Letter: Palmer Pointe is not 'like a church'

Posted 10/2/19

To the editor:

In last week's letter to the editor "Editorial about Palmer Pointe was all wrong", housing board member Chris Brady tries to convince residents that affordable housing developers in …

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Letter: Palmer Pointe is not 'like a church'

Posted

To the editor:

In last week's letter to the editor "Editorial about Palmer Pointe was all wrong", housing board member Chris Brady tries to convince residents that affordable housing developers in Barrington are fairly taxed like a "church, hospital, or private school." As a proponent of affordable housing, it's not surprising that Mr. Brady would favor residents having to subsidize wealthy affordable housing developers, even when those subsidies are alleged to be illegal.

Let's clear up any misconceptions about the so-called financial plight of affordable housing developers. The Sweetbriar and Palmer Pointe developers, along with many of their contemporaries, are for-profit corporations for a reason: to eventually cash-in on their investment.

Similar affordable housing corporations, like Priderock Capital Partners, who own East Providence's 250-unit Kent Farms development, were "founded to generate above-average risk adjusted returns for high net worth investors" (from Priderock's website). The good citizens of East Providence have been subsidizing Priderock's "high net worth investors" via their property tax subsidies for years.

In Barrington, it's helpful to look at how Barrington Tax Assessor Michael Minardi treats the Sweetbriar development.

The original construction cost of Sweetbriar was around $12 million. Property taxes on a $12 million property would be around $234,000 per year if it were valued as a normal business. But because of Sweetbriar's affordable housing deed restrictions (which disappear in 22 years), the valuation drops to around $5.5 million, which should generate an expected tax bill of around $107,000 per year.  

But assessor Minardi applies one more controversial property tax discount, dropping the effective valuation down to around $2 million using a law that applies only to rehabilitated properties. Sweetbriar was entirely new construction and does not qualify as a rehabilitated property.

The logic the town uses to get around the "rehabilitated property" limitation is by claiming that Sweetbriar's new buildings are placed on raw land, and thus the land itself is "rehabilitated". This questionable interpretation provides the loophole needed for the town to reduce Sweetbriar's taxes down to only a fraction of what they should be paying.

Together with other state and federal subsidies, and the fact that these properties are often flipped, you can understand why "high net worth" investors are flocking to the cash-cow called affordable housing.

Mr. Brady's assertion that affordable housing tax breaks are just like those of "churches, hospitals, and private schools" is not based on reality. Most churches, hospitals, and private schools are not operated as for-profit entities. Sweetbriar and Palmer Pointe are for-profit entities meaning they can be flipped at any time for any price. There is no legal limit placed on the profits that can be pulled out when it comes to flipping affordable developments like Sweetbriar. The residents of East Providence learned that cold fact after decades of subsidizing property taxes for Kent Farms. Barrington residents are sure to learn that fact at some point in the future.

Don't look to the town council for any help. They too want you to believe that for-profit affordable housing developers are just like churches, hospitals, and private schools.

Gary Morse

Barrington

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