HomeMy WebLinkAboutItem 06- Housing Diversity Tax Exemption AGENDA ITEM SUMMARY Meeting Date: 3/4/2024
Meeting Type: Regular Meeting
Staff Contact/Dept.: Katie Carroll / DPW
Staff Phone No: 541-726-3660
Estimated Time: 10 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:
Conduct a public hearing and first reading of the following ordinance:
AN ORDINANCE ADOPTING SPRINGFIELD MUNICIPAL CODE SECTIONS
3.550 THROUGH 3.558 TO ENACT A PROPERTY TAX EXEMPTION FOR
MULTIPLE-UNIT HOUSING TO INCREASE HOUSING DIVERSITY,
TERMINATING THE VERTICAL HOUSING DEVELOPMENT ZONE
APPROVED OCTOBER 12, 2004, ADOPTING A SEVERABILITY CLAUSE,
AND PROVIDING AN EFFECTIVE DATE
ISSUE
STATEMENT:
The City recognizes there is a need for more housing choice in the community and
is working to address this need 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 sufficient housing to meet demand. The
Council’s Housing Strategy identifies 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 Council Briefing Memo
2. HDTE Draft Ordinance
Exhibit A: HDTE Code
3. HDTE Draft Program Guidelines
4. HDTE Draft Letter to Other Taxing Districts Requesting Support
5. Multiple-Unit Development Map (FY19-FY24)
DISCUSSION/
FINANCIAL
IMPACT:
Council has been developing the Housing Diversity Tax Exemption (HDTE)
program to incentivize multiple-unit housing as part of the City’s Housing Strategy.
In its October 2023 meeting, Council directed staff to return for a public hearing on
the HDTE. Per ORS 307.606(3), prior to enacting the HDTE the City must hold a
public hearing to determine whether multiple-unit housing meeting the
qualifications of the program guidelines would not otherwise be built in the
designated program areas without the benefits provided by the exemption. When
the City began working on this incentive, only one multiple-unit housing project
had been constructed in Springfield in the last decade. Over the past five years,
more multiple-unit housing projects have been proposed or completed, however,
development has not been sufficient to meet Springfield’s needs. A challenging
market context, with high interest rates, and high construction and land costs has
made multiple-unit residential development more difficult without incentives like
the HDTE.
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 ten 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: 3/4/2024
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 need 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 sufficient housing to meet demand. The Council’s Housing Strategy identifies 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 Oregon multiple-unit property tax exemption (ORS 307.600-637) is a property tax
exemption cities and counties can implement to incentivize development of multiple-unit
housing in specified transit-served and core areas of the city. The aim of the program is to get
more housing projects built by exempting taxes for the first several years of a project’s
operation, thus lowering operating costs and making more projects “pencil.” The Council has
been exploring implementation of this exemption, which the City is calling the Housing
Diversity Tax Exemption (HDTE) for several years.
Why is Springfield Pursuing the HDTE?
In 2016 the City conducted an analysis of housing challenges in Springfield and found a
shortage of housing and high expense of housing relative to incomes. To address these
challenges, the Council created the Housing Strategy in 2017, and has identified the HDTE as
one of several tools it is interested in pursuing to address the community’s housing needs.
Springfield has a tight housing market, which includes a rental vacancy rate of just 1.6%,
compared to a statewide rental vacancy rate of 3.7%.1 A low supply of housing drives up prices
and makes it more difficult for people to move to and remain in the community. 43% of
Springfield’s renters are cost burdened, meaning they pay 30% or more of their income on
housing costs.2
Springfield has a need for additional housing at a variety of sizes and affordability levels,
particularly more multiple-unit housing. Springfield’s 2011 Residential Land and Housing
Needs Analysis, which looked at the community’s housing needs from 2010-2030, estimated
1 U.S. Census American Community Survey (ACS) 5-year estimates (2022).
2 U.S. Dept. of Housing and Urban Development Comprehensive Housing Affordability Strategy data (2016-
2020).
