HomeMy WebLinkAboutItem 04- Housing Diversity Tax Exemption AGENDA ITEM SUMMARY Meeting Date: 10/23/2023
Meeting Type: Work Session
Staff Contact/Dept.: Katie Carroll/DPW
Staff Phone No: 541.726.3660
Estimated Time: 45 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: HOUSING DIVERSITY TAX EXEMPTION
ACTION
REQUESTED:
Give staff direction on the draft program guidelines and code for this tax
exemption.
ISSUE
STATEMENT:
The City recognizes there is a need for more housing choice in the community and
is working to address this problem through measures in Springfield’s Housing
Strategy. One challenge Springfield faces is a lack of diversity in housing types
available in the market.
Several multiple-unit housing projects have been built in recent years, but
Springfield still does not have enough housing to meet demand. The Council’s
Housing Strategy identified property tax exemptions as one tool to help spur
housing development. A property tax exemption for multiple-unit housing could
incentivize development of more diverse housing types.
ATTACHMENTS: 1. HDTE Memo
2. HDTE Draft Program Guidelines
3. HDTE Draft Code
4. HDTE Slides
DISCUSSION/
FINANCIAL
IMPACT:
Council directed staff to explore a property tax exemption for multiple-unit housing
(ORS 307.600-637) as part of the City’s Housing Strategy. Council discussed this
exemption and provided direction to staff in several work sessions starting in 2017.
Most recently Council provided direction in work sessions in March and May 2023.
In this work session, Council will review updated draft program guidelines based
on Council direction, feedback from developers, and City Attorney’s Office review.
Staff seeks direction on the draft program guidelines and draft code.
A property tax exemption could impact the City’s property tax revenues by
exempting qualifying residential multiple-unit projects from paying some property
taxes for several years. The purpose of the tax exemption is to incentivize
construction of housing that would likely not otherwise be built, resulting in a long-
term revenue gain by adding improvement value to the City’s property tax rolls.
M E M O R A N D U M City of Springfield
Date: 10/23/2023
To: Nancy Newton COUNCIL
From: Katie Carroll, Housing Analyst
Jeff Paschall, Community Development Director
BRIEFING
Subject: Housing Diversity Tax Exemption MEMORANDUM
ISSUE: The City recognizes there is a need for more housing choice in the community and is
working to address this problem through measures in Springfield’s Housing Strategy. One
challenge Springfield faces is a lack of diversity in housing types available in the market.
Several multiple-unit housing projects have been built in recent years, but Springfield still does
not have enough housing to meet demand. The Council’s Housing Strategy identified property
tax exemptions as one tool to help spur housing development. A property tax exemption for
multiple-unit housing could incentivize development of more diverse housing types.
COUNCIL GOALS/
MANDATE:
Promote and Enhance our Hometown Feel While Focusing on Livability and Environmental
Quality
BACKGROUND:
The Council has been considering adoption of a property tax exemption to incentivize
development of multiple-unit housing in specified transit-served and core areas since 2017. The
Housing Diversity Tax Exemption (HDTE) is codified as the multiple-unit property tax
exemption (MUPTE) at ORS 307.600-637. Additional background on the tax exemption is
available at the end of this packet.
Most recently Council provided direction in two spring work sessions on March 13, 2023 and
May 1, 2023. In the March meeting, Council directed staff to not cap the amount of total
property tax that could be exempted through the program, but to provide an option for Council
to do so at any time. Council also confirmed its prior direction on the geographic areas of
Springfield which would be eligible for the HDTE.
In the May meeting, Council discussed the public benefit aspect of the program and reviewed
draft program guidelines. Council directed staff to bring back a longer list of public benefit
categories which was less specific. Council said the list should provide applicants with some
guidance but give flexibility for developers to bring their own ideas to the City.
Additional Input
Following the spring work sessions, staff reached out to other impacted taxing districts and to
local developers to solicit feedback on the HDTE program. Staff have incorporated feedback
into the draft criteria for the program detailed below and in Attachments 2 (Program Guidelines)
and 3 (Code).
Taxing Districts: The exemption would apply only to the City’s tax levy unless other taxing
districts equaling at least 51% of the total combined tax rate support it. Staff from the
Springfield School Board and Lane County shared support for the exemption. Willamalane staff
have expressed some concern about potential impacts to the district’s revenue from the
exemption. Council could address this concern by pausing, changing, or ending the program at
any time upon Willamalane’s or another impacted district’s request.
MEMORANDUM 10/19/202310/18/2023 Page 2
Staff has planned additional follow up with Willamalane’s board later this year. Staff has not
heard back from other taxing districts which represent smaller shares of the levy. Staff will reach
out again if the Council moves forward with adoption.
Developers: Staff solicited input from eight local developers on the HDTE and received
feedback from six. Themes that emerged from these conversations include:
• Certainty: Developers want a program that is clear and offers certainty about
requirements that must be met for approval.
• Efficiency: An approval process which is quick and relatively simple for applicants is
critical.
• Flexibility: Developers like having a variety of options to meet program requirements.
Some may be more interested in a prescriptive approval path, and others in an open path.
DRAFT CRITERIA:
Updated draft criteria for the program, which were revised based on input received, additional
research, and City Attorney’s Office review are summarized below and further detailed in the
draft Program Guidelines (Attachment 2) and draft Code (Attachment 3). Policy considerations
which are outlined in this memo are highlighted in the draft code and guidelines in blue.
Exemption Length: The City must determine for how many years to offer tax exemptions, with a
maximum of ten years allowed by statute. In May, Council members shared multiple opinions
on this criterion. Council could uniformly offer exemptions for ten or fewer years or could adopt
criteria to determine different exemption lengths on a project-by-project basis.
