HomeMy WebLinkAboutItem 01 Low-Income Rental Housing Property Tax ExemptionAGENDA ITEM SUMMARY Meeting Date: 4/2/2018
Meeting Type: Work Session
Staff Contact/Dept.: Erin Fifield / DPW Staff Phone No: 541-726-2302
Estimated Time: 30 minutes
S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Promote and Enhance our Hometown Feel
while Focusing on Livability and Environmental Quality ITEM TITLE:
LOW-INCOME RENTAL HOUSING PROPERTY TAX EXEMPTION
ACTION REQUESTED: Review and provide direction on draft Municipal Code amendments to update City’s low-income rental housing property tax exemption program.
ISSUE STATEMENT: The City recognizes that there is a shortage of affordable housing within the community and is working to address the problem. The findings point to a shortage
of housing and the expense of housing relative to household incomes. According to
the American Community Survey 2010-2014, half of Springfield households who rent are cost burdened, paying more than 30% of their income on housing and basic
utilities; 27% of households who rent are severely cost-burdened, paying more than
half their income on housing and basic utilities. Almost all (2570 households) of these severely cost-burdened households earn 80% or less of the Area Median
Family Income. The housing problem is getting worse as housing costs are increasing faster than incomes.
One of the Council’s Affordable Housing Strategies is to “Contribute to Income-Qualified Housing Development.” A property tax exemption for low-income rental housing is one tool available to help finance an affordable housing development
with low rents.
ATTACHMENTS: ATT1: Council Briefing Memo
ATT2: Draft Municipal Code Amendments
ATT3: Draft Standards and Guidelines
DISCUSSION/
FINANCIAL IMPACT:
Oregon cities have been empowered to create low-income rental housing property
tax exemption programs under Oregon Revised Statutes since 1989. The purpose of the low-income rental housing tax exemption is to provide an incentive that will encourage rental housing for low-income (defined as income at or below 60 percent
of the area median income) persons.
At the April 10, 2017 Work Session, Council expressed support for updating the
existing Municipal Code provisions for low-income housing property tax exemption in hopes of increasing the availability of housing affordable to people
with low incomes. Staff have drafted amendments to Municipal Code Section
3.500 to reflect the statutory amendments that have occurred since the City initiated its program in 1993, as depicted in Attachment 2. Staff have also prepared updated
Standards and Guidelines for Council consideration, as outlined in Attachment 3.
Staff requests Council direction on the questions contained in Attachment 1, Council Briefing Memo, concerning moving forward with updates to the City’s
low-income housing property tax exemption program.
M E M O R A N D U M City of Springfield 3/29/2018
Attachment 1, Page 1 of 5
M E M O R A N D U M City of Springfield
Date: 4/2/2018
To: Gino Grimaldi, City Manager COUNCIL
From: Tom Boyatt, DPW Interim Director
Erin Fifield, Community Development Analyst
BRIEFING
Subject: Low-Income Rental Housing Property Tax Exemption MEMORANDUM
ISSUE:
The City recognizes that there is a shortage of affordable housing within the community and is
working to address the problem. The findings point to a shortage of housing and the expense of
housing relative to household incomes. According to the American Community Survey 2010-2014, half of Springfield households who rent are cost burdened, paying more than 30% of their
income on housing and basic utilities; 27% of households who rent are severely cost-burdened,
paying more than half their income on housing and basic utilities. Almost all (2570 households) of these severely cost-burdened households earn less than 80% of the Area Median Family
Income. The housing problem is getting worse as housing costs are increasing faster than incomes.
One of the Council’s Affordable Housing Strategies is to “Contribute to Income-Qualified Housing Development.” A property tax exemption for low-income rental housing is one tool available to help finance an affordable housing development with low rents.
COUNCIL GOALS/
MANDATE:
Promote and Enhance our Hometown Feel While Focusing on Livability and Environmental
Quality
BACKGROUND:
Property tax exemptions are one tool available to incentivize an increase to the supply and affordability of housing. Last spring, Council discussed various property tax exemptions to support housing development. During the April 10, 2017 Work Session, Council expressed
support for updating the existing Municipal Code provisions for low-income rental housing property tax exemption in hopes of increasing the availability of housing affordable to people
with low-incomes.
