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HomeMy WebLinkAboutItem 1: Ordinance on MUPTE Boundary ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Public Hearing: An Ordinance Concerning Multiple-Unit Housing Property Tax Exemption and Amending Sections 2.945 and 2.947 of the Eugene Code, 1971 Meeting Date: July 21, 2008 Agenda Item Number: 1 Department: Planning and Development Staff Contact: Richie Weinman www.eugene-or.gov Contact Telephone Number: 682-5533 ISSUE STATEMENT The Mayor and City Council requested a public hearing to discuss the boundary and selection criteria associated with the Multi-Unit Property Tax Exemption Program (MUPTE), section 2.945 of the Eugene Code, 1971. BACKGROUND The MUPTE program is enabled by state statute. In 1975, the Oregon legislature adopted the enabling statutes for the MUPTE program as an incentive tool to complement the state land-use laws that were approved in 1973. The intent was to “stimulate the construction of rental housing in the core areas of Oregon’s urban centers…” Eligible developments must be five units or more, and provide a public benefit, as determined by the local jurisdiction. The program enables a ten-year property tax exemption on housing improvements. The land and any non-housing improvements continue to be taxed. The exemption applies to taxes owed to all jurisdictions because School District 4J also formally accepted the provisions. This is permissible under state law because Eugene and 4J together collect over 50% of the property taxes. Each application for an exemption must be approved by the council on a case-by-case basis. The state enabling legislation sunsets in 2012 unless extended during a future legislative session. If that occurs the City must then also adopt the revised provisions in order to continue offering the program. Council Action History In July 1977, the City Council adopted the provisions of this state-authorized tax exemption program through a resolution that included “. . . to complement the Eugene Community Goals and Polices adopted in 1974 which stated that ’High density dwellings should be encouraged close-in to accommodate those people who prefer to live near the center of activity’…” Since that time both the state statutes and Eugene’s implementation of them have been amended. For instance, the statutes now allow multi-family ownership in addition to rental housing. The following is a summary of related council actions during the last twelve years: Z:\CMO\2008 Council Agendas\M080721\S0807211.doc In 1996, the council both redesigned the program and also placed a moratorium on accepting MUPTE applications after the passage of Measures 47 (a property tax limitation and redesign). In January 2001, the council reinstated MUPTE with the new guidelines and adopted a boundary area that was limited to the heart of downtown, substantially smaller than what had previously existed. In February 2003, the council recognized that no multi-family development occurred in the core area (including the pre-2001 boundary area) after the moratorium took effect (Broadway Place and High Street Terrace were approved prior to the moratorium but constructed during the moratorium period). The council then directed staff to return with proposed amendments to the program as part of a series of “downtown tools.” In July 2003, the council approved a small expansion of the MUPTE boundary to include the City’s th development site at 14 and Olive (the future home of The Tate Condominiums) and directed staff to return at a later date with additional amendments to the program and boundary. In early 2004, during multiple meetings, the council debated the merits of setting more specific and stricter quality standards for MUPTE-approved developments and settled on the current approach, which provides a range of options to be evaluated by the council prior to approval. The council voted to expand the boundary area for MUPTE-eligible housing and amended the rules to include quality standards and increased public notification requirements. The amendments also eliminated an annual fee that was paid into a low-income housing fund if at least 50% of the housing built was not low-income. This was done after some members of the council asserted that charging the fee reduced the incentive and ability to construct higher quality housing. In October 2007, the council reviewed the MUPTE program and asked for an additional work session. A motion to consider shrinking the boundary to the downtown, but including both The Tate and co-housing sites was approved 5-4, with the Mayor specifically expressing a willingness to continue the discussion about the boundary once more information is received from staff. Other council comments included an interest in expanding the boundary and options to make the selection criteria more objective than subjective. In November 2007, when discussing two specific MUPTE requests, additional questions about the program were raised. Responses to the questions raised at the October and November 2007 meetings are provided below. In May 2008, the council reviewed the program at a work session and requested a public hearing on amendments that would adjust the boundary to include the Highway 99 corridor and Trainsong Neighborhood, would limit the core area to the downtown (removing the West University neighborhood), and would create objective standards for approval. Z:\CMO\2008 Council Agendas\M080721\S0807211.doc Issues raised by City Councilors on May 27, 2008 How many developments were constructed after being denied MUPTE approval? For those constructed after being turned down, was there a significant design change? Answer: No proposed developments have been constructed after being denied a MUPTE. Two applicants that were turned down have reapplied. Both applications include design changes. How many housing units were constructed in the West University Neighborhood with and without MUPTE, since 1995? Answer: There were 299 housing units constructed in the West University Neighborhood since 1995. They are summarized below. Eight developments received MUPTE approval 177 units (59%) Six developments were too small to qualify for MUPTE (fewer than 5 units) 20 units (7%) Six developments were outside the MUPTE boundary 55 units (18%) Three developments were inside the boundary and were built without MUPTE 47 units (16%) Is the requirement to construct five units or more to qualify for MUPTE above and beyond existing units that might be removed in the process, and does a rehabilitation count as adding a unit? Answer: The MUPTE requirement for construction of five or more units is based on state statute. It does not require a net gain of five units. Therefore, it is possible, for example, to qualify by removing one unit of housing and then replacing it with five. Staff is not able to identify an instance where this has actually occurred in Eugene. A MUPTE is also possible if an existing structure that is not in housing use (such as an office building or warehouse) was rehabilitated to create five or more housing units. Eugene has not th received any applications for this type of activity. Nozama Apartments on 19 Avenue received a MUPTE for a substantial rehabilitation when buildings that were a part of the former Amazon Student Housing were relocated to the site. How does staff monitor, after the fact, the need for each project’s “but for” requirement? Once a project is approved, staff only monitors if the project is built and if it is substantially the same as what was approved. At the time a MUPTE application is submitted to the City the proposal is typically in an advanced conceptual state. The developer presents a concept, basic drawings, and a financial pro- forma, but has not submitted plans for building permits. The financial projections that are presented are reviewed by staff knowledgeable about housing finance. Under the newproposed standards, additional review would come from Eugene’s Loan Advisory Committee. Once approved by the council, the developer proceeds with investing in the more detailed design and permitting process with the knowledge that the tax exemption has made the project feasible. If the development has a substantial change in plans it would be a violation of the MUPTE approval and would need to come back to the City Council for re- approval. Examples of a substantial change would be a deviation in the number of units by more or less than 10%, or adding additional floors. Less significant changes are often inevitable during the design, building permit and inspection process. Z:\CMO\2008 Council Agendas\M080721\S0807211.doc Issues raised by City Councilors in October and November 2007 Because new multi-family housing is not occurring in west Eugene and low-income housing is limited by the Housing Dispersal Policy, could the boundary extend to the Four Corners and Trainsong area? Response: The MUPTE boundary can be extended and a map showing this option is included as Attachment C-3. The Housing Dispersal Policy discourages City subsidy assistance for family housing in thth low-income neighborhoods. The 6, 7, and Trainsong areas are specifically impacted by the policy. Is the MUPTE tool needed in the West University area and how much of a role should the City take on to encourage quality development? Are there quality standards that could be changed or added to the list? Response: West University is coming out of a long period with little rehabilitation or new construction activity. How long the period lasts depends entirely on economic factors. Appraisers acknowledge that some multi-family construction is currently economically possible without MUPTE, depending on the price paid for the land and the quality of the construction. This is evidenced by two recent developments