One way to do this would be to require applicants to demonstrate whether their project would
not pencil “but-for” the tax exemption. This would require submission and analysis of project
pro formas with and without the exemption applied.
Recommendation: Uniformly offer tax exemptions for ten years. Do not require applicants
to show the project would not pencil “but-for” the exemption.
Why:
• Certainty
o Applicants would know before applying what benefit they could get if
approved. This would allow developers to evaluate whether to apply and to
build the exemption into a project’s pro forma for planning purposes.
o Analysis of pro formas to determine financial need is subjective. Developers
have different levels of risk versus return on investment they require to move
forward with a project. Pro formas may also shift during a project with changing
market conditions and construction costs.
• Efficiency
o To conduct analyses of pro formas, the City would need to contract with an
outside agency which would add onto the administrative burden, as well as the
cost and decision timeline for an application.
• Offering ten-year exemptions aligns with the practices of other cities with this program
which would make Springfield more competitive when developers consider where to
build. Offering exemptions for fewer than ten years could result in fewer developers
using the program and fewer units being built in Springfield.
• Council could put more limitations on the program in the future, including shortening
the exemptions offered.
MEMORANDUM 10/19/202310/18/2023 Page 3
Stacked Incentives: Council previously directed staff to not allow developers taking advantage
of the Springfield Economic Development Agency’s (SEDA) system development charge (SDC)
payment assistance to also qualify for the HDTE incentive. Multiple developers requested that
the City reconsider this policy choice and allow developers to stack these two incentives. This
would only be applicable in the areas of Downtown where the boundaries of the urban renewal
district and the HDTE overlap.
Recommendation: Allow developers receiving SDC payment assistance from SEDA to be
eligible for the HDTE conditionally – to qualify for a tax exemption, projects would need to
reach a height of four or more stories.
Why:
• Certainty
o Basing the conditional allowance of stacked incentives on the number of stories
in the development is a simple way for developers to evaluate potential
eligibility for both incentives and determine whether to apply for the tax
exemption.
• Staff previously recommended not allowing these incentives to be stacked. Current
market conditions are a barrier to higher density development Downtown. Conditionally
allowing incentive stacking can help address the high costs developers are facing so
more development can occur Downtown.
• Basing this criterion on building stories recognizes the higher price tag for mid- and
high-rise development, providing more tools for developers trying to make these types
of projects pencil.
• Apart from the Royal Building (which benefitted from the Vertical Housing Tax
Exemption and various affordable housing subsidies) and the in-progress Rivett
development, Downtown is mainly one- and two-story development. Encouraging
denser development would address the Downtown Refinement Plan’s goal to revitalize
the Downtown with new uses by encouraging high-density uses near transit.
• Denser development Downtown would also mean higher value development and more
long-term revenue for the urban renewal district.
Public Benefit Structure: By statute, to qualify for an exemption a developer must provide one or
more public benefits as part of the project. In May, Council reviewed initial staff
recommendations for this aspect of the program. Council directed staff to make the public
benefit requirement more open and flexible to allow developers to come to the City with ideas.
Over the summer, staff spoke with developers who expressed interest in having multiple options
to meet this requirement, including a clear and objective pathway to approval.
Recommendation: Offer three options for developers to choose from to meet the public
benefit requirement.
OPTION 1: CLEAR AND OBJECTIVE CRITERIA
This option would be for developers interested in a prescriptive approval pathway. Developers
would pick public benefits from a list with clear minimum thresholds for meeting the
requirement. Developers would be required to include two public benefits if at least one of those
met the List A requirements or would be required to include three public benefits if all public
benefits met List B requirements. List B items are generally lower cost and/or lower effort items
than List A items.
This option is similar to what Council reviewed in its May work session, but the list of benefit
categories has been refined. At its May meeting, Council expressed interest in including a longer
list of public benefit categories. For this draft, the benefit categories for which staff was able to
identify clear and objective criteria were included in OPTION 1. Benefit categories that did not
lend themselves to a clear and objective review were included in OPTION 3 (see below).
MEMORANDUM 10/19/202310/18/2023 Page 4
OPTION 1 PUBLIC BENEFIT OPTIONS
Category List A Criteria List B Criteria
Amenities Supporting Bicyclists and Pedestrians ✓ ✓
Units Accessible to a Range of Household Sizes
✓
Affordable Housing ✓ ✓
Amenities Supporting Mass Transit Use ✓ ✓
Dedication of Land or Easement for Public Purpose ✓
Electric Vehicle and Micro-mobility Charging ✓ ✓
Offsite ADA Accessibility ✓ ✓
Accessible Units
✓
Child Care Center ✓
Energy Efficiency/Green Building ✓ ✓
Development or Redevelopment of Underutilized
Property
✓ ✓
Community Spaces
✓
Moderate Income Housing ✓ ✓
OPTION 2: FEE-IN-LIEU FOR ADA ACCESSIBILITY
This option would be available for developers interested in an alternative to including a public
benefit in their project. The developer would pay a fee to City which would be reserved for
completing infrastructure projects that increase ADA accessibility, such as curb ramps, in HDTE
program areas. These projects are already identified in the City’s Capital Improvement Program.
The fee would effectively reduce the total benefit received by 10% and could be paid upfront
with a discount or annually beginning in the third year of the exemption to allow time for project
stabilization. This option is similar to how the City of Eugene has structured one of the public
benefit requirements for its exemption program.
Why OPTION 1 and OPTION 2:
• Certainty
o Both Option 1 and 2 address feedback from developers that there should be a
prescriptive path for meeting the public benefit requirement.
o Having clear and objective criteria would allow a developer to evaluate the
likelihood of being granted an exemption before applying.
o Clear and objective criteria would also give developers more confidence to
invest in plans and concept renderings which integrate public benefits they
know are likely to be approved.
