Item A: Multi-Unit Property Tax Exemption Program

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Compliance Requirements EUGENE MUPTE PORTLAND MULTE  Following application approval and immediately prior to Owners sign an “Extended Use Agreement” related to affordability commencement of construction, working drawings and other and the project rate of return. documents reviewed by City to ensure project will comply with  Owners submit certification of public benefits requirements with approval conditions upon completion. the first annual financial documentation submitted.   Council resolution includes disqualification provision in the event that Owners submit financial information annually (audited financial the approved project does not meet the approved project description. statements, tax returns, 10-year operating cash flow with to-date  Submission of green building certification (if applicable). rate of return)  Portland Housing Bureau prepares annual analysis and informs owner if rate of return is expected to exceed 10 percent for the entire exemption period.  At the end of 10-year period, if the overall rate of return exceeds 10 percent: -The Extended Use Agreement requires an additional 5-year period of affordability (number of units necessary to reduce the return to 10 percent); or -Owner pays an “Accrued Payment Liability” in an amount equal to the net present value of the difference between the actual cash flow during the exemption period and the pro forma projected cash flows that would provide a 10 percent return during the exemption.  For ownership projects, verification that homebuyers meet program criteria. Analysis/Comments Portland MULTE requirements, particularly related to affordable housing and the rate of return cap, require significant on-going monitoring o for compliance. Project monitoring may be required for several years following expiration of the program. Financial statements and tax returns are typically treated as confidential information. o