Funds the city earns from property owners of affordable housing will now be separated from Bloomington’s general fund under a new resolution passed Wednesday during a City Council meeting.
Resolution 2025-13 passed a 7-0 vote, with councilmembers Sydney Zulich and Kate Rosenbarger not present.
What are PILOT funds?
The PILOT, or Payment in Lieu of Taxes, program offers a tax exemption to owners and developers of affordable housing properties, according to Ordinance 2025-21. Owners are exempt from the requirement to pay property taxes on low-income housing tax credit properties. The city receives a yearly payment from the property owner instead.
Property owners are only required to pay 45% of what they would have paid in property taxes annually, with that base amount increasing 3% each year for a 17-year term.
In February, the city established the Cambridge Square and Henderson Court PILOT programs, in addition to two existing PILOT programs at Country View Apartments and Evergreen Village.
Why now?
According to Controller Jessica McClellan, the payments received in 2023 and 2024 from the previously established PILOT programs were deposited into the general fund, as was previously standard practice.
McClellan stated that the City of Bloomington’s legal department found that Indiana Code requires a separate fund be created to hold the payments.
The resolution passed Wednesday will allow the past payments, approximately $150,000, to be transferred to the new fund. The two new PILOT programs expect contributions starting at $80,400 annually from Henderson Court and $29,376 annually from Cambridge Square. Further payments will be deposited into the affordable housing PILOT fund, as well.
“The uses in this fund are very similar to the programs that they already have a very good handle on administering,” McClellan said. “This will just be another tool in their toolbox to really use these PILOT payments the way they’re intended to be used.”
Councilmembers Matt Flaherty and Hopi Stosberg emphasized the importance of using the fund in ways that maximize supporting Bloomington residents.
“We should try our best to use these funds in ways that seek income diversity in neighborhoods,” Flaherty said. “In particular, folks who need the benefit of subsidy to help affordable housing.”
According to the same Indiana Code, ways the city can use the funds include providing financial assistance to low-income residents, allowing them to purchase or lease residential units within the county, and making grants, loans and loan guarantees for the development rehabilitation.
“I agree with Councilmember Flaherty in terms of trying to make sure to maximize some of that upward mobility and maximize some of those ways that we can support our residents,” Stosberg said.
The council will meet again at 6:30 p.m. Sept. 10 at City Hall for a committee and deliberation meeting.