Summary of Low-Income Rental Housing Property Tax Exemption Oregon cities have been empowered to create low-income rental housing property tax exemption
programs under Oregon Revised Statutes (ORS) 307.515 through 307.537 since 1989. The purpose of the low-income rental housing tax exemption is to provide an incentive that will
encourage rental housing for low-income (defined as income at or below 60 percent of the area
median income) persons through new residential construction, maintaining the affordability of existing income-qualified housing, or acquiring housing in order to provide affordable rents to
low-income persons. Exemptions apply to rental housing units and can be used for both new
development and existing rental housing.
The Low-Income Rental Housing Property Tax Exemption enables rents to be affordable for residents by lower operating costs for the property owner, requiring the savings to be reflected in the lower rents. Exemptions further help to make housing development in Springfield more
MEMORANDUM 3/29/2018
Attachment 1, Page 2 of 5
feasible when paired with HOME funds, and more competitive for state tax credits given the local investment.
The table below shows the incomes for households earning 60% of area median income (AMI) and the maximum amount they could afford to pay for monthly rent (including basic utilities)
assuming a limit of 30% of their income goes toward housing.
Maximum Income and Monthly Rent for Low-Income Households by Household Size
1-Person 2-Person 3-Person 4-Person
Income Limit (60% AMI) $24,780 $28,320 $31,860 $35,400
Rent (including utilities) $619 $708 $796 $885
In 1993, the City Council adopted provisions into the Municipal Code to implement a program
for exempting low-income rental housing from ad valorem taxes for a period of twenty years. In accordance with ORS 307.521(4), the Council also adopted Standards and Guidelines for processing exemption applications. According to City records, one entity applied for and
received approval for property tax exemption under the program but the project was never constructed.
The Oregon legislature has updated the tax exemption’s enabling statute ten times since Springfield first established its program, but the City has not updated its code or policies in
conformance with these changes. In response to Council’s April 2017 direction to explore
updating the Municipal Code provisions for the low-income housing tax exemption program, staff have drafted proposed amendments to Municipal Code Section 3.500 to reflect the statutory
amendments that have occurred since the City initiated its program in 1993. Staff have similarly
prepared updated Standards and Guidelines for Council consideration.
State statute requirements (ORS 307.515 – 307.537) Low-income: Low-income is defined as income at or below 60 percent of the area median income.
Application to tax levy: The exemption would apply to the tax levy of Springfield. The exemption would also apply to the tax levy of all other taxing
districts if other impacted taxing districts agree to the policy of exemption. (There must be support from enough taxing districts
such that their combined rates total at least 51% of the combined
rate of all taxing districts.)
Duration of exemption: The exemption would be granted for 20 years. (For land that is
being held for future development of low income rental housing, the City can impose a time period for the exemption.)
Eligible for exemption: Only the portion of rental units housing low-income persons may be eligible. Cities may choose to add additional criteria.
Property owner: Property owners can be a private corporation or a non-profit, provided they demonstrate how the rent payable reflects the savings
from the property tax exemption, and/or how the exemption will benefit project residents.
Charges to apply: The City can charge an application fee to cover costs incurred by the City in administering the exemption program.
MEMORANDUM 3/29/2018
Attachment 1, Page 3 of 5
Response to a request Final decision on each application must go before City Council for exemption: to obtain approval/denial of the tax exemption within 60 days of
receiving the application.
QUESTIONS FOR COUNCIL:
Attachment 2 outlines proposed amendments to the Springfield Municipal Code that reflect statutory amendments that have occurred since 1993, and to fix Scrivener’s errors.
Question 1: Does Council wish to restart the Low-Income Rental Housing Property Tax Exemption program? If so, does Council wish to reinstate the program as outlined in the
proposed Municipal Code amendment (Attachment 2) or with modified program requirements?
