Saturday, May 9, 2009

Madison Nonprofit Affordable Housing Endangered While State Law Goes Unchanged

Pictured below: Activities now sponsored by the Vera Court Neighborhood Center, an offshoot of one of the affected housing projects, the Northpointe Apartment Complex. The center is home to community-building projects such as this carpentry workshop, and an empowerment project for neighborhood high school girls, with activities that include meal delivery for senior citizens.

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Please join us on Sunday, May 10th for a community conversation about a topic that will potentially negatively affect hundreds of Madison and Dane County families, and their ability to afford basic housing.

Our guests will be Linda Ketchum, Executive Director, Madison Urban Ministry (at podium in photo above at an April 10, 2008 press conference); and pictured below, Steve Verriden and Jason Glozier of the disability rights group, Wisconsin ADAPT; and Michael Basford, Program Director, Housing Initiatives Inc., representatives of an ad hoc group that is planning a "Tent City" rally this Tuesday (5/12/2009) at noon at the King St. entrance of the State Capitol. Further details are contained in the Housing Initiatives press release reprinted below.

Rally to highlight need to restore property-tax exemption for non-profit housing providers

An ad-hoc organization is planning a rally at the Wisconsin State Capitol’s King Street entrance on Tuesday, May 12th at Noon to highlight the need for state government to immediately restore the property-tax exemption for non-profit housing providers.

A recent court case last fall and a subsequent interpretation by the state’s Department of Revenue have changed which properties belonging to providers of affordable housing can continue to be property-tax exempt. As a result, municipalities all over Wisconsin are establishing procedures to assess properties owned and operated by non-profit housing providers and, in some cases, have already issued tax bills for several such property owners.

Unless the State Legislature and the Governor act to change the State Statutes, buildings that house thousands of low-income individuals and families will be subject to property taxation with possible devastating effects. “Right now, our budgets are stretched thin as they are,” said Dean Loumos, Executive Director of Housing Initiatives, Inc. of Madison. Housing Initiatives owns and operates 51 housing units for previously-homeless individuals and families who are affected by severe mental illness. Loumos added, “We have developed these properties under property-tax exemption rules that have been in place for decades. If the state doesn’t change them back to where they have been, we stand to receive a property tax bill of around $70,000. My agency and others like us cannot afford that kind of a hit. We would have to make some tough choices which may include reducing services and housing fewer clients.”

Housing Initiatives, Inc. is one of about 40 agencies operating in Madison alone that could be receiving property tax bills for nearly 1,700 housing units.

The main focus of the rally is to remind Governor Doyle, the State Legislature and municipalities around Wisconsin that during these tough economic conditions, where tent cities are starting to spring up around the nation as more and more people become homeless, they should not balance their budgets on the backs of thousands of low-income individuals and families who will be adversely affected and should instead act quickly to restore the property-tax exempt status.

For more information on Tuesday’s rally and the property-tax exemption issue, please contact Dean Loumos at 332-2095.

Further background:

As you may have read, the Madison Common Council recently tried to buy some time for these properties by granting them a grace period for payment of taxes, but this action was over-ruled by the City Attorney as beyond city government's mandate. (Ironically, the crisis is being inadvertently precipitated by the city attorney's defense of a Common Council decision to deny nonprofit status to a new housing development a couple of years ago.) It is hoped that the new state legislature will respond by changing state law in a way that restores the tax exempt status, but that's still up in the air.

Under any circumstances, affordable housing is not easy to find locally, and that's exacerbated at a time of national economic crisis and increasing underemployment and unemployment. And there are special challenges facing people on fixed incomes, including people with disabilities and the elderly.

Most of these housing units were constructed, and relatively affordable rent structures were set, under the understanding that these properties were tax exempt. So what happens now?. Under the worst case scenarios, some properties could go bankrupt, and rents could rise dramatically. While this crisis has been acknowledged publicly, action is needed by mid-summer.

Please join in our conversation this Sunday, to learn more about how you can make a difference. Please call us at 321-1670 with your questions and comments, or email us at .

Still more background information can be found in this Cap-Times article, this Wisconsin State Journal article, and this recent "citizen journalist" blog entry of Common Council action by Brenda Konkel.

Below: the west side's Wexford Ridge apartment complex, one of nonprofit group Future Madison's projects endangered because of pending nonprofit legal status questions.

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