Juneau -- The Alaska Senate Thursday passed House Bill 272, which changes State law to encourage the development of needed affordable housing for low-income families.

In 1998, the Municipality of Anchorage changed its method of assessing low- and moderate-income housing units, basing assessments on estimated market value, that is: on the amount of rent these properties would receive were they not deed-restricted. As a result, assessed values of some low-income properties went up as much as 100 percent in 1998.

"This change in assessment has created a severe problem for the non-profit agencies and others who are developing these types of properties," said Representative Andrew Halcro (R-Anchorage), joint sponsor of HB 272. "Banks are now refusing to finance these properties because they are no longer financially viable under the market assessment approach."

Properties developed under the federal Department of Housing and Urban Development's tax credits for low-income housing policy are designed to show little profit, but the Municipality of Anchorage's actions have put the financial future of some properties at risk through substantial tax increases. Increases in local taxes cannot be a cause for a rent increase under the program's guidelines. HB 272 requires local governments to assess low-income housing based on its actual rents rather than its estimated market value.

"Providing affordable housing to Alaskans who are otherwise priced out of the market is an important goal," said Representative Norman Rokeberg (R-Anchorage), joint sponsor of HB 272. "The federal government provides tax credits for the specific and worthy purpose of encouraging housing for those who need it the most. As a result of the Municipality of Anchorage's policy, Alaska is now the only state in the union not to use its allotted tax credits for this program."

HB 272 passed the Senate 14-5. Notice of reconsideration was filed.

Attachments:

• Sponsor Statement

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