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HomeMy WebLinkAboutOrdinance 6383 06/25/2018 CITY OF SPRINGFIELD, OREGON ORDINANCE NO. 6383 (GENERAL) AN ORDINANCE CONCERNING PROPERTY TAX EXEMPTION FOR LOW-INCOME RENTAL HOUSING; AMENDING SECTIONS 3.500, 3.502, 3.504, 3.506, AND 3.508 OF THE SPRINGFIELD MUNICIPAL CODE; ADOPTING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Springfield has a shortage of affordable housing and the cost of housing relative to household incomes is rising; WHEREAS, the City of Springfield has developed an Affordable Housing Strategy that identifies and implements various initiatives to help address this issue; WHEREAS, ORS 307.515-307.535 allows cities to establish and implement a program exempting low-income rental housing from ad valorem real property taxes for twenty years; WHEREAS, to comply with ORS 307.515-307.535, the Council adopted the Tax Exemption for New Low-Income Housing on February 1, 1993 (Ordinance No. 5667) which was incorporated in the Springfield Municipal Code sections 3.500-3.508; WHEREAS, the Council has identified the Tax Exemption for Low-Income Rental Housing program as one tool available to meet some of the objectives of its Affordable Housing Strategy; WHEREAS, the Oregon legislature has updated DRS 307.515 through 307.535 since Springfield first established its program and the Springfield Municipal Code must be changed to reflect the updated statutes; NOW, THEREFORE, THE COMMON COUNCIL OF THE CITY OF SPRINGFIELD ORDAINS AS FOLLOWS: Section 1. Sections 3.500, 3.502, 3.504, 3.506 and 3.508 of the Springfield Municipal Code are amended as shown and more particularly described and set forth in Exhibit A attached hereto and incorporated herein by reference. Section 2. Severability Clause. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is, for any reason, held invalid or unconstitutional by a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portion hereof. Section 3. Effective Date of Ordinance. This ordinance shall become effective 30 days from the date of passage by the City Council and approval by the Mayor. ADOPTED by the Common Council of the City of Springfield this 25 day of dune , 2014 by a vote of 5 for and 0 against. (1 absent - Stoehr) APPROVED by the Mayor of the City of Springfield this 25 day of June , 2018 Mayor ATTEST: City Recorder REVIEWED &APPROVED VTs ❑ F RME: OFFJCE OF CITY TTOJINLY ORDINANCE NO. 6383 Exhibit A, Page 1 of 5 Chapter 3 Pubiic Improvements 3.500 Tax Exemption for Low-income Rental Housing 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. 3.502 Definitions. For purposes of sections 3.502 to 3.508, the following words 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 a 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 asdetermined by the Oregon Housing Stability Council based on information from the United States Department of Housing and Urban Development. 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 City Manager, on a form provided by the City Manager, which shall contain the following, if applicable: (a) A description of the property, or portion thereof, forwhich the exemption is requested; (b) A description of the purpose of the project and whether all ora portion of the property will be used forthat 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; (e) A description of how the tax exemption will benefit project occupants; (f) Evidence that,if unoccupied, the property is offered for rental solely as a residence for low-income persons,a r i s held for the purpose of developing law-income rental housing; (g) Evidence that,if accupied, the property is occupied solely as a residence for low-income persons; (h) Evidence that the property is owned or being purchased by a non-profit corporation that meets the criteria fora public benefit corporation as described in ORS 65.001(3 5), or a religious corporation as described in ORS 65.001(37); (i) 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, orfarthe provision of on-site child care services for residents of the rental property; ORDINANCE NO.6383 Exhibit A, Page 2 of 5 W A description of the plans for deveIopment of the property if the property is being held forfuture low-income rental housing development; and (k) Any other information required by the City Manager. (2) The information contained in the application shall he 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 Council, in consultation with the County Assessor. If the application is approved, the portion of the fee attrihutable to the County Assessor'scost 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. (4) An application forexemption hereunder shall be filed on or before December 1o the calendar year immediately precedingthe first assessment year forwhich 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 ca lendaryea r, 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 0R 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. 