Attachment 1
Page 1 of 4
MEMORANDUM 2/28/2024 Page 2
that 40% of new housing needed would be multiple-unit housing. In 2010, around 17% of the
City’s housing units were multiple-unit, and by 2022, multiple-unit housing made up 16% of
housing units.3 The share of multiple-unit housing has not grown during the last decade. The
majority of homes in Springfield are single unit detached residences. Supporting the addition of
new multiple-unit housing will provide more options for community members to find housing at
a price and size that meets their needs.
When the City began working on this tax exemption, a 2018 report titled “Spurring multifamily
housing development in Springfield, Oregon” prepared by LOCUS: Responsible Real Estate
Developers and Investors found that only one multiple-unit housing project had been built in
Springfield during the last decade and recommended that the City institute a multiple-unit
property tax exemption to address financial barriers to the development of multiple-unit housing.
Over the last five years incremental progress has been made as several multiple-unit housing
projects have been permitted and built (see Attachment 5) including in HDTE eligible program
areas. However, the housing market has become more difficult. High land and construction
costs, coupled with high interest rates, have made it challenging for developers to make
multiple-unit housing projects “pencil.” For example, an 84-unit mixed-use residential project in
Downtown Springfield recently failed to move forward even with significant public investment
in the project due to market conditions which impacted the developer’s ability to secure
construction financing.
The Council has determined that implementing the HDTE program is necessary to ensure
developers have the tools needed, especially in the current market context, to develop multiple-
unit housing in Springfield to address the supply and diversity needs of the community.
In addition to addressing the housing needs of the community, the HDTE program will make
Springfield more development-friendly by making development financially feasible. This will
attract growth that can help increase Springfield’s property tax base over the long-term.
Recent Council Work Sessions
The Council has been discussing this program since 2017. It met four times between 2023 and
2024 to give staff direction on how to set up the HDTE program:
• March 13, 2023: Reviewed refined eligible program area boundaries based on an
updated mapping methodology and directed staff to not cap the maximum amount of
forgone tax revenue for the program, but to provide Council with the ability to cap the
program in the future.
• May 1, 2023: Discussed initial staff recommendations for the public benefit requirement
and reviewed a first draft of program guidelines. Directed staff to make the public
benefit requirement more flexible and to include more options.
• October 23, 2023: Reviewed draft code and revised draft program guidelines, including
updated options for the public benefit requirement. Directed staff to not include parking
in the tax exemption, concurred with staff recommendations on program design, and
asked staff to return for a public hearing on the program.
• February 5, 2024: Directed staff to include an area of Glenwood as an eligible program
area.
Outreach During Development
Staff conducted outreach with various stakeholders during development of the HDTE. First,
Springfield staff interviewed staff from seven other cities that have adopted this tax exemption.
3 U.S. Census ACS 5-year estimates for structures with 5 or more units.
Attachment 1
Page 2 of 4
MEMORANDUM 2/28/2024 Page 3
Staff reached out to taxing districts that would be impacted by the adoption of this program to
provide information and seek input and were able to speak with staff from the Springfield
School District 19, Eugene 4J School District, Willamalane Park and Recreation District, and
Lane County. Staff also presented to the Willamalane Board in December 2023, and are
scheduled to present to the 4J School Board March 6, 2024. Although the Springfield Utility
Board (SUB) is not a taxing district, staff have begun to discuss the potential impacts of the
program on SUB’s services with their staff.
Six local developers provided feedback on the design of the HDTE program through interviews.
Developers shared that they are interested in a program that focuses on certainty, efficiency, and
flexibility. Staff used this feedback to make adjustments to the program guidelines, including the
design of the public benefit requirement.
