The Tax Status of Ohio Property Used for Low-Income Housing

This Note argues that the rule denying property tax exemption to low-income housing units is improper. The rule is improper in three significant regards. First, as a matter of social and public policy, the rule is misguided, because it hinders the fulfillment of an important need in Ohio and in American society at large. Second, as a purely legal matter, the original rule denying exemption for these properties resulted as a mistaken application of the existing law regarding the definition of charitable use. The third, and most compelling reason, is that the legal basis underlying the original rule has undergone a significant change.\u27 The change of the rule\u27s legal foundation is the result of many factors, most notably a 1990 amendment to the Ohio Constitution. Other factors include the actual practice in the nonprofit organizations and affiliated governmental support, and shifts in national and state policy. The old rule, though still applied, is in conflict with the otherwise clearly declared policy of the state. As one writer phrased the case, there appears to be no logical explanation for the routine denial of exemptions ... when a charitable institution provides low-rent housing for needy persons.