HB 2673
In CommitteeHouse
Social housing agencies/tax
Establishing tax exemptions for property used as affordable housing owned or operated by a social housing agency.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill creates a new property tax exemption for rental housing owned or operated by social housing agencies, provided the housing serves low- or moderate-income households and is funded through designated state or federal programs. It also clarifies definitions and eligibility rules for tax-exempt housing and updates related tax exemption procedures.
- Creates a new property tax exemption for real and personal property owned or used by a social housing agency to provide rental housing for low- or moderate-income households, if at least 50% of units are occupied by qualifying households.
- Allows partial exemptions when fewer than 50% of units are occupied by qualifying households—exemption is proportional to the share of qualifying units.
- Defines 'social housing agency' as a public or quasi-public entity (e.g., public development authority) that owns, develops, or finances affordable housing—explicitly excluding traditional housing authorities, public corporations, and counties or municipalities.
- Requires that the housing be financed, insured, or assisted through specific state or federal programs (e.g., Department of Commerce programs, affordable housing levies, or city/county affordable housing funds).
- Permits payments in lieu of taxes (PILOTs) from exempt agencies to local governments, capped at the last levied property tax amount on the property before exemption.
- Includes income and occupancy rules: qualifying households earn ≤80% of area median income (adjusted for household size); moderate-income households earn ≤120%.
- Allows temporary exemption for unoccupied properties undergoing renovation if financing and intent to build affordable housing are documented, for up to three years.
Who is affected
- Social housing agencies — Social housing agencies can now claim full or partial property tax exemptions for rental housing they own or operate, if at least 50% of units are occupied by low- or moderate-income households and the housing is funded or assisted through specific state or federal programs.
- Low- and moderate-income households — Low- and moderate-income households benefit from increased availability of affordable rental housing, as the bill encourages development and preservation of such housing through tax incentives.
- Cities, counties, and other local governments — Local governments may receive partial payments in lieu of taxes (PILOTs) from exempt properties, up to the amount of property tax previously levied, to help offset lost revenue.
- Housing authorities and public development authorities — Housing authorities and other public or quasi-public entities that qualify as social housing agencies gain new authority to develop or finance affordable housing with property tax relief.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The bill directly increases the supply of affordable rental housing by providing full or proportional property tax exemptions for social housing agencies, lowering operating costs and making new or preserved units more financially viable—especially for households earning ≤80% AMI.
HousingPeopleRef: Sec. 3(1); Sec. 3(6)(e)By allowing partial exemptions when 30–49% of units serve qualifying households, the bill encourages broader inclusion of moderate-income households (≤120% AMI), expanding access to affordable housing beyond the lowest-income brackets.
HousingPeopleRef: Sec. 3(1)(b)(v); Sec. 3(6)(f)The temporary exemption for unoccupied properties undergoing renovation (up to 3 years) helps preserve existing housing stock and supports redevelopment of blighted or underutilized sites—preventing displacement and stabilizing neighborhoods.
HousingPeopleRef: Sec. 3(4); Sec. 3(6)(d)The income “cliff” protection—allowing existing exempt households to remain if income rises below 80% AMI—prevents displacement due to modest income gains, promoting housing stability for working families.
HousingPeopleRef: Sec. 3(3); Sec. 3(6)(e)The PILOT provision allows local governments to negotiate payments for services, offering some fiscal offset—though limited—while encouraging collaboration between agencies and municipalities on shared community goals.
Local GovernmentLean peopleRef: Sec. 3(6)(f)
Potential Concerns (4)
Local governments may experience reduced property tax revenue due to exemptions on qualifying social housing agency properties, with PILOTs capped at prior tax levies and no guarantee of full compensation—especially problematic for jurisdictions already under fiscal stress from other exemptions (e.g., tribal lands, federal property).
Local GovernmentPeopleRef: Sec. 3(1)(b)(v); Sec. 3(6)(f)The PILOT provision (Sec. 3(6)) is voluntary and capped at the *last levied* tax amount, meaning jurisdictions that have cut levies in prior years receive no additional compensation, and agencies are not required to make PILOTs at all—reducing fiscal reliability for local governments.
Local GovernmentLean peopleRef: Sec. 3(1)(b)(v); Sec. 3(6)(f)The bill’s narrow definition of “social housing agency” excludes traditional housing authorities, counties, and municipalities—limiting access to the exemption to only a subset of public entities (e.g., public development authorities), potentially slowing deployment of affordable units in jurisdictions without such authorities.
HousingPeopleRef: Sec. 3(1)(b)(v); Sec. 3(6)(f)The requirement that housing be financed or assisted through specific state/federal programs (e.g., Dept. of Commerce, affordable housing levies) may exclude smaller developers or nonprofits that rely on private capital or mixed-finance models, limiting market participation and potentially reducing construction activity in some regions.
Business & EmploymentLean peopleRef: Sec. 3(1)(b); Sec. 3(6)(f)
Who Is Most Affected
Social housing agencies (e.g., public development authorities) gain new authority to claim full or partial property tax exemptions, reducing operating costs and improving financial viability of affordable housing projects. However, they must comply with strict eligibility and reporting requirements and may face PILOT obligations.
Low- and moderate-income households benefit from increased availability of affordable units and protection from displacement due to income changes. However, access depends on agency capacity and program availability in their jurisdiction.
Local governments may receive partial PILOTs but face reduced property tax revenue, especially in areas with high concentrations of exempt properties. Jurisdictions without strong PILOT negotiation capacity or with high exempt property concentrations may face budget strain.
Traditional housing authorities are explicitly excluded from the definition of “social housing agency,” limiting their ability to access this exemption—potentially putting them at a competitive disadvantage relative to newly eligible public development authorities.
Private developers and landlords are not direct beneficiaries, but may benefit indirectly if social housing agencies acquire land or partner on mixed-income developments. However, the bill may reduce demand for market-rate rentals in some areas as affordable supply increases.