A. Yes, reinstate the program as proposed in Attachments 2.
B. Reinstate the program with Council-articulated changes to the proposed amendments in
Attachments 2 that do not conflict with the provisions of ORS 307.515 to 307.523.
C. Do not reinstate the program.
Standards and Guidelines
The state statute requires that Cities adopt Standards and Guidelines to establish the policies
governing the consideration of applications under ORS 307.515 to 307.523. The following sections are optional and can be included in the Standards and Guidelines.
Duration of Tax Exemption: Per statute, an exemption from ad valorem taxes shall be granted for a period of twenty (20) successive years for the land and the improvements located thereon
that are a part of the low-income rental housing. Land that is being held for future development of low income rental housing may be granted an exemption for a period not exceeding a period established by the City.
Question 2: Does Council wish to limit the duration of tax exemption for land that is being held
for future development? If so, for how long?
A. Yes, establish a limit of two years as shown in the Draft Standards and Guidelines under
Item 4.
B. Yes, establish a different time limit.
C. No, there is no need to limit the time period for which land is being held for future development of low income rental housing.
Question 3: Does Council wish to expressly allow properties to subsequently apply for low-
income housing tax exemptions following the 20 year exemptions?
A. Yes, allow for reapplications as shown in the Draft Standards and Guidelines under Item
4.
B. No, remove the language in the Draft Standards and Guidelines under Item 4 allowing
MEMORANDUM 3/29/2018
Attachment 1, Page 4 of 5
for an application of subsequent low income housing tax exemptions.
Rent Regulatory Agreement: The rent payable must be established to reflect the savings resulting from the exemption from taxation. The City could choose to adopt a policy to enforce this requirement through a Rent Regulatory Agreement or other enforcement mechanism. The
City could require the owner to execute and maintain a Rent Regulatory Agreement in effect for the duration of the tax exemption period. The Agreement would be in a form approved by the
City which contains, but is not limited to, provisions establishing regular reporting requirements
and periodic inspection period, and demonstrates that the required rent payment reflects the benefit of the property tax exemption.
Question 4: As an enforcement mechanism, does Council wish to require property owners to
demonstrate how the property tax exemption benefits the residents through the use of a Rent
Regulatory Agreement?
A. Yes, require a Rent Regulatory Agreement as shown in Item 5.1 of the Draft Standards and Guidelines.
B. No, use another enforcement mechanism.
C. No, leave the enforcement to the tenants through ORS 307.525 and the recourse allowed through ORS 307.529, ORS 307.530, and ORS 307.531.
Inspection of Premises: The City Council could require that the owner consent in writing that
for the duration of the tax exemption period, the City may inspect the property for which the exemption is granted at reasonable times, without prior notice, to ensure that the premises are maintained in decent, safe, and sanitary conditions for the occupants.
Question 5: As an enforcement mechanism, does Council wish to require property owners to
consent to allow the City to inspect the property during the tax exemption period?
A. Yes, require the owner to consent to inspection as shown in item 5.2 of the Draft
Standards and Guidelines.
B. No, remove item 5.2 from the Draft Standards and Guidelines.
Charging an Application Fee: The enabling statute provides for cities to establish an application fee in an amount sufficient to cover the cost to be incurred by the city and the county assessor in
administering the program. The Lane County Assessor’s Office does not charge a fee for
administering this program. Springfield did not charge a fee under the program instituted in 1993. Other cities have similarly waived fees for affordable housing development as the
exemption is intended to incentivize the development and maintenance of affordable housing.
Question 6: Does Council wish to charge an application fee?
A. Yes, charge a fee such as $1600 resulting in some cost recovery for administering the
program.
B. Yes, charge a nominal application fee such as $400.
C. No, do not charge an application fee.
MEMORANDUM 3/29/2018
Attachment 1, Page 5 of 5
Capping the amount of tax revenues exempted through this program: Although cities implementing the state statute for the low-income rental housing property tax exemption program must offer the tax exemption for a period of 20 years, cities may limit the amount of
lost tax revenues through this program. When Springfield instituted this program in 1993, the Council placed an annual cap of $100,000 in lost tax revenues on the program. It was a
cumulative total based upon all owners receiving the exemption. Other cities have determined
that since there are not that many properties receiving the exemption that the benefit of
affordable housing exceeds any need for a cap.
