At the suggestion of tax collector/assessor Greg Andrews, the Lowndes County Board of Supervisors have approved a change in the way Section 42 housing will be assessed.
“We have decided to use what is known as the ‘cost’ approach,” Andrews said. “The cost approach means I measure a house and price it by the square footage and we note whether the home is made of brick or wood, etc. We have a system that assesses the house based on a formula.”
The current method of assessment is based on the income of the housing for its owners.
Not only will the new method make tax collections more equitable — non-Section 42 home-owners are paying more taxes for comparable houses — it should also increase the counties overall tax collections.
Section 42 housing is affordable housing for low income families created by the Reagan Administration through the Tax Credit Reform Act of 1986. It is also known as the Low Income Housing Tax Credit Program (LIHTC). To receive the tax credits, Section 42 owners must keep the units affordable for specified number of years. The affordable rents are based on the median household income in the area. The numbers are published annually through the U.S. Department of Housing and Urban Development (HUD). According to HUD, the median income for Lowndes County based on a rounded figure is $51,200. Andrews said government subsidizing of Section 42 housing is not subsidized as much as Section 8 housing, which he described as “lower income.”
“Section 42 provides incentives for private equity in development of affordable housing for low income families,” said Rep. Gary Chism (R-Columbus). “It gives tax breaks to individuals and corporations that build low income housing.”
Chism and Andrews noted Section 42 housing had become a contentious issue around the state.
“Section 42 is very complex across the state,” Andrews said. “The state law says two different things in the same law and that has created some confusion. Humphreys County is saying if the owners want to be assessed by the income method, they need to report all of their income, including about $2 million they get in federal credits each year they currently aren’t getting.”
Andrews said another change could be on the horizon for assessments of Section 42 housing.
“We are meeting with some owners of Section 42 housing in Lowndes County and some of our state legislators to discuss finding a method of assessment that everyone can agree on. As it stands, Section 42 housing isn’t equal. The Constitution states everyone must be taxed equally. We are trying to find a way to satisfy the County, the owners of Section 42 housing and the legislators. I just want everything to be equal for everyone.”
Jeff Clark was previously a reporter for The Dispatch.
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