HomeMy WebLinkAboutOrdinance No. 20556
COUNCIL ORDINANCENO. 20556
COUNCIL BILL 5142
AN ORDINANCE CONCERNING MULTIPLE-UNIT PROPERTY
TAX EXEMPTIONSAND SYSTEMS DEVELOPENT CHARGES;
AMENDING SECTIONS 2.945, AND 2.947 OF THE EUGENE
CODE, 1971; AND ADDING SECTIONS 2.946 AND 7.731 TO THAT
CODE.
ADOPTED:July 13, 2015
SIGNED:July 20, 2015
PASSED:7:1
REJECTED:
OPPOSED:Taylor
ABSENT:
EFFECTIVE: August 20,2015
ORDINANCE NO. 20556
AN ORDINANCE CONCERNING MULTIPLE-UNIT PROPERTY TAX
EXEMPTIONSAND SYSTEMS DEVELOPENT CHARGES; AMENDING
SECTIONS 2.945, AND 2.947 OF THE EUGENE CODE, 1971; AND ADDING
SECTIONS2.946 AND 7.731 TO THAT CODE.
THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS:
Section 1.
Section 2.945 of the Eugene Code, 1971, is amended to provide as follows:
2.945Multiple-Unit Housing –Property Tax Exemption.
(1)
The provisions of ORS 307.600 to 307.637 enable cities to grant local property
tax exemptions for multiple-unit housing located in core and transit oriented
areas designated by the city. There is a need and demand for better housing
at rental rates or sale prices accessible to a broad range of the general public
in the core and transit oriented areas which is not likely to be produced without
this incentive. This incentive is intended to:
(a)Stimulate the construction of transit supportive multiple-unit housing in
the city’score and transit oriented areas to improve the balance
between the residential and commercial nature of those areas, and to
ensure full-time use of the areas as places where citizens of the
community have an opportunity to live as well as work;
(b)Encourage the development of vacant or under-utilized sites in core and
transit oriented areas, rather than sites where sound or rehabilitable
multiple-unit housing exists;
(c)Encourage the development of multiple-unit housing, with or without
parking, in structures that may include ground level commercial space;
(d)Encourage the development of multiple-unit housing, with or without
parking, on sites with existing single-story commercial structures;
(e)Encourage the development of multiple-unit housing, with or without
parking, on existing surface parking lots; and
(f)Preserve existing publicly assisted housing that is affordable to low
income persons by providing the incentives authorized in ORS 307.600
to 307.637 to existing multiple-unit housing that is subject to a low
income housing assistance contract with an agency or subdivision of
this state or the United States.
(2)
The provisions of ORS 307.600 to 307.637 are hereby adopted as the city’s
multiple-unit housing property tax exemption program.
(3)
Applications for property tax exemption hereunder shall be filed with the city
manager and shall be accompanied by an application fee. The application
shall contain the information required by, and beprocessed in accordance
with,administrative rules adopted by the city managerin the manner
described in section 2.019 of this code. Prior to filing the application, the
applicant, including at least one of the applicant’s principals, must have
arrangedfor and attended one public engagement opportunity with residents
in the neighborhood, including the board of any city-recognized affected
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neighborhood association, and then included in the application copies of
comments received from the meetingor documentation of the applicant’s
attempt to solicit comments.
(4)
Following receipt of a completed application, the city manager shall retain an
independent outside professional consultant to review the project’s financial
pro-forma, with the costs of that review to be paid for by the applicant. The
city manager shall also convene the review panel authorized by subsection
(13) of this section to review the applicationand the independent consultant’s
conclusions.The review panel shall make a recommendation to the city
manager about whether the application meets the criteria in section 2.946,
and provide any other comments about the project’s financial projections.
After the city manager receives the review panel’s recommendation and
comments, but in no event later than 135days following submission of the
application, the city manager shall provide the council with the city manager’s
recommendation on the application, and shall provide to the council the
independent consultant’s conclusions as well as the review panel’s
conclusions.