PUBLIC HEARING
Per ORS 307.606(3), prior to enacting the HDTE program the City must hold a public hearing to
determine whether multiple-unit housing meeting the qualifications of the program guidelines
would not otherwise be built in the designated program areas without the benefits provided by
the exemption. If Council finds there is a need for this program to stimulate construction
of multiple-unit housing as shown in the whereas statements of the adopting ordinance
(Attachment 2), then Council would pass the ordinance as drafted in at a future meeting.
Repealing the Vertical Housing Development Zone
As part of considering eligible program areas for the HDTE, Council reviewed a comparison of
the existing Vertical Housing Development Zone (VHDZ) tax exemption in place in Downtown
with the proposed HDTE during a March 2020 meeting. At its March 2020 meeting, Council
gave direction to replace the VHDZ with the HDTE in Downtown, therefore the draft ordinance
(Attachment 2) includes provisions repealing that program.
Overview of Updates to the Program Materials
Staff have made minor edits to the draft code and draft program guidelines from what was
included in Council’s October 23, 2023 packet. These updates are summarized below and
include changes to reflect direction from Council:
• Added an area of Glenwood to the eligible program areas per Council direction
(Attachment 2, Exhibit A, Figure 5). Accordingly, added an eligibility criterion to the
draft guidelines requiring the project site to be within the city limits to qualify for the
HDTE (Attachment 3, p. 1).
• Updated maps showing eligible program areas (Attachment 2, Exhibit A, Figures 1-5) to
be based on the property-specific Springfield Comprehensive Plan Map which went into
effect March 1st. This resulted in minor changes to the mapped boundaries of some
areas to ensure they align with plan designations that allow multiple-unit housing
development.
• Added language to the draft code (Attachment 2, Exhibit A, Section 3.558(3)) to clarify
Council’s ability to pause/reinstate the program by adopting/repealing a cap on
maximum forgone tax revenue at any time.
(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. The authority provided under this
subsection includes the authority to adopt a resolution at any time to amend or repeal a
limit on the maximum amount of foregone tax revenue previously adopted under this
Attachment 1
Page 3 of 4
MEMORANDUM 2/28/2024 Page 4
subsection.
• Per Council direction, updated program guidelines (Attachment 3, p. 1) to exclude onsite
parking from the tax exemption. Removed related language from the draft code to make
it easier for Council to adjust this aspect of the program in the future.
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. Onsite parking
constructed for the multiple-unit housing is not exempted. Housing made available for
rental or sale of individual units is eligible for the exemption.
• Edits for clarification of requirements and to address typographical errors.
REMAINING STEPS:
Staff will return during the April 1, 2024 regular session for a second reading of the adopting
ordinance (Attachment 2) and a resolution to adopt the program guidelines (Attachment 3). To
implement the program, the City would also need to adopt an application fee in coordination
with the Lane County Assessor’s Office. Staff would return to Council for authorization of an
application fee at a later date.
If Council moves forward with adoption, the City must seek formal support for the tax
exemption program from other impacted taxing districts such that at least 51% of the levy signs
on. Otherwise, the exemption will only apply to the City’s share of taxes. A draft letter
requesting support for the exemption is included in the packet as Attachment 4. If Council
adopts the HDTE program, staff will coordinate with the City Manager to send a finalized copy
of this request letter to each taxing district impacted by this program as is allowed by the draft
adopting ordinance.
RECOMMENDED ACTION:
Conduct a public hearing and first reading of the following ordinance:
AN ORDINANCE ADOPTING SPRINGFIELD MUNICIPAL CODE SECTIONS 3.550
THROUGH 3.558 TO ENACT A PROPERTY TAX EXEMPTION FOR MULTIPLE-UNIT
HOUSING TO INCREASE HOUSING DIVERSITY, TERMINATING THE VERTICAL
HOUSING DEVELOPMENT ZONE APPROVED OCTOBER 12, 2004, ADOPTING A
SEVERABILITY CLAUSE, AND PROVIDING AN EFFECTIVE DATE.
