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Lawmakers advance bill to exclude federal housing tax credits from property valuations
Summary
House Bill 753 would prohibit property assessors from including federal low-income housing tax-credit incentives in valuing LIHTC developments; sponsors argued it would preserve the incentive and spur housing construction while assessors warned it could create unequal treatment and raise legal challenges.
House Bill 753, introduced in the House Government Operations Committee as "by Chairman Faizon," would bar local property assessors from including the value of federal low-income housing tax credits when setting assessed value for qualifying developments. Sponsor Chairman Faizon told the committee the credits carry requirements — 20-year affordability terms and rents at roughly 60% of area median income — and said taxing the incentive has reduced development in parts of the state.
Faizon said the bill "would make it to where you can't tax the incentive that the federal government has given these developers," and pointed to pilot projects in Nashville and Memphis as models. He also cited a fiscal-note estimate of about $100,000 in foregone statewide revenue. Opposing testimony came from Will Denami of the assessors of property, who warned the bill would "do an end run" around valuation practice and argued the restricted rents are part of the property's market value because a willing buyer would factor the credits into price.