(5)
Upon receipt of the city manager's written recommendation on an application,
the council shall consider the application, the city manager’s written
recommendation, and any written comments submitted on the application. If
the council fails to act on an application within 180 days from the date it was
filed, the application shall be deemed approved and processed thereafter in
accordance with subsection (10) of thissection.
(6)
At the meeting at which the city manager's recommendation on an application
is considered,or at a subsequent meeting, the council shall adopt a resolution
approving the application and granting the property tax exemption, or adopt a
resolution disapproving the application and denying the property tax
exemption.
(7)
The council shall approve an application if the councildetermines that the
criteria described in section 2.946 of this code have been met. The resolution
approving the exemptionshall set forth any specific conditions of approval.
The exemption may not include the land or any improvements not a part of the
multiple-unit housing. The exemption may include parking constructed as part
of the multiple-unit housing construction, addition or conversion, and
commercial property to the extent that the commercial property is a required
design or public benefit element of a multiple-unit housing construction,
addition or conversion approved by the city. In the case of a structure to
which stories or other improvements are added or a structure that is converted
in whole or in part from other use to dwelling units, only the increase in value
attributable to the addition or conversion may be exempt from taxation.
(8)
If the council determines that one or more of the criteria in section 2.946 of this
code are not met,the council shall deny the application. The resolution
denying an application shall set forth the specific reasons for denial.
(9)
The city manager shall forward to the applicant a copy of the resolution
adopted by the council within 10 days from the date the council acts on the
application.In addition, on or before April 1 following approval, the city
manager shall file with the county assessor a copy of the resolution approving
an application.
(10)
With respect to an application deemed approved through inaction of the
council under subsection (5) of this section, on or before April 1following the
expiration of the 180-day period, the city manager shall file with the county
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assessor an administrative order containing the same findings and information
as required to be set forth in a resolution approving an application and forward
a copy thereof to the applicant.
(11)
In the case of a structure to which stories or other improvements are added or
a structure that is converted in whole or in part from other use to dwelling
units, only the increase in value attributable to the addition or conversion may
be exempt from taxation.
(12)
Notwithstanding subsection (6) of section 2.947 of this code, if the multiple-
unit housing is or becomes subject to a low income rental assistance contract
with an agency of this state or the United States, the city may extend the
exemption through June 30 of the tax year during which the expiration date of
the contract falls.
(13)
Review Panel.
(a)The city manager shall create a review panel to provide third-party
reviewof individual applications. The panel shall be comprised of the
following members:
1.Two at-large neighborhood representatives selectedby
neighborhood association boards;
2.An additional two representatives selected by the board of the
neighborhood association from the neighborhood in which a
proposed project is located; and
3.Six technical professionals from the following six groups:
architects/green building specialists; building trades union;
developers;environmental professionals; public health
professionals; and human rights representatives.
In order to be eligible to serve on the review panel, members must sign
a confidentiality agreement in a form approved by the city manager.
(b)Thereview panel shall:
1.Reviewproject applications, including compliance with the criteria
contained in section 2.946and the independent outside
professional consultant’s review of the proforma as described in
subsection (4);
2.Midway through construction, upon completion of construction,
and during the tax exemption period, assist thecitymanagerin
reviewing an approved project’s compliance with the requirements
of section 2.946 of this code, and the resolution approving the tax
exemption; and
3.Assist the city manager in preparing annual reports to the council
on the progress that will also include information about the
program volume cap and review of the documentation required
under subsection (3)(c)of section 2.946 of this code.
Section 2.
Section 2.946 of the Eugene Code, 1971, is added to provide as follows:
2.946Multiple-Unit Housing –Threshold Criteria and Public Benefits.
(1)
Boundaries.
(a)Sections 2.945 through 2.947 of this code shall initially apply onlyto the
property that is:
1.In the downtown area as depicted on Map 2.946 attached to
Ordinance 20556 and appended to chapter 2 of this code; and
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2.East of Charnelton Street.
