The City Commission will consider adoption of a new PILOT (payment in lieu of taxes) ordinance at their Monday, October 2, 2023 meeting.
In late 2022, the State of Michigan enacted legislation that allows local governments to establish PILOT policies and engage in PILOT agreements with developers involved in the construction or rehabilitation of workforce housing units, without the previous requirement of securing state or federal tax credits.
Previously, local government participation in PILOTs depended on developers obtaining low-income housing tax credits through the Michigan State Housing Development Authority (MSHDA). However, this was a competitive program, and local authorities lacked the discretion to grant a PILOT unless the developer secured MSHDA tax credits.
With the approval of Senate Bill 432 on December 13, 2022, local governments gained the authority to enter into PILOT agreements with developments not seeking state or federal tax credits. This legislative change marks a significant policy shift.
City Attorney, Lauren Trible-Laucht, President of the Michigan Association of Municipal Attorneys, worked with other attorneys, MSHDA, and the State of Michigan to create the necessary policies and a model ordinance that municipalities statewide can use for implementation.
This legislative modification aims to simplify the approval of PILOT agreements and aligns with the City Commission's objectives concerning affordable housing. It provides a more flexible approach that can contribute to the advancement of affordable housing initiatives within the community.