• Efficiency
o Applications submitted under Option 1 and 2 would be straightforward to
evaluate, so could be reviewed more quickly with lower administrative effort.
This addresses developers’ interest in having a streamlined evaluation process.
o Option 2 would require minimal additional staff time to administer as the City
has already identified needed accessibility upgrades and has a process in place
to complete those.
o Clear and objective criteria would reduce the need for a back and forth between
the City and applicants to determine what would adequately address the public
benefit requirement, offering time and money savings to developers completing
applications.
MEMORANDUM 10/19/202310/18/2023 Page 5
OPTION 3: COUNCIL PROPOSAL
This option would allow developers to propose their own ideas for public benefits to include in
the project. The Program Guidelines (Attachment 2) include some categories and examples of
the types of benefits a developer may want to propose. These categories are carried over from
the list of public benefits Council saw in its May work session. A developer could propose
benefits within those categories or could put forward something else for consideration as a
public benefit. Benefit categories listed as examples under Option 3 in the draft program
guidelines include:
OPTION 3 PUBLIC BENEFIT OPTIONS
Accessibility Features Energy Efficiency and Green
Building
Special Architectural Features
Community Spaces Tenant Amenities Structured Parking
Disaster Resiliency Innovative Material Use/Re-Use Other Developer Proposal
Extra Costs Associated with
Infill and Redevelopment
Public Art
Why OPTION 3:
• Flexibility
o Option 3 responds to direction from Council and interest from developers in
having a flexible and open option for meeting program requirements.
o The draft program guidelines include discretionary evaluation criteria for
Council to use in determining whether an applicant’s proposal is sufficient. The
criteria give Council latitude to accept creative public benefit ideas, while
ensuring those benefits meet minimum program standards.
Approval Authority: In past work sessions, staff shared that Council must review and rule on
every application for exemption. However, during the most recent legislative session, a bill
passed (House Bill 2080) which changed the requirements for this tax exemption so that Council
is no longer required to approve each application.
Recommendation: Staff recommends delegating approval authority for this program to the
City Manager or designee for applications meeting clear and objective criteria (public
benefit OPTION 1 and OPTION 2).
The draft Guidelines and draft Code (Attachments 2 and 3) require all applicants to attend a pre-
application meeting before submitting an application to discuss preliminary plans for the project
and meeting the public benefit requirements, and to get staff feedback to assist with preparing a
complete application. Staff recommends that Council delegate approval authority to the City
Manager or designee to rule on those HDTE applications which meet clear and objective criteria
(public benefit OPTIONS 1 and 2), and that Council review and rule on discretionary
applications (public benefit OPTION 3).
Under staff’s recommendation, the approval pathways would be:
MEMORANDUM 10/19/202310/18/2023 Page 6
Why:
• Efficiency
o Delegating approval authority for applications meeting clear and objective
criteria would reduce the decision timeline for those applications and allow
developers to avoid potential delays to moving forward with a project (for
example if an application was received during Council recess).
o Allowing staff to rule on applications meeting those criteria would reduce the
administrative burden to run the program.
Council would not see projects meeting clear and objective criteria before they were approved
for an exemption, but staff could keep Council updated on the program’s effectiveness with
communication packet memos upon granting an exemption or by providing Council with an
annual report.
Exemption for Parking: The City could choose to limit the tax exemption to multiple-unit
housing, or it could choose to also include onsite parking for the housing in the exemption (see
Attachment 3, section 3.558(2)). The City will soon no longer have onsite parking requirements
anywhere in the City as part of complying with the Climate Friendly Equitable Communities
(CFEC) rules, so including parking in the exemption could potentially incentivize developers to
provide it. However, the market may already drive developers to include parking. Excluding
parking from the exemption would increase the taxable value of projects granted exemptions.
Staff does not have a recommendation on this policy choice.
QUESTION: Does Council want to include onsite parking constructed for the multiple-unit
housing in the tax exemption?
QUESTION: Does Council concur with staff’s policy recommendations for the Housing
Diversity Tax Exemption?
NEXT STEPS
When Council is ready to move forward with the program, staff will return with adoption-ready
program guidelines and code incorporating any additional Council direction. The City must hold
a public hearing in order to determine whether multiple-unit housing meeting the qualifications
laid out in the draft Code and Program Guidelines would not otherwise be built in the designated
areas without the benefits provided by the tax exemption. Upon making that finding, the Council
would then adopt the program by ordinance. If the Council adopts the HDTE program, the City
will seek concurrence for the program from other taxing districts. The City will also need to
establish an application fee in coordination with the Lane County Assessor and prepare outreach
and application materials.
Multiple developers urged the City to be expeditious in implementing this program to help meet
housing needs. Notably, Obie Companies has requested this tax exemption as part of their letter
of interest to develop City-owned tax lots Downtown (see June 5, 2023 Council agenda item).
ADDITIONAL BACKGROUND:
The HDTE is a program that the City is permitted to adopt by ORS 307.600-637. While there
are many aspects of the program which the City has discretion over, there are certain minimum
requirements for the property tax exemption program. Those include:
• Must identify a minimum number of units a project must include to be eligible for
exemption
• Must identify areas where the exemption would be available that are core areas or within
¼ mile of transit
• Can offer tax exemptions for a maximum of 10 years
MEMORANDUM 10/19/202310/18/2023 Page 7
• Tax exemption does not apply to land
• Project must provide public benefit(s)
• Transient accommodations are not eligible for an exemption
There are at least eight other Oregon cities that have adopted this tax exemption, including
Cottage Grove, Eugene, and Florence in Lane County.