Question 7: Does Council wish to cap the amount of tax revenues exempted through this
program and, if so, at what amount?
A. Yes, maintain the cap of $100,000 in revenue exempted per year as instituted under the 1993 program Standards and Guidelines.
B. Yes, but increase the cap to $173,000 in revenue exempted per year (accounting for inflation).
C. No, do not cap the amount of tax revenues exempted through this program.
Other policy objectives: The statute allows the city to adopt additional criteria for exemption as
long as they do not conflict with the statutory criteria.
Question 8: Does Council have any other criteria you would like to establish as part of the Low-
Income Rental Housing Property Tax Exemption program? Or any changes to the Draft Standards and Guidelines?
NEXT STEPS:
1) Amend the Municipal Code and Adopt Standards and Guidelines – Following
agreement on proposed Municipal Code changes and draft Standards and Guidelines, staff will bring an Ordinance before Council to formally adopt the changes to the
Municipal Code and a Resolution to adopt the Standards and Guidelines.
2) Inform and ask other taxing districts –The City will inform other taxing districts of the program and formally request their support for the exemption for their portion of the tax
levy.
RECOMMENDED ACTION: Provide direction on how to move forward concerning the low-
income housing rental property tax exemption program.
Attachment 2, Page 1 of 6
Exhibit B
Proposed Amendment to Springfield Municipal Code
The amendments are shown in legislative format (deleted text with strike-thru red font and new text
with underline red font). Commentary is shown in purple italics font.
Chapter 3 Public Improvements
3.500 Tax Exemption for New Low-Income Rental Housing
Commentary: Remove extra comma.
3.500 Intent.
It is the intent of this code to give effect to and adopt the provisions ORS 307.515 through ORS 307.537,
as amended.
Commentary: Update to reflect amendments to ORS 307.515 and fix Scrivener’s errors.
3.502 Definitions.
For purposes of sections 3.502 to 3.508, the following words means:
City Manager. The City Manager of the City of Springfield, or the manager’s designee.
Lender. The provider of a loan secured by the recorded deed of trust or recorded mortgage made to
finance the purchase, construction, or rehabilitation of a property used for low-income housing under
the criteria listed in section 3.506 of this code.
Low-Income. Income at or below 60 percent of the area median income as determined by the Oregon
Housing Stability Council based on information from the United States Department of Housing and
Urban Development.lower than established for very low-income families as defined by 42 U.S.C. Section
1437a(b)(2) as amended before December 1, 1984.
Commentary: Update to reflect amendments to ORS 307.518, 307.521 and fix Scrivener’s errors. Note
that proposed amendment to subsection 3.504(4) is discretionary and based upon similar policies in
other jurisdictions.
3.504 Low-Income Rental Housing Property Tax Exemption—Application.
(1) An application for exemption from property taxes hereunder for low-income rental housing
units constructed after the effective date of sections 3.500 to 3.508 of this code shall be filed
with the cCity Mmanager, on a form provided by the cCity mManager, which shall contain the
following, if applicable:
(a) A description of the property, or portion thereof, for which the exemption is requested;
(b) A description of the purpose of the project and whether all or a portion of the property
will be used for that purpose;
(c) A certification of the income levels of low-income occupants;
(d) The proposed recommended rent payments reflect the full value of the property
tax exemption;
Attachment 2, Page 2 of 6
(de) A description of how the tax exemption will benefit project occupants;
(e) Evidence that, if unoccupied, the property is offered for rental solely as a residence for
low-income persons, or is held for the purpose of developing low-income rental
housing;
(f) Evidence that, if occupied, the property is occupied solely as a residence for low-income
persons;
(g) Evidence that the property is owned or being purchased by a non-profit corporation
that meets the criteria for a public benefit corporation as described in ORS 65.001(35),
or a religious corporation as described in ORS 65.001(37);
(h) Evidence that the non-profit corporation expends no more than ten percent of its
annual income from residential rentals for purposes other than acquisition,
maintenance, or repair of residential rental property for low-income persons, or for the
provision of on-site child care services for residents of the rental property;
(i) A description of the plans for development of the property if the property is being held
for future low-income rental housing development; and
(jf) Any other information required by the cCity Mmanager.
