Some wary of senior property tax relief bill
Advocates say measure could weaken affordable housing law: ‘It seems like a partial solution’
Housing advocates are concerned that a bill, which has garnered bipartisan support from members of the Housing Committee, would allow towns to include existing units temporarily in their calculations of affordable housing instead of putting new affordable units on the market.
House Bill 6777 got approval from the Housing Committee at the beginning of March. It would offer property tax relief to senior citizens who volunteer to deed-restrict their homes as affordable.
“I think this is one of the most imaginative, creative, thoughtful proposals in the entire legislature and I see it as an opportunity to provide real property tax relief for seniors who are hoping to age in place, to incentivize more affordable housing in exactly the communities where we have largely failed to get more affordable housing into those communities by looking at the existing housing stock,” said Rep. Geoff Luxenberg, D-manchester, chair of the Housing Committee, during a committee meeting.
But advocates worry that the measure would allow those existing units’ affordable designation to be reversed at any point and raised concern that a plan to allow those homes to add points toward a moratorium on new units would weaken the state’s 8-30g affordable housing law.
Connecticut’s 8-30g allows towns that are making progress toward creating more affordable housing to gain points based on the number of newly deed-restricted units. Those points add up to “moratoriums,” or a set number of years that a town is exempt from court remedies.
Some legislators on the committee said they wanted to see additional tweaks as the bill goes through the lawmaking process.
“If there was ever a time to invoke the work-in-progress doctrine, I think this may be the case, because the concept is good,” said Rep. Joe Zullo, R-east Haven, who voted in favor of the bill.
It’s gained bipartisan support from members of the Housing Committee and comes as lawmakers have been under political pressure to change the decades-old affordable housing law 8-30g.
H.B. 6777, sponsored by Rep. Melissa Osborne, D-simsbury, allows seniors with incomes of up to 80% of the area median income to opt in to the program that deed-restricts their homes as affordable. In exchange, they wouldn’t pay municipal property taxes. The
towns could count the unit toward their 10% goals, and the homes count for two points each toward an 8-30g moratorium.
The goal, Osborne said, is to allow seniors to age in place, preserving the affordability of their homes by shielding them from increasing property taxes. It’s not the way to solve the state’s affordable housing crisis, but one approach to help a certain group, she said.
“I really felt that I needed to solve a bunch of concerns to make it amenable to both sides of the aisle,” she said in an interview. “And I really tried to listen to concerns from both groups, because I think it’s important to have community buy-in and buy-in from both sides of the aisle.”
8-30g
But, advocates say, the homes are already occupied. The tax credits are also revocable, meaning the homes don’t actually have to stay affordable for the set 40-year period required under 8-30g.
The deed restriction also counts as two points toward a moratorium. The point system as it stands is weighted toward multi-family housing, housing for people with lower incomes and family housing, a system that aims to incentivize towns to zone for the types of housing that they’ve historically been reluctant to allow.
“I see its attractiveness — to alleviate the tax burden on more moderate-income seniors that are homeowners,” said Sean Ghio, policy director at Partnership for Strong Communities. “The state already has laws that allow towns to do that, property tax credits for low income senior homeowners.
“It seems like a partial solution to the affordable housing crisis that doesn’t involve any change.”
Osborne said she’s still working on the bill, to ensure that it’s not creating a loophole for people “acting in bad faith” to get around 8-30g.
“This is not meant as an end run around 8-30g,” she said.
The affordable housing law, 8-30g, gives developers court remedies if towns deny their affordable housing proposals. Towns are exempt if at least 10% of their housing stock is deed-restricted as affordable, and when new affordable units go on the market, they can gain points toward a moratorium.
Town officials, particularly in Fairfield County, have argued that 8-30g circumvents local zoning and puts undue burdens on certain towns to deal with an influx of multi-family housing applications. And Republican gubernatorial candidate Bob Stefanowski brought the issue to the forefront of his campaign by proposing a repeal of the law.
Republicans this session also proposed a bill that would mean major changes to the law; the proposal did not get a vote from the Housing Committee, which has no more scheduled meetings this session.
Housing advocates and some Democrats have argued that 8-30g works as it’s supposed to, a tool for creating more affordable units in towns that have imposed zoning ordinances that largely work to keep people with low incomes out.
How the bill works
Osborne’s bill requires that all towns allow seniors to opt in, although she says adding the deed restriction won’t make sense for everyone.
It could reduce resale value for heirs, and reduce generational wealth-building that comes with home ownership, she said.
She instituted an option to pay a fee to remove the deed restriction in case the home value rises and the family wants to build wealth, she said. In order to revoke the deed restriction, homeowners would have to pay back the taxes and half of the difference between the deed-restricted value at the time of the sale and the non-deed restricted value.
The funds must go towards creating new affordable units or upgrades to make affordable homes in town more accessible and energy efficient, Osborne said.
Osborne said the program was inspired by a need she saw in her community: more affordable housing for seniors, many of whom live on fixed incomes. Nationally, more than 10 million households headed by someone who is 65 or older are housing cost burdened, or paying more than a third of their income to housing costs.
She’d also seen too many single-family houses sold by seniors who couldn’t afford to stay, that were then flipped by investors and sold at an increased price.
“I was trying to think about how we could make it more affordable for seniors to age in place and live at home,” she said.
The tax credit would end if the house is sold or inherited, unless its new owner is also an income-qualified senior, she added.
The revocable element of the deed restriction is one of the things that have housing advocates concerned. The concern is that people could use the restriction, then soon after remove it, and that it wouldn’t preserve affordability in the long-term, according to public testimony.
“The bottom line is the state needs way more housing supply to actually solve this problem. Just counting the home that is already fairly affordable doesn’t help,” Ghio said.
Osborne says she thinks the fees will be enough to keep people from revoking the credits.
Saverio Degiorgio, a member of the Pemberwick Glenville Association in Greenwich, submitted testimony in favor of the bill.
“Please give the town, that I have proudly resided in for the past 30 years, the empowerment to continue serving all its residents, including its lower income population,” Degiorgio wrote.
Some towns opposed the measure, saying it would cut down on tax revenue.
“The majority of municipalities are concerned with eroding its property tax base any further and this bill does not have enough check and balances to ensure that those who avail themselves of this opportunity are eligible,” wrote Brian O’connor, director of public policy and advocacy for the Connecticut Conference of Municipalities, in public testimony. “It should be noted that cities and towns can already provide this tax abatement, but have not done so because of its complexity to implement.”
He added that the two moratorium points weren’t enough to offset the cost.
“It seems inequitable to force a mandate on a town for one particular type of affordable housing without in some way compensating for that mandate,” Osborne said.
Some housing advocates said that two points for single-family senior housing was too much and could allow towns to enact moratoria without building new housing stock.
Ghio said he doesn’t subscribe any ill intent to the people working on the bill, but thinks it’s misguided. The state needs zoning reform or more funding to housing vouchers, he said.
“People want to live in these towns, and it makes sense,” Ghio said. “We need growth.”