[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Columbus City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, Slip Opinion No. 2018-
Ohio-3254.]




                                        NOTICE
     This slip opinion is subject to formal revision before it is published in an
     advance sheet of the Ohio Official Reports. Readers are requested to
     promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
     South Front Street, Columbus, Ohio 43215, of any typographical or other
     formal errors in the opinion, in order that corrections may be made before
     the opinion is published.


                         SLIP OPINION NO. 2018-OHIO-3254
  COLUMBUS CITY SCHOOLS BOARD OF EDUCATION, APPELLEE, v. FRANKLIN
COUNTY BOARD OF REVISION ET AL., APPELLEES; NETWORK RESTORATIONS I,
                                 L.L.C., APPELLANT.
  [Until this opinion appears in the Ohio Official Reports advance sheets, it
  may be cited as Columbus City Schools Bd. of Edn. v. Franklin Cty. Bd. of
                   Revision, Slip Opinion No. 2018-Ohio-3254.]
Taxation—Real-property         valuation—Valuation         of    government-subsidized
        residential properties—Board of Tax Appeals’ decision vacated, and cause
        remanded.
      (No. 2016-0551—Submitted May 8, 2018—Decided August 15, 2018.)
              APPEAL from the Board of Tax Appeals, No. 2014-4633.
                                 _________________
        Per Curiam.
        {¶ 1} This appeal challenges a decision of the Board of Tax Appeals
(“BTA”) and involves the question of how best to determine the true value of a
low-income-housing property that is both rent restricted (i.e., the owner is restricted
in the rent it can charge) and rent subsidized (i.e., some of the rent is paid by the
                                SUPREME COURT OF OHIO




government). Appellant, the property owner, Network Restorations I, L.L.C.,
maintains that rents as derived from rent-restricted comparables should be used in
the analysis but that the property’s rent subsidies should be excluded from
consideration. Appellee Columbus City Schools Board of Education (“BOE”)
takes the opposite view, claiming instead that the property’s actual rents, which
include tenant-paid rent and rent subsidies, should be used.
        {¶ 2} As explained below, we are compelled to vacate the BTA’s decision
and remand the cause to the BTA because it failed to weigh and analyze a
potentially material piece of evidence presented by Network Restorations.
                 FACTS AND PROCEDURAL BACKGROUND
        {¶ 3} The subject property consists of 101 low-income-housing rental units
encompassed within 24 parcels that are scattered throughout Columbus. The
parcels operate as one economic unit1 and contain one- to three-bedroom
apartments. For tax year 2011, a sexennial reappraisal year in Franklin County, the
Franklin County auditor valued the property at $4,417,500. Network Restorations
filed a complaint seeking a reduction in this valuation, and the BOE responded with
a countercomplaint urging retention of the auditor’s valuation.
                                     BOR proceedings
        {¶ 4} At the Franklin County Board of Revision (“BOR”) hearing, Network
Restorations presented an appraisal report and supporting testimony from Donald
E. Miller II, a certified appraiser. Miller explained that the subject property benefits
from two types of government assistance.



1
  An “economic unit” is “[a] combination of parcels in which land and improvements are used for
mutual economic benefit. An economic unit may comprise properties that are neither contiguous
nor owned by the same owner. However, they must be managed and operated on a unitary basis
and each parcel must make a positive economic contribution to the operation of the unit.” The
Appraisal Institute, The Dictionary of Real Estate Appraisal 72-73 (6th Ed.2015); see also Park
Ridge Co. v. Franklin Cty. Bd. of Revision, 29 Ohio St.3d 12, 504 N.E.2d 1116 (1987), paragraph
two of the syllabus (it is permissible to value property according to an economic-unit theory).