that did not request MUPTE. In each case the land was acquired at a price well below the current market value. Appraisers also note that the overall quality of the West University neighborhood has suffered from the previous uses of inexpensive construction and the same experience may be repeated if left only to market forces. Attachment D is a proposal for new selection criteria with objective standards that include incentives for higher quality. Was the original intent of the program to promote compact urban growth and infill? Response: The state created the program through statutes and Eugene adopted the provisions as an incentive to promote higher density in the core area. The state legislation was broadened later to include areas along mass transit lines. It was created as a tool to encourage compact urban growth and growth in mass-transit corridors, in recognition that in-fill is typically more costly than “green field” development. What is the definition of “low-income housing”? Response: “Low-income” is a term that is often informally used with different meanings. The HUD definitions are used in a variety of adopted City documents: Extremely low-income: households with income at or below 30% of median income pay no more than 30% of their income for rent/mortgage and utilities. Very low-income: households with income at or below 50% of median income pay no more than 30% of their income for rent/mortgage and utilities. (For some subsidy programs this threshold is at 60% of median income.) Low-income/Moderate Income: households with income at or below 80% of median income pay no more than 30% of their income for rent/mortgage and utilities. Affordable: households at or below median income pay no more than 30% of their income for rent/mortgage and utilities. Z:\CMO\2008 Council Agendas\M080721\S0807211.doc Extremely Very Low income Low-income Household 2008 Low-income (Low) (Moderate) 100% (Very Low) Size Area Median 50% of Area 80% of Area Median Income 30% of Area Median Income Income Median Income 1 $38,750 $11,650 $19,450 $31,100 2 $44,375 $13,300 $22,200 $35,500 3 $49,937 $15,000 $25,000 $39,950 4 $55,500 $16,650 $27,750 $44,400 5 $59,937 $18,000 $29,950 $47,950 6 $64,375 $19,300 $32,200 $51,500 7 $68,812 $20,650 $34,400 $55,050 8 $73,250 $22,000 $36,650 $58,600 To what degree do students at other universities live on campus and is the University of Oregon typical? What is the projected future enrollment at the U of O? Response: Mike Eyster of the University of Oregon’s housing office reports that the degree to which students live off-campus is very much related to the local real estate market, including both cost and availability, and the profile of the student body. Toward one end of the spectrum Portland State University has 26,608 students and only 1,863 (7%) live on campus. On the other end, 81% of Stanford University students live on-campus because Palo Alto housing is very expensive. Also, at Stanford there are only 6,600 undergraduate students out of 19,800 total enrollments. “The Association of College and University Housing Officers International” collects data. Mr. Eyster provided data for nine of the PAC 10 schools (accurate data from Arizona State University was not available): University Per cent of Students Housed in University Housing Arizona 17% California (Berkeley) 20% UCLA 36% Southern California 21% Oregon State 18% Stanford 81% Oregon 22% Washington 23% Washington State 36% The University of Oregon Provost presented a strategic housing plan to the OUS Board in October 2007. The Provost has made a commitment to provide on-campus housing for at least 25% of undergraduates (22% now), and at least 11% of graduates (8% now) in the future. Currently 85% of freshmen live on campus. The U of O is planning to replace and expand much of their existing housing because it is old and obsolete for today’s needs. Z:\CMO\2008 Council Agendas\M080721\S0807211.doc Public universities typically do not require adult students to live on campus and there are many students who live with parents, commute from nearby communities or are non-traditional (older, married, parents etc.). About one-fifth of NW Christian University students live in student housing. The current combined undergraduate and graduate enrollment at the University of Oregon is 20,394, of whom over 16,000 are undergraduate students. For planning purposes, the University is projecting modest increases over the next eight years with enrollment at 21,477 in 2016. Can a chart be provided that compares property taxes prior to an approved MUPTE, taxes collected after ten years, and shows how long it takes to recover the lost revenue? Response: Original tax data is not easily available for the older MUPTE projects. Others are not yet on the tax rolls. The following table provides information for the four most recent MUPTE developments that are now being fully taxed. The amount of revenue lost from removed improvements is provided in the third column. The ten- year total is based on the taxes on the removed improvements increasing by an estimated 34% over the ten years. An estimate is provided because actual predictions are difficult because of the peculiarities of Oregon’s property tax system created by Measure 47. APARTMENT ANNUAL REVENUE LOST TOTAL TAX AVERAGE CURRENT PROPERTY TAX ON REMOVED PAID (ON TAX PAID ANNUAL TAX PRIOR TO IMPROVEMENT LAND) ANNUALLY PAID ON LAND MUPTE (LAND IN YEAR ONE DURING DURING AND PLUS AND MUPTE MUPTE IMPROVEMENTS* IMPROVEMENTS) ESTIMATED 10 EXEMPTION YEAR TOTAL (YEAR) Paradice Apts. 3,376 (1995) 1,398/18,733 24,020 2,404 18,156 Burnell Ambrose 3,564 (1995) 3,084/41,425 8,114 811 5,463 Nozama Apts. 1,693 (1996) 135/1,809 19,065 1,905 10,959 Hilyard House 3,357 (1996) 1,769/23,704 19,240 1,923 31,320 *If one of these projects were constructed without the MUPTE the total tax exempted over ten years would be approximately ten times the amount in the last column. However, it can be assumed that they would not have been built at all, because the applicant had to financially demonstrate that the project wasn’t feasible “but for” the MUPTE. When was the current MUPTE boundary created, and has multi-family activity followed the boundary amendments? Response: The MUPTE boundary has changed numerous times since it was originally created. The current boundary was adopted in 2004. Multi-family development activity is most significantly impacted by economic factors which include the cost of land and construction, interest rates, and housing demand. To some extent the degree of construction is also impacted by opportunities in other locations. After the boundary was reduced to the heart of downtown in the late 1990’s, no multi-family construction Z:\CMO\2008 Council Agendas\M080721\S0807211.doc took place in the deleted MUPTE area. When the boundary was mostly restored to the previous area in 2004 the tool was used and ten new developments applied for and received approval. If applied to other neighborhoods the tool may not work immediately because the rental rates may not be adequate to offset the construction costs – even with a ten-year tax exemption. Are there demonstrable differences between the developments with MUPTE and without? Response: Multi-family housing construction is primarily influenced by economics. The most significant determining factors are the cost of land, cost of construction, and potential rental income. Recently, two potentially eligible projects were developed in the West University Neighborhood (WUN) which did not apply for MUPTE assistance. A local appraiser believes that neither needed the MUPTE (and therefore couldn’t prove the “but for” requirement) because they were able to purchase the land at a very favorable land value. Since there is almost no bare land in that neighborhood, any redevelopment also includes an additional cost for an improvement (typically an old house) that is likely going to be removed. In the WUN, rents are particularly high for this community and new units are charging $525 per bedroom per month. The result is a project that can be financially viable. The same appraiser believes that two of the most recent MUPTEs were of significantly higher than typical quality and that MUPTE probably resulted in the difference. The third project that we discussed was described as high but not exceptional quality. The MUPTE enabled the project to pencil out economically. Can the evaluation of MUPTE applications be less subjective and more objective? How do staff analyze the applications to determine compliance with the “but for” requirement? Response: A proposal for objective criteria is provided as Attachment E. This criterion offers specific circumstances where the approval criteria are clear and others where points are awarded for increasing degrees of compliance. Because of market differences from one neighborhood to the next, raising the bar through objective criteria may result in limiting the effectiveness of MUPTE as a tool. In neighborhoods with little history of redevelopment and average or depressed rental rates, the MUPTE, even if public benefit criteria are reduced, is not enough of an incentive to encourage new housing. Therefore, if conditions are added, the value of the MUPTE incentive is diminished. The Vertical Housing Zone program is administered by the state and has clear objective criteria which make it easier for applicants to plan their projects. The pro-forma for each MUPTE application is reviewed by City staff. The applicant must demonstrate in their financial presentation why the project could not be built “but for” the exemption. Staff is familiar with the construction costs of new multi-family housing because the City closely monitors the financial details of low-income housing developments. In a similar role, private