Affordable housing developers in Rhode Island are spending 2014 much the same way they finished last year, fending off attempts from municipal leaders to raise their taxes.
In Providence, a new ordinance passed by the City Council this past winter enshrined in local law the tax rate – 8 percent of gross rental income – affordable housing developments have been paying across the state since 1995.
It also solidified the tax treatment of newly constructed and future affordable developments, which had been a subject of debate with some officials arguing that only rehabilitated buildings qualified for the 8 percent rate.
The victory, however, was far from easy.
City councilors had to override a veto from Mayor Angel Taveras, who argued that the ordinance contained “loopholes so significant that, if enacted, it would put the entire city of Providence at risk.”
And ultimately the effort could prove fruitless if state lawmakers pressing for an increase in affordable housing taxes have their way.
For the second year in a row, a series of bills have been filed in the General Assembly to raise the tax paid by affordable housing developments from 8 percent to 10 percent.
Last time around, lawmakers approved the tax hike only to see it vetoed by Gov. Lincoln D. Chafee. Legislative leaders did not return for a special session to attempt an override of the veto.
“This is just to help the communities,” said Rep. Jan P. Malik, D-Warren, about his bill to raise the rate to 10 percent. “It seems like with each piece of legislation we hear about how bad the towns are doing and I think the whole dynamic of affordable housing has changed with [real estate] prices going down.”
In addition to Malik’s bill, a corresponding Senate bill has been filed by Sen. Roger A. Picard, D-Woonsocket, and an identical bill by Rep. Stephen M. Casey, D-Woonsocket.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.