DeWine
File photo | The Lima News
COLUMBUS – GOP Gov. Mike DeWine signed legislation Friday that could raises taxes on affordable housing developments and block their owners from claiming certain tax credits.
But he offered some hope to advocates as well with a promise to address affordable housing in his forthcoming two-year budget proposal.
The two provisions came within legislation appropriating $6 billion of mostly federal coronavirus relief funds. Because the legislation was a spending bill, DeWine had the power to veto individual items while keeping the bill largely in tact.
DeWine faced lobbying from affordable housing developers, advocates, and the state Chamber of Commerce to veto the two provisions in question, which were added at the last minute by Senate Republicans.
As something of a consolation, however, DeWine said his state budget proposal for the next two years will include a “comprehensive” suite of housing and affordable housing provisions, including a state affordable housing tax credit and a single-family home tax credit. He said he has “confidence” the provisions will survive the budget negotiation process, after conferring with GOP Senate President Matt Huffman.
Amy Riegel, executive director of affordable housing and anti-homeless advocacy organization COHHIO, said she’s disappointed in the lack of a line-item veto. However, she said the governor putting his name and administration behind an affordable housing tax credit is a significant positive shift.
“This is the first time that the affordable housing tax credit has been supported vocally by the administration,” she said. “That really is a gamechanger.”
The political drama hinges on Ohio’s shortage of affordable housing. According to state data, Ohio hosts 80 affordable units for every 100 low-income households. More than 8% of Ohio households spend more than 50% of their monthly income on housing. The housing market is tight and new construction is sluggish.
The first of the two amendments signed Friday would prohibit developers from pairing a state-funded historic preservation tax credit with a federally funded low-income housing tax credit.
The second would allow, but not require, county auditors to assess the value of affordable housing units as if they charged market value rent. Developments claiming the federal affordable housing tax credit can only charge rents based on a tenant’s income, which usually lands with a rent price well below market value. Thus, the developments could face higher tax bills with no ability to pass the raised costs onto their tenants.
This would reverse Supreme Court precedent reiterated as recently as 2018, that affordable housing units should be assessed based on the income they actually earn, not the income they could earn if they charged market prices.
DeWine didn’t defend either policy point on the merits. Rather, he pointed to other priority items in the bill including hundreds of millions in support for hospitals, nursing homes, K-12 schools, and others. He depicted the overall package as the product of a compromise.
“Well, I’m not the person who brought that issue up, candidly,” he said when asked about the amendments. “I’m not the person to be asking that question to.”
Kevin Nowak, executive director of affordable housing developer CHN Housing Partners, called DeWine’s budget proposal a “silver lining” that could help add thousands of affordable housing units to Ohio.
But the bill could still create “confusion” for county auditors, and called on them to work closely with the industry when assessing its properties.
“We are disappointed that HB 45 has become law and remain very concerned about the impact that it will have on existing affordable housing and future investment in affordable housing across the State of Ohio,” he said.
The governor’s signing of the bill Friday changes the law. His budget proposal, set to be unveiled in the coming weeks, requires approval from both chambers of the General Assembly. That includes Huffman, who the developers believe pushed for the amendments.
The state budget is traditionally a negotiated outcome between the governor, House and Senate. The dynamics and relationships can be complicated. DeWine in 2021 vetoed legislation weakening his power to respond to pandemics. That veto was overridden by his fellow Republicans. Earlier this week he vetoed legislation spearheaded by Senate Republicans prohibiting cities from strengthening anti-tobacco laws. The House, meanwhile, recently selected a new Speaker after an insurgency by a faction of Republicans who partnered with Democrats to oust a somewhat more conservative leader the GOP caucus had previously agreed upon. And DeWine’s previous attempts to use the budget to pass moderate forms of gun control have failed.
A Huffman spokesman neither confirmed nor denied DeWine’s characterization of events. He said he is pleased the governor signed the bill and “looks forward to continued discussions related to the upcoming two year budget.”
DeWine, asked why he seemingly ceded policy items Friday for the potential of a win down the line, expressed optimism he’d get the affordable housing items over the finish line.
“We have confidence that we’re going to be able to deal with this comprehensively,” he said.
