Item 4: MUPTE for Student Housing Project

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ATTACHMENT J Portland’s Housing Tax Exemption Program Program Summary Portland, Oregon – New Multiple-Unit Housing (NMUH) Property Tax Abatement Established in 1975. Authorized under ORS 307, the same statutes that authorize the o Eugene MUPTE program. Must have 10 or more dwelling units. o Tax exemption for up to 10 years. o From 2005-2009, there was a moratorium that limited applications to only projects that were o 100% affordable. Application must include cash flow analysis and calculate an internal rate of return (IRR) on o the project to demonstrate that the abatement is required to achieve economic feasibility. All rental projects containing more than 15 units must include at least 15% of the units for o rent at rates that are affordable and restricted to households earning 80% or less of the area median income. An Extended Use Agreement (EUA) is signed that requires a 15-year affordability period. For ownership housing, the exemption is only available at an initial purchase price not o exceeding 95% of the FHA mortgage maximum and must be sold to a household earning no more than 100% of the area median income. Project must meet one of the following public benefits: o - Open space available to the general public - Day care facilities - Permanent dedications for public use - LEED Silver - 20% of the rental units have 3 or more bedrooms - 25% of the rental units are affordable to households at 80% MFI - Other public benefits approved by Portland Housing Bureau and City Council The City Council reviews and approves applications following a public hearing. o If the anticipated IRR for the project exemption period exceeds 10%, the Portland Housing o Bureau shall recommend that the application be denied. Tax exemption recipients are required to submit financial data on an annual basis to verify o the project’s IRR. Projects that exceed a 10% IRR are subject to an “Accrued Payment Liability” (APL). The EUA (15-year affordability period) is terminated at the end of 10 years if the project o does not exceed a 10% IRR during the exemption period. If the 10-year IRR is greater than 10%, then the EUA (15-year affordability period) shall be o maintained or the owner will be required to pay the APL.