RECOMMENDED ACTION: Give staff direction on the following questions-
1. Does Council want to include onsite parking constructed for the multiple-unit
housing in the tax exemption?
2. Does Council concur with staff’s policy recommendations for the Housing Diversity
Tax Exemption?
HDTE Program Guidelines 1
Key: Policy Decision
Housing Diversity Tax Exemption - City of Springfield
Program Guidelines
The following standards and guidelines expand on program requirements articulated in the Springfield
Municipal Code (SMC) sections 3.550-3.558, and in ORS 307.600-637. Prospective applicants should
review both the code requirements and these guidelines before applying.
Purpose
Property tax exemptions are one tool available to incentivize an increase to the supply and
diversity of housing. The Housing Diversity Tax Exemption (HDTE) program adopts the Oregon
Multiple Unit Property Tax Exemption (MUPTE) for approved housing projects in designated
areas of Springfield. The program, enabled by state law, encourages development of new
multiple-unit housing in transit-supported and core areas of Springfield by reducing the operating
costs for qualified projects during their first several years of operation. Applicants intending to
build multiple-unit low-income rental housing projects may be better served by the Low Income
Rental Housing Property Tax Exemption (see SMC 3.500 through 3.508).
Applicants building multiple-unit housing that meets the definition in SMC 3.552 can apply to
receive an exemption of property taxes for a period of ten (10) successive years on residential
improvements if program requirements are met. Housing made available for rental or sale of
individual units is eligible for the exemption.
Eligibility Criteria
To be eligible for the exemption, applicants must meet the following minimum criteria:
• Applicant has attended a pre-application meeting
• Applicant controls (owns or has proof of future ownership) of project site at time of
application
• Project will add a minimum of five new dwelling units and meet the definition of
“Multiple-Unit Housing” in SMC section 3.552
• Project site is located within an eligible program area as shown in SMC section 3.554
• Project will provide public benefits as outlined in these program guidelines
• The construction of the project for which the exemption is sought will be completed on or
before the date specified in ORS 307.637
• At completion, the project will conform to the requirements of the Springfield
Comprehensive Plan, any applicable refinement plans or functional plans, and the
Springfield Development Code, in effect at the time the application for this tax exemption
is approved
• Project must comply with the Springfield Development Code and not rely on any type of
statutory exemption or exception
HDTE Program Guidelines 2
• Applicants receiving system development charge (SDC) payment assistance from the
Springfield Economic Development Agency (SEDA) are not eligible for the tax
exemption unless the project will have a height of four or more stories upon completion
(includes projects that have ground-floor commercial)
• Projects on properties abutting Main Street from 38th Street to Bob Straub Parkway may
not include any ground floor residential which faces Main Street.
• Projects granted the exemption cannot be designed or used as transient lodging, including
but not limited to hotels, motels, AirBnbs, VRBOs, and Short Term Rentals
• Projects for which the applicant has already applied for a building permit are not
eligible for the exemption
Application
A complete application must be filed on or before February 1 for consideration of an exemption
beginning July 1 of the following assessment year. Any application which does not contain all
required information and/or the required fee shall be returned and considered not filed. The City
reserves the right to request additional materials from the applicant during its review.
At a minimum, the application must contain:
• Explanation of why the applicant is requesting the exemption
• Preliminary site plans showing major features, including public benefits, as applicable
• Legal description of the property
• Proof of ownership/site control
• Project design elements and planned façade materials
• Description of existing use of the property
• Justification of the elimination of any existing sound or rehabilitable housing or
businesses on the project site
• Proposed number of housing units, including a breakdown of the number of units by unit
size
• Description and preliminary proof of the public benefits to be provided
An application fee will be charged at the time of application and should be made payable to the
City of Springfield. Application fees cover the City and County’s costs for processing the
application and administering the exemption. If an application is denied, the City will retain the
portion of the fee attributable to its expenses for processing the application and will refund the
balance to the applicant.
Review Process
1. Before submitting an application, the applicant must attend a pre-application meeting to
discuss their plans for meeting the requirements of the program, including provision of
public benefits. Materials for the meeting must be submitted at least two weeks in
advance. Staff will provide preliminary feedback to assist the applicant in preparing their
exemption application. Staff will try to coordinate the pre-application meeting with
development review meetings the applicant may schedule where applicable and possible.
HDTE Program Guidelines 3
2. A complete application must be submitted by February 1 immediately preceding the first
assessment year for which the exemption is requested. Applications are accepted on a
rolling basis but applicants are encouraged to coordinate timing with the project’s
development applications. Applicants should bear in mind the Lane County Assessor’s
assessment date when determining application timing. Tax exemptions will not begin
until a project is complete and assessed at its completed value. Applicants may wish to
consult with the Lane County Assessor for additional information.
3. The City Manager or designee will be the Approval Authority for applications applying
for approval under public benefit OPTION 1 or OPTION 2 and will rule on the
application within one hundred and eighty days (180) of the City’s receipt of a complete
application. Review may require a follow-up meeting with the applicant to clarify or
request additional application materials.
The Council will be the Approval Authority for applications applying for approval under
public benefit OPTION 3. The City Manager or designee will review applications
applying for approval under public benefit OPTION 3 and forward a recommendation to
the Council to approve, approve with conditions, or deny the application. Review may
require a follow-up meeting with the applicant to clarify or request additional application
materials. The Council will rule on the application within one hundred and eighty days
(180) of the City’s receipt of a complete application. The Council may approve, approve
with conditions, or deny the application. The Council may hold a public hearing on the
application at its discretion. Final action by the Council shall be by resolution.
Applications not acted upon within 180 days of receipt of complete application are
deemed approved. Following approval or denial of an application, the City will provide
notice to the applicant and Lane County Assessor as provided in ORS 307.621.