(b)The council may expand the boundaries covered by sections 2.945
through 2.947 of this code to include one or more of the areas listed in
this subsection (b)uponcity council’sapproval of:
1.Amendments to sections 2.945 to 2.947 of this code that require
that a percentage of the units in an approved tax exemption
project must be workforce housing as that term is defined in
subsection (2)(h) of this section 2.946, or that the developer must
makea commensurate “in-lieu of” paymentto the city thatis
based on workforce housing rental rates, and that those payments
shall be used to facilitate or develop workforce housing; and
2.Refinement plan policies that specifically provide for multiple-
family and mixed use projects within that area, and that those
policies are acknowledged pursuant to ORS 197.625.
The areas that the council may approve pursuant to this subsection are:
the downtown area west of Charnelton; Mid-town; South Willamette;
ththth
West 11; 6/7TrainsongHighway 99 Corridor; Valley River Center
commercial area; North Franklin; South River Road; Mid-River Road;
North River Road; South Coburg Road; Mid-Coburg Road; and North
Coburg Road. Any resolution approving one or more of these areas
shall have a map appended to it identifying the precise boundaries of
the areabeing approved.
(2)
Criteria for Approval. No exemption may be approved under subsection (7) of
section 2.945of this code unless all of the following criteria are met:
(a)Eligible Project Types.The project will provide multiple-unit housing of
five or more new units through new construction, an addition to an
existing structure, or a conversion of a structure from another use to
dwelling units. Notwithstanding the preceding sentence, no exemption
may be granted for a project designed for the leasing of individual rooms
or beds, rather than entire apartment units, or a project otherwise
designed primarily for individuals attending college.
(b)Project Need. The proposal could not financially be built “but for” the tax
exemption. The burden is on the applicant to demonstrate that absent
the exemption, the project would not be financially viable.
(c)Compact Urban Development. For the downtown area, the project
meets one of the following density requirements:
1.Residential zones: 175% of minimum density for the zone.
2.Form-based zones with height limit of three or four stories: 30
units per acre.
For any other area that council activates under subsection (1)(b) above,
density requirements shall be stated in the area planor other process
that activates the area.
(d)The project complies with any requirements in administrative rules
adopted by the city manager related to proximity to historic resources.
(e)Project Design and Compatibility.
1.The applicant has included a detailed description of the proposed
project and graphic information including site plans and elevations
containing sufficient detail to demonstrate that the project
addresses a set of basic design principlesin the context of the
project location. The city manager shall adopt as part of the
administrative rules to implement these sections a more detailed
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description of the required design principles, including the scale,
form, and quality of the building; the mix of project elements; and
the relationship to the street and surrounding uses.
2.Compliance with the project design elements that were reviewed
at the time of council approval is a condition of approval of the
exemption, except that the city manager may approve a deviation
from those design elements if the city manager determines in
writing that the deviations provide the same or greater degree of
adherence to the design principles.
(f)Green Building.
1.Green building requirements apply only to the residential
occupancy areas and common areas such as hallways, stairwells,
centralized HVAC or hot water heating, and laundry facilities. The
requirements do not apply to the commercial areas or ancillary
amenities such as parking garage, swimming pools, and
recreation centers.
2.The project will perform at least 10% more efficiently than the
performance established in the Oregon Energy Efficiency
Specialty Code (OEESC) or similar code adopted by the State of
Oregon.
a.Green building requirements for one to three story multiple-
family buildings are as follows:
(1)Obtain LEED v4 for homes low-rise multiple-family
basic certification and modeled at least 10% above
current OEESC;
(2)Obtain earth advantage multiple-family silver level
certification and provide a commissioning report; or
(3)Obtain NW Energy Star certification through the
Eugene Water and Electric Board program and
provide a commissioning report.
b.Green building requirements for four stories and above
multiple-family buildingsare as follows:
(1)Obtain LEED for homes midrise basic certification and
modeled at 10% above current OEESC; or
(2)City review of the project demonstrates that:
(A)Model building energy performance, utilizing the
LEED for homes midrise energy modeling
methodology, shows that the building will
perform 10% above current OEESC
performance;
(B)The building is constructed to modeled plans;
(C)Commissioning reporthas beenprovided prior
to issuance of certificate of occupancy; and
(D)Applicant commits to working with city to report
multiple-family occupancy energy use data to
city for the tax exempt period.
