The Kenai Peninsula Borough Assembly unanimously voted down an ordinance that would authorize the assessor to assess a low-income housing tax credit property based on restricted rents. Per state statute, the assessor is required to value low-income housing tax credit properties existing, based on the actual income derived from the property, which can result in a value that is less than the ‘full and true value’ if the property were unencumbered.
Borough Mayor Charlie Pierce said that the assessing department received an application from East End Cottages in Homer requesting that the assessor value their low-income housing tax credit property based on the restricted rents derived from the property. Low-income housing tax credit projects in the state are created when the property owner enters into an agreement with the Alaska Housing Finance Corporation, under which the owner agrees to restricted rents for qualifying low-income tenants in exchange for an allocation of income tax credits.
Previously, all other post-January 1, 2001 low-income house tax credit projects that have applied for a determination to be assessed based on the restricted rental income method have been denied.
Assemblyman Brent Johnson communicated as much to the assembly:
“In the past, we have always, the Borough has always valued these type of properties at full and complete value and I’m in favor of doing that again now on this one. A no vote will treat this property the same way we have treated these properties in the past, it would be a no vote.”
Alaska Statute requires properties that first qualified as low-income housing tax credit projects before January 1, 2001 to be valued based on the actual income derived from the restricted rents without consideration of the value of the tax credits.
Six other times across the Kenai Peninsula, according to corresponding memos, have an application been denied for that reason. There are presently no low-income housing tax credit properties within the Kenai Peninsula Borough that are being valued based upon the restricted rent income method, according to Mayor Pierce.