Attachment 1
Page 4 of 4
PAGE [_ of _]
CITY OF SPRINGFIELD, OREGON
ORDINANCE NO. ___________ (GENERAL)
AN ORDINANCE ADOPTING SPRINGFIELD MUNICIPAL CODE SECTIONS 3.550 THROUGH
3.558 TO ENACT A PROPERTY TAX EXEMPTION FOR MULTIPLE-UNIT HOUSING TO
INCREASE HOUSING DIVERSITY, TERMINATING THE VERTICAL HOUSING DEVELOPMENT
ZONE APPROVED OCTOBER 12, 2004, ADOPTING A SEVERABILITY CLAUSE, AND
PROVIDING AN EFFECTIVE DATE
WHEREAS, Springfield has a shortage of housing that is affordable and accessible to households of
various incomes and sizes;
WHEREAS, the 2011 Residential Land and Housing Needs Analysis for the City of Springfield estimated
that about 40 percent of new housing units needed to accommodate Springfield’s projected population
growth from 2010 to 2030 would be multiple-unit housing;
WHEREAS, a 2018 report titled “Spurring multifamily housing development in Springfield, Oregon”
prepared by LOCUS: Responsible Real Estate Developers and Investors found that only one multiple-
unit housing project had been built in Springfield during the period from 2008 to 2018, and
recommended that the City institute a multiple-unit property tax exemption to address barriers to the
development of multiple-unit housing;
WHEREAS, in the past five years, more multiple-unit housing projects have been proposed and
completed in Springfield than in the previous decade;
WHEREAS, according to the U.S. Census Bureau’s American Community Survey 5-year data, the share
of housing in Springfield that is multiple-unit housing (5 or more units) has not increased during the
last decade, and as of 2022 made up only 16 percent of the city’s housing units;
WHEREAS, new multiple-unit housing built in Springfield during the last decade has not kept pace
with the estimated need outlined in the 2011 Residential Land and Housing Needs Analysis, resulting in
a lack of housing diversity in Springfield;
WHEREAS, despite the incremental progress of past five years toward meeting Springfield’s multiple-
unit housing needs, a changing market context, including high interest rates, high construction costs,
and high land costs has made development more difficult without financial incentives such as tax
exemptions;
WHEREAS, the Common Council has approved a Housing Strategy that identifies and implements
various initiatives to help address the City’s unmet housing needs, including the need for greater
housing diversity;
WHEREAS, ORS 307.600 through 307.637 enables cities to establish a program exempting multiple-
unit housing meeting specified requirements from ad valorem real property taxes for up to ten years;
WHEREAS, the Common Council finds it in the public interest to adopt the multiple-unit property tax
exemption as part of the City’s Housing Strategy to help the address the need for more multiple-unit
Attachment 2
Page 1 of 8
PAGE [_ of _]
housing, particularly in core areas of the City close to transit, in order to diversify the housing stock
and increase the accessibility of housing;
WHEREAS, on October 12, 2004, the State of Oregon designated a Vertical Housing Development
Zone in downtown Springfield, based upon application by the Springfield City Council in Resolution 04-
36, to provide partial property tax exemptions to qualifying projects to stimulate development of
housing in the downtown corridor, which was determined to be difficult to achieve without financial
assistance;
WHEREAS, in 2017, Senate Bill 310 removed the Oregon Department of Housing and Community
Services from its role in the process and granted cities the authority to act on vertical housing
zones/projects in their jurisdiction;
WHEREAS, ORS 307.867 allows the City to terminate the Vertical Housing Development Zone at any
time, which does not affect any partial tax exemption that was certified prior to the termination of the
zone;
WHEREAS, the Common Council finds that is in the public interest to terminate the Vertical Housing
Development Zone to avoid duplicative or competing property tax exemption programs for multiple unit
housing;
WHEREAS, the Springfield City Council held a public hearing on March 4, 2024 in accordance with the
requirements of ORS 307.606(3), and has determined that multiple-unit housing meeting the
specifications of this ordinance as outlined in Exhibit A would not be built without the benefits provided
by the multiple-unit tax exemption;
NOW, THEREFORE, THE COMMON COUNCIL OF THE CITY OF SPRINGFIELD ORDAINS AS FOLLOWS:
Section 1. Springfield Municipal Code sections 3.550 through 3.558 are hereby adopted as
provided in Exhibit A, which is attached hereto and incorporated herein by reference.