3.Projects that will provide onsite parking are required toinstall
conduit for future electric vehicle charging stations.
(g)Local Economic Impact Plan.
1.The applicant must provide a plan that provides for more than
50% of the dollar volume of the combined professional services
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and construction contracts to include local firms. “Local firm”
means a business that is based in Lane County.
2.The applicant must ensure that qualified minority and women
business enterprises have an equitable opportunity to compete for
contracts and subcontracts.
3.The city manager shall include in the administrative rules adopted
to implement sections 2.945 through 2.947 of this code provisions
that:
a.Identify additional requirements for the local economic
impact plan, including definitions and exceptions such as
when trades are not available locally;
b.Enable qualified minority and women business enterprises
to have an equitable opportunity to compete; and
c.Ensure that the developer and its contractors and
subcontractors comply with wage, tax and licensing laws in
the development of the projectand posts information about
the city’s rights assistance program.
(h)Following the city council’s compliance with the requirements of
subsection (1)(b) of this section 2.946 related to workforce housing and
the council’s activation of one or more areas listed in subsection (1)(b)
of this section 2.946, a developer shall include as workforce housing
units not less than the percentage of the unitsspecified in those future
code amendments, or alternatively shall pay to the city an equivalent
workforce housing fee. “Workforce housing” is housing with rents equal
to or less than 30% of the area median income. “Equivalent workforce
housing fee” is a fee equal to the difference between the rent charged
and workforce housing rents for the percentageof the unitsspecified by
the future code amendments.
1.If the developer chooses to include the workforce housing units,
the application shall identify which units in the project will be the
workforce housing units, and shall maintain those units as such for
the duration of the tax exemption period. As part of the
administrative rules adopted pursuant to section 2.019 of this
code, the city manager may further define “workforce housing unit”
and shall establish requirements to ensure that the units are
maintained as such during the tax exempt period. For purposes of
this subsection, “project” means all new development that occurs
after approval of the application on one or more contiguous lots all
owned by a single entity or covered by acity-approved master
plan.
2.If the developer chooses to pay the equivalent workforce housing
fee, the fee may be paid annually in years 3 through 10 of the
exemption, or may be paid up front. Funds received by the city
under this paragraph shall be used forworkforce housing.
3.The provisions of this subsection(h) do not apply to tax exemption
projects that are located in the downtown area east of Charnelton
Street.However, the owner of the property shall pay to the city an
amount equal to 10% of the total property tax exemption and all
such payments shall be dedicated to the facilitation or creation of
workforce housing. The fee may be paid annually in years 3
through 10 of the exemption, or may be paid upfront.
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Alternatively, the owner may comply with the requirement to
include not less than 30% of the units as workforce housing
pursuant to subsection (2)(h)1. of this section 2.946.
(i)In the case of the construction of, or the addition or conversion to
multiple-unit housing,the construction, addition or conversion will be
completed on or before January 1, 2022.
(j)In the case of multiple-unit housing subject to a low income housing
assistance contract with an agency or subdivision of this state or the
United States,
1.The application for exemption was made on or before January 1,
2022;
2.It is important to the community to preserve the housing as low
income housing and it is probable that the housing would not be
produced as or remain low income housing without the exemption
being granted.
(k)The multiple-unit housing is not designed for, and will not be used as
transient accommodations.
(3)
Additional and On-Going Obligations of Project Approved for Exemption.
(a)Following approval of an exemption under section 2.946 of this code,
the city manager shall monitor the development of the project to ensure
that the project complies withthe requirements of sections 2.945
through 2.947 of this code, including the provision related to workforce
housing, the administrative rules adopted pursuant to this code, and any
other conditions of approval of the exemption.
(b)During the developer’s design process and before the final design
drawings are completed, the developer shall hold at least one
neighborhood engagement opportunity to allow members of that
neighborhood to provide comments on the proposal. At least one of the
applicant’s principals must attend that meeting. In addition, once the
final design is completed and before it is submitted for permits, the
developer shall allow the neighborhood an opportunity to review and
comment on that final design.
