Officials say valuations for Grand Forks subsidized homes too high
Grand Forks City Council members Monday recommended lower property assessments on apartment buildings used for low-income housing.
The properties are managed by the Grand Forks Housing Authority but owned by for-profit groups that participate in subsidized-housing programs. The authority requested the city provide the lower assessments because valuations were rising faster than landlords’ ability to raise rents to make up for their higher tax liabilities.
“It’s because rents are restricted,” said Housing Authority Executive Director Terry Hanson. “We can’t pass the increased tax assessments on to the tenants in one fell swoop.”
He said the properties faced new assessments as much as 30 percent higher.
The council’s Finance/Development Committee recommended approval for lower assessments for six apartment properties. The new assessments will have to be approved by the full council.
City Assessor John Herz said the new assessments were calculated by adjusting what his office expects rental units to generate for income. Because there are higher administrative expenses associated with participating in subsidized housing, property owners earn less from their properties.
“We were able to reflect that additional cost,” Herz said.
The new assessments ranged from a reduction of $509,000 on a building initially assessed at $3.3 million to a $70,000 reduction from a $1.9 million assessment.
On a separate topic, committee members recommended property-tax abatements for low-income housing properties approved by the North Dakota Legislature in 2013.
The state abatement applied to taxes paid on the properties for 2013, and the committee’s recommendation, if approved by the council, would refund those taxes.