By SARA QAMAR
Capital News Service
LANSING — A new bill would exempt nonprofit housing organizations such as Habitat for Humanity from property taxes on homes being built for low-income families.
The bill is from Rep. Dale Zorn, who was a county commissioner in Monroe County for 20 years.
Zorn, R-Ida, said some municipalities already grant such exemptions, but it should become a statewide policy.
When such organizations have been paying property taxes, sometimes they can’t afford the payments.
“They end up having to re-sell them rather than re-build them,” Zorn said.
Once a low-income family takes ownership of a property, the tax would be reinstated under the bill.
“In most cases it will only take a year or two,” he said.
The savings to nonprofits could free up additional resources to invest in construction, said Rep. Bruce Rendon, R-Lake City, a co-sponsor of the bill.
“It would help to keep that money in their coffers and to look for another host family to do another project,” he said.
Other sponsors include Reps. Peter Lund, R-Shelby Township; Mark Ouimet, R-Scio Township; Nancy Jenkins, R-Clayton; and Pat Somerville, R-New Boston.
Habitat for Humanity is a community asset, Rendon said, and gives all people involved a sense of worth and direction.
“This would actually aid local economies in communities by creating work and housing. I think the plus is much more than what it would cost the local government,” Rendon said.
But if the bill goes through, it could create a division between nonprofits and local communities, resulting in a weaker program, Michigan Townships Association legislative liaison Bill Anderson said.
Under current law, nonprofits are required to ask the city or other municipality’s permission for the tax exemption. But under the bill, nonprofits would be sidestepping the dialogue, Anderson said, instead of working with the community.
“It’s a great program,” but many times people feel the organizations are not contributing revenue to the already cash-strapped communities they are working in, he said.
Most properties are donated by the city or lank banks and are dilapidated houses, which are not paying taxes, said Habitat for Humanity Michigan President Sandy Pearson.
“What we’re actually doing is creating a situation where we are building tax-generating property, so we feel we do contribute to the community,” Pearson said.
The bill is pending in the House Tax Policy Committee.
© 2011, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.