To Establish A Method Of Valuation For Real Property Used For Affordable Housing; And To Establish A Method Of Valuation For Certain Real Property Under Arkansas Constitution, Article 16, ยง 5.
Summary
HB1894 directs the Arkansas Assessment Coordination Division to create rules and guidelines for the fair and equitable assessment of certain real property used for housing, with a particular focus on affordable housing. The bill applies to property subject to federal or state restrictions that limit rent, impose operating requirements, or otherwise constrain use because the property is connected to federal low-income housing tax credits, the HUD HOME Investment Partnerships Program, or USDA housing incentives.
In practical terms, the bill does not itself set a new valuation formula in statute, but it requires the state assessment agency to adopt one through rulemaking. The stated legislative intent is to ensure that all real property used for housing, including affordable housing, is assessed fairly and equitably. The agency must file final rules by January 1, 2026, or as soon as practicable after any required approval process, and must submit proposed rules to the Legislative Council in time for review before that date.
Impact
HB1894 affects Arkansas property assessment law by adding a new subsection to the statute governing valuation procedures and by requiring the Assessment Coordination Division to promulgate rules for restricted housing properties. It specifically targets properties tied to LIHTC, HUD HOME, and USDA-assisted housing, which may influence how assessors value income-restricted multifamily and other affordable housing developments for ad valorem tax purposes. The bill therefore has potential fiscal implications for property owners, local taxing units, and affordable housing providers, while leaving the detailed valuation method to administrative rulemaking.
Sentiment
The available voting history suggests broad bipartisan support for the bill. It passed the House 92-3 and the Senate 32-1, indicating strong overall agreement that a clearer and more equitable assessment approach is needed for affordable housing properties. No committee transcript is available, but the near-unanimous votes suggest the measure was viewed as a technical or policy refinement rather than a controversial overhaul.
Contention
The main policy issue is how restricted affordable housing should be valued for tax assessment purposes, since such properties are subject to rent and operational limits that can reduce market value relative to unrestricted housing. Supporters appear to favor a standardized, fairer assessment method to avoid overvaluation of these properties. Any opposition likely centers on the possibility that a special valuation approach could reduce local property tax revenue or create preferential treatment for a subset of housing, but the recorded votes show little organized resistance.