lenders closely look at a project pro-forma, carefully examine the cash-flow, and determine cost reasonableness and feasibility before approving the project financing. In virtually every approved MUPTE project, the private lender requires documentation of the MUPTE approval as a condition of their approval of project financing. As part of the proposed standards recommended by staff for consideration, another step is suggested – a review by the City’s loan advisory committee. This committee is comprised of lenders who are experienced at analyzing financial statements for business development loans and can apply their expertise to multi- family housing projects. Z:\CMO\2008 Council Agendas\M080721\S0807211.doc What are the criteria for determining compliance with historic resources ? Response: The criteria used for historic designations are codified in the Eugene Land Use Code, Section 9.8165 (2). Designation is based on a determination of historic significance according to one or more of the following: (a) is associated with events that have made a significant contribution to the broad patterns of history; (b) is associated with the lives of persons significant to our past; ( c) embodies the distinctive characteristics of a type, period, or method of construction, or represents the work of a master, or possesses high artistic values, or represents a significant and distinguishable entity whose components may lack individual distinction;. (d) yields, or may be likely to yield, information important to prehistory or history. How is “density” defined and what is a “housing unit?” Response: The Eugene Code provides the following definitions: Density (gross). The number of dwelling units per acre of land, including areas devoted to dedicated streets, neighborhood parks, sidewalks, and other public facilities. Density (net). The number of dwelling units per each acre of land in residential use, excluding from the acreage dedicated streets, neighborhood parks, sidewalks and other public facilities. Dwelling. A building, or portion thereof, designed and used as a residence for occupancy by one family. This includes both buildings constructed on-site and manufactured homes. Dwelling, Multiple-Family. One or more buildings on a single lot or parcel that are designed and used for 3 or more families, all living independently of each other, and having separate housekeeping facilities for each family. The dwellings may share common walls, common roofs, or common foundations. Multiple-family dwellings include condominium and apartment units without regard to ownership status. MUPTE Guidelines The current MUPTE application packet is provided as Attachment A. This includes the adopted local standards. Public benefits are at the core of the program. Applicants must currently respond to a list of public benefits including sustainability features, responsiveness to adjacent historic resources, building material quality, design elements, Americans with Disabilities Act (ADA) accessible units, home ownership and solicitation of neighborhood association comments. The guidelines include specific rules for protection of historic or potentially historic buildings. Local Market Conditions and Activity The local rental housing market is complex. Eugene has very low rental vacancy rates (estimated at less than 2% in Eugene and near 0% in the core area) resulting in rent increases at rates in excess of wage growth. In some areas, such as West University, the tenants are willing to pay a premium for the convenience of location. However, in other neighborhoods rental rates still appear to be insufficient to support new construction of quality infill rental housing because of the increasing cost of construction and land. Very little in-fill multi-unit housing is being constructed without the MUPTE or some other incentive (e.g. low-income housing). Z:\CMO\2008 Council Agendas\M080721\S0807211.doc Timing The program is operating under existing guidelines that remain in place until changed by ordinance. RELATED CITY POLICIES Policy Issues and Council Goals The key policy issues are whether the City wishes to provide a tax exemption as a tool that encourages construction of housing in the core area and if so, whether the rules or guidelines should be revised. Encouraging housing, and higher densities in the core area and in surrounding neighborhoods is consistent with numerous adopted planning and policy documents. Examples include: Growth Management Policies Policy 1 Support the existing Eugene Urban Growth Boundary by taking actions to increase density and use on existing vacant land and under-used land within the boundary more efficiently. Policy 2 Encourage in-fill, mixed-use, redevelopment, and higher density development. Policy 3 Encourage a mix of businesses and residential uses downtown using incentives and zoning. Downtown Plan: Living Downtown Policy 1 Stimulate multi-unit housing in the downtown core and on the edges of downtown for a variety of income levels and ownership opportunities. Policy 2 Reinforce residential use in neighborhoods abutting the downtown commercial core to help contain commercial activity in downtown and maintain the historic character and livability of adjacent neighborhoods. Downtown Plan Implementation Strategies A. Expand the MUPTE program boundary to encourage housing on the edges of downtown. Periodically review boundaries and expand to include areas where additional housing is appropriate. F. Seek opportunities to equalize the costs of building housing in and near downtown compared with locations elsewhere in the city. West University Refinement Plan V.9 The City will encourage residential uses in all parts of the plan area. V.11 The City and the neighborhood shall study ways to encourage a variety or mix of structure types providing both owner and rental opportunities and appealing to a diverse population. COUNCIL OPTIONS No formal action is required; however, options will be provided as part of the deliberations following the public hearing. Z:\CMO\2008 Council Agendas\M080721\S0807211.doc CITY MANAGER'S RECOMMENDATION This item is scheduled for a public hearing only. Following the City's receipt of all testimony, the City Manager will make a recommendation to be included in the council packet for action on (DATE). SUGGESTED MOTION No action is required on this item. Therefore, no motions are offered by the City Manager at this time. A suggested motion will be provided at the time of formal deliberations. ATTACHMENTS A. Revised ordinance B. MUPTE boundary options B-1 Current boundary thth B-2 Current boundary with 6, 7, and Trainsong neighborhood added thth B-3 Current boundary with 6, 7, and Trainsong neighborhood added and West University Neighborhood deleted B-4 Current boundary with West University Neighborhood deleted. C. Proposal for new selection criteria D. MUPTE Application Packet - current E. History of MUPTE approvals FOR MORE INFORMATION Staff Contact: Richie Weinman Telephone: 682-5533 Staff E-Mail: richie.d.weinman@ci.eugene.or.us Z:\CMO\2008 Council Agendas\M080721\S0807211.doc ATTACHMENT A ORDINANCE NO. ____________ AN ORDINANCE CONCERNING MULTIPLE-UNIT HOUSING PROPERTY TAX EXEMPTION AND AMENDING SECTIONS 2.945 AND 2.947 OF THE EUGENE CODE, 1971. THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS: Section 1. Sections 2.945 and 2.947 of the Eugene Code, 1971, are amended to provide as follows: 2.945 Multiple-Unit Housing – Property Tax Exemption. (1) The provisions of ORS 307.600 to 307.[691]637 enable cities to grant local property tax exemptions for multiple-unit housing located in core and transit oriented areas designated by the city. [This incentive supports the concept of a compact urban growth form, and t]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 downtown 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’s core 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 307.690 to 307.[691]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) In order to provide the incentives described in subsection (1) of this section, the provisions of ORS 307.600 to 307.[691]637 are hereby adopted as the city’s multiple-unit housing property tax exemption program for the city’s following core and transit oriented areas. (a) The city’s core area shall include the area generally bounded [on the north stth by 1 Avenue, then south on Lawrence Street to 7 Avenue, then east to th Lincoln Street, then south to 13 Avenue, but including a quarter-block th section on the northwest corner of Lincoln Street and 11 Avenue, then th east to Olive Street, then south to 17 Avenue, then east to Kincaid Street, th then north to the Willamette River and along the Willamette River to 4 rd Avenue, then west to Pearl Street, then north to 3 Avenue, then west to st Lincoln Street, then north to 1 Avenue, excepting therefrom Tax Lots 17- 03-30-43-0010 and 17-03-30-44-04700,] by Lincoln Street on the west, rd 3 Avenue to the Willamette River on the north, Hilyard Street on the th East, and on the south and east by a line that runs along 11 Avenue th from Hilyard Street to High Street, High Street from 11 Avenue to the thth east-west alley between 13 and 14 Avenues, and the east-west alley thth between 13 and 14 Avenues from High Street to Lincoln Street, as more particularly [described in the standards and guidelines adopted by the city manager in the manner prescribed in section 2.019 of this code] depicted on Map 2.945(2)(a) attached to Ordinance ______ and appended to chapter 2 of this code. (b) The city’s transit oriented area shall include the area generally th bounded by a line that begins at the NW corner of the 5 Avenue Alley th and Lincoln Street, then west on 5 Avenue Alley (including tax lots 17-04-36-12-06300, 17-04-36-12-06400, 17-04-36-12-07900 in the