The URL can be used to link to this page

Home My WebLink AboutAgenda 05-24-22; 6-a - Longtime Homeowner Assistance (LHA) Additional Information 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 24, 2022 Action Agenda Item No. 6-a SUBJECT: Longtime Homeowner Assistance (LHA) Additional Information DEPARTMENT: Housing and Community Development ATTACHMENT(S): INFORMATION CONTACT: Corey Root, Director, Housing and Community Development, 919-245- 2492 Nancy Freeman, Tax Administrator, Orange County Tax Office, 919-245- 2735 Gary Donaldson, Chief Financial Officer, Orange County Finance, 919-245- 2453 PURPOSE: To receive further information and consider options for the LHA program in 2022. BACKGROUND: On May 3, 2022, the Board of County Commissioners reauthorized and approved the following changes to the Longtime Homeowner Assistance (LHA) program for 2022: • Adjust program operation dates to August 1 through December 1, 2022. • Include an informational insert with the tax assistance application packet and increase awareness about LHA. • Formalized the LHA policy for heirs' properties where there are more than one person/households listed on the deed. • Formalized the policy for Family Trust owned properties. • Require that the applicant provide a copy of the targeted tax bill. • Reduce the requirement to have owned and lived in the home for 10 years to 5 years to increase access to the program. Staff plans to add this or a similar clarifying statement to the informational insert: If you received assistance from this program on your 2021 tax bill, you DO NEED TO APPLY again to qualify for assistance on your 2022 tax bill. Staff offers the following information regarding a change program design that would cover more of the amount owed by the taxpayer. Using data from the 2021 LHA program, the American Community Survey, the FY22 Area Median Income for Orange County, staff is providing more detailed estimates for options. 2 Additional Information: • Currently 913 properties in Orange County are receiving the Homestead Exemption or another type of low-income assistance. • The Tax Office found 20,009 owner-occupied residential properties in Orange County that have been owned for 5 or more years who will likely have an increase in the County portion of the tax bill as compared to their 2020 tax bills (base year). • In comparison, the Tax Office previously identified 9,704 residential properties that have been owned for 10 or more years. 1. Institute a baseline minimum award amount: The award amount would be equal to the difference between the County Tax portion of the 2020 tax bill and the estimated 2022 tax bill, with a minimum award amount of $300 (note that the average award amount for 2021 was roughly $190). • For the 20,009 residential properties owned for 5+ years who will have increases in the County portion of their 2022 tax bill, the average County tax portion is $2,954. • The tax increases range from $0.01 to $8,940.92 • 17,044 have an estimated increase of under $300 (average $110) • For the remaining 2,935, the average increase is $569 and the total increase for all 2,935 is $1,670,143. • Using income data from the American Community Survey (ACS) 5-Year Estimates Data Profiles and an owner-occupied rate of 63.8% per the 2020 Consolidated Plan, staff estimate the following number of households at the Area Median Income levels: Estimated owner- occupied Income level households in OC Over 80%AMI 9,984 61-80%AMI 3,181 31-60%AMI 3,622 30%AMI and under 3,241 TOTAL 80%AMI and below 10,045 • Using the ACS data for household numbers and owner-occupied rate leads to a slight difference in the total number of households compared with Tax Office data —the ACS total households is 20,029 compared with the Tax Office actual total of 20,009. • The total liability (100% participation)for instituting a $300 minimum for 10,045 households would be $3,013,355. • Program costs decrease as participation decreases: Total Liability (100% 25% 50% 75% participation) participation participation participation $300 minimum $ 3,013,355 $ 753,339 $ 1,506,678 $ 2,260,017 2. Awards cover half of total tax bill: Award would cover half of total tax bill for homeowners earning 80% AMI or under, up to these total amounts: $500 for households with incomes <_ 61- 80% AMI $750 for households with incomes <_ 31- 60% AMI 3 $1,000 for households with incomes <_ 30%- below AMI 2021 apps w/County portion Average of tax Owner-occupied of bill over 2x bill under 2x max Max Income level households in OC max assistance assistance Assistance Total Liability 61-80%AMI 3,181 100% N/A $ 500 $ 1,590,716 31-60%AMI 3,622 67% $1,007 $ 750 $ 2,418,645 30%AMI and under 3,241 5% $1,083 $ 1,000 $ 1,831,465 TOTAL 80%AMI and below 10,045 $ 5,840,825 • Staff used 2021 LHA program data to calculate the percentage of potential participants with the County portion of their tax bills in excess of double the max assistance proposed. • For households at 61-80% AMI, all 2021 LHA participants at 61-80% AMI had tax bills in excess of$1,000 (double the max assistance of$500); liability for this group was calculated by simply multiplying the number of households (3,181) by the max assistance ($500) _ $1,590,716 • For households at 31-60% AMI, 67% of the 2021 LHA participants at 31-60% AMI had tax bills in excess of $1 ,500 (double the max assistance of $750); liability for this group was calculated by multiplying the number of households (3,622) by 67% times the max assistance ($750) and then adding this to the remainder of the group, the number of households (3,622) times 33% times half of the average tax bill for the 2021 LHA participants at 31-60% AMI that did not have tax bills over $1,500 — this average is $1 ,007 = $2,418,645 • For households at 30% AMI and under, 5% of the 2021 LHA participants at 30% AMI and under had tax bills in excess of $2,000 (double the max assistance of $1 ,000); liability for this group was calculated by multiplying the number of households (3,241) by 5% times the max assistance ($1,000)and then adding this to the remainder of the group, the number of households (3,241) times 95% time half of the average tax bill for the 2021 LHA participants at 30% AMI and under that did not have tax bills over $2,000 — this average is $1083 = $1,831,465 • The total liability using these calculations is $5,840,825 • Program costs decrease as participation decreases Total Liability (100% 25% 50% 75% Income level participation) participation participation participation 61-80%AMI $ 1,590,716 $ 397,679 $ 795,358 $ 1,193,037 31-60%AMI $ 2,418,645 $ 604,661 $ 1,209,322 $ 1,813,983 30%AMI and under $ 1,831,465 $ 457,866 $ 915,733 $ 1,373,599 TOTAL TOTAL 80%AMI and below $ 5,840,825 $ 1,460,206 $ 2,920,413 $ 4,380,619 FINANCIAL IMPACT: The program would expend the remaining $233,636 in ARPA funding that has been allocated to assist long-term, low-income households affected by the tax revaluation of property. The funding is limited to the available funds consistent with the NC Statutes pre-audit requirements. 4 SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable to this item: • GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND INEQUITY The fair treatment and meaningful involvement of all people regardless of race or color; religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic background; age; military service; disability; and familial, residential or economic status. • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. ENVIRONMENTAL IMPACT: There are no Orange County Environmental Responsibility Goal impacts applicable to this item. RECOMMENDATION(S): The Manager recommends that the Board discuss and consider the design change and options detailed above and provide direction to staff.