Item A: Multi-Unit Property Tax Exemption Program

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within walking distance, and advances Portland Development Commission’s (PDC) Neighborhood Economic Development Goals. • Parking – The exemption may include parking constructed as part of the multiple-unit housing construction, addition or conversion; any parking available shall not be required as payable rent. • Extensions for low income housing – Extensions beyond the ten year exemption period will be granted only for projects subject to a low income housing assistance contract with an agency or subdivision of Oregon or the United States. Applications for extensions must be submitted under the same application timeline as new applications prior to the exemption expiring. Extensions may be granted only for the portion of units which meet the affordability requirements through June 30 of the tax year during which the termination date of the low income housing assistance contract falls. Projects that propose to make changes to the affordability mix must reapply through the competitive process. Minimum Threshold Requirements • Eligible areas – Projects must be located within identified Designated Plan Areas/Metro 2040 Centers, within a quarter mile radius of Max Station Areas, or within a quarter mile from either Metro 2040 Main Streets with Transit Service or Metro 2040 Corridors with Frequent Transit Service within the City of Portland as illustrated on the map attached as Exhibit 1. • Timing of application – Applications for tax exemption must be submitted and approved prior to application for the project’s building permit. • Rental project financial need – Analysis of the project pro forma must establish that the project would not otherwise be financially feasible without the benefit provided by the property tax exemption; the applicant must submit documentation that the anticipated rate of return for the project for the period of the exemption will not exceed 10 percent. • Affordability – For rental projects, during the term of the exemption, a minimum of 20 percent of the number of units must be affordable to households earning 60 percent or less of the area median family income upon initial occupancy of the unit by that household. In high cost market areas a project may propose 20 percent of the number of units affordable to households earning 80 percent or less of the area median family income based on the market for similar units in the same geographic area supported by a market study. Subsequent monitoring of the incomes of these households is not required until the affordable unit again becomes available for rent, at which time it must be rented to an income qualified household earning 60 percent (or 80 percent if approved as such) of the area median income for the remaining term of the property tax exemption, unless another unit has subsequently been rented at an equivalent affordable rate to a qualified household so that the project continues to comply with the affordability guidelines. Measurement of household income shall be determined using the U.S. Department of Housing and Urban Development’s, or its successor agency’s, annual household income for the Portland Metropolitan Area for a family of one person (for a studio apartment), two persons (for a one-bedroom apartment), three persons (for a two-bedroom apartment), or four persons (for a three-bedroom apartment). Affordability shall be defined as a rental rate which does not exceed 30 percent of the monthly gross income including allowances for utilities (rent burden). Affordable units to be distributed evenly amongst unit mix (bedroom sizes). Projects must maintain the same unit distribution of affordable units during the exemption period but individual units do not need to be designated. • For-sale project financial need/Affordability – Units receiving tax exemption will be sold to buyers meeting the affordability requirements. Homebuyers (who will be both on title to the property and occupying the home) must earn no more than 100% median family income for a family of four, adjusted upward for households larger than 4 persons. • For-sale project price cap – The property must sell for less than the sale price cap established annually by PHB – no more than 120% of the annual median sale price (or appraised value if an owner/builder) for the City of Portland.