area the alley does not go through) to Chambers Street, then north on Chambers Street to Roosevelt Boulevard, then west on Roosevelt Boulevard to Bethel Drive, then north and northwest on Bethel Drive to its intersection with Highway 99 North, then south on Highway 99 th North to West 7 Avenue Alley, then east to the SW corner of Lincoln Street (including tax lots 17-04-35-11-00400, 17-04-35-11-00300, 17-04- 35-11-00300, 17-04-35-11-00200, 17-04-36-23-00502, 17-04-36-23-00101, 17-04-36-23-00501, 17-04-36-21-06800, 17-04-36-23-00300, 17-04-36-21- 06400, 17-04-36-12-14701, 17-04-36-12-15100, 17-04-36-12-16000, 17-04- 36-12-16300, 17-04-36-12-157000, 17-04-36-12-16400, and 17-04-36-12- th 16600), then north to the NW corner of the 5 Avenue Alley and Lincoln Street, as more particularly depicted on Map 2.945(2)(b) attached to Ordinance _____ and appended to chapter 2 of this code. The standards and guidelines adopted by the city manager in the manner described in section 2.019 of this code shall include provisions to relate the net financial benefit from the property tax exemption to the public benefits provided by the improvements. (3) Applications for property tax exemption hereunder shall be filed with the city manager on or before February 1 immediately preceding the first assessment year for which exemption is requested and shall be accompanied by an application fee. The application shall be processed in accordance with the standards and guidelines adopted by administrative rule of the city manager. As used in this section and section 2.947 of this code and the standards and guidelines referred to above, “city manager” includes the manager’s designee. The standards and guidelines adopted by the city manager shall include a public benefit scoring system for evaluating applications. (4) 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 during the 30 day comment period on the application at its next scheduled meeting. If the council fails to act on an application which has been timely referred to it as provided in the standards and guidelines within 180 days from the date it was filed, the application shall be deemed approved and processed thereafter in accordance with subsection (810) of this section. (5) At the meeting at which the city manager's recommendation on an application is considered, 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. (6) In [approving] order to approve an application, the council must find that: (a) The project will provide multiple-unit housing of five or more units; (b) The project is located within the boundaries of the core or transit oriented areas described in subsection (2) above; (c) The application contains documentation that the proposal could not financially be built “but for” the tax exemption; (d) The application documents the applicant’s efforts to solicit comments from city-recognized affected neighborhood associations, or provides such documents with the application; (e) The application includes proof that requirements in the standards and guidelines related to proximity to historic resources have been satisfied; (cf) The owner has complied with [all] the provisions of the city's standards and guidelines referred to above. (g) In case of multiple-unit housing located in the transit oriented area described in subsection (2)(b) of this section, the structure must: 1. Be physically or functionally related to a light rail or mass transportation system; and 2. Enhance the effectiveness of a light rail or mass transportation system. (ah) In the case of the construction of, or the addition or conversion to multiple- unit housing: 1. The construction, addition or conversion will be completed on or before January 1, 2012; 2. The owner has agreed to include in the construction, addition or conversion, as a part of the multiple-unit housing, one or more public benefits, including but not limited to open spaces, parks and recreational facilities, common meeting rooms, child care facilities, transit amenities and transit or pedestrian design elements, or as otherwise specified in the standards and guidelines referred to above; 3. The proposed construction, addition or conversion project is, or will be at the time of completion, in conformance with all local plans and planning regulations, including special or district-wide plans developed and adopted pursuant to ORS chapters 195, 196, 197, 215 and 227, that are applicable at the time the application is approved; (bi) 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, 2012; 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[;and]. (7) Unless the [council makes each of the findings] applicant complies with each of the requirements contained in subsection (6) of this section, the council shall deny the application. In addition to the owner's name and address, and a legal description or the assessor's property account number for the subject multiple-unit housing, the resolution approving the application shall contain the above findings and set forth the specific conditions of approval or exclusions therefrom and specify the percentage and duration of the exemption. A resolution denying an application shall set forth the specific reasons for denial. (8) An application that meets the requirements of subsection (6) of this section and receives a score of at least 100 points on the public benefit scoring system contained in the standards and guidelines shall be approved by the council and the resolution granting the property tax exemption may be placed on the council’s consent calendar. (7) 9The city manager shall forward to the applicant a copy of the resolution adopted by the council within 10 days from the date [a determination is made under subsection (6) above] the council acts on the application, and on or before April 1 following approval shall file with the county assessor a copy of the resolution approving an application. (8) 10 With respect to an application deemed approved through inaction of the council under subsection (4) [hereof] of this section, on or before April 1 following the expiration of the 180-day period, the city manager shall file with the county 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. (9) 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 shall be exempt from taxation. (10) 2 If the multiple-unit housing is 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. 2.947 Multiple-Unit Housing - Termination of Approval, Review. (1) 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 has failed to comply with the provisions of ORS 307.600 to 307.[691]637, the provisions of this code, any provisions of the standards and guidelines adopted by the city manager, or (c) The applicant has failed to comply with any conditions imposed in the resolution approving the application, or (d) Construction of multiple-unit housing was not completed on or before January 1, 2012, 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 and the owner of the property, at the owner's last known address, and to any known lender, mailed to the 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 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 council shall 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 address, 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 subsection (2) of ORS 307.680. 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, 2012, 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 that the owner had been and could reasonably be expected to act in good faith and with due diligence. (6) In any event, no multiple-unit housing granted an exemption by the council shall be exempt from ad valorem taxation for more than 10 successive years. The first year of exemption shall be 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 shall not include the land, nor any improvements located thereon that are not a part of the multiple-unit housing but may include parking constructed as part of the multiple-unit housing construction, addition or conversion, and shall be in addition to any other exemption provided by law. However, no property shall be 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 housing has occurred for the multiple-use housing, or portion 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 307.675. Section 2. Maps 2.945(2)(a) and 2.945(2)(b) attached hereto are hereby adopted, and copies thereof shall be appended to Chapter 2 of the Eugene Code, 1971. Section 3. The City Recorder, at the request of, or with the consent of the City Attorney, is authorized to administratively correct any reference errors contained herein, or in other provisions of the Eugene Code, 1971, to the provisions added, amended or repealed herein. Passed by the City Council this Approved by the Mayor this ____ day of _____________, 2008 ____ day of ______________, 2008 ____________________________ _____________________________ City Recorder Mayor ATTACHMENT C MUPTE OBJECTIVE CRITERIA DRAFT 3.25.08 MINIMUM REQUIREMENTS a) Multi-family housing of five units or more b) Located inside the adopted boundary c) Documentation that the proposal, financially, could not be built “but for” the tax exemption. The applicant must submit documentation, including a pro-forma and an analysis of the projected rate of return, for the proposed project. This information will be reviewed by city staff and recommended by the City’s loan advisory committee. d) Documentation of effort to solicit comments from the neighborhood association. Developers need to make a demonstrated effort to contact the appropriate neighborhood association to share information and seek input. Neighborhood association support is not a requirement for MUPTE approval. Comments from the Neighborhood association, as well as other public comments, will be provided to the City Council. Applications must include either a) documentation of the attempt to solicit comments or b) the comments received from the neighborhood association. e) Documentation related to proximity of historic resources. PUBLIC BENEFIT CRITERIA 1. Density The MUPTE program is enabled by state legislation designed to encourage higher density housing and redevelopment in the core area and along mass transit corridors. Therefore, a criterion for approval of a specific application includes the degree to which minimum density is exceeded. Points: Tier 1 – 100 points -- Immediate MUPTE approval: Project is on a designated Opportunity Site (as indicated by opportunity siting process through City Council) Tier 2 – 50 points maximum: 10 points awarded for each unit in excess of the minimum required density. 