Nonprofits may get tax relief: Agencies that provide affordable housing without state subsidies have seen property tax bills surge higher

Nonprofits that provide affordable housing without state subsidies may get some property tax relief under a bill introduced Monday by state Sen. Jerry Hill, D-San Mateo. 

Senate Bill 678 aims to help nonprofits and religious organizations that provide affordable housing by increasing their property tax exemption from $20,000 annually to $100,000 annually.

Some local agencies, including the Ministry Services of the Daughters of Charity of St. Vincent de Paul and the St. Francis Center in Redwood City, have seen their property tax bills increase substantially as the area’s property values have skyrocketed.

The Daughters of Charity property tax bill for last year was $68,000 over the $20,000 cap.
“This money would go a long way to support the Missions of the Daughters of Charity to provide services to low-income families,” the agency’s Director of Ministry Services Jacqueline Day wrote in a letter to lawmakers.

The agency provides 40 low-cost apartments in East Palo Alto.

The bill is an idea born out of Hill’s eighth annual “Oughta Be A Law … Or Not” contest for constituents.
It was proposed by Sister Christina Heltsley of the Saint Francis Center, which provides 46 units of low- and extremely low-income housing in Redwood City.

The agency’s tax bill last year was about $24,000 over the cap.

“We are seeking relief so that we can reinvest whatever donations come to us into this community especially into low-income housing,” Heltsley wrote in a letter to Hill.

There are only 76 different properties in California currently being reported to the Board of Equalization by the county assessors that are subject to this cap, according to Meegen Murray, Hill’s legislative director. These properties are owned by 26 different nonprofit organizations. Only eight of those organizations might be approaching, are at or over the cap. Three of the eight organizations are in Hill’s district, according to Murray.

Hill said ultimately that he would like to lift the cap entirely so the entities won’t have to pay any property taxes.

“We can’t afford to lose affordable housing. These agencies can save a considerable amount of money toward providing critical services to those most in need,” Hill said.

The $20,000 cap became law in 2000. It was placed in statute following abuses by some nonprofit agencies in the 1990s that provided affordable housing but essentially acted as “slumlords,” Hill said.
Hill introduced nine bills Monday, two others of which were “Oughta Be A Law” contest winners. One, SB 681, was proposed by San Bruno resident John Dillon. The bill reduces the fine for right turn-on-red traffic violations from $500 to $250.

The other is SB 814, proposed by a San Mateo resident, which requires water districts to fine households that use excessive amounts of water each month.

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