Payment in Lieu of Taxes (PILOT)

The City of Grand Rapids administers a payment in lieu of taxes (PILOT) program that exempts eligible housing units from standard property taxes (i.e. ad valorem taxes) and allows the owner to pay a reduced PILOT fee instead. PILOTs are desirable because they are much lower than ad valorem property taxes. The City of Grand Rapids supports low-income and workforce housing units by authorizing and accepting PILOTs for units occupied by income eligible households.

This is authorized by Chapter 9, Article 5 of Title I of the City Code (i.e. the PILOT Ordinance).

Read the full ordinance

Types of PILOTs

The PILOT program includes two general types:

Low-Income PILOT

The Low-Income PILOT is for rental housing with federal or state (MSHDA) "qualifying financing" that restricts the rental units for affordable housing. Two common forms of "qualifying financing" are: A) Low-Income Housing Tax Credits (LIHTC) along with a mortgage loan, and B) a HOME Investment Partnerships Program (HOME) loan. Eligible units must be rented to low-income tenants, which typically means tenants with household income at or under 60% of area median income (AMI). LIHTC units may be rented to tenants with household incomes up to 80% of AMI as long as all of the LIHTC units have an overall average of 60% of AMI. Low-Income PILOTs are limited to fifty (50) years in length or the term of the “qualifying financing,” whichever is less.

Low-Income PILOT

Workforce Housing PILOT

The Workforce Housing PILOT is for qualified rental and owner-occupied units that do not have "qualifying financing." All units must be new construction units or rehabilitation units. Owner-occupied units must also undergo a change in ownership. This means an existing homeowner who decides to rehabilitate their own house is not eligible for a Workforce Housing PILOT. Both tenants and owner-occupants must have household incomes at or below 120% of area median income (AMI) adjusted by household size. Workforce Housing PILOTs are limited to fifteen (15) years in length.

*Please note there is a $270 PILOT application fee

Workforce Housing PILOT for Rental Projects

Workforce Housing PILOT for Owner-Occupied Homes

Contact Community Development

Phone
616-456-3677

Fax
616-456-4619

Email
communitydev@grcity.us

Location
Grand Rapids City Hall
300 Monroe Ave NW, Suite 460
Grand Rapids, MI 49503