own survey shows only a handful of apartments available in the city for less than $1,000 a month.

Linda Schadenfroh of the Columbus Homeless Dependency and Resiliency Program provided a more personal perspective regarding the problem.

She told the audieence about a homeless man living in a tent earlier this year in Columbus Township who was dead for two and a half weeks before his body was discovered.

“We have lost one person a year to the elements,” Schadenfroh said. “Four years ago, I didn’t think we had this type of a problem. But it’s bigger than anyone wants to admit.”

The Sustained Community Dialogue is an ongoing series to identify obstacles and create opportunities to help economically challenged residents achieve self-sufficiency.

Senate bill on affordable housing

Senate Bill 559, which is being considered in the Indiana General Assembly, would provide a property tax exemption for an affordable rental housing property when the property does not otherwise qualify. In order to qualify for the exemption, the owner must meet criteria applied by the Internal Revenue Service in determining if an organization that provides low-income housing is considered charitable because it relieves the poor and distressed.SB 559 was authored by Sen. Douglas Eckerty, R-New Castle, and Sen. Rick Niemeyer, R-Lowell. It was referred to the Indiana House of Representatives on March 1 and to its Committee on Ways and Means on March 7.

Low-income threshold

The United Way household survival threshold for a family of four is an annual income of $46,495. In Indiana, 570,300 families — about 23 percent — meet this threshold.

Pull Quote

“We continue to struggle to keep our clients served, our properties out of foreclosure, our neighborhoods out of further decline and our agency alive.”

— Mark Lindenlaub, executive director of Thrive Alliance, which operates Housing Partnerships in Columbus

Author photo
Mark Webber is a reporter for The Republic. He can be reached at mwebber@therepublic.com or 812-379-5636.