Prior to issuance of the Certificate of Occupancy, the applicant may be required to record
one or more restrictions or other covenants pertaining to the property that reflects any
requirements or conditions required in the application approval.
4. The City may require the applicant to provide verification of the project’s public benefits
before issuing the Building Permit and/or Certificate of Occupancy.
5. For approved projects, the City Manager or designee may require submission of an
annual report during the exemption period to verify the continuation of public benefits
and continued conformance with other eligibility requirements. The project owner will be
required to allow on-site inspections for the purposes of verifying that the project remains
in compliance with its eligibility requirements.
HDTE Program Guidelines 4
Public Benefits
In exchange for granting the property tax exemption, the City requires applicants to include
public benefits as part of the project. There are three options applicants can choose between to
meet the public benefit requirement for the program.
OPTION 1: Clear and Objective Criteria
The applicant may pick public benefits from the list below to include in the project. The
applicant may include two (2) public benefits if at least one benefit is a List A item. The
applicant must include three (3) public benefits if all proposed benefits are List B items. These
benefits must be in addition to any land use or building code requirements. The City Manager
or designee will be the Approval Authority for applications applying under OPTION 1.
Benefit List A List B
Amenities
Supporting
Bicyclists and
Pedestrians
Provide at least one element from the
following list:
• Raised or signalized pedestrian
crossing in excess of any
requirements and as approved by
the Community Development
Department
• Street lighting in excess of any
requirements (one or more)
• Create new sidewalk connections in
excess of any requirements (100
feet or more of block length)
• Convert existing curbside sidewalk
to setback sidewalk in excess of any
requirements (100 feet or more of
block length)
Provide at least one element from the following
list:
• Striping and signage for pedestrian
crossing in excess of any requirements
and as approved by the Community
Development Department
• Create new sidewalk connections in
excess of any requirements (50 feet to 99
feet of block length)
• Convert existing curbside sidewalk to
setback sidewalk in excess of any
requirements (50 feet to 99 feet of block
length)
Applicant must show on site plan at application and include letter of support from the Community
Development Department. City to verify prior to issuance of building permit and certificate of
occupancy.
Units Accessible to
a Range of
Household Sizes
Project provides a mix of unit sizes. To qualify,
must provide at least three different unit sizes. At
least 10% of the total number of units must be
allocated to each of the three unit sizes. Unit sizes
include: live/work1, studio, 1 bed, 2 bed, 3 bed,
etc.
(Round up decimals to the nearest whole number)
Applicant must state plan for providing in application. City will verify during building plan review
and at certificate of occupancy.
Affordable
Housing
At least 20% of units (only available for 6+
unit projects) are reserved for households
with low incomes (at or below 80% AMI) for
the duration of the exemption through:
• Master lease with non-profit; OR
At least 10% of units are reserved for households
with low incomes (at or below 80% AMI) for the
duration of the exemption through:
• Master lease with non-profit; OR
1 Live/work unit is a dwelling unit or sleeping unit in which a significant portion of the space includes a
nonresidential use that is operated by the tenant (OSSC 202.1).
HDTE Program Guidelines 5
• Housing Choice Voucher; OR
• Similar housing subsidy program
(Round up decimals to the nearest whole
number)
• Housing Choice Voucher; OR
• Similar housing subsidy program
(Round up decimals to the nearest whole number)
Applicant must state plan for providing affordable units and include letter of support from
sponsoring agency as applicable. Prior to issuance of certificate of occupancy and annually, must
submit verification letter, including letter of confirmation from entity issuing vouchers/leases.
Amenities
Supporting Mass
Transit Use
• Create new sidewalk to provide
connection to a nearby bus stop
location in excess of any
requirements (100 feet or more of
block length)
• Installation of bus shelter or
enhancement of existing bus shelter
Provide at least one element from the following
list:
• Create new sidewalk to provide
connection to a nearby bus stop location
in excess of any requirements (50 feet to
99 feet of block length)
• Installation and maintenance of trash
receptacle at bus stop for duration of
exemption
Applicant must show on site plan at application and include letter of support from the Community
Development Department or Lane Transit District (LTD) as applicable. City to verify prior to
certificate of occupancy.
Dedication of Land
or Easement for
Public Purpose
Dedication or easement to a public agency on
the project site which is not otherwise
required, but which serves as a public
benefit.
Examples of dedications/easements that may
be acceptable include: pedestrian or bike
access path, park space, utility easements.
Applicant must show planned location on site plan and submit a letter of support from the public
agency verifying the dedication is sufficient. City to verify legal documentation of easement or
dedication prior to certificate of occupancy.
EV and Micro-
mobility Charging
Provide Electric Vehicle (EV) charging
stations for a minimum of 40% of parking
spaces, and a minimum of 2 EV charging
stations. Stations may be limited to residents.
(Round up decimals to the nearest whole
number)
Provide micro-mobility charging stations with
locking which are accessible to the public. A
minimum of 1 space for every 5 units is required
with a maximum of 5 spaces required.
(Round up decimals to the nearest whole number)
Applicant must show on site plan at application. City to verify at building permit and prior to
certificate of occupancy. Must annually submit report verifying still in use.
Offsite ADA
Accessibility
Create ADA accessible path from front
entrance of building to nearest transit stop in
excess of any requirements. This could
include curb improvements and/or sidewalk
panel replacement.
Replace existing broken or deteriorated sidewalk
to help make ADA connections offsite for a
minimum of one block face in excess of any
requirements.
Applicant must show on site plan at application and include letter of support from the Community
Development Department. City to verify prior to certificate of occupancy.
