Item A: Multi-Unit Property Tax Exemption Program

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Attachment E PORTLAND MULTE – ADMINISTRATIVE RULES Definition of Administrative Rules These Administrative Rules are created in accordance with the City of Portland’s Administrative Rule process by the Portland Housing Bureau (PHB) in order to define the policies, processes, and procedures of implementation of the Multiple-Unit Limited Tax Exemption Program authorized by City Code 3.103 (Property Tax Exemption for Multiple-Unit Housing Development) and State Statute, ORS 307.600 through 307.637. The Administrative Rules shall be approved through City Council annually however the Director of the PHB or a designee shall have authority to make changes to the Administrative Rules as is necessary to meet current program requirements throughout the year. Program policies, processes, and procedures are outlined in these Administrative Rules however there may be additional program requirements necessary to maintain compliance with City Code and State Statute. The items included in these Administrative Rules are the following: 1. Program Goals 2. Benefit of the Tax Exemption 3. Minimum Threshold Requirements 4. Application Review and Scoring of Public Benefits 5. Application Approval 6. Compliance Requirements 7. Termination of Active Exemptions 8. PHB Administrative Requirements and Dates 9. Attachments Program Goals The Legislative goals of the Multiple-Unit Limited Tax Exemption Program include: • Stimulate the construction of transit supportive multiple-unit housing in the core areas of urban centers to improve the balance between the residential and commercial nature of those areas; • Ensure full-time use of the areas as places where citizens of the community have an opportunity to live as well as work; • Promote private investment in transit supportive multiple-unit housing in light rail station areas and transit oriented areas in order to maximize transit investment to the fullest extent possible; and • Establish and design programs to attract new development of multiple-unit housing and commercial and retail property, in areas located within a light rail station area or transit oriented area. The City of Portland and Multnomah County have established these additional core goals: • Stimulate the construction of affordable housing and other public benefits where such housing or benefits may not otherwise be made available; • Leverage market activities to advance housing and economic prosperity goals by aligning those activities with the goals of the Portland Plan and the PHB’s Strategic Plan; and • Provide transparent and accountable stewardship of public investments. Benefit of the Tax Exemption The Multiple-Unit Limited Tax Exemption Program provides a ten year property tax exemption on the residential portion of the structural improvements as long as program requirements are met. During the exemption period, property owners are still responsible for payment of the taxes on the assessed value of the land and any commercial portions of the project, except for those commercial improvements deemed a public benefit and approved for the exemption. The value of the exemption cannot exceed 100 percent of the real market value. In the case of a structure converted in whole or in part from other uses to multiple-family, only the increase in value attributed to the conversion is eligible for the exemption. The property is reassessed when the exemption is either terminated for noncompliance or expires after the ten years, and owners begin paying full property taxes. • Commercial portions of a project – For exemption of the commercial portion of a mixed use development, the developer must demonstrate through community engagement and/or a market analysis that the commercial space meets a community identified need for a good or service that is not currently available within walking distance, does not compete with a similar established business