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EXPLANATION OF <br /> AFFORDABLE LIFE-CYCLE HOUSING OPPORTUNITIES AMOUNTS <br /> FOR THE YEAR 1998 <br /> Simply stated, here's how we determined your community's ALHOA for 1998. <br /> Determine the average market value of your city's houses in 1995. Double it to arrive at a <br /> base value. Find all of the 1995 high priced homes that are above this base value. <br /> Subtract the base value from each of the high priced homes to arrive at an excess value <br /> number. Add- up all of those excess values. This is the base year excess number. It <br /> doesn't change. <br /> Do the same for the current year, this time using the current market values for the houses <br /> and the current base value supplied by the Met Council. <br /> If the current year's excess is bigger than the 1995 excess, subtract the 1995 excess from <br /> the current year. Multiply the resultant number times your city's tax rate. This:is your <br /> Affordable &Life Cycle Housing Opportunities Amount. ' <br /> Definitions: <br /> HOMESTEAD <br /> A homestead is defined as property regularly "homesteaded" by its owners. For farm <br /> homes, it represented the assessment of the farm house, a garage and one acre of,land <br /> only. <br /> CONSUMER PRICE INDEX(CPI) <br /> The Consumer Price Index measures the inflation factor in the U.S. economy. The <br /> Department of the Interior publishes this rate monthly along with a yearly average. For <br /> this program, the yearly average CPI is used. <br /> To ensure that this base value did not lose its meaning in future years the base value is <br /> increased by the CPI each year. This increased value represents the effect of inflation on <br /> the market value of houses in your city. Changing the base value every year, prevents <br /> some houses that did not get included in the base year calculation getting included in <br /> future years just because their market value changed. <br /> Refer to attached sample city printout for assistance <br />