HDTE Program Guidelines 6
Accessible Units2 Where Type A units are required, increase
accessibility to fully accessible ADA units;
AND where Type B units are required, increase
accessibility of at least 60% of Type B units to
Type A units. A maximum of 20 Type B units
must upgraded to Type A units to meet this
requirement. For projects with different unit sizes
(1-bed, 2-bed etc.), at least one unit of each unit
size must be upgraded from Type B to Type A
(where applicable).
Applicant must explain plan for meeting requirement. City will verify during building plan review
and prior to certificate of occupancy .
Child Care Center3 Provide Child Care Center onsite. The center
may be limited to residents or open more
broadly. The applicant must demonstrate
how the center will be provided for the
duration of the exemption.
Applicant must show location of child care center on site and building plans plan and demonstrate
that code requirements for facility are met. Applicant should identify the care provider if available.
City to verify prior to certificate of occupancy. Must annually submit copy of certification of child
care center.
Energy
Efficiency/Green
Building
Project will comply with one of the
following certification programs:
• Energy Trust New Building Path to
Net Zero
• LEED Platinum
• Earth Advantage Platinum or higher
• Similar energy certification
(applicant will be required to justify
how program is similar to one of the
above)
Project will comply with an energy certification
programs:
• Energy Trust of Oregon New Building
Whole Building
• Energy Trust Multifamily Market
Solutions Best
• LEED Silver or higher
• Earth Advantage Silver or higher
• Similar energy certification (applicant
will be required to justify how program
is similar to one of the above)
Applicant must show some level of coordination with the certifying agency in application. City to
verify prior to issuance of building permit and certificate of occupancy.
Development or
Redevelopment of
Underutilized
Property
Project meets all of the following criteria:
• Aggregate development site is at
least 0.5 acre.
• Project will increase residential
density to at least 40% above
minimum density requirement for
the site or 40% above current
density, whichever is greater.
Projects that hit maximum
allowable density also qualify.
• Project must not permanently
displace any existing residents or
businesses.
Project meets all of the following criteria:
• Aggregate development site is at least
0.25 acre.
• Project will increase residential density
to at least 40% above minimum density
requirement for the site or 40% above
current density, whichever is greater.
Projects that hit maximum allowable
density also qualify.
• Project must not permanently displace
any existing residents or businesses.
2 The terms Type A and Type B are defined in the Oregon Structural Specialty Code.
3 Child care center is defined in ORS 329A.440.
HDTE Program Guidelines 7
Applicant must demonstrate how requirement is met in application. If there are existing residents
or businesses that are temporarily displaced, applicant must demonstrate return of those
residents/businesses after completion of project.
Community Spaces Project includes at least one of the following
community spaces which will be open to the
public free of charge for at least 30 hours per
week for the duration of the exemption.
• Community garden with seating
• Public plaza or park with seating
• Common meeting rooms (can be open to
public by reservation)
• Rooftop gardens with seating
• Playground
• Facilities for cultural groups, youths, or
seniors
Applicant must show facility on site plan and explain how facility will meet requirements for
public access. City to verify prior to certificate of occupancy. Must annually submit report
verifying still in use.
Moderate Income
Housing
At least 30% of units are reserved at prices
affordable to households with moderate
incomes (at or below 100% AMI) for the
duration of the exemption. Required
maximum rent levels to be calculated
annually by City.
(Round up decimals to the nearest whole
number)
At least 15% of units are reserved at prices
affordable to households with moderate incomes
(at or below 100% AMI) for the duration of the
exemption. Required maximum rent levels to be
calculated annually by City.
(Round up decimals to the nearest whole number)
Applicant must complete moderate income housing worksheet with application and submit
proposed rental or sales prices. Prior to issuance of certificate of occupancy and annually, must
submit rent rolls to verify moderate income units.
OPTION 2: Fee-in-Lieu for ADA Accessibility
The applicant may pay a fee in lieu of including a public benefit in the project which will be
dedicated to completing infrastructure projects in HDTE program areas that increase ADA
accessibility for the community.
The fee will be 10% of the total HDTE tax exemption. Project owners can pay the fee annually
during years three through ten of the exemption or may pay upfront with a 5% discount. The
City Manager or designee will be the Approval Authority for applications applying under
OPTION 2.
OPTION 3: Council Proposal
The applicant may choose to propose one or more public benefits to include in the project which
do not meet the clear and objective criteria listed under OPTION 1. These benefits may be of a
HDTE Program Guidelines 8
similar nature to those listed under OPTION 1 or may be other public benefits that are consistent
with ORS 307.600 through 307.637.
The burden is on the applicants to explain how the benefit(s) they have proposed meet the
program’s requirements. The City reserves the right to exercise discretion in determining
whether the proposed public benefits are appropriate for the site and if program requirements
have been sufficiently met.
The applicant must explain how the proposed benefit(s) further adopted City policies (if any) and
demonstrate how they will certify to the City that the public benefit is included in the project. If
any other public agencies will be impacted, the applicant should include a letter of support for
the benefit from the relevant agency. In most cases, proposed benefit(s) should go above and
beyond development requirements. Exceptions should be rare and require justification from the
applicant. The Council will be the Approval Authority for applications applying under
OPTION 3.
Examples of public benefits an applicant may wish to propose include:
• Accessibility Features: This may include dwelling units and/or communities designed to
allow for aging in place and/or to meet mobility needs. It could also include other
accessibility retrofits and upgrades not otherwise required by code.
• Community Spaces: Community spaces are locations where people can gather and spend
ample time building community. This may include recreation facilities or other
community-serving facilities. These may be limited to residents or paying customers if
Council finds the proposal provides a sufficient public benefit.
