The Wilmington morning star., 1940-08-04
TAX ON HOUSING
PROPOSAL RAPED

FkUPUSAL kAPPEU
Continued From Page Onel
radically different opinion now
from that which you held in 1888
and 1889.
You are, of course, aware that
the Housing Authorities law CHAP
ter 456, PL 1885 as amended speci-
hcally exempts housing projects
from taxation because such prof.
ects are held to be of a public
character and to serve a public
purpose in the same way that such
a purpose is served by schools,
streets, municipal buildings and
the like. This definition of the ma
lure OF the housing projects was
vigorously upheld by the North
Carolina Supreme Court in the
Wilmington test case (213 NC, TAO
wherein the Court found that Hous-
ing Authority properties as oper-
ated under the law were actually
municipal in character and there
fore ought to be and were entire
~ freed from taxation. Subsequent
~, the Court ruled with equal clar-
ity and to the same effect in a sec
ond test case coming up from Kins-
ton.
l do not think it is worth while
here to discuss the question wheth-
er the Court would upset its two
strong decisions even though new
legislation should be adopted i'm
posing taxation on housing prof.
ects. l do think it is of some value,
however, to observe that a property
is either public in nature, such as
a city hall; private in nature, such
as a merchantile establishments;
or semi-public in nature, such as
a utility company. So far as /
Know, there are no other classical
tons. and housing projects must
fall into n of the three. If they
fall into the first classification,
they are tax exempt; if into either
of the latter wo, they should be
taxed on the same basis as any
other privately owned property,
Since the Supreme Court of this
State, and the Supreme Cours in
about two-thirds of all the other
States, have ruled with great clar-
ity and logic that housing prof.
ects for families of low income are
actually public in character, i. is
impossible for me to see how a
law taxing such projects could On
any ground whatsoever be held
constitutional.
That, however, is a question for
those versed in the law, and l am
not qualified to discuss it. l do
want to make a few observations
as to the reasons for the exempt
ion of the housing projects from
taxation and the probable results
If such exemption should be re-
moved.
The theory upon which a govern.
ment taxes property is that the
owner thereof derives profit or adj
vantage therefrom. No profit or ad.
vantage accrues to the owners of a
housing project under the North
Carolina Housing Authorities Act.
The law forbids the charging of any
more rent than necessary to retire
n obligations against the project
and to maintain the property. Prof
its are specifically prohibited. The
benefits from the. project go to the
occupants, not to the owners.
The average shelter rent which
will be paid by tenants In the Will
mington projects will be about 1925
per month. This does not include
any utilities such as electricity or
heat; nor, of course, does it include
any provision for the payment of
taxes. The total cost of the two
projects combined will be about ST..
900, 900. If they should be assessed
for taxes at $1,000, 900, the resulting
annual city and county tax bill lat
1920 per $1,000 would be $35, 200.
There are 1852 families in the prof..
ects. If such a tax bill We're distrib.
uted among them the Housing Au-
thority has nj other way of paying
any operating cost than to charge it
into the rent) the resulting cost
would be about SIS per family per
year or about $3.50 per family per
month. Added to the shelter rent of
1925 per family per month, this
would produce a total shelter rental
of about $15.75 per family per
month; and it goes without saying
that the truly low income family in
Wilmington cannot pay such rents.
This would mean that it would be
necessary for the Housing Authority
to make inroads into the higher in
come brackets in order to fill the
projects and the question now be-
fore us is whether it is more desir-
able to, fill the projects with fami-
lies of low income or with families
of medium income. The Housing
Authority is not going to allow a
81, 900, 900 investment to stand idle
and u~noccupied. There can be no
doubt that all the units will be TAX
by one income bracket or the
other. Regarding the matter purely
from the point of view of the real