2. Green Building Features and Quality of Building Materials City Council wants to use MUPTE as an incentive for higher quality developments. One measure of quality can be tied to sustainable “green” features. Leadership in Energy and Environmental Design (LEED) certification is the premier industry standard. However, the certification process can be prohibitively expensive. In those instances, the cost of certification would outweigh the benefit of the MUPTE incentive. Points Tier #1 – 100 points -- Immediate MUPTE approval: For projects that indicate a plan to attain LEED, the applicant must produce evidence of initial application and demonstrate that the project endeavors to obtain LEED certification; and the project application includes a working copy of the LEED checklist that demonstrates at least 5 points more than the minimum needed for Certification are identified as “Yes” or “Possibly” categories. Tier #2 – 50 maximum points: For projects where LEED certification would not be feasible, but that intend to utilize green practices, the application must include a) a plan that addresses energy reductions, and b) two other areas of the applicant’s choice: a ?Site Planning: if construction practices will exceed CE requirements for erosion and sedimentation controls and stormwater management ex: green roof, maximized open space, rainwater harvesting techniques ?Water Efficiency: if project will reduce water use by 20% or more ex: dual flush toilets and low flow showerheads/faucets, no potable water used for irrigation, sensors for irrigation system ?Energy and Atmosphere: if project reduces energy consumption 15% beyond code ex. Energy Star certification, solar hot water system, PV panels for 15% of load, night flush cooling system instead of AC ?Materials and Resources: if utilizes both MRF for construction/demolition debris targeting 60% reduction and plans for alternative/durable materials ex. FSC certified lumber, alternative roof/siding materials, composite woods for decking/fencing, stone/tile ?Indoor Environmental Quality: if committed to low emitting materials and enhanced ventilation ex. operating windows, low voc paints, adhesives and sealants, minimal carpeting, automated humidity controls 3. Mixed Income The City has adopted policies that encourage the creation of low-income housing. A specific twenty-year property tax exemption is available for rental housing that is 100% dedicated to low-income housing. MUPTE could be used to further the low-income housing policies through mixed-income developments. Points:10 points awarded for every housing unit dedicated to controlled income and rent housing that is affordable to a household at 60% of median income. The applicant must provide a written certification. The applicant must provide a written certification (form to be created) a LEED puts significant emphasis on alternative transportation in this section, but is not needed in this instance as MUPTE is already linked to core and transit oriented areas. 4. Homeownership Homeownership is acknowledged to be highly desirable because owners add stability and pride to the neighborhood. Points: 100 points - Automatic MUPTE approval, if a proposal is at least 50% dedicated to homeownership. 5. Accessibility The building code required standard related to ADA is to provide adaptable units (the number depends on specific project details). For a unit to be adaptable, it must have the structural enhancements necessary for the installation of specific accessible features (grab bars, hallway width, etc.). Accessible units have already been adapted and include specific features. Points: 10 points awarded for each ADA accessible unit. 6. Historic Sensitivity Preservation of the community’s history is valuable and important. The City wants to carefully consider the use of any incentive that could result in the loss or degradation of historic resources. Any application for a project that is immediately adjacent or contiguous to a historic resource shall include a plan to mitigate impacts to the historic resource that might be created with the assistance of an architect. (Historic resources are buildings that have historic, cultural and/or architectural significance, locally, regionally, or nationally and can also include those acknowledged by the Eugene Historic Review Board as strongly or possibly eligible for City Landmark or National Register listing.) Points: 25 points awarded if the proposal preserves and enhances an existing historic resource, as evidenced by a concept plan that has been reviewed and accepted by Planning & Development Department staff that possess expertise in design and historic preservation. 7. Location Increased multi-family development in the heart of downtown is both strongly desired and particularly challenging due to increased property and construction costs. Proposals for projects located within the adopted “Downtown Plan Area” are worthy of added consideration. Points: 100 points for projects in the Downtown Plan Area. 8. Parking -- To be applied only in Residential Parking Permit Program (RPP) zones Based on reports in the West University neighborhood some landlords may be maximizing their income by renting out parking spaces to non-tenants. (This circumstance has not been reported for any MUPTE- assisted development). Additionally, many newer apartments have four or five bedrooms but are still only required to provide one parking space. The Land Use Code requires the provision of one parking space per dwelling unit, except in parking-exempt zones. In RPP zones the City has acknowledged the parking shortage and has a paid permit program for residents to park on the streets. Points: 10 points for each space provided, beyond what is required. Scoring Sheet Each of the following are minimum requirements: a) Multi-family housing of five units or more b) Located inside the adopted boundary c) Documentation that the proposal could not financially be built “but for” the tax exemption d) Documentation of efforts to solicit comments from the neighborhood association or provision of said comments e) Satisfaction of requirements related to proximity of historic resources Public benefit options In addition to providing housing in the core area, the MUPTE program must provide additional public benefit. The following are scored criteria to evaluate public benefit. A MUPTE is granted with the achievement of 100 points. ITEM MAXIMUM POINTS RUNNING POINTS AWARDED TOTAL Density 10 points for every unit over the minimum required 50 density Development is a designated “Opportunity Site” 100 Green Building Features LEED Certification 100 Utilization of green practices – plan to address 50 energy reductions plus 2 or more other areas (site planning, water efficiency, energy & atmosphere, materials & resources, indoor environmental quality) Mixed Income 10 points for each housing unit dedicated to 10 per unit controlled income and rent at 60% of median income Home ownership Over 50% of units dedicated to home ownership 100 Accessibility 10 points for each ADA-accessible unit (in addition 100 to the adaptable code requirements) Historic Sensitivity (for projects identified as or adjacent to an historic structure) Provision of mitigation plan created w/ assistance of 10 w/ plan an architect ITEM MAXIMUM POINTS RUNNING POINTS AWARDED TOTAL 25 points, if the proposal preserves and enhances an 25 existing historic resource or provides an extraordinary complement to an adjacent historic resource (requires support of Planning & Development Department staff who possess expertise with design and historic preservation) Location Project located in downtown core area 100 Parking – Residential Parking Permit (RPP) zones 100 10 Points for each parking space provided that is in 100 excess of minimum requirement (applicable in RPP zones only) ATTACHMENT D Multi-Unit Rental Housing Property Tax Exemption Program Revised August 2006 APPLICATION PACKET For more information, please contact Richie Weinman at 541.682.5533 City of Eugene Planning and Development Department th 99 W. 10 Avenue, Eugene OR 97401 Richie.D.Weinman@ci.eugene.or.us Property Tax Exemption for New Multi-Unit Housing Application Coversheet The Multi-Unit Property Tax Exemption (MUPTE) is an incentive program to encourage downtown housing. This ten-year exemption is enabled by state law, but each project must be approved by the Eugene City Council. Both rental housing and multi-unit housing for home ownership are eligible. thth Projects must be within an area generally bounded by 4 Avenue, Patterson, 17, and Lawrence Street. GENERAL INFORMATION Applicant(s) Business Name:______________________________________________________ Address:______________________________________________________________________ Phone #________________ Fax #_________________ E-mail:_____________________ Representative:________________________________________________________________ Address (if different):____________________________________________________________ Phone #_______________ Fax #_________________ E-mail:_____________________ Proposed Project Name:_________________________________________________________ Location:_____________________________________________________________________ ELIGIBILITY AND QUALIFICATION CRITERIA Eligible Property. To be eligible for the property tax exemption, a structure must be: 1. A multiple unit structure, having five or more dwelling units, not designed or used as transient accommodations and not including hotels and motels; 2. Housing completed on or before January 1, 2012 This includes new multiple-unit housing on vacant sites, the conversion of buildings into new units on under-utilized sites and housing which increases densities consistent with the applicable Comprehensive Plan and zoning designations, as well as relevant plan goals and policies; and 3. Located within the boundaries illustrated on the attached map of eligible areas. Term of Exemption. This program provides for a ten-year exemption for all residential improvements. The land and non-residential improvements continue to be taxed. PUBLIC BENEFITS The City Council places a great deal of importance on adding high quality housing to the core area. Therefore, applicants must respond in writing as to how each of the following nine quality standards relate to the proposed project. Council will consider the responses when determining whether to grant the application. 