Lowndes Seeks Options in Section 42 Housing Dispute

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LOWNDES COUNTY, Miss. (WCBI) — Lowndes County leaders want to stop developers of low-income housing from using state tax breaks to avoid hundreds of thousands of dollars in local property taxes.

Supervisors today refunded $110,000 in school taxes to five properties.

The refunds were part of a statewide lawsuit won by the developers who fought the way Lowndes and other counties were charging property taxes. Together, the county and Columbus have refunded more than $300,000.

Supervisors agreed to study whether the county could block future Section 42 housing complexes if they don’t agree to pay property taxes. The board asked County Administrator Ralph Billingsley, Tax Assessor Greg Andrews and Columbus attorney Berk Huskison to study what options the county might have.

Four more developers are considering projects in the county.

Supervisors noted one subdivision alone has 84 homes valued at at least $100,000 each but paid no property taxes because of the tax incentive. Each home normally would have been assessed about $1,825 in taxes, Andrews said.

The incentive allows Developers to get federal tax credits to help build the homes, which are leased for 15 years and then can be bought by the renters. The tax credits aren’t counted as income so the developers can show no income on their balance sheets.

That issue is what prompted the three-year court battle between developers and counties over how the properties should be taxed. Statewide, it cost local governments millions of dollars.

The Legislature has rejected requests from local governments to correct the problem.