No. 163 March Term, 1977, Appeal from the Order of the Commonwealth Court affirming the Order of the Court of Common Pleas of Allegheny County, Civil Division, at No. 1971 July Term, 1974, dated December 18, 1975.
Daniel M. Berger, Berger, Kapetan & Malakoff, Pittsburgh, for appellant.
William J. Fahey, D. R. Pellegrini, Asst. City Sol., Pittsburgh, for appellee.
Eagen, C. J., and O'Brien, Roberts, Pomeroy, Nix, Manderino and Packel, JJ. Manderino, J., concurred in the result. Roberts, J., filed a dissenting opinion. Packel, J., did not participate in the decision of this case.
The appellant, Metropolitan Pittsburgh Nonprofit Housing Corporation (Metropolitan), was denied a local real estate tax exemption by appellee Board of Property Assessment, Appeals and Review. A de novo appeal was taken to the Common Pleas Court of Allegheny County, which determined that the exemption had properly been denied. On appeal from that determination, the Commonwealth Court
affirmed.*fn1 We granted appellant's petition for allowance of appeal, and now affirm.
Metropolitan is a nonprofit corporation which has built the Lemington Heights Housing Project in Pittsburgh in conformity with the provisions of section 221(d)(3) of the National Housing Act, 12 U.S.C. § 1715 l. Under the terms of section 221(d)(3), the federal government provides subsidies on mortgage interest payments to Metropolitan, and Metropolitan is permitted to rent the dwelling units to low and moderate income families approved by the federal Department of Housing & Urban Development (HUD) in accordance with a rent schedule established by HUD. HUD also guarantees the mortgage payments.*fn2 Seed money for the project came from the federal government and the Urban Affairs Foundation of the United Jewish Federation of Pittsburgh. These funds were also guaranteed by HUD and have been repaid, although without interest.
Of the 87 rental units in Lemington Heights, 32 are rented by families whose annual incomes average $5,000, and who also receive rent supplement payments from HUD. The other 55 units are occupied by families with average annual incomes of $7,500. The rents paid by all tenants range from $130 per month for a one-bedroom apartment to $200 per month for a four-bedroom apartment. These rents are below the market rate for comparable apartments commercially available in the area. The lower rates are possible because the federal government subsidizes the mortgage payments and because Metropolitan is a nonprofit corporation. Tenants who fail to pay their rent are evicted. In the Rental Housing Project Income Analysis and Appraisal form*fn3 which it used in establishing a rental schedule to
cover the project's cost, HUD allocated $35,000 annually for the payment ...