1. Incorporation of sustainability features such as conservation performance measures, solar heating, natural lighting, “green” building (techniques that use environmentally friendly materials and practices), and landscaping with native species that reduce the need for fertilizers, herbicides and pesticides 2. Responsiveness to adjacent historic structures that are on the National Register of Historic Places or listed as a City Landmark 3. Use of higher quality materials that contribute to longevity, durability, or enhanced building design 4. Prominent entry facing the public street 5. Number of units by which the minimum density is exceeded or the percent of housing units having three or more bedrooms (to encourage families) 6. Number of available ADA accessible units that exceed the required standard 7. Responsiveness to neighborhood character and safety in respect to height, mass, architectural detail, landscaping and open space 8. Number of units designed for home ownership 9. Solicitation of comments from the relevant neighborhood association REGARDING HISTORIC BUILDINGS Removal of Historic Structure or Potential Historic Structure. No exemption shall be granted for any property where an historic structure or potential historic structure has been demolished or removed from the property within the two years immediately proceeding the date of application for the exemption. This restriction shall be waived if the owner of the property gave notice of the intent to demolish or move the structure to the Historic Review Board at least 60 days before the owner’s application for demolition or moving permit from the City of Eugene. Historic Structure is defined as any building, structure, or object which has been identified as a primary or secondary historic resource (strong or possible eligibility for City landmark or National Register status) in a survey acknowledged by the Eugene Historic Review Board and the State Historic Preservation Office, or which is an “historic property” as that term is defined by Eugene Code, 1971, Section 2.403, or Any building or structure which is older than 50 years in age and located in an area of the city of Eugene which has not been canvassed as part of an historic resource survey acknowledged by the Eugene Historic Review Board and the State Historic Preservation Office. This provision may be waived by City Council in the event of unusual or particularly justifiable circumstances. APPLICATION PROCESS A copy of the Property Tax Exemption Standards and Guidelines is attached. Section R-2.945-H explains the application review process once it is received. PLEASE ATTACH THE FOLLOWING: 1. A schematic drawing, drawn to a minimum scale of one inch equals 16 feet, which shows the site plan and major features and dimensions of the proposed development and includes a side and front elevation of the proposed development. 2. A written statement which pinpoints the location of the proposed development and includes the number, size, and type of dwelling units; dimensions of structures; public and private access; parking and circulation plans; landscaping uses; and a description of public benefit(s) which the Public Benefits. applicant proposes to include in this project. See the section entitled 3. Application Fee: An application fee of $300 must be submitted at the time of application. Checks “CITY OF EUGENE.” may be made payable to 4. Electronic submissions: In addition to the required paper copy, an electronic copy of the application, including photos and drawings is encouraged. It can be submitted to Richie.d.weinman@ci.eugene.or.us Submit applications to: Richie Weinman City of Eugene, Planning & Development Department th 99 West 10, Eugene OR 97401 For more information: Call 682-5533 or e-mail: Richie.d.weinman@ci.eugene.or.us Property Tax Exemption for New Multi-Unit Housing Application Part One: GENERAL INFORMATION Project Name or Designation: _________________________________________________ Parcel Size:_______________________________________________________________ Estimated Dimensions of Project: Structure “Footprint”_________________________________ Sq. Ft. Building Square Footage _____________________________ Sq. Ft. Number of Stories_____________ Number of Housing Units__________ Proposed Lot Coverage____________________________________ (%) Amount of Open Space_____________________________________ Sq. Ft. (Parcel minus “footprint”) Part Two: UNIT INFORMATION Size/Type Number of Units Average Square Feet Proposed Estimated Rental Ownership per Unit Rental Rate or Sale Price Efficiency One Bedroom Two Bedroom Three Bedroom Four Bedroom Commercial/Retail Accessible “Ready” Number of Units/ Average Square Feet Proposed Estimated Units Bedrooms per Unit Rental Rate or Sale Price Type/description of construction and materials. Describe any additional public utility needs. Describe proposed landscaping. Please attach the following to your application: PRO-FORMA. 1. Detailed construction and operating cost analysis demonstrating project’s “need” for tax exemption, and that the project could not be built “but for” the tax exemption. This analysis or pro-forma should show the rental rates of each type of unit both with and without the tax exemption. FINANCIAL FEASIBILITY. 2. Information on the property costs and financing for the housing which demonstrates the financial feasibility of the project. SITE PLAN. 3. A site plan and supporting maps, drawn to a minimum scale of one inch equals 16 feet, which shows in detail the development plan of the entire project, including a side and front elevation, showing streets, driveways, sidewalks, pedestrian ways, off-street parking, and loading areas; location and dimension of structures; use of land and structure; major landscaping features; design of structures; existing and proposed utility systems including sanitary sewers; storm sewers, water, electric, gas, and telephone lines. PUBLIC/PRIVATE ACCESS. 4. Description and map or diagram of public and private access to property and parking, and circulation plans for project. Please provide above drawings on 8-1/2” X 11” size paper for reproduction purposes. An alternative is an electronic PDF version that can be easily printed. The applicant is encouraged to provide, in addition to the above, any additional materials, such as economic feasibility status or market analysis appropriate to the project. PROPOSED ELIMINATION OF EXISTING STRUCTURES. 5. Explanation and justification for any proposed elimination of existing, sound and rehabitable housing on the site. No exemption will be granted for any property within the two years immediately preceding the date of application for the exemption. This restriction will be waived if the proposed project increases the number of dwelling units by 50% from what previously existed or if it replaces the old dwelling units by larger dwelling units that will accommodate families. Part Three: SITE INFORMATION/LEGAL DESCRIPTION Legal Description: (please also attach a legal description) Addition Block Tax Lot Cross Streets: North Side South Side East Side West Side What is the current use on the site? Please provide digital photos of the site. Describe the current number and type of any structures, as well as their use, and the number of residential units, if any. Indicate the occupancy status and whether the structures will be demolished or relocated as part of the proposed development. Please attach a current photo of this site. Is the building over 50 years old or designated as a historic structure? ???? Signature of Applicant: Date: SUBSCRIBED AND SWORN to before me this day of Notary Public for Oregon My Commission Expires ADMINISTRATIVE ORDER NO. 53-04-03-F of the City Manager AMENDMENT OF MULTIPLE-UNIT HOUSING PROPERTY TAX EXEMPTION STANDARDS AND GUIDELINES RULE R-2.945 AND REPEAL OF ADMINISTRATIVE ORDER NO. 53-02-04-F. The City Manager finds that: A. Sections 2.019 and 2.945 of the Eugene Code, 1971 authorize the City Manager to adopt rules for administration of provisions of the Eugene Code, 1971, and specifically Standards and Guidelines for processing applications for multiple-unit housing property tax exemptions. B. Pursuant to that authority, and based on the findings contained in Administrative Order No. 53-04- 03 issued on May 24, 2004, I proposed the amendment of the Multiple-Unit Housing Property Tax Exemption Standards