                                              2
                                      January Term, 2018




         {¶ 5} First, the property operates under the federal low-income-housing-
tax-credit (“LIHTC”) program. See 26 U.S.C. 42. “The LIHTC is a device for
raising capital for low-income-housing projects that by themselves generate little
(if any) profits—investors are attracted by federal income tax credits that are tied
to the amount of capital invested in the housing projects.” Columbus City Schools
Bd. of Edn. v. Franklin Cty. Bd. of Revision, 151 Ohio St.3d 12, 2017-Ohio-2734,
85 N.E.3d 694, ¶ 6. As Miller explained, the property is bound by a restrictive
covenant in accordance with the LIHTC program. The restrictive covenant here
provides that 21 percent of the units must be made affordable to persons with
incomes at or below 35 percent of the median gross income in the area (“AMGI”),
23 percent of the units must be made affordable to persons with incomes at or below
40 percent AMGI, and 56 percent of the units must be made affordable to persons
with incomes at or below 45 percent AMGI.
         {¶ 6} Second, the property receives project-based subsidies through the
Department of Housing and Urban Development’s (“HUD’s”) Housing Assistance
Program (“HAP”).2 The HAP contract specifying the precise subsidy levels is not
in the record. But Miller’s appraisal report states that over 90 percent of the
property’s rental revenue came from subsidies for 2009, 2010, and 2011.
         {¶ 7} In developing his opinion of value, which was based on an income
approach, Miller hypothesized that the property was being operated solely in accord
with the LIHTC program—that is, he accounted for the presence of the LIHTC
restrictions but excluded the effect of the rent subsidies. He further explained: “The
value is developed looking to the LIHTC rental market to see what rents are for
those units and considers LIHTC operating expense data to estimate reasonable




2
  Project-based subsidies and tenant-based vouchers are among the notable forms of government
assistance. The former are assignable to units at the property itself whereas the latter “travel” with
the tenant.




                                                  3
                             SUPREME COURT OF OHIO




expenses were the property operating as a LIHTC property apart from the
HUD/HAP program.”
        {¶ 8} Miller evaluated seven LIHTC rent comparables to generate a market-
based effective gross income of $646,450. He then deducted operating expenses to
arrive at a net operating income of $260,728. The data for the operating expenses
draws from eight LIHTC properties and the subject property. After applying an
overall capitalization rate of 11.15 percent and making deductions for personal
property, Miller opined a rounded valuation of $2,310,000 as of the January 1, 2011
tax-lien date.
        {¶ 9} The BOR determined that a reduced capitalization rate should apply,
reasoning that an investor in this type of property would face “very little” risk and
be assured of receiving an income. After reducing the capitalization rate, the BOR
assigned a value of $2,448,200 for tax years 2011, 2012, and 2013.
                                 BTA proceedings
        {¶ 10} The BOE appealed to the BTA and furnished the testimony and
appraisal report of Thomas D. Sprout, a certified appraiser. Like Miller, Sprout
relied on an income approach to value the property. But unlike Miller, who relied
on comparable data from other LIHTC properties, Sprout made his calculations in
reliance on the subject property’s actual income and expenses. And unlike Miller,
who excluded the effect of the HUD subsidies, Sprout included them.
        {¶ 11} Sprout estimated a net operating income of $465,000, to which he
applied an overall capitalization rate of 10.75 percent. After deducting $60,000 to
account for furniture, fixtures, and equipment, Sprout opined a valuation of
$4,265,000 as of the January 1, 2011 tax-lien date.
        {¶ 12} Miller appeared at the BTA hearing as well, and he again explained
how he had arrived at the valuation stated in his appraisal report. Miller also
provided four explanatory memorandums, one of which, Memorandum D, reflects
his attempt to determine market rents of properties in similar locations that do not




