ShareThis Page
Reassessment problems may affect public housing |

Reassessment problems may affect public housing

Brian Nearing
| Tuesday, April 17, 2001 12:00 p.m

The Allegheny County reassessment may upset the delicate financing of some housing projects for the elderly, poor and disabled, where federally controlled rents cannot be raised to cover higher property tax bills, advocates warned Monday.

‘We have no money to pay the taxes or the ability to generate any further revenue. It is a crisis situation,’ attorney Raymond N. Baum told the county Board of Property Assessment Appeals and Review.

Baum and Larry Swanson, deputy director of ACTION-Housing Inc., said high tax bills could threaten some projects with default and discourage lenders from making loans in the future.

Allegheny County has approximately 25,000 affordable housing units owned by for-profit and nonprofit developers.

Baum and Swanson are members of the Allegheny County Community Assistance Advisory Council, which was appointed by County Executive Jim Roddey to study the effect of countywide reassessment on low-income people.

Margaret Philbin, a spokesman for Roddey, referred a call for comment yesterday to the council.

Affordable housing is made available to the elderly, poor and disabled at below-market rents, with the federal government providing a rent subsidy. The federal government also provides tax credits to lenders who make the loans, allowing them to pass on some savings to the developers.

ACTION-Housing is a nonprofit group that owns or manages 23 affordable housing units throughout the county. Swanson said the group is appealing assessments on five of them, including Greenfield Terrace, a 202-unit residence for low-income senior citizens that opened in 1997 off Lydia Street in Greenfield.

The assessment was increased from about $526,000 to nearly $1.1 million, which would increase property taxes from about $17,700 to more than $56,000, he said.

Swanson said appeals may have been filed for as many as 100 developments countywide. Appeals board Chairman Kevin McKeegan said the board would need exact figures. The matter will be discussed by the board April 30, he said.

Baum said some project owners are being pressed by lenders to increase escrow payments to cover the higher property taxes.

‘We need to get these (appeal) hearings moved up as quick as we can,’ he said.

Charities like ACTION-Housing get federal aid from the U.S. Department of Housing and Urban Development to construct housing units, and in return agree to keep rents at below-market levels for 30 years.

Under federal rules, projects are not allowed to turn any annual profit and cannot be sold, said Swanson.

Swanson said if property tax bills cannot be reduced, the only option may be to apply for tax exemptions. Nonprofits like ACTION-Housing are entitled to complete exemptions, Baum and Swanson said.

ACTION-Housing doesn’t want to do that ‘unless we absolutely have to,’ Swanson said, because the group wants to pay at least a share of local taxes as a sign of commitment to the community.

For-profit developers of affordable housing borrow construction money from banks, which in turn get federal tax credits for 10 years, he said.

Again, the developers agree to set rents at below-market levels and cannot earn any annual profits. Developers make their money in up-front development fees, said Baum. Should property taxes go unpaid, the Internal Revenue Service can declare a project in default and revoke the tax credits.

Richard Nemoytin, spokesman for the Pittsburgh office of HUD, was not able to comment when contacted yesterday.

Brian Nearing can be reached at or (412) 391-0927.

Categories: News
TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.