(2) The information contained in the application shall be verified by oath or affirmation of the
applicant.
(3) At the time the application is filed, the applicant shall submit the application processing fee. The
application fee will be set by resolution of the Ccouncil, in consultation with the County
Assessor. If the application is approved, the portion of the fee attributable to the County
Assessor’s cost in administering the program shall be paid by the City to the County Assessor. If
the application is denied, the City shall retain that portion of the application fee attributable to
its own administrative costs and shall refund the portion attributable to the County Assessor’s
administrative costs to the applicant. In the event that there is any fee charged by county for
processing this application, applicant shall also be responsible for payment of that fee.
(4) An application for exemption hereunder shall be filed on or before December 1 of the calendar
year immediately preceding the first assessment year for which an exemption is requested.
However, if the property is acquired after November 1st, the application shall be made within
30 days after the date of acquisition, but no later than December 31 of that same calendar year,
in order to be considered for the following assessment year..
(5) An application which does not contain all the required information and is not accompanied by
the required fee shall be returned. Any application returned for these reasons shall be deemed
not to have been filed.
(6) Notwithstanding the dates specified in ORS 307.517 and 307.518, property granted exemption
pursuant to an application filed under sections 3.502 to 3.508 of this code before the date
specified in ORS 307.523, shall continue to receive the exemption on the same terms, including
duration, on which the exemption was granted.
Commentary: Update to reflect amendments to ORS 307.517, 307.518, 307.523, 307.527 and fix
Scrivener’s errors. Note that proposed amendment to subsection 3.506(3)(f) is discretionary and based
upon similar policies in other jurisdictions.
3.506 Low-Income Rental Housing Property Tax Exemption—Review, Approval or Denial of
Application.
Attachment 2, Page 3 of 6
(1) Upon receipt of the application and required fee, the Ccity Mmanager shall review the
application and make a written recommendation thereon to the Ccouncil in sufficient time to
allow the cCouncil to act within 60 days from the date the application is filed.
(2) Upon receipt of the cCity Mmanager’s recommendation, the Ccouncil shall consider the
application and grant or deny the property tax exemption. The Ccity Mmanager shall
recommend approval of an application, and the Ccouncil shall grant the exemption upon
determining satisfactory compliance with or mitigation of the following criteria:
(a) If unoccupied, the property is offered for rental solely as a residence for low-income
persons or held for the purpose of developing low-income rental housing;
The property is offered for rent;
(b) If occupied, Tthe property, or portion thereof subject to the property tax exemption, is
occupied solely as a residence by low-income persons;
(c) The required rent payment reflects the full value of the property tax exemption;
(d) The housing units on the property were constructed after the effective date of sections
3.500 to 3.508 of this code;
(e) The policies set forth in the Standards and Guidelines for Low-Income Rental Housing
Tax Exemption adopted by cCouncil resolution;
(f) The proposed development does not cause displacement of low-income persons unless
the cCity and developer can reach agreement on provisions (to be provided by the
developer) that reflect satisfactory mitigation thereof;
(g) The proposed development does not cause destruction of historic structures unless
criteria established in Section 3.3-900article 30.100 of the Springfield Development
Code, 1986, are met, and destruction is granted by the Historic Commission; and
(h) The proposed development is otherwise consistent with this code and adopted Ccity
regulations and policies.
