Rent-restricted property appraisal changes advanced

Senators gave first-round approval March 18 to a bill that would adjust the property appraisal calculation for rent-restricted housing.

LB356, introduced by Omaha Sen. Burke Harr, would require county assessors to use an income approach calculation for all rent-restricted housing projects to determine taxable valuation. Harr said the bill would create a fair system of appraisal for owners of such properties.

“This acknowledges that even if you have two nearly identical housing units located next to each other, that the rent-restricted housing does not create as much income as the other property,” he said. “By [adopting LB356], developers will likely build more rent-restricted housing and provide more places for low-income families to reside.”

Rent-restricted housing project is defined as a project consisting of five or more houses or residential units that is financed, in whole or in part, with an allocation of federal low-income housing tax credits.

The bill would create the Rent-Restricted Housing Projects Valuation Committee, which would develop a market-derived capitalization rate to be used by county assessors when determining assessed value for qualified projects.

The committee would include the state tax commissioner, as well as:
• a representative of local government assessing officials appointed by the commissioner;
• a representative of the low-income housing industry appointed by the commissioner; and
• an appraiser from the private sector appointed by the tax commissioner.

Owners of a rent-restricted housing project would be required to file a detailed income and expense data statement with the committee and the county assessor by Oct. 1 of each year.

Gothenburg Sen. Matt Williams supported the bill, saying that it is a crucial economic development tool.

“Often times, we try to go out and create new jobs in our districts. The plain fact is that we just don’t have the people to fill the jobs that are available,” Williams said. “[Providing affordable housing] is essential in creating new housing in the state and [filling available jobs].”

Following the adoption of two technical amendments, senators advanced the bill to select file on a 30-0 vote.