But in many cases, local officials assessing property use different approaches, said Isabel McLain, policy and advocacy director at the Virginia Housing Alliance.
In some cases, nonprofit housing providers told the alliance they have been assessed on the same basis as single-family homes — that is, on what similar nearby properties have sold for — and in some, by the use of what are called “mass appraisal” techniques, she said.
Mass appraisal involves using data from large numbers of properties, developing statistics from that data and then applying to still more property.
The problem when that approach is used for income-based assessment is that collecting income data from a large number of rental properties assumes that a provider of affordable housing is collecting the higher rents that other landlords do. In Virginia, affordable housing built with one of the most popular supports, the Low Income Housing Tax Credit, has to charge rents at least 15% below market rents. Some charge much less.
The impact of inaccuracy
McLain told a housing commission work group on Wednesday that one alliance member has estimated that inaccurate assessments cost it about $16,000 a year more in taxes than it should be paying, which translates to about $200 more in taxes for each unit.
Another provider says inaccurate assessments can make the difference in a property generating some cash flow for the year or being in the red, she told the commission work group.
Yet another has to appeal its assessments on most properties in all jurisdictions every year, calling it a tremendous waste of time and money and still often results in tax bills that are higher than they should be, McLain said.
Coyner’s bill would tighten the language to say assessors must consider actual rent collected and actual expenses incurred on affordable housing. The measure also includes an extensive listing of what data and sources of data should be looked at and what should not be, and specifically prohibits using mass appraisal techniques when assessing affordable housing for taxes.
It says that if an assessment did not follow proper appraisal practices, the assessment could not be presumed to be correct. A successful appeal would entitle the locality to reimburse the affordable housing provider for attorneys’ fees and costs. Coyner said an October opinion from Attorney General Jason Miyares said assessors must fully consider the actual operating expenses incurred at an affordable housing property, rather than a more cursory review.
But Jamie Timberlake, Powhatan County’s commissioner of revenue, told the commission work group that getting the information is a problem.
“We’re an annual assessor, so we do this every year, just to give you a timeline, in June or July we send out and ask for this information, it’s due to us by August 1, so that we can proceed … go through the procedures of reviewing it and have good, equitable assessments for the fall. I get anything on those letters from ‘none of your business’ to … ‘Heck no,’ ” he said.
“We have to have some kind of teeth on our side to get that information, because we don’t,” he said.
The other big issue is that state law says assessments have to fairly and equitably spread the tax burden, he said.
The commission will decide what to recommend about the bill when it meets in November.
At that meeting, it will also consider a proposal from state Sen. Russet Perry, D-Loudoun, that would allow victims of sexual abuse, domestic violence or stalking who get a temporary or preliminary protective order to get out of a lease quickly.
“We need to protect them,” Perry said.
