ITHACA, N.Y. — There are a lot of tasks that need to be done to address the affordable housing crisis. The Tompkins County Legislature will be taking baby steps on one of those tasks at its Government and Operations Committee this afternoon, and at the full legislative hearing on Thursday.
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The long title of the resolution is “Urging New York State to Amend the Real Property Tax Law to Allow Tompkins County the Option to Provide a Partial Exemption to Residential Properties Subject to Resale Restrictions.”
A long, verbose heading, but it addresses a really big problem here in Tompkins County – high property taxes are killing affordable housing, by taxing it for a value greater than it can legally sell for.
The Voice previously brought this up a few months ago as part of our in-depth analysis of the obstacles faced when trying to build and maintain affordable housing in Ithaca and the surrounding towns. To quote that piece:
“All of the for-sale houses developed by INHS have been built for our Community Housing Trust (CHT) Program,” said [Paul Mazzarella, Director of Ithaca Neighborhood Housign Services]. “This program builds high quality homes that are sold to low-income buyers at prices that are below both market rates and the development cost. In exchange for the opportunity to buy at a low price, Community Housing Trust buyers agree in advance that when the house is sold, it will be sold at a price that is capped by a formula and only to another low income homebuyer. This keeps these homes permanently affordable and maintains them as community assets.”
Not included in that cost, however, is property taxes.
Mazzarella said the typical CHT house is sold for about $130,000 today, but the county assesses and taxes the properties at full market value, which is about $185,000. That $55,000 difference leads to an extra $2,000 a year to be paid in taxes on average, even though a CHT home buyer could never sell the house for full market value. As a result of the higher taxes, existing homes are less affordable.”
So you have the recurring problem where families with modest means are paying taxes on houses that they can’t sell at the value the county assessor pegs them at.
Seems the problem should be easy to fix, right? Just tell the assessor that a house is part of the Community Housing Trust and deduct accordingly?
Turns out, the answer isn’t that easy.
“Jay Franklin [the county assessor] believes he doesn’t have any legal authority to grant any exemption,” said Paul Mazzarella.
According to the county’s resolution, New York State’s property tax law has no provisions that address land and housing trusts, meaning that regardless of how much the house is legally allowed to sell for by the trust, the state only recognizes the full value of the house.
What this means is that fixing the tax problem on the housing trust requires the approval of the NYS Legislature. Someone has to make a pitch in Albany.
“Our initial approach was to create a law that covers the state and all municipalities,” said Mazzarella. “But there were concerns, so we drafted an amendment to the law. I met with [assemblywoman] Barbara Lifton, our current strategy limits this to Tompkins County. We hope she’ll propose this for us, she’s supported this [change to the law] in the past.”
So why the county vote?
“It’s a show of support, not law,” said Mazzarella.
But the support needs to be there if someone is going to introduce this amendment at the Capitol. It’s just be one step of many, but this week’s vote might finally get the gears in motion to help solve one of the major issues facing the region and its ever-growing housing problem.
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