(3) As an alternative to an application considered under subsection (2) of this section, the Ccity
Mmanager shall recommend approval of an application, and the Ccouncil shall grant the
exemption upon determining the applicant meets the criteria set forth in subsections (2)(e), (f),
(g), and (h) of this section and all the following criteria:
(a) If unoccupied, the property is offered for rental solely as a residence for low-income
persons, or is held for the purpose of developing low-income rental housing;
(b) If occupied, the property, or portion thereof subject to the property tax exemption, is
occupied solely as a residence for low-income persons;
(c) The applicant’s application was filed prior to July 1, 2000; the dates specified in ORS
307.517 and 307.518;
(d) The property is owned or being purchased by a non-profit corporation organized in a
manner that meets the criteria for a public benefit corporation, as described under ORS
65.001 (31) or for a religious corporation, as described under ORS 65.001(33); and
(e) The property is owned or being purchased by a non-profit corporation that expends no
more than ten percent of its annual income from residential rentals for purposes other
than acquisition, maintenance or repair of residential rental property for low-income
persons, or for the provision of on-site child care services for residents of the rental
property.
(f) For purposes of this subsection, a non-profit corporation that has only a leasehold
interest in property is considered to be a purchaser of that property if the non-profit
corporation is obligated under the terms of the lease to pay the ad valorem taxes on the
Attachment 2, Page 4 of 6
real and personal property used in the rental activity on that property, or the rent
payable has been established to reflect the savings resulting from the exemption from
taxation.
(4) At the meeting at which the Ccity Mmanager’s recommendation is considered, the Ccouncil shall
adopt a resolution approving the application and granting the property tax exemption, or adopt
a resolution disapproving the application and denying the property tax exemption.
(5) A resolution approving an application shall contain:
(a) The owner’s name and address;
(b) The description of the housing unitdevelopment;
(c) The legal description of the property or the Ccounty Aassessor’s property account
number;
(d) Any specific conditions upon which the approval is based;
(e) The grounds for possible termination of the exemption prior to the end of the
exemption period, or thereafter, and the effects of termination;
(ef) If only a portion of the property is approved, a description of the portion approved; and
(fg) A certification that the property or portion thereof, is exempt from ad valorem taxation.
(6) Within 10 days from the date of the approval resolution, the cCity Mmanager shall forward to
the applicant a copy of the resolution adopted by the Ccouncil approving an application, and, on
or before April 1 following approval, shall file a copy thereof with the Ccounty aAssessor. The
copy shall contain therein or be accompanied by a notice explaining to the applicant the
grounds for possible termination of the exemption prior to the end of the exemption period or
thereafter, and the effects of termination.
(7) A resolution denying an application shall state the reasons for denial, shall be forwarded to the
applicant within 10 days of its adoption, and shall inform the applicant of the right to appeal in
the manner set forth in ORS 34.010 to 34.100.
Commentary: Update to reflect amendments to ORS 307.519, 307.525, 307.529, 307.530, 307.531 and
fix Scrivener’s errors.
3.508 Low-Income Rental Housing Property Tax Exemption—Termination.
(1) If, after a resolution approving an application for exemption hereunder has been filed with the
Ccounty Aassessor, the Ccity Mmanager finds that:
(a) Construction or development of the exempt property differs from the construction or
development described in the application for exemption, of the housing unitor was not
completed within two years after the date the application was approved, or on or
before the dates specified in ORS 307.529January 1, 2000, and no extensions or
exceptions as provided in subsection (4) hereof have been granted; or,
(b) The applicant has failed to comply with the provisions of ORS 307.515 to 307.523, the
provisions of this code, any provisions of the standards and guidelines adopted by
Ccouncil resolution; or
(c) The applicant has failed to comply with any conditions imposed in the resolution
approving the application;
the Ccity Mmanager shall recommend to the cCouncil, and notify the owner of the property, at
the owner’s last known address, and every known lender, at the last known address of each
such lender, of the manager’s recommendation that the exemption be terminated. The notice
shall clearly state the reasons for the proposed termination, and shall require the owner to
appear before the Ccouncil, at a time specified in the notice, which shall not be less than 20 days
Attachment 2, Page 5 of 6
from the date the notice was mailed, to show cause, if any exists, why the exemption should not
be terminated.
