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County counsel: housing subsidy likely not taxable for tenants; leases held by manager are not County Office public records
Summary
Deputy County Attorney Lisa Cho advised that, under IRS Section 119D, subsidized housing tied to an employer-provided benefit is taxable only in specific circumstances; because leases will be with Greystar and the County Office will not own the property, Cho said the subsidy "should not be considered taxable income," and leases held by Greystar are not County Office public records under the PRA.
Deputy County Attorney Lisa Cho addressed board members’ questions on tax and public-records exposure for occupants of the planned educator housing project. Cho said the taxability of a housing subsidy depends on the relationship between owner and employee and cited IRS Section 119D, explaining that subsidized housing is typically taxable only when an educational institution provides the housing directly. Because the County Office will not own the property and leases will be between tenants and Greystar, she said the subsidy "should not be considered taxable income." She advised tenants to consult their own tax preparers and noted future tax-law changes cannot be predicted.
On public-records concerns, Cho said leases held by Greystar would not be County Office records under the Public Records Act and therefore would not be automatically disclosable by the County Office; she also said household income information used to determine subsidy levels is private. HEART staff added that California provides tax waivers for affordable housing on school property in similar projects and that HEART would work with state and federal partners if any tax issues arose. Board members and staff said they would continue outreach to local districts to explain the tax and reporting arrangements.