Section 2. The tax exemption adopted in this Ordinance only applies to the tax levy of the
City of Springfield, except that the exemption shall apply to the ad valorem property taxes of all taxing
districts when the rates of ad valorem taxation of taxing districts whose governing boards adopt a
resolution as provided in Section 3 herein, when combined with the rate of taxation of the City, equals
51 percent or more of the total combined rate of taxation levied on the property which is tax exempt
under the provisions of this Ordinance.
Section 3. The Common Council hereby directs and authorizes the City Manager to request
all other taxing districts whose boundaries include the property designated for tax exemption under this
Ordinance, to approve by resolution of the taxing district’s governing body the policy of providing tax
exemptions for multiple-unit housing as provided herein.
Section 4. The Vertical Housing Development Zone approved by the State of Oregon
effective October 12, 2004, is hereby terminated. This termination shall not affect any partial tax
exemption that was certified prior to the effective date of this Ordinance.
Section 5. 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
Attachment 2
Page 2 of 8
PAGE [_ of _]
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 6. Effective Date. This ordinance shall become effective 30 days from the date of
passage by City Council and approval by the Mayor.
ADOPTED by the Common Council of the City of Springfield this ___ day of _________, ____,
by a vote of _____ for and ____ against.
APPROVED by the Mayor of the City of Springfield this ______ day of __________, ____.
_______________________
Mayor
ATTEST:
__________________________
City Recorder
Attachment 2
Page 3 of 8
1
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 5 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;
(h) The project cannot be designed or used as transient lodging; and
Exhibit A
Page 1 of 5
Attachment 2
Page 4 of 8
2
(i) The project will conform with any additional criteria provided in the program guidelines.
Figure 1
Figure 2
Exhibit A
Page 2 of 5
Attachment 2
Page 5 of 8
3
Figure 3
Figure 4
Exhibit A
Page 3 of 5
Attachment 2
Page 6 of 8
4
Figure 5
3.556 Application Review
(1) Prior to submission of an application, the applicant must attend a pre-application meeting.
(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, as 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.
Exhibit A
Page 4 of 5
Attachment 2
Page 7 of 8
5
(2) The exemption does not include the land or any improvements which are not part of the multiple-unit
housing included in the project. 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 of or conversion to 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. The authority provided under
this subsection includes the authority to adopt a resolution at any time to amend or repeal a limit on the
maximum amount of foregone tax revenue previously adopted under this subsection.
Exhibit A
Page 5 of 5
Attachment 2
Page 8 of 8
HDTE Program Guidelines 1
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. Onsite parking constructed for the multiple-unit
housing is not exempted. 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
• The project site is within the city limits
• 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
Attachment 3
Page 1 of 10
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.
• 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.
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
Attachment 3
Page 2 of 10
HDTE Program Guidelines 3
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.
Public Benefits
Attachment 3
Page 3 of 10
HDTE Program Guidelines 4
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 timing of City
verification is at the discretion of the City. 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/or 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
• Housing Choice Voucher; 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).
Attachment 3
Page 4 of 10
HDTE Program Guidelines 5
• Housing Choice Voucher; OR
• Similar housing subsidy program
(Round up decimals to the nearest whole
number)
• 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
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 (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 and/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/or 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.
Attachment 3
Page 5 of 10
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 be 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 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 one of the following
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 certif ying agency in application. City to
verify prior to issuance of building permit and/or 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.