(2) If the owner fails to appear before the Ccouncil at the time specified in the notice, or if the
owner appears and fails to show cause why the exemption should not be terminated, the City
Manager shall notify every known lender and shall allow each such lender not less than 30 days
after the date the notice of the failure to appear and show cause is mailed to cure any
noncompliance or to provide assurance adequate to the Council that all noncompliance shall be
remedied. If the owner fails to appear and show cause why the exemption should not be
terminated and the lender fails to cure or give adequate assurance any noncompliance will be
cured, the Ccouncil shall adopt a resolution terminating the exemption, which shall contain its
findings in support thereof. Copies of the resolution shall be filed with the cCounty Aassessor
and mailed to the property owner, at the owner’s last address, and the lender, at the lender’s
last known address, within 10 days from the date adopted. If a determination is made that the
exemption should continue as previously granted, the Ccouncil shall adopt a motion rejecting
the manager’s recommendation, and notify the property owner of that action within 10 days
from the date of the hearing.
(3) All reviews of the Ccouncil action in denying an application or terminating an exemption shall be
governed by the procedures set forth in ORS 34.010 to 34.100 and correction of assessments
and tax rolls and the evaluation of the property shall be in conformity with subsection (2) of ORS
307.533. The Ccouncil’s action on an exemption shall not be a land use decision for purposes of
administrative review.
(4) Upon receipt of a request from the property owner, the Ccouncil may, by resolution, extend the
deadline beyond the dates specified in ORS 307.535January 1, 2000, for completion of
construction of the low-income rental housing for a period not to exceed 12 consecutive
months, i.e., January 1, 2001, if it finds the failure to complete construction by the dates
specified in ORS 307.535January 1, 2001, was due to circumstances beyond the control of the
owner, and that the owner had been and could reasonably be expected to act in good faith and
with due diligence. If property granted an exemption hereunder is subsequently destroyed by
fire or act of God, or is no longer capable of owner-occupancy due to circumstances beyond the
control of the owner, the exemption shall cease, but no additional taxes shall be imposed upon
the property under ORS 307.531 or 307.533.
(5) In no event shall the low-income housing granted an exemption by the Ccouncil be exempt from
ad valorem taxation for more than 20 successive years beginning the assessment year
commencing immediately following the calendar year in which the application was approved.
The exemption shall not include the land or any improvements thereon not a part of or
necessary for the low-income housing unit. The exemption shall be in addition to any other
exemption provided by law.
(6) Any exemption granted by the Ccouncil shall terminate immediately without right of notice or
appeal, in the event the Ccounty Aassessor determines that a change of use to other than that
allowed has occurred for the housing unit, or portion thereof, or a declaration as defined in ORS
100.005 is presented to the Ccounty Aassessor or tax collector for approval under ORS 100.100.
Termination shall be in accordance with the provisions of ORS 307.531.
NOTE: The Ccouncil requests that all other taxing districts that levy taxes on property within the city of
Springfield agree to the policies of tax exemption set forth in this ordinance and notify the cCity
Mmanager of the city of Springfield of their agreement. When sufficient taxing districts have notified the
city manager of their agreement to the policies of tax exemption set forth herein so that, in combination
with the Ccity, their combined tax levy equals 51 percent or more of the total combined rate of taxation
Attachment 2, Page 6 of 6
on property certified by the cCity for limited assessment, the Ccity Mmanager shall notify the Lane
County Tax Assessor that an exemption certified by the city shall apply to the tax levy of all taxing
districts in which the property is located.
Attachment 3: Standards and Guidelines -- Page 1 of 3
DRAFT Standards and Guidelines
for
Proposed Low Income Rental Housing Property Tax Exemption
STANDARDS AND GUIDELINES FOR PROCESSING APPLICATIONS FOR THE LOW-INCOME RENTAL
HOUSING PROPERTY TAX EXEMPTION UNDER ORS 307.515 TO ORS 307.537
Pursuant to the provisions of the Springfield Municipal Code Sections 3.500 – 3.508, the City Manager
shall be governed by the following rules in considering applications and making recommendations for
the low-income rental housing local property tax exemption. These standards and guidelines are
adopted pursuant to ORS 307.521(4).