                                         4
                                January Term, 2018




participate in low-income-housing programs. In Miller’s view, Memorandum D
confirms that the LIHTC market rent he developed in his appraisal report is similar
to conventional market rents.
        {¶ 13} The BTA viewed the case largely through the principles articulated
in Alliance Towers, Ltd v. Stark Cty. Bd. of Revision, 37 Ohio St.3d 16, 523 N.E.2d
826 (1988) and Woda Ivy Glen Ltd. Partnership v. Fayette Cty. Bd. of Revision,
121 Ohio St.3d 175, 2009-Ohio-762, 902 N.E.2d 984. Based on its understanding
of those decisions, the BTA observed that rent subsidies can be taken into account
to the extent they do not raise a property’s value above that which would be found
in the conventional market.     Applying that understanding, the BTA favored
Sprout’s approach over Miller’s: “In the absence of some evidence that the subject
property is receiving rents above conventional market rents, * * * we find Sprout’s
analysis more accurately values the subject property as it existed on [the] tax lien
date.” BTA No. 2014-4633, 2016 WL 2907635, *4 (Mar. 17, 2016). The BTA
thus assigned a value of $4,265,000 for tax years 2011, 2012, and 2013 but
remanded the matter to the BOR because, in its view, some of the parcels were
apparently subject to a tax-increment financing agreement that necessitated an
allocation of value. Network Restorations then filed this appeal.
                           STANDARD OF REVIEW
        {¶ 14} We will affirm a BTA decision that is reasonable and lawful. Satullo
v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 14. We review
de novo the BTA’s resolution of legal issues but will defer to the BTA’s findings
concerning the weight of the evidence if there is record support for them. Lunn v.
Lorain Cty. Bd. of Revision, 149 Ohio St.3d 137, 2016-Ohio-8075, 73 N.E.3d 486,
¶ 13.
                                  DISCUSSION
        {¶ 15} Although Network Restorations presents ten propositions of law for
our consideration, the core of each claim is that the BTA erred in adopting the




                                         5
                             SUPREME COURT OF OHIO




valuation opinion of Sprout, the BOE’s appraiser, because he relied on the
property’s actual rents, which include both tenant-paid rent and rent subsidies. In
Network Restorations’ view, that method overstates the property’s value because it
fails to account for the LIHTC restrictions and impermissibly values the rent
subsidies. Network Restorations asserts that when, as here, a property is subject to
LIHTC restrictions but the owner receives rent subsidies, the proper analysis, as
exemplified by Miller’s approach, is to determine a LIHTC market rent that
excludes the value of the rent subsidies. An amici curiae3 brief filed in support of
Network Restorations echoes this sentiment.
       {¶ 16} In making its argument, Network Restorations relies mainly on
Alliance Towers, 37 Ohio St.3d 16, 523 N.E.2d 826, and Woda, 121 Ohio St.3d
175, 2009-Ohio-762, 902 N.E.2d 984. Those decisions are, to be sure, guideposts
in our low-income-housing-valuation jurisprudence. But their meanings were
addressed in a pair of more recent decisions that were decided after the submission
of briefs in this case, namely, Columbus City Schools Bd. of Edn., 151 Ohio St.3d
12, 2017-Ohio-2734, 85 N.E.3d 694, and Notestine Manor, Inc. v. Logan Cty. Bd.
of Revision, 152 Ohio St.3d 439, 2018-Ohio-2, 97 N.E.3d 446. Because Columbus
City Schools and Notestine Manor best reflect our contemporary understanding of
how to properly value low-income housing, we begin by reviewing the insights
from those decisions.
       {¶ 17} In Columbus City Schools, we discerned three general principles that
bear on the valuation of low-income housing. First, “in applying the income
approach, market rents and expenses, as opposed to the actual rents of the properties
at issue, are used.” Id. at ¶ 16. Second, in using “an income approach, government
subsidies should not be taken into account in a way that would increase the value

3
 The amici are Ohio Capital Corporation for Housing, Ohio Housing Council, Coalition on
Homelessness and Housing in Ohio, Ohio Community Development Corporation Association,
Council for Rural Housing & Development of Ohio, Midwest Affordable Housing Management
Association, Ohio Apartment Association, and Columbus Apartment Association.




