Home Economy Government Revised ‘8% law’ ordinance introduced by Providence City Council

Revised ‘8% law’ ordinance introduced by Providence City Council

By

Christopher Allen

-

05/17/2024

179lSWTz-JQFaI3qY-city-council-PVD-1 — THE PROVIDENCE CITY COUNCIL will take up a revised version of its “8% law” ordinance after a previous version was vetoed by Mayor Brett P. Smiley. /PBN FILE PHOTO/CHRIS BERGENHEIM

PROVIDENCE – After failing to muster the votes needed to override a veto from Mayor Brett P. Smiley, the City Council on Thursday introduced a newly revised “8% law” ordinance that reduces some of the oversight and compliance requirements for city staff who would be charged with implementation. A council press release said the revision

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PROVIDENCE – After failing to muster the votes needed to override a veto from Mayor Brett P. Smiley, the City Council on Thursday introduced a newly revised “8% law” ordinance that reduces some of the oversight and compliance requirements for city staff who would be charged with implementation. A council press release said the revision was “crafted after significant input and lengthy discussions with community partners." 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. Introduced by City Council President Rachel Miller, the “8 Law” ordinance would define rental units "low-income" only when restricted to tenants earning 80% or less of the area median income and the rent is limited to 30% of their income. The revised ordinance adds flexibility to the tax assessor's process for creating written rules that require ratification by the council, including requiring that only a copy of the restrictive covenant of a property is needed at initial certification, rather than annually. It also removes the requirement to include annual income of tenant households occupying each low-income unit within a property, defines "substantial rehabilitation" within the ordinance as opposed to using the U.S. Department of Housing and Urban Development handbook and adds clarifying language defining the ordinance’s intention is to apply to new construction in addition to “substantially rehabilitated properties.” Lastly, it sets the application deadline for March 15, includes the ability for a revocation to be reinstated the following tax year, and allows for the revocation of the tax treatment of individual units rather than entire properties. Housing Network of Rhode Island expressed support for the changes, writing that city officials and council members to were open to "hear and understand our concerns, and work together to address those concerns.” Supporters of the ordinance argue the law has been abused by housing developers and property owners by applying it to entire buildings rather than only income-restricted units. Others have received the incentive for commercial and mixed-use buildings. In a statement Thursday, Miller said council members held multiple discussions with community development groups and non-profit developers since the past council meeting. “We listened and collaboratively made the appropriate changes to the legislation,” she said. “Council urgently needs to move forward with this ordinance to close the tax loophole being taken advantage of by ultra-wealthy developers and to ensure that everyone is paying their fair share in our city.” In other matters, the council approved an ordinance requiring short-term lenders be licensed with the city and pay a $250 annual fee. Lenders are also required to maintain accounting records open for inspection by the police department or other authorized personnel. The council also approved an amendment to the city code requiring that graduates of Providence Public School District be considered for vacant city jobs by mandating that if one or more qualified PPSD graduate apply within seven days of being advertised, the Human Resources Department will be required to interview at least one applicant. Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.