Ada County Loses Tax Assessment Battle New Calculation Ordered On Value Of Low-Income Apartment Complex

The Idaho Supreme Court on Thursday ordered recalculation of the value of a Boise low-income apartment complex in view of the long-term restrictions on the rent it can charge.

In its unanimous ruling, the high court held that the Ada County assessor and the county commission improperly applied the state tax assessment laws by ignoring the requirement that assessments reflect the actual and functional use of property.

The county officials, backed up 4th District by Judge Robert Rowett, maintained that for property taxation purposes assessed value means the value of the apartments on the open market, ignoring their reservation for low-income tenants only.

“The county’s position ignores the significance of the requirement … that actual and functional use shall be a major consideration when determining market value for assessment purposes,” Justice Gerald Schroeder wrote for the court.

“The actual and functional use of this property is as rent-restricted, low-income housing,” Schroeder said. “It cannot be used otherwise.”

The Greenfield Village Apartments, run by an Oregon-based company, were set up under federal law which provides them a tax credit of $258,000 in return for a 20-year binding commitment to restrict rent charges to accommodate low-income tenants.

The county assessed the property at $3.2 million. The complex claimed the value should only be $2.65 million because of the rent restriction that checked revenue potential.

While the court said the county failed to properly calculate the value of the complex, it did not endorse the calculation submitted by Greenfield Village. It instead ordered the district court to review the matter, taking into account the impact of the rent restriction as well as the tax credit.