                                          6
                                  January Term, 2018




of the property.” Id. at ¶ 17. Third, a cost approach to valuation is disfavored. Id.
at ¶ 18.
           {¶ 18} Columbus City Schools involved a property that, like the property at
issue in this case, operated under LIHTC restrictions and received subsidized rents.
Id. at ¶ 5-7. In that case, the board of revision adopted the value opined by the
property owner’s appraiser, who valued the property under the hypothetical
assumption that the property received market rents. Id. at ¶ 1, 8. The BTA,
however, apparently regarded this method as violating Woda and reversed the
BOR’s decision. See Columbus City Schools at ¶ 11. In Woda, we held that the
valuation of a LIHTC property should account for LIHTC restrictions. Id. at ¶ 30.
The BTA apparently understood Woda’s directive as requiring an actual-rent
income approach rather than a market-rent income approach, see Columbus City
Schools at ¶ 11, 19, but we reversed the BTA’s decision and “clarif[ied] that Woda
adheres to the rule for using a market-rent income approach when valuing
government-subsidized residential properties,” Columbus City Schools at ¶ 22.
Given that the BTA committed legal error in rejecting the owner’s appraisal, we
concluded that it was permissible to restore the board of revision’s decision as a
proper finding of fact because the owner’s appraisal formed the basis for that
decision. Id. at ¶ 23.
           {¶ 19} Notestine Manor involved low-income housing operated in accord
with a federal program that provided capital advances “to build rental housing for
very low-income elderly individuals.” Id. at ¶ 4 (detailing Section 202 of the
Housing Act of 1959, codified at 12 U.S.C. 1701q). A principal point of contention
in that case centered on how best to read Alliance Towers and Woda in light of
Columbus City Schools. The board of education argued that Columbus City Schools
required a market-rent rather than a contract-rent income approach.           But we
determined that this reading was too strict, explaining that “the preference for
market rent over contract rent is presumptive, not conclusive.” Notestine Manor at




                                            7
                                   SUPREME COURT OF OHIO




¶ 22. Harmonizing the case law, we instructed that “[t]he guiding principle from
Alliance Towers, articulated in Woda Ivy Glen, and reiterated in Columbus City
Schools, is that the valuation method must account for the ‘affirmative value’ of
government subsidies, i.e., the tendency of government subsidies to inflate the
value above what the market would otherwise bear.” Id. In light of these principles,
we upheld the BTA’s adoption of an appraisal predicated on actual restricted rents.
There was no evidence that adjusting from contract rent to market rent would have
eliminated the subsidies’ affirmative value. Id. at ¶ 23. And the record did not
establish that contract rents exceeded those in the general market or that the
property benefited from additional tax incentives. Id. at ¶ 24.4
         {¶ 20} The BTA did not have the benefit of Columbus City Schools and
Notestine Manor when it decided this case; however, those cases as well as Woda
itself justify the BTA’s statement that Miller’s appraisal logic “appears to be
sound,” 2016 WL 2907635 at *4. First, in developing a LIHTC market rent based
on rents taken from comparable LIHTC properties, Miller heeded Woda’s directive
to take the LIHTC restrictions into account. Indeed, had Miller developed a market
rent based on properties not subject to LIHTC restrictions, the LIHTC restrictions
would not have been taken into account. Second, Miller’s evaluation of rents from
the LIHTC market rather than the property’s actual rents is consistent with the
court’s instructions in Columbus City Schools, 151 Ohio St.3d 12, 2017-Ohio-2734,
85 N.E.3d 694, at ¶ 16, and Notestine Manor, 152 Ohio St.3d 439, 2018-Ohio-2,
97 N.E.3d 446, at ¶ 22, to consider market rents. To be sure, the reference to market

4
  Notestine Manor also addressed the effect of amendments that 2012 Am.Sub.H.B. No. 487 (“H.B.
487”) made to R.C. 5713.03, a statute governing the valuation of real estate. See Notestine Manor
at ¶ 25-29. H.B. 487 took effect for tax year 2013, Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision,
150 Ohio St.3d 527, 2017-Ohio-4415, 83 N.E.3d 916, ¶ 18, and tax year 2013 is one of the years at
issue here by virtue of the carryover of the value that was determined for tax year 2011. Dispositive
here is that no party contends that H.B. 487’s amendments to R.C. 5713.03 apply in this case, and
in any event, Notestine Manor held that those amendments did not override Woda, see Notestine
Manor at ¶ 29.




