Home Economy Government City Council delays vote to override Smiley’s 8-law veto

City Council delays vote to override Smiley’s 8-law veto

By

Christopher Allen

-

05/03/2024

Screenshot — THE PROVIDENCE CITY COUNCIL delayed a vote to override Mayor Brett P. Smiley’s veto of the recently passed 8% law ordinance. /PBN SCREENSHOT

PROVIDENCE – An effort by city officials to change the state-enabled tax incentive available to developers and rental property owners is now in limbo. The Providence City Council on Thursday tabled its scheduled vote to override Mayor Brett P. Smiley’s veto of the recently passed 8% law ordinance, an incentive that allows municipalities to give tax

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PROVIDENCE – An effort by city officials to change the state-enabled tax incentive available to developers and rental property owners is now in limbo. The Providence City Council on Thursday tabled its scheduled vote to override Mayor Brett P. Smiley’s veto of the recently passed 8% law ordinance, an incentive that allows municipalities to give tax breaks to residential property owners of buildings with low-income units by allowing them to pay 8% of the previous year’s rent collected as its property tax bill. Council President Rachel Miller, who sponsored the bill, released a statement after the meeting saying “some concerns” had been raised in the preceding two days from “low-income housing partners.” “While I am confident that the ordinance as written meets their concerns, I am happy to give us all an opportunity to discuss together before moving forward,” she said. Seen as closing a longtime loophole that disproportionately benefits real estate interests, saving them millions of dollars in property taxes, the ordinance was approved by the council on April 18 in a 13-2 vote. State law allows property owners of buildings being rehabilitated to pay 8% of the previous year’s rent collected as its property tax bill on housing that includes low-income units. But some property owners have been awarded 8% law treatments that were then applied to entire buildings even though only a small number of units were income-restricted. It has also been used for market-rate commercial units in mixed-use buildings. The new ordinance defined low-income units as those restricted to tenants earning 80% or less of the area median income and where rent is limited to 30% of their income. It also changed the way the incentives are applied to those properties across the city, adding new oversight and reporting powers, as well as added costs to City Hall in the form of new hires and technology upgrades. Administration officials said the ordinance would increase the budget by $548,651. There are 620 properties comprising 7,500 units currently eligible for the incentive. Smiley had said repeatedly that his administration supports 8% law reform but questioned the approach of the city going it alone rather than through a bill being pushed in the General Assembly. He suggested in his veto letter that certain elements regarding income verification to confirm continued eligibility may conflict with federal regulations. Majority Leader James Taylor, who was one of two council members who voted against the ordinance, was troubled it had not gone through the usual public hearing process, with additional input from local nonprofits and housing advocates. “Let’s do it right the first time,” he said. The council had 30 days to override the veto, which it could do at its next meeting on May 16. During the council discussion, Councilman Miguel Sanchez suggested that certain nonprofit organizations and other stakeholders had been quietly pressured by the administration to lobby their council representatives to oppose the override. “A lot of phone calls are happening,” he said. “To me, this is simple. You are either with the people of Providence or you are not.” Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.