Habitat for Humanity asks county to defer property taxes during construction to close affordability gap

Molly Hillegas, president and CEO of Habitat for Humanity of Wicomico County, told the council Sept. 2 that construction-cost inflation and rising home values have widened an affordability gap for lower-income buyers and made it harder for Habitat to complete rehabilitations and sell homes to qualifying families.

Hillegas described steep increases in construction and materials costs in recent years and said the nonprofit's holding and rehab expenses (grass cutting, utilities, extended rehabilitation timelines when homes are tenant-occupied) have added to financing pressures. She asked the council to consider a property-tax waiver or deferral for properties owned and renovated by Habitat while they are under construction and before resale. Finance Director Grama Olin and county staff said state enabling legislation already allows local tax-waiver mechanisms and that the county could establish a deferred-billing process to track and apply a waiver during rehabilitation.

Council and staff discussed details the legislation rewrite should address: whether the waiver is a full deferral or a partial credit, how long a property could be deferred (the state statute allows a maximum of five years), whether the fiscal-year billing and settlement amounts would be pro-rated at sale, and whether interest would be charged. County staff proposed tracking properties through the county's Munis financial system and flagged the need for clear settlement language so that, when Habitat sells a house, the remaining pro-rated taxes become payable by the new owner.

Councilmembers requested the administration and counsel to draft revised legislation with clear rules on: tracking, maximum deferral period, treatment at sale/settlement, and whether the county would seek repayment without interest. The council said it would review revised language in a future work session.