(c)During the exemption period, the project’s owner must annually submit
documentation to evaluate compliance with workforce housing
requirements, unless the project’s owner is paying the equivalent
workforce housing feeor is exempt pursuant to subsection (2)(h) of this
section.The regular reporting shall include the home city or zip code of
the construction labor workers, and any other information required by
administrative rules adopted pursuant to section 2.019 of this code.
Section 3.
Section 2.947 of the Eugene Code, 1971, is amended to provide as follows:
2.947Multiple-Unit Housing -Termination of Approval, Review.
(1)
Except as provided in subsection (8) of this section, after a resolution
approving an application has been filed, if the city manager finds that:
(a)Construction of multiple-unit housing was not completed within the time
specified in the resolution, and no extensions as provided in subsection
(5) hereof have been granted, or
(b)The applicant, developer or other owner of the projecthas failed to
comply with the provisions of ORS 307.600 to 307.637orthe provisions
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of this codeor administrative rules adopted thereunder, or
(c)The applicant, developer or other owner of the projecthas failed to
comply with any conditions imposed in the resolutionapproving the
application and the city manager has not determined in writing that
project design deviations provide the same or greater degree of
adherence to the design principles that council approved for the project,
or
(d)Construction of multiple-unit housing was not completed on or before
January 1, 2022,or
(e)In the event units within the development are sold individually, a unit
owner fails to comply with applicable requirements described in
paragraphs (b) or (c) of this section,
the city manager shall notify the council; the owner of the property, at the
owner's last known address;and any known lender, atthe lender’s last known
address,of the manager's intention to recommend to the council that the
exemption be terminated. The notice shall clearly state the reasons for the
proposed termination, and shall require the owner to appear before the
council, at a time specified in the notice, which shall not be less than 20 days
from the date the notice was mailed, to show cause, if any exists, why the
exemption should not be terminated.
(2)
If the owner fails to appear and show cause why the exemption should not be
terminated, the city shall further notify every known lender of the owner’s
failure to appear and shall allow the lender a period of not less than 30 days,
beginning with the date that the notice of failure to appear and show cause is
mailed to the lender, to cure any noncompliance or to provide adequate
assurance that the noncompliance will be remedied.
(3)
If the owner fails to appear before the council at the time specified in the
notice, or if the owner appears and fails to show cause why the exemption
should not be terminated, and a lender fails to cure or give adequate
assurance that any noncompliance will be cured, the councilshall adopt a
resolution terminating the exemption, which shall contain its findings in support
thereof. Copies of the resolution shall be filed with the county assessor and
mailed to the property owner, at the owner's last knownaddress, and to any
lender at the lender’s last-known address, within 10 days from the date
adopted. If a determination is made that the exemption should continue as
previously granted, the council shall enter written findings of record in support
of the continued exemption and forward a copy thereof to the property owner
and to any lender within 10 days from the date of the hearing.
(4)
All reviews of council action in denying, approving, or terminating an
application shall be governed by the procedures set forth in ORS 34.010 to
34.100, and correction of assessments and tax rolls and the evaluation of the
property shall be in conformity with ORS 307.687. The council's action on an
exemption shall not be a land use decision for purposes of administrative
review.
(5)
If construction, addition, or conversion of multiple-unit housing is not
completed by January 1, 2022, upon receipt of a request from the property
owner, the council may, by resolution, extend the deadline for completion of
construction of multiple-unit housing for a period not to exceed 12 consecutive
months, if it finds the failure to complete construction by the time specified in
the resolution was due to circumstances beyond the control of the owner, and
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that the owner had been and could reasonably be expected toact in good faith
and with due diligence.
(6)
In any event, no multiple-unit housing granted an exemption by the council
may be exempt from ad valorem taxation for more than 10 successive years.