ADMINISTRATIVE PROCESS
For purposes of these rules, the following words and phrases mean:
City Manager. The City Manager of the City of Springfield, or the manager’s designee.
Lender. The provider of a loan secured by the recorded deed of trust or
recorded mortgage made to finance the purchase, construction, or
rehabilitation of a property used for low-income housing under the
criteria listed in section 3.506 of this code.
Low-Income. Income at or below 60 percent of the area median income as
determined by the Oregon Housing Stability Council based on
information from the United States Department of Housing and Urban
Development.
Low-Income Rental Housing. Rental housing constructed after April 5, 1993, which is occupied by
low-income persons.
1. Statement of Program Purpose. The intent of the low-income rental housing tax exemption
program is to benefit low-income residents and provide an incentive that will encourage
construction, conversion, or retention of housing for rent by persons with low-incomes.
2. Eligible Property. To be eligible for City property tax exemption hereunder, the property must
comply with Sections 3.504 and 3.506 of the Municipal Code.
3. Application for Exemption. To be considered complete, an application for property tax exemption
hereunder must comply with Section 3.504 of the Municipal Code.
Attachment 3: Standards and Guidelines -- Page 2 of 3
4. Duration of Tax Exemption. Per statute, an exemption from ad valorem taxes shall be granted for a
period of twenty (20) successive years for the land and the improvements located thereon that are a
part of the low-income rental housing. Land that is being held for future development of low
income rental housing may be granted an exemption for a period not exceeding two (2) years.
In the final year of low-income housing tax exemptions, applications for subsequent low-income
housing tax exemptions for the property may be submitted. Such applications shall be processed
and acted upon in accordable with Sections 3.500 – 3.508 of the Municipal Code.
5. Policies. In addition to the criteria set forth above and in Sections 3.500 – 3.508 the Springfield
Municipal Code, the applicant must demonstrate compliance with the following policies in order to
be eligible for a property tax exemption hereunder:
5.1 Rent Regulatory Agreement. The owner must agree to execute and maintain in effect for
the duration of the tax exemption period, a Rent Regulatory Agreement in a form approved
by the City, and which contains, but is not limited to, provisions establishing regular
reporting requirements and periodic inspection period, and demonstrates that the required
rent payment reflects the benefit of the property tax exemption.
5.2 Inspection of Premises. The owner must consent in writing that for the duration of the tax
exemption period the City may inspect the property for which the exemption is granted at
reasonable times, without prior notice, to ensure that the premises are maintained in
decent, safe, and sanitary conditions for the occupants.
6. Recommendation on Applications. Upon receipt of an application for property tax exemption
hereunder, the City Manager shall:
6.1 Review the application to verify that the applicant has provided the information required
and paid the required fee. The City Manager shall promptly notify the applicant of any
omissions.
6.2 If necessary, establish a meeting with the applicant, or the applicant’s authorized
representative to review the application.
6.2 Make a written recommendation to Council in sufficient time to allow the Council to take
final action upon the application and certify the results of the action to the county assessor
within 60 days from the date the Application is filed. The recommendation shall be based
upon and contain findings of compliance or non-compliance with these Standards and
Guidelines, Sections 3.506(1) through 3.506(4) of the Springfield Municipal Code, Council
resolutions, ordinances, and adopted policies, and applicable State statutes, that support
the recommendation.
Attachment 3: Standards and Guidelines -- Page 3 of 3
7. Final Action on Applications. Upon receipt of the City Manager’s recommendation, the City Council
shall consider the application and adopt a resolution granting or denying the property tax
exemption, per Sections 3.506(5) through 3.506(7).
8. Termination of Exemption. Section 3.508 outlines the criteria for termination of the exemption.
9. Amendments to Guidelines. The City Manager may, from time to time, propose such revisions,
deletions, or amendments to these Standards and Guidelines as deemed necessary or desirable for
the efficient implementation of the low-income rental housing property tax exemption program, but
no such revision, deletion, or amendment shall be effective until approved by Council Resolution.