From: Jessica Love, executive director Prosperity Indiana
Indianapolis
In the article, “HPI wins court decision; county plans to appeal ruling,” The Republic outlined a legal battle involving the Bartholomew County Assessor’s Office and nonprofit Housing Partnerships Inc. (HPI). Essentially, the assessor’s decision to deny property tax exemption to HPI, starting in 2006 initiated a series of court proceedings lasting more than a decade. Ultimately, Indiana Board of Tax Review (IBTR) found in favor of HPI this summer.
As the article notes, Assessor Lew Wilson is appealing the decision, at the expense of county taxpayers. Wilson justifies this action by claiming that tax exemption for HPI would drive low-cost landlords out of business. He also suggests, when he departs office at year’s end, the new assessor will handle the case the same way. I’m compelled to respond to both claims.
This case has sparked debate about the viability of offering affordable rental housing to low-income Hoosiers, if nonprofits that wholly own and operate them are forced to pay property taxes. Truthfully, nonprofits like HPI save cities, counties and state tax dollars by preventing homelessness and reducing reliance on emergency services. Unfortunately, due to inconsistent application of existing law, property tax treatment differs by county.
In fact, many counties operate in accordance with IBTR’s assessment, understanding that these “obviously charitable acts” and their relief of governmental burden is “a public benefit sufficient to justify the loss of tax revenue.” In contrast, those operating like Bartholomew County force nonprofits into financially untenable situations. The result: nonprofits in counties with tax exemption can expand affordable housing investments, while nonprofits in counties without exemption are selling properties, diminishing the affordable housing stock. This creates a veritable game of monopoly with geographic winners and losers among vulnerable households.
What’s worse is that the logic – and, frankly, the math – is faulty. Data disproves Mr. Wilson’s notion that low-cost private landlords are impaired by these exemptions. In June, we released Out of Reach data showing that a minimum wage worker in Indiana must work 86 hours per week to afford a two-bedroom apartment at fair market rate. Further, Census data shows Indiana has a 134,998-unit deficit of rental homes that are affordable and available to extremely low-income renters. For the 40.41 percent of cost-burdened households in Bartholomew County, their needs are not sufficiently met by private market rents. Without nonprofit assistance, many families will fall through the cracks.
It was also bold of Mr. Wilson to claim that the incoming assessor will continue with his approach. Decisions that impact the well being of an entire community should be based on facts presented, not prior bias. While repaying taxes that IBTR deemed wrongfully collected is a short-term loss in the county budget, the long-term price tag of failing struggling families is far higher.
Prosperity Indiana hopes the IBTR’s decision in HPI’s case will stand and serve as a powerful precedent. We urge the incoming assessor to look at the whole equation when weighing how to proceed, so HPI can continue serving the community’s unmet needs.
