Item 2D: Approval of Low-Income Rental housing Property Tax Exemption

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 5025, Amendment of Resolution 4999 Approving a Low-Income Rental Housing Property Tax Exemption for the Property Located at 2984, 2986, 2988 Oak Street, Eugene, Oregon (ShelterCare/Applicant) Meeting Date: February 28, 2011 Agenda Item Number: 2D Department: Planning and Development Staff Contact: Becky Wheeler www.eugene-or.gov Contact Telephone Number: 541-682-5532 ISSUE STATEMENT The City Council is asked to consider an amendment to Resolution 4999 related to a low-income rental housing property tax exemption. Resolution 4999 (adopted February 8, 2010) granted a 20-year th property tax exemption for ShelterCare’s 29 Place development (formerly known as Hawthorn Apartments). BACKGROUND The City of Eugene established current goals and programs for the development of housing affordable to low-income people through the adopted 2010 HUD Consolidated Plan. The Consolidated Plan guides the use of HOME funds and Community Development Block Grant (CDBG) funds over a five-year period. Each year, the City Council approves the allocation of federal funds through a One-Year Action Plan. In addition to use of federal funds, the City of Eugene has established System Development Charge (SDC) Waivers and the Low-Income Rental Housing Property Tax Exemption to further enable the development of affordable housing. The 20-year low-income rental housing property tax exemption is enabled by state statute. To date, Eugene has approved numerous projects totaling over 1,000 housing units since 1992. The council reviews and decides whether to approve each request on a case-by-case basis. ShelterCare, a local non-profit, requested funding in 2008, to acquire and preserve what was then known th as Hawthorn Apartments. The 35-unit housing development, renamed 29 Place Apartments, that serves very low-income persons with severe mental illness is located at 2984, 2986, and 2988 Oak Street and 2985 Willamette Street (see Attachment B for location map). ShelterCare has provided supportive th services for residents since its construction in 1982. 29 Place Apartments historically has been subsidized through a HUD project-based Section 8 contract and financing from the State of Oregon, which will expire in 2012. By acquiring the property, ShelterCare proposed to preserve its current use and also maintain the HUD operating subsidies. In June, 2008, the City Council unanimously allocated $700,000 for the project. The funding is structured as a deferred no-interest loan. The council also approved a low-income rental housing property tax exemption for the property on February 8, 2010. At the time Resolution 4999 was adopted, ShelterCare was in the process of purchasing the property, but the sale had not yet closed. Although other project funding had been \\Cesrv500\cc support\CMO\2011 Council Agendas\M110228\S1102282D and atts A and B.doc