Developer seeks assessment reduction
The developer of 30 rent-to-own houses in Uniontown is seeking a reduction in the assessed value of those homes, arguing that rent paid by its low- and moderate-income tenants is not enough to cover real estate taxes. Uniontown Family Homes, which is a partnership between Fayette County Community Action and PIRHL Developers of Cleveland, Ohio, appealed the assessed values of the houses to the Fayette County Assessment Appeals Board earlier this year, but the hearing was continued until Thursday.
Uniontown Family Homes built the houses last year using tax-credit financing through the Pennsylvania Housing Finance Agency, a state grant and financing from other public and private sources.
The development cost about $7.5 million.
The homes – most of which are located on Pearl and Diamond streets in Uniontown – are currently assessed with a median value of about $92,000.
The development group’s initial appeal looked to reduce that figure by about 80 percent to around $13,000 assessed value per unit.
However, during Thursday’s hearing, development officials said they have since revised that figure to about $36,000 per home.
Following testimony, assessment appeals board President Lloyd Moser said that the appeal will be taken into account and a ruling will be issued at a later date.
The county based its assessment on the homes’ market value, but developers want the assessment based on an income-based approach because their tenants pay below-market rent, which is set by the state.
The income approach is commonly used in assessing the value of tax-credit properties with income restrictions, said James Stark, Community Action’s chief executive officer.
The current assessed value of the houses ranges from $85,000 to $95,000, requiring the development group to pay about $2,100 a year in taxes on each house, and that money is then divided between the Uniontown Area School District, Fayette County and the city of Uniontown.
“We never would have made this investment if we knew that we would be viewed as a market rate development,” said David Burg, a PIRHL official.
Stark said that developers had spoken often with the county assessment office since 2007 and that the group had believed that the assessments would be based on income.
Assessment appeals board member John Rogish said that if the board would follow the income-based assessment approach for the developer’s homes and reduce the assessed values, then the board would be forced to also take income into consideration for other county residents.
Burg said that while he understood the question of fairness being posed by Rogish, the houses would not have been built if the developer thought they would be assessed by a market-based approach and also noted that there is state law that urges income-based assessments for such projects.
“The rationale you submit is going to be difficult for the constituents to absorb,” Rogish said.
Uniontown Mayor Ed Fike said he agreed with some of Rogish’s concerns, noting that while he recognizes the benefits of the housing, the reduced assessments would be difficult for Uniontown residents to understand.
“These are nice homes, well-built homes+ but I represent 12,500 people and whatever they want is where I am at,” Fike said.
He did note that if the values are reduced, the city and the school district would still receive about $500 per home in tax revenue and that many of the properties were vacant prior to the development project.
Officials said that all 30 houses are currently rented, with a monthly rent total of more than $16,000 being collected.
The Uniontown Redevelopment Authority, which obtained a $500,000 state grant for the development, recently agreed to apply for another $500,000 state grant for the Uniontown Family Homes II development of more rent-to-own homes on scattered sites.