Taxing fairness...

Among the myriad impediments to creating an even remotely adequate supply of affordable housing in Howard County, one stands out for being dumb...and unfair.

An idea to lower the property tax burden for buyers of subsidized homes in Howard County has support from several candidates for county executive and the County Council.

The proposal, backed by the Association of Community Services (ASC), an umbrella group of 150 social service and health agencies, would have homebuyers under the county's Moderate Income Housing Unit program pay property taxes on just the portion of the house that they own - typically 51 percent to 60 percent. The county Housing Commission owns the rest.

Buyers now pay taxes on the full market price of the house, a heavy burden in Howard's high-price real estate market.

Yes, that's really how the system works. Families own half the house, the government owns the other half, and yet they're forced to pay the government's share of taxes, even though by qualifying for the program the government has acknowledged that they could not afford a house without assistance. Although the homeowners in this program enjoy the full use of their house, the real benefit of homeownership -- wealth creation -- is something they have to split with the county upon selling it.

All the taxes, half the returns.

Why shouldn’t the county also be liable for its share of taxes, especially considering the large tax bill some homeowners face?

A recently sold home in the program included a monthly mortgage of $1,448, plus real estate taxes of $375 a month, according to county housing officials. The change could cut that tax bill nearly in half.

In this case, the homeowner was paying more than $1,800 a month for housing (affordablilty is clearly relative), but could have reduced those payments by almost $200 if the county paid its fair share. I don't know anyone who couldn't use an extra $200 a month.

The good news is: changing this backwards provision seems to have support from public officials.

"I think it's a great idea," Councilman Ken Ulman, a west Columbia Democrat running for county executive, said at a candidates forum on human services last week in Columbia.

… [O]thers, including independent executive candidate C. Stephen Wallis, Republican council candidates Tony Salazar and Gina Ellrich and Democratic council candidates such as Mary Kay Sigaty and Joshua Feldmark, said they support the concept.

"It seems fair to me for us to support such an initiative," Wallis said.

Unfortunately, it doesn't enjoy unanimous support.

Council Chairman Christopher J. Merdon, a Republican candidate for county executive, said after the meeting that he would have to study the issue.

"Property taxes are to pay for services," he said. "We have to pay for our services somehow."

He also stressed his support in a housing bill approved by the council June 5 for allowing lower-income people to qualify for moderate-income housing.

This argument would carry more weight if we actually had a large supply of affordable housing. But considering the housing program has only been around for a few years and in that time it has had a minimal impact on affordability (read: it has produced a handful -- again, relative -- of houses), I don't think allowing residents to pay taxes only on what they actually own is going to have a noticable effect on county revenue.

However, at least Merdon supported a housing bill that lowers the income threshold for particiaption in the program, a measure that gives us a larger pool of qualified applicants who won't be able to afford their affordable house after the tax man visits.