Apartments' Tax Break Rapped

Apartments’ Tax Break Rapped

State Rep. Thomas G. Sharpe, R-Howell, said today he believes the state’s property tax exemption should be removed from Colonial Square Apartments in Ann Arbor and from other housing built with low-interest loans provided by the Federal Housing Administration under Section 221 (d) (3) of the federal housing act.

Sharpe said that “in 1966 the (Michigan) Legislature exempted non-profit federally-aided housing corporations from property taxes by providing for the payment of 10 per cent of rents instead. But the Legislature also specified that such housing was to be restricted to families unable to afford housing on the private market.”

A proposal to remove the property tax exemption from Colonial Square Apartments and other 221 (d) (3) housing now operating in Michigan is being considered by the House State Affairs Committee and may be voted on by the House about two weeks, Sharpe said. He is chairman of that committee.

He charged that the administration standards of Colonial Square Cooperative, at 30102 Williamsburg in southeastern Ann Arbor, "encourage middle-class families to move from the private to the public sector in housing by means of a substantial subsidy."

Sharpe contends that "the federal government has set standards that make a mockery of the Michigan Legislature's sincere attempt to help low-income families.  At the Colonial Squares Apartments in Ann Arbor, for example, the maximum income for residents has been set at $9,600...even this requirement isn't being enforced."

"As a result of federal aid," Sharpe states, residents "would pay only $107 for a new six-room, 1 1/2 bath apartment — that is, if the development contributed its fair share of taxes . . . the apartment development will charge only $87 a month for such apartments — at a cost of fully $89,240 in taxes to the schools the children of the residents attend and the local governments that provide their protection and other essential services."

Sharpe add:  "Whatever the reason for this glaring loophole, I am calling upon all my fellow legislators to join with me in taking prompt and emphatic action to plug it.”

Spokesmen for Colonial Square Apartments have told The News the maximum income for tenants was raised last year from $9,600 to $10,540, and that rent on a six-room apartment has been raised to $115, although some units rent for less. The spokesmen also said tenants’ income checked each three years, and will be checked in 1968.