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Providence committee defines which buildings qualify for 8% low-income housing tax treatment
Summary
The committee approved an ordinance that sets municipal thresholds for the state-authorized 8% tax treatment, preserving the benefit for many existing properties while tightening eligibility so the credit applies to buildings that meet clear affordability tests.
Chair Nikith Sanchez called the special committee to order and presented a revised ordinance that would set municipal definitions and thresholds for the state-authorized 8% tax treatment for low-income housing.
Sanchez said the measure responds to a 2024 version that applied the 8% treatment only to deed-restricted units and was later vetoed by Mayor Smiley. "That ordinance, you'll remember, was, vetoed by mayor Smiley," he said, and sponsors reworked the proposal to set building-level thresholds so the tax treatment would apply to the entire building when it meets the affordability test.
The draft ordinance creates two qualification pathways: a building with 40% of units restricted at 60% of area median income (AMI) or less would qualify; alternatively, a building with 51% of units at 80% AMI or less would also qualify. The sponsor said the 51%/80% option aligns the municipal standard with thresholds used in some federal and state programs.
The ordinance also includes a preservation clause for properties already receiving the 8% treatment. The sponsor cited two examples discussed in meetings: University Heights (about half its units restricted) and 93 Cranston Street (described as workforce housing that might not meet the new thresholds). Under the preservation language, properties now receiving the tax treatment will continue to receive it if they meet a defined preservation test (for example, at least 20% of units at 80% AMI or less, or 40% restricted to 120% AMI).
Sanchez clarified the municipality intends the 8% mechanism to apply only to housing and not to commercial space. He also described administrative elements: an assessor deadline (March 15) for developers to submit documentation, penalty rules for late filings, and an annual reporting requirement so the council can monitor compliance.
Committee members commended the outreach to nonprofit developers and administration staff and asked about the city's ability to identify other properties currently receiving 8% treatment. The sponsor said the assessor's list of properties receiving the 8% treatment is public and offered to share it with colleagues.
The clerk recorded the committee's action: "Item 1 is approved." The transcript supplied does not include a roll-call vote or tallies for this approval in the provided excerpt.
The committee's next procedural step for this ordinance was not recorded in the transcript extract provided.