• Disaster Resiliency: This may include building to an acceptable above-minimum seismic
code standard, building to an acceptable flood standard within the 42nd Street levee
impact area, including resilient community spaces (e.g. warming/cooling or cleaner air
spaces, emergency food/water supplies), or including emergency shelter space.
• Extra Costs Associated with Infill and Redevelopment: This may include development
costs that go well beyond the regular cost of development, such as brownfield site
remediation, high costs for offsite construction staging, or significant installation or
replacement of infrastructure. The applicant should demonstrate the additional cost and
include a comparative basis to show how the costs go beyond typical development costs.
• Energy Efficiency and Green Building: This may include features such as a significant
portion of the building’s energy being provided by renewable energy, reuse of grey
water, green roofs, and other similar features.
• Tenant amenities: This may include features such as broadband internet connection, and
in-unit A/C.
• Innovative Material Use/Re-Use: This may include preservation of a building shell or
façade of an existing significant or historic building. It could also include significant use
of innovative construction materials or techniques such as mass timber, 3D printing, or
straw bales.
HDTE Program Guidelines 9
• Public Art: Public art may include the installation of sculptures, murals, or other forms of
public art. It may also include galleries or performance venues.
• Special Architectural Features: Special architectural features could include extraordinary
material use, outstanding architectural design, restoration of missing historical features
based on photographic evidence, or similar.
• Structured Parking: This may include providing parking for some or all units in a parking
structure or as tuck-under parking to address parking needs while helping to create a
dense urban form.
The criteria used by Council to weigh public benefits proposed under OPTION 3 are:
• The proposed public benefit(s) will provide a benefit to the public which is proportional
to the exemption requested; and
• The public benefit(s) goes above and beyond development requirements, or the applicant
has made a compelling argument for an exception; and
• The public benefit(s) will extend for at least the duration of exemption; and
• The public benefit(s) will be included as part of the construction of the project; and
• Staff will be able to verify on-going compliance without notable increase to workload
Monitoring
After a project is approved for the exemption, the project owner must continue to comply with
program requirements for the duration of the exemption. The owner of a property receiving the
HDTE may be required to submit a report annually to the City and must allow on-site inspections
verifying the continuation of all conditions of approval, including public benefits. The City or
Lane County Assessor may conduct additional monitoring of projects granted the exemption as
needed, including following the sale of a project participating in the program which is still within
its exemption period.
The City Manager or designee shall submit an annual report to Council summarizing the status
and fiscal impact of all approved projects within an exemption period.
Termination
If the City finds that construction of multiple-unit housing was not completed on or before the
date specified in these guidelines, or that any provision of ORS 307.600-637, SMC section
3.550-558, or the program guidelines are not being met, or any condition of approval is not being
or has not been complied with, the City shall give notice to the property owner and any known
lender of the proposed termination of the exemption. The notice shall list the reasons for
termination and require the project owner to appear at a time specified by the City (not less than
20 days after mailing the notice) to show cause, if any, why the exemption should not be
terminated. For additional guidance on termination of an exemption, refer to ORS 307.627, and
ORS 307.631.
Extension
HDTE Program Guidelines 10
If the City finds that, due to circumstances beyond the control of an owner who is acting in good
faith, the multiple-unit housing cannot be completed by the date specified in these guidelines, it
may grant an extension of up to one year for completion of construction.
Changes to a Project
Following a project’s approval for exemption, the applicant may need to make changes to the
project from what was approved due to materials availability, land use requirements, or other
unforeseen circumstances. Before making changes, the applicant must contact the City to
determine if the changes can be approved. Changes to a project that relate to specific conditions
upon which the approval of the application is based will require a new application and approval.
Additional Requirements
The City may choose to apply additional regulations or requirements on applications at any time.
The City may choose to alter or eliminate the tax exemption program at any time. Applications
that have been approved before program changes are made will continue under the program
guidelines in effect at their time of acceptance.
1
Key: Policy Decision
CHAPTER 3 Public Improvements
HOUSING DIVERSITY TAX EXEMPTION
3.550 Housing Diversity Tax Exemption (HDTE) – State Statutes Adopted
The provisions of the Multiple Unit Property Tax Exemption (MUPTE) in ORS 307.600 through 307.637
are hereby adopted to stimulate the creation of multiple-unit housing through new construction, addition,
or conversion in core and transit-supported areas of the City as designated in these sections 3.550 through
3.558.
3.552 Definitions
For the purposes of the Housing Diversity Tax Exemption code in sections 3.550 through 3.558, the
following definitions apply. Where the definitions in this section conflict with a definition provided in
ORS 307.603, the definition in this section will prevail. Unless specifically defined below or in ORS
307.603, words or phrases used in the Housing Diversity Tax Exemption code must be interpreted so as to
give them the meaning they have in common usage.
Approval Authority. The individual or public body with authority to make a final decision on an
application under the provisions of sections 3.550 through 3.558 of this code and the Program Guidelines:
specifically, the City Manager or Council.
Multiple-Unit Housing. Newly constructed structures, stories, or other additions to existing structures
and structures converted in whole or in part from other use to housing, where the structure has a minimum
of five new dwelling units, excluding cottage clusters.
Program Guidelines. The standards and guidelines for this program as adopted by resolution of the
Council.
Project. The proposed construction, addition, or conversion of multiple-unit housing for which applicant
is applying for a tax exemption under this section.
Transient Lodging. As defined in section 7.700 of this code.
