Columbus Ctiy Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision (Slip Opinion), 2017 Ohio 2734

Network Restorations III, LLC owned 42 scattered Franklin County parcels comprising 35 buildings and 150 low-income rental units financed/operated under LIHTC and Section 8/HAP subsidies and subject to recorded 30-year use restrictions.
County auditor valued the parcels at an aggregate of about $4.45 million for tax year 2008 and increased aggregate value to about $5.49 million for 2009 (carried into 2010) after renovations.
Owner petitioned the Franklin County Board of Revision (BOR) seeking a lower aggregate valuation; it presented an appraisal by Donald Miller using an income approach based on market rents (checked by sales comparison) and testified about the LIHTC and HAP subsidies and use restrictions.
The BOR adopted the owner’s 2008 valuation of $2.83 million and added a renovation-based increase to reach $3.867 million for 2009–2010.
On appeal the Board of Tax Appeals (BTA) reversed and reinstated the auditor’s higher valuations, reasoning that Woda required valuing LIHTC property by actual (subsidized) rents and that Miller’s market-rent approach ignored the use restrictions.
The Ohio Supreme Court reviewed de novo the BTA’s legal interpretation and reversed the BTA, reinstating the BOR’s valuations for 2008–2010.

Issue	Network's Argument	BOE's Argument	Held
Proper income-approach rent standard for LIHTC/HAP property	Use market rents (market-rent income approach); remove affirmative subsidy value	Woda requires considering subsidies/actual rents (BTA’s reading)	Court: market-rent approach is appropriate; Woda does not mandate using actual subsidized rents
Treatment of government subsidies in valuation (affirmative value)	Subsidy benefits should be disregarded to avoid inflating value; use market measures	Subsidies and use restrictions reduce marketability and should constrain appraisal	Court: confirm rule that affirmative value of subsidies must be excluded and market measures used; but highest-and-best-use must account for use restrictions
Effect of BOR adopting owner’s appraisal (rule of default valuation)	BOR’s adopted valuation eclipses auditor’s valuation and is default before BTA	BOE relied on auditor’s higher valuation before BTA	Court: Bedford rule applies; BOR’s reduced valuation is the default and should stand absent lawful rejection
Increase for 2009–2010 tied to renovations	BOR’s incremental increase based on auditor’s measured renovation-related increase is proper	BTA claimed it could not replicate BOR’s method and restored auditor’s overall higher base	Court: BOR’s addition closely tracked auditor’s increase (de minimis difference) and is replicable; BOR increase reinstated

Woda Ivy Glen Ltd. Partnership v. Fayette Cty. Bd. of Revision, 902 N.E.2d 984 (Ohio 2009) (LIHTC use restrictions must be considered; does not require adopting actual-rent income approach)
Delhi Estates, Ltd. v. Hamilton Cty. Bd. of Revision, 625 N.E.2d 594 (Ohio 1994) (income approach should use market rents/expenses for subsidized housing)
Bedford Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 875 N.E.2d 913 (Ohio 2007) (when BOR adopts owner evidence and reduces value, that valuation eclipses auditor’s and is the default before BTA)
Sapina v. Cuyahoga Cty. Bd. of Revision, 992 N.E.2d 1117 (Ohio 2013) (BTA may reject BOR valuation where record does not permit replication; distinguishable where BOR method is replicable)
Canton Towers, Ltd. v. Stark Cty. Bd. of Revision, 444 N.E.2d 1027 (Ohio 1983) (cost approach disfavored for subsidized housing because subsidies make construction otherwise uneconomic)
Colonial Village Ltd. v. Washington Cty. Bd. of Revision, 873 N.E.2d 298 (Ohio 2007) (treatment of subsidies and valuation approaches for subsidized housing)
Hilliard City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 9 N.E.3d 920 (Ohio 2014) (definition of market value and typically motivated market participants)