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Wisconsin Supreme Court to Rule on Low-Income Housing Assessment

by Morgan Thomas, Chicago, April 2016

 

In its upcoming session, the Wisconsin Supreme Court will examine a case related to the appropriate methodology for assessing low-income housing developments. This is an issue that has resulted in differing opinions in other states.

 

Which Assessment Approach is Correct?

 

In Regency West LLC vs. The City of Racine the key question is whether the sales comparison approach, the income approach, or the cost approach is the proper method to assess Section 42 low-income housing.

 

Under Section 42, developers receive tax credits for building affordable housing. The owner of the Regency West Apartments sued the City of Racine in 2013, alleging the subsidized housing complex was overvalued in 2012 and 2013. The case went to trial in 2014 and was dismissed by County Circuit Judge Gerald Ptacek. Then in September 2015, the Wisconsin Court of Appeals dismissed an appeal of Ptacek's ruling. The Supreme Court will render its decision after being petitioned by the owner of Regency West.

 

No Definitive Precedent

 

There is no general agreement about whether local governments should include the value of federal tax credits in their valuation of low-income properties for tax assessment.

 

The following are just some examples of the wide variety of legal opinions expressed.

 

It is not known just when the Wisconsin Supreme Court will issue its ruling on property tax assessment of low-income housing projects. However, the case has been scheduled for oral arguments.