Loading...
HomeMy WebLinkAbout04/02/2018 Work Session City of Springfield Work Session Meeting MINUTES OF THE WORK SESSION MEETING OF THE SPRINGFIELD CITY COUNCIL HELD MONDAY APRIL 2,2018 The City of Springfield Council met in a work session in the Jesse Maine Meeting Room, 225 Fifth Street, Springfield, Oregon, on Monday,April 2,2018 at 6:22 p.m.,with Mayor Lundberg presiding. ATTENDANCE Present were Mayor Lundberg and Councilors VanGordon, Wylie,Moore, Stoehr, Woodrow and Pishioneri. Also present were City Manager Gino Grimaldi, City Attorney Mary Bridget Smith,City Recorder Amy Sowa and members of the staff. 1. Low-Income Rental Housing Property Tax Exemption. Erin Fifield,Community Development Analyst,presented the staff report on this item. 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. 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. Staff have also prepared updated Standards and Guidelines for Council consideration,as outlined. Staff requests Council direction on the questions contained in the Council Briefing Memo, concerning moving forward with updates to the City's low-income housing property tax exemption program. Councilor Woodrow said the provisions indicated that they pertained to non-profits, but for-profits weren't noted. City of Springfield Council Work Session Minutes April 2,2018 Page 2 Ms. Fifield explained that the first application in the Code allows anyone to apply. The second piece has additional infonnation for non-profits. Councilor Woodrow asked about the other taxing agencies that would be affected. Ms.Fifield said it would include Willarnalane, Springfield Utility Board, Springfield School District, Lane County, LCC,etc.It would have to be approved by at least 51%of the taxing agencies.The exemption would then be divided by only those who approved. Councilor Woodrow asked if there were actually 20,000 units that were rentals in Springfield. Mr. Grimaldi said staff could check and confirm those figures. Councilor Stoehr asked about requiring that people applying for the exemption would not exceed a certain monthly rent. Ms.Fifieldsaid when.the City uses Federal HOME dollars,there is a requirement that rent be capped. Councilor Pishioneri asked if we have people wanting to have this section of the Code updated which would warrant staff working on this. Ms. Fifield said there has been interest from both for-profit and non-profit agencies,especially during HOME fund discussion. Councilor Pishioneri said the statute description for property owner lists private corporations and non- profits. He would like to add private property owners so it is available to all. City attorney Mary Bridget Smith said she would look into that and get back to them with that information. Councilor VanGordon asked if the City would still have to get approval from the other taxing districts since we already have this program in our Code. Ms. Fifield said in looking back to 1993 when this section of Code was originally added,they could not provide proof that the City had asked the taxing agencies at that time. Councilor VanGordon asked if this program would be stackable with the multi-use property tax exemption(MUPTE)program. Ms. Fifield said she was not sure adding the MUPTE to this program would actually add anything. Councilor VanGordon asked if the edits would make our Code closer to what Eugene has since they have had more interest in this program. He would like to structure out Code in a way that makes it more attractive and easy to use. Councilor Moore said if they are only allowed to build affordable housing, could they set a percentage of the tenant's income rather than a rent amount. She asked what would happen if the property was sold during the 20 years. City of Springfield Council Work Session Minutes April 2,2018 Page 3 Mayor Lundberg said her issue has been with the DOME Funds and the Request for Proposals(RFP). All of these prograrns are mentioned for Eugene's sites, and nothing in Springfield.Eugene has more incentive programs making them look more attractive. Regarding corporations, she noted that there are a couple of non-profits that have sold to corporations who specialize in rentals,which concerns her, She wants to make sure we keep in mind what we are trying to accomplish. The Council addressed the questions in the Council Briefing Memorandum. 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 or with modified program requirements? The Council said they would like to reinstate the program,but still have questions and concerns that need addressed. 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? Councilor Pishioneri said he would like to see this program set up so it attracts a large group and pencils out.If it doesn't pencil out_how can we look at what we can do to make it snore attractive to a larger group. Councilor Stoehr asked what would prevent people from holding land and then deciding later that they can't do anything with it. Ms. Fifield said they could offer the exemption for only two years and if they did not build during that time,then certain things would happen. Council could also say they don't want to allow an exemption for vacant land. After further discussion,Council directed staff to remove the exemption for undeveloped land. Question 3: Does Council wish to expressly allow properties to subsequently apply for low-income housing tax exemptions following the 20 year exemptions? Council discussed this topic and decided that a property owner could apply for whatever program is available at the time, so there is no need to include this section. Councilor Pishioneri asked about an encumbrance on the property. Ms. Fifield said a property owner could opt out of the exemption at any time during the 20 years. It was also noted that if someone using this program sold their property,the exemption could remain as long as the new owner met the requirements. Due to time constraints,Ms.Fifield said she would like to skip to question 8. 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? City of Springfield Council Work Session Minutes April 2,2018 Page 4 Councilor VanGordon said he is in favor of having a cap and would like to look at the other incentive programs the City has and their caps.He was not sure $173,000 would be enough. Ms. Fifield explained that the actual portion of tax exempted is fairly low per property so many could be assisted. Councilor Pisbioneri asked if the$173,000 was based on inflation. He would like to see it adjusted to fit the current property valuation. Staff will bring this back for another work session in order to address the rest of the questions,and Council concerns. ADJOURNMENT The meeting was adjourned at 7:00 p.m. Minutes Recorder--Amy Sowa Christine L.Lundberg Mayor Attest: Arra Sowa PAc City Recorder