For many years, Alliance and other nonprofit owned affordable housing organizations were able to claim property tax exemption status as 501(c)(3) organizations. However, when the City of Minneapolis unexpectedly revoked this status in 2019, we found ourselves scrambling to respond. Property tax exemption provides an important reduction in expenses for Alliance, especially crucial as property operating expenses rise quickly. It allows us to keep rents affordable even without subsidies and allows our fundraising dollars to go towards paying for rent, maintenance, and staffing, as opposed to property taxes.
We’ve been fortunate to have the assistance of Faegre Drinker Biddle and Reath LLP and Larkin Hoffman in appealing this decision. Earlier this year, their hard work paid off when the issue made it all the way to the Minnesota Supreme Court. The court ruled in favor of Alliance, reinstating our property tax exemption status. This was a significant victory not just for Alliance, but for many organizations like ours.
Yet, our work was not done. Following the Supreme Court’s decision, Hennepin County pursued a legislative change that would remove property tax exemption for some nonprofit and charitable organizations providing only housing. You may have seen our outreach earlier this spring, asking you to contact your legislators to oppose this change. While we understand the importance of property taxes in providing revenue for the city, we opposed this change due to its unknown implications and the affects it would have on nonprofit housing providers who are already struggling to keep up with rising costs.
As of the end of the legislative session in late May, Hennepin County’s effort was unsuccessful. This was a relief, but we recognize that there will be continued attempts to pursue the issue. We will continue to advocate on behalf of our tenants and our ability to provide low-cost housing and hope you will join us.
Our hope is that going forward, the county will be open to discussion with nonprofit housing providers and others affected by this change to determine a solution that works for all. We believe in the power of dialogue and collaboration and hope that future discussions will lead to solutions that balance the needs of both the city with the critical role of nonprofit housing providers. Alliance Housing is committed to its mission of providing affordable housing and will continue to advocate for policies that support this goal.
