Tax breaks to help investment in low-income housing

REED CITY – Reed City will benefit after a local developer was awarded more than $468,000 in Low-Income Housing Tax Credits.

The Michigan State Housing Development Authority recently announced PK Development Group was awarded $468,078 in tax credits that will help with renovations and improvements to the Reed City Apartments sites located on West Church Street and West Franklin Avenue.

HOWELL

City Manager Ron Howell said the developer had expressed interest in the tax credits to city council members in March 2016, with hopes to make improvements.

“It didn’t work out for 2017, but it means that 68 units now can be improved,” he said.

As part of that tax break, Howell said the city agrees to waive the property tax on those improvements and will accept Payment In Lieu of Taxes based on 10.5 percent of the normal rent for those units.

“Overall, the city may be getting slightly less in tax revenue – the Payment in Lieu of Taxes versus the outright property tax,” he said. “But, we’re also getting $468,000 invested in rental units which will be a benefit to the tenants.”

Howell added the units are for families and elderly.

“The city is all set up for the this to happen,” he said. “The developer will get to make the investment they wanted to make and the residents will benefit. I’m happy to see them get awarded the tax credit. If it doesn’t go to Reed City, it will go somewhere else.”

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Posted by Brandon Fountain

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