City of Ann Arbor - File #: 22-1968

• File #: 22-1968
• Version: 1
• Name: 2/6/23 Ordinance - Chapter 19 - Tax Exemption for Housing Projects
• Type: Ordinance
• Status: Passed
• File created: 2/6/2023
• In control: City Council
• On agenda: 2/21/2023
• Final action: 2/21/2023
• Enactment date: 2/21/2023
• Enactment #: ORD-23-06
• Title: An Ordinance to Amend Chapter 19 (Tax Exemptions for Housing Projects) of Title I of the Code of the City of Ann Arbor (ORD-23-06)
• Sponsors: Christopher Taylor, Jen Eyer, Erica Briggs

Date	Ver.	Action By	Action	Result
2/21/2023	1	City Council	Held and Closed
2/21/2023	1	City Council	Adopted on Second Reading	Pass
2/6/2023	1	City Council	Approved on First Reading	Pass

Title
An Ordinance to Amend Chapter 19 (Tax Exemptions for Housing Projects) of Title I of the Code of the City of Ann Arbor (ORD-23-06)
Memorandum
Attached for your review and approval is an amendment to Chapter 19, which is the City's ordinance that allows property tax exemption for certain low-income housing projects, also known as a PILOT (Payment in Lieu of Taxes), as permitted by State Housing Development Authority Act of 1966 (1966 PA 346, as amended; MCL 125.1401, et seq. The current Chapter 19 may be found in the attached pdf or online at: https://library.municode.com/mi/ann_arbor/codes/code_of_ordinances?nodeId=TITIAD_CH19TAEXHOPR

The primary purpose of this amendment is to increase the minimum income for eligible housing projects from 60% of Area Median Income to 80%; and to allow tax exemption for projects where the average income does not exceed 60%. As discussed below, this reflects current practices related to grants for affordable housing from the federal Department of Housing and Urban Development.

This chapter was originally enacted in 1968, and has been amended several times. The ordinance as written is inconsistent with current best practices for tax exemption ordinances in Michigan. Therefore, the amendment repeals and replaces the existing chapter in its entirety. This amendment was reviewed by the Michigan State Housing Development Authority (MSHDA) for consistency with State law and is based on their model PILOT ordinance.

Detail
At its meeting on November 10, 2022, the Housing and Human Services Advisory Board passed a resolution recommending that the PILOT ordinance be amended to make it consistent with the Low-Income Housing Tax Credit (LIHTC) and other state and federal affordable housing programs.

MCL 125.1415a. (1) defines an eligible housing project:

"If a housing project owned by a nonprofit housing corporation, consumer housing cooperative, limited dividend housing corporation, mobile home park corporation, or mobile home ...