3.506 Low-Income Rental Housing Property Tax Exemption—Review, Approval oraenial of Application. (1) Upon receipt of the application and required fee,the City Manager shall review the application and make a written recommendation thereon to the Council in sufficient time to allow the Council to act within 60 days from the date the application is filed. (2) Upon receipt of the City Manager's recommendation, the Council shall consider the application and grant or deny the property tax exemption.The City Manager shall recommend approval of an application, and the Council shall grant the exemption upon determining satisfactory compliarice with or(in it_igation of the following criteria: (a) If unoccupied, the property, or portion thereof subject to the property tax exemption, is offered for rental solely as residence for low-income person, oris 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 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 afterthe 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 Council resolution; (f) The proposed development does not cause displacement of low-income persons unless the City and developer can reach agreement on provisions (to be provided by the developer) that reflect satisfactory mitigation thereof; ORDINANCE NO. 6383 Exhibit A, Page 3 of 5 (g) The proposed development does not cause destruction of historic structures unless criteria established in Section 3.3-900 of the Springfield Development Code,are met, and destruction is granted by the Historic Commission; and (h) The proposed development is otherwise consistent with this code and adopted City regulations and policies. (3) As an alternative to an application considered under subsection (2)of this section, the City Manager shall recommend approval of an application, and the Council 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 isoff ered for rental solely as a residence forlow-income persons, or is held farthe purpose of developing low-income rental housing; (b) If occupied, the property is occupied solely as a residence for low-income persons; (c) The applicant's application was filed prior to 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 fora 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 re pair of residential rental property for low-income persons, or for the provision of on-site child care services for residents of the rental pro pe rty. (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 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 City Manager's recommendation is considered, the Council shat! adopt a resolution approving the application and granting the property tax exemption, or ado pt 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 development; (c) The legal description of the property arthe County Assessor's property account number; (d) Any specific conditions upon which the approval is based; (e) If only a portion of the property is approved, a description of the portion approved; and (f) 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 City Manager shat) forward to the applicant a copy of the resolution adopted by the Council approving an application, and,on or before April 1fol Iowing approval,shall file a copy thereof with the County Assessor. 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 the reafter, and the effects oftermination. ORDINANCE NO. 6383 Exhibit A, Page 4 of 5 (7) A resolution denying an application shall state the reasons for denial, shall be forwarded to the applicant within 10days of its adoption, and shall inform the applicant of the rightto appeal in the manner set forth in ORS 34.010 to 34.11X}. 3.508 Low-Income Rental Housing Property Tax Exemption----Termination. (1) If,after resolution approving an application for exemption hereunder has been filed with the County Assessor, the City Manager finds that: (a) Construction ordeveiopment of the exempt property differs from the construction or development described in the application for exe mption, or on or before the dates specified in ORS 307.524, and no extensions orexceptions as provided in subsection (4) hereof have been granted; or, (b) The applicant has failed to comply with the provisions of DRS 307.515 to 307.523, the provisions of this code, any provisions of the standards and guidelines adopted by Council resolution; or (c) The applicant has failed to comply with any conditions imposed in the resolution approving the application; the City Manager shall recommend to-the Council, and notify the owner of the property, at-the owner's last known address, and every known lender,atthe 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 Council, ata time specified in the notice,which shall not be less than 20 days 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 Council at the time specified inthe 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 afterthe 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 falls 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 Council shall adopt a resolution terminating the exemption, which shall contain itsfindings in support thereof. Copies of the resolution shah be filed with the County Assessor 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 Council 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 Council action in denying an application orterminating 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 TORS 307.533. The Council's action on an exemption shall not be a land use decision forpurposes of administrative review. (4) Upon receipt of a request from the property owner, the Council may, by resolution, extend the deadline beyond the dates specified in ORS 307.535, for completion of construction of the low- income rental housing fora period not to exceed 12 consecutive months, if itfinds the failure to complete construction by the dates specified in ORS 307.535, was due to circumstances beyond the control of the owner, and that the owner had been and could reasonably be expected to act ORDINANCE NO. 6383 Exhibit A, Page 5 of 5 in good faith and with due diligence. If property granted an exemption hereunder is subsequently destroyed by fire oract 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) Any exemption granted by the Council shal I te rmi nate immediately without right of notice or appeal, in the event the County Assessor determines that a change of use to other than that allowed has occurred forthe housing unit,or portion thereof, ora declaration asdef ined in ORS 100.005 is presented to the County Assessor or tax collector for approval under ORS 100.100. Termination shall be in accordance with the provisions of ORS 307.531. ORDINANCE NO. 6383