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HB45 Signed by Governor DeWine in Lame Duck

By Kelli Moss posted 12 days ago

  
During Lame Duck, Ohio REALTORS joined a coalition to veto the sections of House Bill 45 related to Low-Income Housing Tax Credit property (ORC Sec. 5713.03) and historic rehabilitation tax credit eligibility (ORC Sec.149.311), as these provisions are contrary to one our primary goals of supporting policies that encourage and incentivize housing of all types. Unfortunately, the Governor signed the bill as-is without Ohio REALTORS suggested changes.

Click here for more information about this bill.

Read the letter sent to Governor DeWine:

Dear Governor DeWine: On behalf of more than 37,500 Ohio REALTORS® I write to you today to join the growing number of organizations and businesses expressing concerns with specific language amended into House Bill 45. We respectfully ask you to veto the sections of House Bill 45 related to Low-Income Housing Tax Credit property (ORC Sec. 5713.03) and historic rehabilitation tax credit eligibility (ORC Sec. 149.311) as these provisions are contrary to one our primary goals of supporting policies that encourage and incentivize housing of all types.

Revisions to R.C. 5713.03
Current statute requires the County Auditor to consider Deed Restrictions in place at a property (effectively requiring the Income Approach methodology for the valuation of affordable housing). Provisions in House Bill 45 would allow a County Auditor to use any of the valuation methods: income, cost, or comparables. The impact of this legislation would change how affordable housing properties across Ohio would be valued using the Cost approach, despite existing deed restrictions, resulting in dramatic increases in valuation and corresponding real estate tax burdens. A vast majority of Ohio’s affordable housing portfolio would be under severe financial pressure and could eventually be lost to foreclosure. Future affordable housing developments would be disincentivized further tightening up housing inventory and drive housing prices upwards in an already volatile market.

Revisions to R.C. 149.311
Current statute allows for low-income housing tax credit (LIHTC) properties to be paired with State Historic Tax Credits. Provisions in House Bill 45 will prohibit LIHTC to be paired with State Historic Tax Credits. Housing development can be a high-risk venture and these tax credits incentivize developers to take a second look at building these properties. More importantly, the language requires that State Historic Tax Credits be rescinded for any property whose construction is not yet complete (that also receives LIHTC). This exposes numerous properties that are currently under construction or properties that are ‘shovel ready’ but now at risk of being halted. The result would be an immediate reduction in affordable housing units for our most vulnerable Ohioans.

All corners of the state are suffering from housing shortages. According to a study conducted by Rosen Consulting Group, looking at all large markets in the United States with 1-3 million residents, Ohio has three cities on the top ten most underbuilt cities list: Cincinnati, Columbus and Cleveland. The shortfall in residential housing production is across all types of housing including luxury, workforce, and federally subsidized affordable housing. However, production of two-to-four-unit structures, likely considered workforce housing, fell by nearly 75% during the last two decades. Ohio needs more housing options and these provisions take Ohio in the wrong direction.

Affordable housing plays a very important role in our economic growth and the future of our great state. It is important to note that affordable housing has a positive impact on not only our neighborhoods, but it provides an opportunity for a person to save for their next home, whether it is renting a market-rate apartment or saving for their first house. In many communities, high-quality federally subsidized affordable housing has lifted up neighborhoods. Many affordable housing developments are often the only significant investments made in distressed communities. Often, blighted real estate is purchased and re-developed into attractive, high-quality housing, thereby removing neighborhood blight and subsequently raising property values of nearby housing. Additionally, business and commerce activity increase due to the attractive housing. In short, affordable housing can stabilize and improve. More importantly, affordable housing can give our neighbors a place to call home.

According to the National Low-Income Housing Coalition, Ohio has a shortage of 252,027 affordable rental homes available for highly low-income Ohioans. Incredibly low-income is defined as someone in Ohio who makes less than $25,750 and includes senior citizens, disabled Ohioans, single caregivers, people enrolled in school and our labor workforce. In short, they are our neighbors, friends, and family, and Ohio REALTORS® supports policies to encourage the development of all types of housing, including federally subsidized affordable housing such as LIHTC properties. The addition of the two amendments mentioned above will not only exacerbate the housing shortage, they will also impact existing developments across Ohio. These provisions send our state in the opposite direction that we need to go in related to housing.

We respectfully ask you to line-item veto these two provisions so there is ample time to properly vet the language next year and ensure it will not hurt Ohioans, especially our most vulnerable neighbors. Additionally, the veto is necessary to prevent disruption of the development of up to 15 low-income housing tax credit developments currently being built across Ohio.

As many businesses come to Ohio to take advantage of all the attributes our great state has to offer, we simply cannot afford to pass such policies that take us backward and stop vital housing development.

Governor DeWine, we thank you for your consideration of our request to veto the specific provisions relating to low-income housing tax credits and historic tax credits from House Bill 45.

Sincerely,
Scott Williams
Chief Executive Office Ohio REALTORS®
CC: Lieutenant Governor Jon Husted


This content is copyright 2023 Ohio REALTORS. Read more at: https://www.ohiorealtors.org/blog/1728/hb-45-signed-by-governor-dewine-in-lame-duck/
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