Even Broward's nonprofits are singing the property tax blues
February 27, 2007
We all know that new homebuyers and owners of commercial, rental and vacation properties have been socked with high property tax bills. Now, thanks to aggressive enforcement of complex state statutes by Broward Property Appraiser Lori Parrish, even some nonprofit groups are getting walloped.
"This causes us tremendous hardship," said Nancy Merolla, CEO of Broward Housing Solutions, a nonprofit hit with a $14,830 tax bill for two undeveloped properties that had previously been exempt. "It's another battle for us that could have a huge impact on what we're trying to do."
Charitable and religious groups historically have gotten tax exemptions from the appraiser for vacant lots or projects under construction.
But that's no longer the case, with Parrish saying state law and a 2005 appeals court ruling compel her to tax properties that are not "used predominantly" for an exempt purpose.
This means she's going after religious groups that have bought land for future use, and she's also going after nonprofits that acquire land to build affordable housing for the poor or disabled.
"We've all been sucker-punched by this," said Suzanne Weiss of the Fort Lauderdale Community Development Corporation, an affordable-housing nonprofit that's fighting a 2006 tax bill of almost $10,000 on four previously exempt properties.
Jerrod Mathias, an attorney at the Property Appraiser's office, said Broward Housing Solutions is one of six nonprofits that are challenging the loss of tax breaks on planned housing projects. Mathias said the properties could regain tax-exempt status when the projects are complete.
The nonprofits say Parrish is being needlessly overzealous, and that the unexpected tax bills will siphon money from tight budgets.
"Every dollar we lose is another dollar that we have to raise," said Merolla, whose organization builds and operates housing for people with mental illness and disabilities.
"We try to work with [the nonprofits]," Parrish said. "But we have to follow the law."
Parrish said an appeals court ruling on a Broward County case in January 2005, the month she took office, set the precedent that calls for the strict interpretation of the "predominant use" standard in state law. With the ruling, Parrish said, properties that aren't actively used for religious or charitable purposes each Jan. 1 must be taxed for the upcoming year.
Merolla said she was shocked when she got a tax notice last fall for two properties the county had deeded to her group. Both are being developed to house young adults with mental illness aging out of foster care. Both have deed restrictions that require the properties to be used for affordable housing for 30 years.
A vacant lot in Coral Springs, proposed site of a triplex named Woodside Gardens, had a $2,264 tax bill. A vacant apartment building in Hollywood, which the county sold to Broward Housing Solutions for $10 in 2005, was assessed over $500,000 and had a $12,566 tax bill. The building has been permitted for demolition, and county grants will help build the new complex.
"This makes no sense," Merolla said, noting her group would apply for another county grant to offset the tax bill.
Parrish's attorneys say the Legislature needs to rewrite the law to allow exemptions to nonprofits making a good-faith effort to build things.
The nonprofits say a legislative fix requires lobbying time and money, things they lack.
"It shouldn't be this complicated," Weiss said.
Nor this inconsistent. The Broward chapter of Habitat for Humanity, which builds houses for the poor, does not pay taxes on the scores of vacant properties it owns throughout the county. Ron Gunzburger, the appraiser's legal counsel, said that's because the nonprofit's predominant purpose includes acquiring land to build on.
Weiss says she can't figure out how that's any different from what her group does.
And Merolla argues that acquiring and developing land is an intrinsic part of her group's mission, too.
Too bad Parrish and her nitpicking crew can't see it that way.