and Guidelines Rule R-2.945 that were established by Administrative Order No. 53- 02-04-F on October 2, 2002. C. Notice of the proposed rule adoption was published in the Register-Guard for five consecutive days on June 6, 7, 8, 9 and 10, 2004. Notice was also made available to persons who had requested such notice, and provided that written comments would be received for a period of 15 days from the first date of publication. No written comments were received within the time or in the manner provided in the Notice. Based upon the above findings which are hereby adopted, and pursuant to the authority contained in Sections 2.019 and 2.945 of the Eugene Code, 1971, I hereby repeal Administrative Order No. 53-02-04- F and adopt the Multiple-Unit Housing Property Tax Exemption Standards and Guidelines Rule R-2.945 to provide as follows: MULTIPLE-UNIT HOUSING PROPERTY TAX EXEMPTION STANDARDS AND GUIDELINES RULE R-2.945 R-2.945-A Definitions. For purposes of these rules, the following words and phrases mean: City Manager. The City Manager of the City of Eugene, or his or her designee. Core area . The area depicted on Attachment 1 hereto. Historic structure. Any building, structure or object which has been identified as a primary or secondary historic resource (strong or possible eligibility for city landmark or National Register status) in a survey acknowledged by the Eugene Historic Review Board and the State Historic Preservation Office, or which is an "historic property" as that term is defined by Eugene Code, 1971, section 9.202. Lender . Any person who makes a loan, secured by a recorded mortgage or trust deed, to finance the acquisition, construction, addition or conversion of multiple-unit housing. Low-income housing. Housing which is affordable to families or persons whose income is low, i.e., income which is no more than 80% of the median income of families or persons in Lane County, Oregon as determined by the U.S. Department of Housing and Urban Development or its successor. Low-income housing assistance contract . An agreement between a public agency and a property owner that results in the production, rehabilitation, or preservation of housing affordable to those with a defined level of household income. Multiple-unit housing. (1) Housing subject to a low-income housing assistance contract with an agency or subdivision of this state or the United States; or (2) Newly constructed structures, stories or other additions to existing structures and structures converted in whole or in part from other use to dwelling units that meet the following criteria: (a) The structure must have five or more dwelling units; (b) The structure must not be designed or used as transient accommodations, including but not limited to hotels and motels; and (c) The structure must have those design elements benefiting the general public pursuant to subsection (1) of Rule R-2.945-G. Potential historic structure. Any building or structure which is older than 50 years in age and located in an area of the City which has not been canvassed as part of an historic resource survey acknowledged by the Eugene Historic Review Board and the State Historic Preservation Office. R-2.945-B Program Purpose and Boundaries. 1. The purpose of the program is to: 1.1 Stimulate the construction of transit supportive multiple-unit housing in the City’s core area to improve the balance between the residential and commercial nature of the area, and to ensure full-time use of the area as places where citizens of the community have an opportunity to live as well as work; 1.2 Encourage the development of vacant or under utilized sites in core areas, rather than sites where sound or rehabilitable multiple-unit housing exists; 1.3 Encourage the development of multiple-unit housing, with or without parking, in structures that may include ground-level commercial space; 1.4 Encourage the development of multiple-unit housing, with or without parking, on sites with existing single-story commercial structures; 1.5 Encourage the development of multiple-unit housing, with or without parking, on existing surface parking lots; and 1.6 Preserve existing publicly-assisted housing that is affordable to low-income persons by providing the incentives authorized in ORS 307.690 to 307.691 to existing multiple-unit housing subject to a low-income housing assistance contract with an agency or subdivision of this state or the United States. 2. The program shall emphasize: 2.1 The development of multiple-unit housing, with or without parking, in structures that may include ground-level commercial space; 2.2 The development of multiple-unit housing, with or without parking, on sites with existing single-story commercial structures; and 2.3 The development of multiple-unit housing, with or without parking, on existing surface parking lots. 3. The program shall result in the preservation, construction, addition or conversion of units at rental rates or sale prices accessible to a broad range of the general public. R-2.945-C Eligible Structures. To be eligible for local property tax exemption hereunder, a structure must: 1. Be multiple-unit housing as defined above, which: 1.1 In the case of the construction, addition, or conversion of multiple-unit housing, the construction, addition, or conversion must be completed on or before January 1, 2006, 1.2 In the case of housing subject to a low-income housing assistance contract with an agency or subdivision of this state or the United States, the application for exemption was made on or before January 1, 2012; 2. Be located within the core area; and 3. Meet the approval criteria set forth in these Standards and Guidelines. R-2.945-D Application for Exemption for Housing Subject to a Low-Income Housing Assistance Contract . 1. On or before February 1 immediately preceding the first assessment year for which exemption is requested, the applicant shall submit to the City Manager, on a form provided by the City, an application for exemption, containing the following information: 1.1 The applicant's name, address, and telephone number; 1.2 A legal description of the property or the assessor's property account number for the site; 1.3 A description of the existing use of the property, including a justification for the elimination of, or a plan for the relocation of existing sound or rehabilitable housing located on the property; and 1.4 Any other information required by state or local law or requested by the City or which is otherwise reasonably necessary to effectuate the purposes of this program. 2. The applicant must also attach to the application the low-income housing assistance contract that has been executed with the agency or subdivision of this state or the United States. 3. The application shall be verified by oath or affirmation of the applicant and submitted with an application processing fee to be set by the City Manager pursuant to Section 2.020 of the Eugene Code, 1971. The application fee shall include the amount to be paid to the County Assessor as the County's agreed processing fee for those applications receiving Council approval. The amount of the basic fee shall be prominently displayed on the application, together with a statement that the applicant may be required to pay other reasonable costs, including publication costs and appraisal costs, if any are incurred by the City or the County in processing the application. Any additional costs shall be paid to the City by the applicant prior to the granting of any final approval. If the application is approved, the City shall pay the application fee to the County Assessor for deposit in the County General Fund, after first deducting that portion of the fee attributable to its own administrative costs in processing the application. In the event an application is denied, the City shall retain that portion of the application fee attributable to its own administrative costs and shall refund the balance to the applicant. R-2.945-E Application for Exemption for New Construction, Additions, or Conversions. On or before February 1 immediately preceding the first assessment year for which exemption is requested, the applicant shall submit to the City Manager, on a form provided by the City, an application for exemption, containing the information required in section (1) of Rule R-2.945-D, and the additional information as follows: 1. A schematic drawing, drawn to a minimum scale of one inch equals 16 feet (1" = 16'), which shows the site plan and major features and dimensions of the proposed development, and a schematic drawing, drawn to a minimum scale of one inch equals 16 feet (1" = 16'), that shows both a side and front elevation of the proposed development; 2. A written statement which: 2.1 Pinpoints the location of the proposed development; 2.2 Describes the number, size, and type of dwelling units, and dimensions of structures; 2.3 Identifies public and private access, parking and circulation plans, and landscaping uses; and 2.4 Describes the public benefit(s) in section (1) of Rule R-2.945-G which the applicant proposes to include in this project; and 3. Information on the costs and financing for the housing and other information required by the City on the financial feasibility of the project. 