Attachment 3
Page 6 of 10
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 how they will provide for
return of those residents/businesses after completion of project. Within six months of the project’s
completion, owner must demonstrate that displaced residents or businesses are back on site or
have voluntarily decided to not return.
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
Rental 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 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
Attachment 3
Page 7 of 10
HDTE Program Guidelines 8
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
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 applicant 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 and 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.
Attachment 3
Page 8 of 10
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
Attachment 3
Page 9 of 10
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.
Attachment 3
Page 10 of 10
1
CITY OF SPRINGFIELD, OREGON
225 FIFTH STREET
SPRINGFIELD, OR 97477
PHONE: 541.726.2358
FAX: 541.741.2763
www.springfield-or.gov
DATE
RE: Springfield Housing Diversity Property Tax Exemption
Dear DISTRICT BOARD,
The Springfield City Council has identified housing as a key community need. A low supply of
housing in the community has driven up prices and makes it difficult for people to move to and
remain in our community. Over 40% of Springfield renters are cost-burdened (paying more than
30% of their income on housing), and the rental vacancy rate is just 1.6%.1 These statistics
indicate the impact that a shortage of housing has on our community.
To address this issue, the City Council created a Housing Strategy (see attachment) to incentivize
the creation of housing at all price points. One strategy the City Council identified to address
Springfield’s need for more multiple-unit housing, is implementation of the state-enabled
multiple-unit property tax exemption (codified at ORS 307.600-637). This tool will help make it
more feasible for developers to build needed housing that is affordable for Springfield residents,
especially in this challenging housing market.
The Springfield City Council adopted the Oregon multiple-unit property tax exemption as the
Housing Diversity Tax Exemption (HDTE) Program on DATE, which will exempt qualifying
housing projects from some ad valorem real property taxes for ten years. The tax exemption
applies only to the residential improvements of a project. Existing improvements, new non-
residential improvements, and land will continue to be taxed.
The program’s tax exemption will only apply to the tax levy of Springfield unless the City
receives support from the governing bodies of other impacted taxing districts such that their
combined rates total at least 51% of the combined rate of all taxing districts. The City Council is
asking the DISTRICT BOARD to support this program by allowing the Housing Diversity
Tax Exemption to also apply to DISTRICT tax levy. To support the exemption, the
DISTRICT BOARD’s governing body must approve by resolution the policy of providing tax
exemptions for multiple-unit housing as provided in City of Springfield Ordinance No. __.
In order to qualify for a tax exemption, a project must add at least five new dwelling units
through addition, conversion, or new construction. All projects must provide a public benefit to
the community. Only projects located within designated areas of Springfield are eligible to apply
1 U.S. Dept. of Housing and Urban Development, CHAS Data (2016-2020); U.S. Census, American Community
Survey 5-year (2022).
Attachment 4
Page 1 of 2
2
for the tax exemption (see attachment X, page X). The exemption is intended to spur
development that would not otherwise happen. If a project doesn’t get built, taxing districts lose
out on the revenue that project would generate over its lifetime once its exemption period ends.
While exempting taxes has the potential to decrease revenue in the short-term in some
circumstances, incentivizing new housing development has significant potential to generate new
revenue in the long-term by adding valuable improvements to the tax rolls.
City Council recognizes this property tax emption program is one tool that could help make more
housing developments pencil in our community. Please consider supporting the City’s efforts to
bring needed housing to Springfield.
City staff is available to provide additional information and/or to come to a board meeting to
answer questions. The City appreciates your partnership and consideration of this request to
support the Housing Diversity Tax Exemption.
Sincerely,
Nancy Newton
City Manager
Staff Contact for Questions and Next Steps:
Katie Carroll
Housing Analyst
City of Springfield
kcarroll@springfield-or.gov
541-726-3660
Attachments:
• City of Springfield Housing Strategy
• Springfield Ordinance No. __
• Springfield Resolution No. __
Attachment 4
Page 2 of 2
Attachment 5
Page 1 of 1