                                                  8
                                 January Term, 2018




rents in those decisions is best understood as describing rents that are both
unrestricted and unsubsidized. But the logic of those decisions can be extended to
permit consideration of an appropriate subset of market rents, here, the appropriate
subset is rents from the LIHTC market. As Miller stated in Memorandum D,
“[m]arket rent is derived from the market place a property competes within.” Thus,
in developing a market rent for a LIHTC property, Miller explained, it is
permissible to look to rents from other LIHTC properties because these types of
properties compete against each other.
       {¶ 21} Turning to the issue whether the property’s rent subsidies should be
taken into account for real-property-valuation purposes, Columbus City Schools at
¶ 17 and Notestine Manor at ¶ 22 explain that the affirmative value of rent subsidies
should be adjusted out to the extent that they raise rents above market rent. It is
this principle that exposes a defect in the BTA’s decision.
       {¶ 22} Miller’s Memorandum D purports to show that adding in the
property’s rent subsidies results in a rent elevated above market rent. Specifically,
Miller computed $57,000 for a monthly LIHTC market rent and $55,787 for a
monthly conventional market rent. In other words, Miller’s computations show
that a LIHTC market rent and a conventional market rent are essentially the same.
Network Restorations then contrasted those figures with those asserted by the BOE,
which used the property’s actual rents—inclusive of rent subsidies—in computing
to a monthly rent of $77,797. Based on these data points, Network Restorations
asserts that adding in the rent subsidies under the BOE’s approach inflates the
property’s value above market.
       {¶ 23} But while the BTA admitted Memorandum D into the record, it
never weighed the memorandum’s probative value to determine whether it could
be credited as showing that the subsidies inflated the rents above market rent. That
was error. “[T]he BTA must review and weigh all competent evidence in the record
in order to determine the property’s true value.” Buckeye Terminals, L.L.C. v.




                                         9
                              SUPREME COURT OF OHIO




Franklin Cty. Bd. of Revision, 152 Ohio St.3d 86, 2017-Ohio-7664, 93 N.E.3d 914,
¶ 22. And “the BTA must engage in sufficient discussion of the evidence to permit
the court on appeal to determine whether the BTA acted reasonably and lawfully.”
Lutheran Social Servs. of Cent. Ohio Village Hous., Inc. v. Franklin Cty. Bd. of
Revision, 150 Ohio St.3d 125, 2017-Ohio-900, 79 N.E.3d 541, ¶ 12. When the
BTA fails to account for potentially material evidence, it is proper for us to vacate
the decision and remand the cause. Mann v. Cuyahoga Cty. Bd. of Revision, 152
Ohio St.3d 197, 2017-Ohio-8820, 94 N.E.3d 529, ¶ 1, 16.
       {¶ 24} The BTA’s statement that there is an “absence of some evidence that
the subject property is receiving rents above conventional market rents,” 2016 WL
2907635 at *4, reinforces the need for vacatur and remand.               As Network
Restorations points out, the BTA never said what an appropriate market rent is in
this case. And, more fundamentally, there is evidence in the record that, if credited
as probative, tends to impugn the BTA’s statement that the property is not receiving
rents above the conventional market rate. Given the BTA’s failure to discharge its
duty as the finder of fact, we vacate its decision and remand the cause with the
instruction that the BTA “explicitly account” for Memorandum D, see Lutheran
Social Servs. at ¶ 13, along with the other evidence.
       {¶ 25} The BOE argues that the property should not be valued in accord
with Miller’s analysis, because, the BOE insists, the record does not support the
facts asserted in his analysis. First, the BOE maintains that Network Restorations
failed to establish that the subject property was 100 percent rent restricted as of the
tax-lien date, asserting that the LIHTC restrictive covenant applies to only 20 of the
24 parcels at issue. Second, the BOE claims that the contract establishing the
subsidies is not in the record.
       {¶ 26} As to the first point, when the BTA makes a finding adverse to the
winning party and the opposing party files an appeal, it is essential that the winning
party challenge the adverse finding through a cross-appeal if it wishes to invoke the




