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Grand Forks County denies authority's long-sought abatement

The Grand Forks County Commission has denied an abatement to the Grand Forks Housing Authority for a $38,000 property tax bill for 2011. The commission voted 4-1 Tuesday to reject the request for 81 parcels of property the Housing Authority owns ...

The Grand Forks County Commission has denied an abatement to the Grand Forks Housing Authority for a $38,000 property tax bill for 2011.

The commission voted 4-1 Tuesday to reject the request for 81 parcels of property the Housing Authority owns but does not use for low- or moderate-income rental housing.

The County Board made the decision despite a ruling in September by the State Board of Equalization that all property owned by the housing authority is tax-exempt for 2012.

"This has been an ongoing issue and we've had concerns about the abatement," said County Commission Chairwoman Cynthia Pic, whose full-time job is community services director with Tri-Valley Opportunity Council, a Crookston-base not-for-profit agency that deals with low-income housing.

The property includes 77 vacant lots in the Congressional and Promenade residential housing neighborhoods west of I-29, as well as buildings in Grand Forks that are used for Housing Authority offices and other non-residential purposes.


The Housing Authority, which develops and maintains affordable housing and administers a federally subsidized rental assistance program, is in the process of selling the vacant lots to a private developer.

Old debate

The issue surfaced in 2010, when Grand Forks city officials interpreted a 2005 revision of the North Dakota Century Code statute governing housing authorities and tax-exempt property.

The legislature revised N.D.C.C. 23-11-29 to read: "The property of an authority used for low-income housing is declared to be public property for essential public and governmental purposes and is exempt from all taxes and special assessments."

The disagreement centered on two questions: whether the Housing Authority should be considered a political entity and whether state law specified that properties must be used for housing to qualify for a tax exemption, according to Terry Hanson, executive director.

The county's decision Tuesday to reject the abatement for 2011 is based on two factors, according to Pic.

First, the state board ruling covers 2012 taxes, not 2011 or other prior years. Second, it's a matter of fairness, she said, adding that the Housing Authority charges market-rate rents even though it is subsidized. Low-income renters receive help in the form of vouchers.

Evidence has shown that Housing Authority's rental property has a near 100 percent occupancy rate and that units usually are vacant only for short periods of time for maintenance between tenants, she said. Meanwhile, occupancy rates for privately owned rental units are much lower.


"It's not against the housing authority. It's not against low-income families," she said. "It's that the Housing Authority should be compared with other property owners that have to pay taxes on their property."

Opposing views

Commissioner William "Spud" Murphy cast the only vote against the motion to deny the request.

For Commissioner Gary Malm, who voted for the denial, the issue is simple.

"Housing is housing, and this was not housing," he said. "Nothing was ever built on it. Why should they get a tax break on that? Now it's sold."

Hanson said the Housing Authority should be treated just like any other local governmental unit.

"The school district owns land. The county and the city own land. The Grand Forks Airport Authority owns land and none of it is taxed," he said. "The county commission doesn't think we're a political entity. I think they made an arbitrary and capricious decision."

The Housing Authority has 30 days to appeal the decision in court, adding that the board will meet Thursday to discuss the issue.


Call Bonham at (701) 780-1110; (800) 477-6572, ext. 1110; or send email to kbonham@gfherald.com .

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