3.554 Application Criteria
(1) The Approval Authority may approve an application under this section if it finds that the project meets
the following criteria:
(a) The applicant has attended a pre-application meeting;
(b) The applicant has site control at time of application;
(c) The project is for multiple-unit housing that will add a minimum of five new dwelling units;
(d) The project will be located within an eligible program area as shown in Figures 1 through 4 of
this section;
(e) The project will include public benefits that comply with the requirements of the program
guidelines;
(f) The project will be completed on or before the date specified in ORS 307.637;
(g) At completion, project will conform to the requirements of the Springfield Comprehensive Plan,
any applicable refinement plans or functional plans, and the Springfield Development Code, in
effect at the time the application under this section is approved;
2
(h) The project cannot be designed or used as transient lodging; and
(i) The project will conform with any additional criteria provided in the program guidelines.
Figure 1
Figure 2
3
Figure 3
Figure 4
3.556 Application Review
(1) Prior to submission of an application, the applicant must attend a pre-application meeting.
4
(2) Applications must be submitted to the City Manager or designee as provided in ORS 307.615 and the
program guidelines, on a form prescribed by the City Manager or designee. Complete applications must
be submitted by February 1 immediately preceding the first assessment year for which the exemption is
requested and must be accompanied by the application fee as established by Council resolution.
Applications will not be considered complete until all required information and the application fee have
been received.
(3) The Approval Authority will review a complete application and make a final decision to approve,
approve with conditions, or deny the application. An application not acted upon within 180 days of the
date the complete application was received by the City, will be deemed approved.
(4) Following approval or denial of an application, the City will provide notice to the applicant and Lane
County Assessor as provided in ORS 307.621.
3.558 Exemption
(1) Multiple-unit housing that is granted an exemption under sections 3.550 through 3.558 and ORS
307.600 through 307.637 will be exempt from ad valorem taxation for 10 successive years. The first year
of exemption is the assessment year beginning January 1 immediately following the calendar year in
which construction, addition, or conversion is completed, determined by that stage in the construction
process when, pursuant to ORS 307.330, the improvement would have gone on the tax rolls in the
absence of the exemption.
(2) The exemption does not include the land or any improvements which are not part of the multiple-unit
housing included in the project. Onsite parking constructed for the multiple-unit housing [is / is not]
exempted. In the case of a structure to which stories or other improvements are added or a structure is
converted in whole or in part from another use to dwelling units, only the increase in value attributable to
the addition or conversion of dwelling units for the project may be exempt from taxation. Exemptions run
with the property and will continue if the property is sold during its exemption period.
(3) At any time, the Council may, by resolution, set a limit on the maximum amount of foregone tax
revenue provided as a benefit of the exemption under this section. Provided, however, the maximum
amount of foregone tax revenue shall not apply to any decrease or limit the amount of any exemption that
was approved before the date a resolution is adopted under this subsection.
Housing Diversity Tax
Exemption
ORS 307.600 -637
Background
▪Incentivize new
multiple-unit housing
▪Help projects pencil
▪City identifies eligible
areas (transit-served)
Recent Council Direction
▪March 13 work session
▪Do not cap program
▪Confirmed eligible areas
▪May 1 work session
▪Public benefits-flexibility, developer proposals
▪Further discussion on number of years to exempt
Outreach
▪Taxing Districts
▪Springfield School District, Lane County, Willamalane, Lane Education Service
District, LCC, Upper Willamette Soil and Water, SEDA
▪Developers
✓Certainty:Clear requirements
✓Efficiency: Simple and quick process
✓Flexibility: Different options for meeting requirements
DRAFT
CRITERIA
Exemption Length
▪Max 10 years: uniform or variable with criteria
▪Recommendation: Uniformly offer for 10 years, do
not require a “but-for” analysis
▪Why:
✓Certainty
✓Efficiency
✓Comparability with other
cities
✓Can limit in future
Stacked Incentives
▪Applicable Downtown where urban renewal district
and tax exemption overlap
▪Recommendation: Allow conditional stacking of
SEDA SDC payment and HDTE →4+ stories
▪Why
✓Certainty
✓High development costs
✓More density and revenue
Public Benefit Structure
▪Must provide 1+ benefits as part of project
▪Recommendation: Offer 3 options for
developers to choose to meet requirement
▪Options:
1.Clear and Objective Criteria
2.Fee-in-Lieu for ADA Accessibility
3.Council Proposal
OPTION 1 –Clear and Objective Criteria
▪Pick 2 if one item is List
A or pick 3
▪Why:
✓Certainty
▪Evaluate before applying
▪Help project planning
✓Efficiency
▪Low administrative effort
▪Quick turnaround
OPTION 2 –Fee-in-Lieu
▪Alternative to including in project
▪Pay into City’s ADA fund for accessibility infrastructure projects in
project areas
▪In Capital Improvement Program
▪Total of 10% of benefit –Paid starting year 3, discount for upfront
▪Why
✓Certainty
✓Efficiency
▪Projects already identified
OPTION 3 –Council Proposal
▪Developer proposes public benefit
▪Guidelines give ideas:
▪Developer can propose something not listed
▪Why:
✓Flexibility
Approval Authority
▪Change in law-Council does not need to rule on
applications
▪Recommendation: Delegate approval authority to
City Manager or designee for applications meeting
clear and objective criteria (public benefit OPTION 1
& 2)
Approval Authority
▪Why:
✓Efficiency
▪Avoid delays
▪Reduce administrative burden
✓Staff can update Council
Exemption for Parking
▪Can limit exemption to housing or include onsite parking
▪CFEC implementation will remove parking requirements
▪Market may provide
QUESTION FOR COUNCIL
Does Council want to include onsite parking constructed
for the multiple-unit housing in the tax exemption?
QUESTION FOR COUNCIL
Does Council concur with staff’s policy
recommendations for the tax exemption?
Next Steps
▪Public hearing to adopt program by
ordinance
▪Seek concurrence from other taxing
districts
▪Establish application fee with Lane
County Assessor
▪Outreach and application materials