                                          10
                                January Term, 2018




court’s jurisdiction to consider the finding. Columbus City Schools Bd. of Edn. v.
Franklin Cty. Bd. of Revision, 151 Ohio St.3d 100, 2017-Ohio-7578, 86 N.E.3d
301, ¶ 31-32. Here, the BTA described the property as consisting of 101 residential
units scattered throughout 24 parcels. 2016 WL 2907635 at *1. The BTA then
went on to describe the property within the parameters of the LIHTC restrictions,
particularly the AMGI levels. Id. at *3. Not once did the BTA mention the
possibility that some parcels may not have been subject to the LIHTC restrictions.
Instead, the BTA viewed all 24 parcels as subject to the restrictions, and for good
reason; no party raised the issue below. Indeed, the BOE’s brief to the BTA
described the subject property as consisting of 24 parcels that are “ ‘scattered site’
residential properties operated as an economic unit by Network Restorations and
encumbered with * * * Low Income Housing Tax Credits (LIHTC) * * * .”
Considering this posture, the BOE’s failure to file a cross-appeal on this point
deprives us of jurisdiction to consider the issue.
       {¶ 27} As for the second point, it is immaterial that the contract establishing
the rent subsidies is not in the record.       We have held that “an appraiser’s
certification permits a fact-finder to rely on facts asserted in an appraisal report—
particularly when * * * those facts are undisputed.” Woda, 121 Ohio St.3d 175,
2009-Ohio-762, 902 N.E.2d 984, at ¶ 15. Here, Miller’s appraisal report breaks
down the property’s yearly revenue into the amounts received from tenant-paid rent
and from subsidized rent. Thus, even though the contract is not in the record, the
level of subsidy can be derived from the report. Moreover, at the BTA hearing, the
BOE’s appraiser did not controvert the level of subsidy received at the property.
                                  CONCLUSION
       {¶ 28} For the foregoing reasons, we vacate the BTA’s decision and remand
the cause for further proceedings.
                                                              Judgment accordingly.




                                          11
                               SUPREME COURT OF OHIO




          O’CONNOR, C.J., and KENNEDY, FRENCH, FISCHER, and DEGENARO, JJ.,
concur.
          O’DONNELL, J., concurs in part and dissents in part, and would vacate and
remand as to tax years 2011 and 2012 and concurs in that part of Justice DeWine’s
opinion directing the BTA to independently value the property for tax year 2013.
          DEWINE, J., concurs in part and dissents in part, with an opinion.
                                  _________________
          DEWINE, J., concurring in part and dissenting in part.
          {¶ 29} The Board of Tax Appeals’ (“BTA’s”) decision in this case dealt
with the valuation of the property for three different tax years. For two of the tax
years—2011 and 2012, I concur in the majority’s judgment vacating the BTA’s
decision and remanding the case for consideration of the property owner’s
evidence. But for tax year 2013, I would direct the BTA to independently value
the property under the statute that was in place for that tax year.
          {¶ 30} Prior to tax year 2013, a county auditor was required to determine
“the true value” of the real estate. Former R.C. 5713.03, Am.Sub.H.B. No. 920,
136 Ohio Laws, Part II, 3182, 3247. Effective tax year 2013, the statute changed.
For tax year 2013, the auditor was required to determine “the true value of the fee
simple estate, as if unencumbered.” 2012 Am.Sub.H.B. No. 487 (“H.B. 487”);
Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision, 150 Ohio St.3d 527, 2017-Ohio-
4415, 83 N.E.3d 916, ¶ 18 (“the H.B. 487 version [of R.C. 5713.03] applies to
valuations for tax year 2013”).
          {¶ 31} I read the statute to mean exactly what it says: the effect of an
encumbrance is not to be considered in valuing a piece of property.             But
unfortunately, a majority of this court recently held otherwise. In Notestine Manor,
Inc. v. Logan Cty. Bd. of Revision, 152 Ohio St.3d 439, 2018-Ohio-2, 97 N.E.3d
446, we dealt with a tax appeal for tax year 2013 that concerned a property that had
been financed through a federal program that provided capital for the development




                                           12
                                January Term, 2018




of low-income rental housing for the elderly. See 12 U.S.C. 1701q. Under the
program, the property was subject to restrictions and covenants in favor of the
United States Department of Housing and Urban Development (“HUD”) that,
among other things, limited the amount of rent the owner could charge. These
restrictions obviously constituted an encumbrance on the property—that is, a
“ ‘right to, or interest in, land which may subsist in another to diminution of its
value, but consistent with the passing of the fee,’ ” Alliance Towers, Ltd. v. Stark
Cty. Bd. of Revision, 37 Ohio St.3d 16, 22, 523 N.E.2d 826 (1988), fn. 5, quoting
Black’s Law Dictionary 473 (5th Ed.1979). So under the plain language of the
statute, the property was required to be valued without consideration of the
restrictions and covenants.
       {¶ 32} But forget the plain language of the statute. The Notestine majority
decided to ignore the legislative amendment to R.C. 5713.03 and value the property
as encumbered.     It noted that in a pre-H.B. 487 case involving the federal
government’s low-income-housing tax credits (“LIHTC”) program, LIHTC use
restrictions were taken into account in valuing the property. Notestine at ¶ 28, citing
Woda Ivy Glen Ltd. Partnership v. Fayette Cty. Bd. of Revision, 121 Ohio St.3d
175, 2009-Ohio-762, 902 N.E.2d 984.            It then concluded that the H.B. 487
amendment was not meant to supersede our existing caselaw. Notestine at ¶ 29.
       {¶ 33} In other words, in Notestine, a majority of this court said that our
precedent controlled over the plain language of a subsequent legislative enactment.
And further, it said that even in the face of a statute that plainly requires property
to be valued as if unencumbered, the auditor is required to value the property as
encumbered.
       {¶ 34} For obvious reasons, I dissented in Notestine. And because it is
impossible to reconcile Notestine with the plain language of the legislative scheme,
I would not apply its holding in this case.