The first year of exemption is the assessment year beginning January 1
immediately following the calendar year in which construction, addition or
conversion is completed, determined by that stage in the construction process
when, pursuant to ORS 307.330 the improvement would have gone on the tax
rolls in the absence of the exemption. The exemption may not include the
land, nor any improvements located thereon that are not a part of the multiple-
unit housing but may include commercial use of a portion of the structure and
parking constructed as part of the multiple-unit housing construction, addition
or conversion, and isin addition to any other exemption provided by law.
However, no property maybe exempt beyond 100 percent of its real market
value.
(7)
Any exemption granted by the council shall terminate immediately, without
right of notice or appeal, in the event the county assessor determines that a
change of use to other than residential or residential with commercial uses of
a portion of the structure,or housing has occurred for the multiple-use
housing, orportion thereof, or if a low income housing assistance contract with
an agency or subdivision of this state or the United States is breached or
terminated prematurely, or a declaration as defined in ORS 100.005(12) is
presented to the county assessor or tax collector for approval in connection
therewith. Termination shall be in accordance with the provisions of ORS
307.627.
(8)
Notwithstanding subsections (1) through (7) of this section, if applicant,
developer or other owner of the projecthas failed to comply with the
requirements of ORS 307.600 through 307.637, sections 2.945 through 2.947
of this code or the administrative rules adopted thereunder, or a resolution
adopted pursuant subsection (7) of section 2.945 of this code, in lieu of
subsections (1) through (7) of this section, the city manager may impose
penalties as set forth in section 2.1995 of this code. Each day in which a
violation is caused or permitted to exist constitutes a separate violation.
Failure to pay an administrative penalty authorized by this subsection shall be
grounds for terminating the exemption under subsections (1) through(3) of
this section.
Section 4.
Section 7.731of the Eugene Code, 1971, isaddedto provide as follows:
7.731SDC –Credits for Multiple-Unit Housing.
(1)
A developer of a multiple-family residential project consisting of 5 or more
dwelling units may receive a credit of up to fifty percent of the appropriate
systems development charges otherwise due under Section 7.720 in
connection with the development if all of the following conditions are met:
(a)The developer constructs, pays for or contributes to the cost of a capital
improvement on the Plan described in subsection (2) of section 7.715of
this Code, and the capital improvement would be eligible for SDC
funding under the Plan;
(b)The improvement is located within the boundaries of the neighborhood
association in which the development is being constructed;
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(c)Credit for the construction of or contribution to the improvement is
permissible under state law; and
(d)The City Council, the developer, and the applicable neighborhood
association board of directors each:
1.Agree that the improvement will mitigate one or more impacts
resulting from the multiple-family residential project in the
neighborhood; and
2.Approve the grant of SDC credit in exchange for the construction
of, or contribution to, the improvement.
(2)
The credit described in this section may be applied only toward the system
development charge attributable to the same system (transportation,
wastewater, stormwater, parks) as the improvement which the developer
constructs or to the cost of which the developer contributes.
Section 5
. Additional areas may become eligible for the MUPTE program upon Council’s
adoption of a Resolution approving the area. Council’s determination to add areas to the
program shall be based upon reports submitted by a Review Panel. The Review Panel shall
meet not less than every 12 months to review the efficacy of the program in reaching the City’s
desired goals, and shall be comprised of the members described in subsections (13)(a)1. and
(13)(a) 3. of Section 2.945 of the Eugene Code, 1971. Members of theReview Panel must sign
a confidentiality agreement in a form approved by the City Manager.
Section 6.
TheMultiple-Unit Property Tax Exemption Programgoal is to assistin the
creation of 1,500 new, multiple-familyhousingunitsafter adoption of this Ordinance, which will,
in part, assist in the implementation of Envision Eugene. The Review Panel will review the cap
as part of the annual report. At such time thattheMUPTE-assisted numberof dwellingunits
constructed reaches the program volume cap, Council shall conduct a comprehensivereviewto
determineif continuation ofthe programis in the best interest of the City.
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Map 2.946
MUPTE Downtown Area
Feet
Available for MUPTE
0250500
\[
Not available for MUPTE at this time
July 10, 2015