4. The application shall be verified by oath or affirmation of the applicant and submitted with an application processing fee to be set by the City Manager pursuant to Section 2.020 of the Eugene Code, 1971. The application fee shall include the amount to be paid to the County Assessor as the County's agreed processing fee for those applications receiving Council approval. The amount of the basic fee shall be prominently displayed on the application, together with a statement that the applicant may be required to pay other reasonable costs, including publication costs and appraisal costs, if any are incurred by the City or the County in processing the application. Any additional costs shall be paid to the City by the applicant prior to the granting of any final approval. If the application is approved, the City shall pay the application fee to the county assessor for deposit in the county general fund, after first deducting that portion of the fee attributable to its own administrative costs in processing the application. In the event an application is denied, the City shall retain that portion of the application fee attributable to its own administrative costs and shall refund the balance to the applicant. R-2.945-F Duration of Tax Exemption. The maximum term of a tax exemption for any multi-unit housing project is ten years. For a multi- unit housing project under an existing low-income housing assistance contract, that term may also not exceed June 30 in the calendar year in which the contract expires. If the City Manager recommends the approval of an application, the City Manager shall recommend a grant of the maximum permissible term. The final determination of the exemption term will be made by the City Council. R-2.945-G Approval Criteria for New Construction, Additions, or Conversions. 1.Public Benefit . The City Council places a great deal of importance on adding high quality housing to the core area. Therefore, applicants must respond in writing as to how each of the following nine quality standards relate to the proposed project. Council will consider the responses when determining whether to grant the application. 1.1 Incorporation of sustainability features such as conservation performance measures, solar heating, natural lighting, “green” building (techniques that use environmentally friendly materials and practices), and landscaping with native species that reduce the need for fertilizers, herbicides and pesticides; 1.2 Responsiveness to adjacent historic structures that are on the National Historic Register or listed as a city landmark; 1.3 Use of higher quality materials that contribute to longevity, durability, or enhanced building design; 1.4 Prominent entry facing the public street; 1.5 Number of units by which the minimum density is exceeded or the percent of housing units having three or more bedrooms (to encourage families); 1.6 Number of available ADA accessible units that exceed the required standard; 1.7 Responsiveness to neighborhood character and safety in respect to height, mass, architectural detail, landscaping and open space; 1.8 Number of units designed for home ownership; and 1.9 Solicitation of comments from the relevant neighborhood association. 2. Compliance with Local Law. The proposed project must be, at the time of completion of construction, in conformance with all local plans and planning regulations which are applicable at the time the application is approved. 3. Local Standards. The proposed project must comply with the following additional standards: of the Proposed Project Site. 3.1 Utilization of Historic Structure or Potential Historic Structure 3.1.1 Removal. No exemption shall be granted for any property where an historic structure or potential historic structure has been demolished or removed from the property within the two years immediately preceding the date of application for the exemption. This restriction shall be waived if the owner of the property gave notice of the intent to demolish or move the structure to the Eugene Historic Review Board at least 60 days before the owner's application for a demolition or moving permit from the City. Justification for Elimination of Existing Housing. 3.1.2 No exemption shall be granted for any property on which any housing unit has been demolished or removed from the property within the two years immediately preceding the date of application for the exemption. This restriction shall be waived if the proposed project increases the number of dwelling units by 50% from what previously existed or if it replaces the old dwelling units by significantly larger dwelling units that will accommodate families. 4. Public Benefit Beyond the Period of Exemption. The owner must demonstrate that one or more of the public benefits described in the application will extend beyond the period of the tax exemption. 5. Project Would Not be Built Without Exemption. The owner must demonstrate that construction of the housing would not be financially feasible without the benefit of the tax exemption. R-2.945-H Recommendations on Applications. Within 90 days from the date an application is filed, the City Manager shall: 1. Review the application and all supportive material to verify that the applicant has provided the information required and notify the applicant of any omissions. 2. Publish a one column, 3" minimum display ad in the Register Guard soliciting recommendations or comments from the public. The ad will advise that written comments may be submitted to the City for a period of 30 days from the first publication date. Recommendations or comments shall also be solicited from the Planning Commission, other interested City departments, agencies, and neighborhood group(s) (if any). Failure of the agencies, departments or groups to submit written comments within 30 days shall be deemed approval of the proposal as submitted. 3. Recommend to the Council that the application be denied, approved, or approved subject to conditions. The recommendation shall set forth specific findings in support of his or her recommendation, based upon these Standards and Guidelines, Council resolutions and ordinances, applicable State statutes, and the written comments received. The written comments shall be forwarded to the City Council with the City Manager’s recommendation. R-2.945-I Compliance Review for New Construction, Additions or Conversions. Following approval of an application for tax exemption by the Council and immediately prior to the commencement of construction, the applicant shall review the working drawings and other documents with the City Manager. If construction commenced prior to Council approval of a tax exemption, the applicant shall review the construction documents and other documents with the City Manager prior to completion of construction to ensure that the project will comply with the approval conditions upon completion. R-2.945-J Reports. If requested by the Council, the City Manager shall submit reports to the Council for transmittal to the House and Senate Revenue Committee of the Oregon Legislature describing the effect of this program in the City of Eugene. The reports shall describe the number of housing developments and residential units to which the exemption applies, the value of the developments constructed, the value of the tax exemptions granted, and the general effectiveness of the property tax exemption as an incentive for construction of housing. The reports shall be submitted to the Council sufficiently in advance so as to permit the Council to file them at least 60 days prior to the convention of each regular legislative session. Dated this ________ day of June, 2004. ___________________________________ Dennis M. Taylor City Manager ATTACHMENT E MULTI-UNIT PROPERTY TAX EXEMPTION PROGRAM HISTORY NAMEADDRESSNUMBER OF UNITSYEAR APPROVED Broadway Center Washington and Broadway 107 units 1978 12 studio; 71 One-Bedroom; 24 Two- Bedroom; 12 Studio Lawrence Court 8th and Lawrence 50 One-Bedroom 1980 Washington Abbey 10th and Washington 48 units 1984 9 One-Bedroom/plus loft; Five Two- Bedroom; 34 One-Bedroom Olive Terrace 15th Ave. & Olive St. 28 units 1989 4 Studio; 12 One-Bedroom Units; 12 Two-Bedroom Units Joseph Shapitka 445 W. 10th Ave. 8 Two-Bedroom Units. 1990 Burnell Ambrose 17 & 35 Lawrence St. 7 One-Bedroom Units. 1995 Nozama Apartments 525 & 541 E. 19th Ave. 14 units 1995 12 Two-Bedroom Units; 2 Four-Bedroom Units. 701 & 725 E. 14th Ave. 1357 53 units 1995 Hilyard House & 1377 Hilyard 44 Two-Bedroom Units; 9 One-Bedroom Units. Pairadice Apts 640 E. 15th Avenue 30 units 1996 6 Studio; 8 One-Bedroom Units; 16 Two-Bedroom Units. High Street Terrace 10th Ave. & High St. 58 units 1996 20 Studio; 26 One-Bedroom Units; 12 Two-Bedroom Units Broadway Place Broadway and Charnelton 170 units 1996 74 Studio, 72 One-Bedroom, 24 Two Bedroom The Tate 1375 Olive 47 units – condominiums 2004 14 one-bedroom, 27 two-bedroom, 6 three-bedroom Patterson House 979 Patterson 27 units 2004 3 studio, 12 0ne-bedroom, 12 two- bedroom th Parkside Place 633 E. 14 Alleyway 21 units 2006 1 one-bedroom, 2 two-bedroom, 5 three- bedroom, 7 four-bedroom, 6 five-bedroom th Coho Townhouses 631 E. 14 Ave. 9 four-bedroom units 2007 14 units 2007 Patterson Place 1360,1372 Patterson 2 two-bedroom, 6 three-bedroom, 4 four- bedroom, 2 five-bedroom NAMEADDRESSNUMBER OF UNITSYEAR APPROVED The following projects are either in construction or planning and are not complete Steelhead Townhouses 2007 534, 535 E. 14th9 rental Targeted for occupancy 8 four- bedroom, 1 five-bedroom in August 2008 Eugene Downtown Cohousing 990 Lincoln24 ownership 2007 2 one-bedroom units, 10 two-bedroom In advanced planning units, 11 three bedroom units, and 1 four- bedroom unit. 7 rental (tentative) th 16 and Hilyard Apts. 693 E. 16th7 rentals (2 one-bedroom, 5 two-2008 bedroom) th The Fenway450 E. 147 rentals (1 one-bedroom, 2 two-2008 bedroom, 2 four- bedroom, 2 five- bedroom) th North Park Apartments14 and Hilyard, NW 40 rentals (6 studios, 16 one-2008 Cornerbedroom, 18 two-bedroom) Additional Downtown Housing Tax Exemptions (not MUPTE) Lincoln School 58 units Historic Exemption (15 years) Tiffany Building 28 units Historic Exemption (15 years) Aurora Building 54 units Low-income Exemption (20 years) th WestTown on 8 102 units Low-Income Exemption (20 years) Updated: July 16, 2008