                                          13
                             SUPREME COURT OF OHIO




       {¶ 35} So where does that leave us? For tax years 2011 and 2012, the matter
is governed by the older version of the statute and our precedent interpreting that
statutory provision. Based upon that version of the statute and our precedent, I
concur in the majority’s judgment vacating the BTA’s decision and remanding the
case for consideration of the property owner’s evidence—specifically, whether that
evidence demonstrates that the rent subsidies resulted in the owner’s receiving
above-market rents. I disagree, however, with the majority’s conclusion that the
relevant market is the market for LIHTC property. Plainly, rents received for
LIHTC property cannot be considered “market rents,” because the governmental
restrictions on rents for such properties mean that the rents are not set by market
forces. Instead, the proper measure is actual market rents. That distinction likely
matters little here, however, because the property owner’s appraiser, Donald Miller
II, calculated LIHTC rents and conventional market rents to be essentially the same.
On remand, the BTA should determine what, if any, weight to give to Miller’s
calculation of actual market rents.
       {¶ 36} For tax year 2013, I would apply the statute in effect for that year.
That means the property should be valued as if unencumbered. In the proceeding
below, neither party set forth evidence of the property’s value as if unencumbered.
Miller’s appraisal relied upon market rents in the LIHTC market. As the majority
explains, LIHTC projects are encumbered by restrictive covenants that limit the
amount of rent the owner may charge its tenants. Thus, Miller’s appraisal values
the property as encumbered. Because the statute requires that the property be
valued as if unencumbered for tax year 2013, it would be improper for the BTA to
rely upon the values set forth in Miller’s appraisal.
       {¶ 37} The Columbus City Schools Board of Education proposed the value
put forth in Thomas Sprout’s appraisal. But like Miller, Sprout did not purport to
value the property as if unencumbered. Instead, Spout’s appraisal relied upon
actual rents received—rents that, of course, were subject to the LIHTC restrictions.




                                          14
                                 January Term, 2018




Thus, it was improper for the BTA to rely upon Sprout’s appraisal in establishing
the 2013-tax-year valuation.
         {¶ 38} Because no party presented an appraisal that valued the property “as
if unencumbered,” I would direct the BTA on remand to independently value the
property under the statute in place for tax year 2013. See Olentangy Local Schools
Bd. of Edn. v. Delaware Cty. Bd. of Revision, 147 Ohio St.3d 409, 2016-Ohio-7381,
66 N.E.3d 722, ¶ 21. I agree with the majority as to its remand instructions for tax
years 2011 and 2012, subject to the caveat concerning the relevant market set forth
above.
                                _________________
         Rich & Gillis Law Group, L.L.C., Mark Gillis, and Kimberly G. Allison,
for appellee Columbus City Schools Board of Education.
         Timothy A. Pirtle, for appellant.
         Porter, Wright, Morris & Arthur, L.L.P., and Mark A. Snider, Abbigail L.
Brothers, and L. Bradfield Hughes, urging reversal for amici curiae, Ohio Capital
Corporation for Housing, Ohio Housing Council, Coalition on Homelessness and
Housing in Ohio, Ohio Community Development Corporation Association,
Council for Rural Housing & Development of Ohio, Midwest Affordable Housing
Management Association, Ohio Apartment Association, and Columbus Apartment
Association.
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