HomeMy WebLinkAboutItem 5: Low-Income Rental Housing Property Tax Exemption - River Road
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Public Forum: Low-Income Rental Housing Property Tax Exemption – River Road
Hearing Date: November 19, 2012 Agenda Item Number: 5
Department: Planning and Development Staff Contact: Becky L. Wheeler
www.eugene-or.gov Contact Telephone Number: 541-682-5532
ISSUE STATEMENT
This public forum is an opportunity for the public to provide comments to the City Council on a
20- year low-income rental housing property tax exemption for River Road Apartments, a $26
million development with 216 units affordable to those at or below 60 percent Area Median
Income (AMI).
BACKGROUND
The City of Eugene uses federal and local subsidies to promote public-private partnerships that
create housing affordable to low-income persons. Affordable housing developers often utilize the
20-year low-income rental housing property tax exemption and the City’s systems development
charge waivers to create housing affordable to low-income residents. In October of 2012,
Evergreen Housing Development Group, LLC applied for this tax exemption for a project located
south of Beltline on River Road. No HOME or CDBG funds are anticipated to be used to assist in
development of this project.
The Eugene-Springfield 2010 Consolidated Plan presents a strategic vision for housing and
community development from July 2010 to June 2015. The goals, strategies, and activities outlined
in the Consolidated Plan are based on priorities identified through an analysis of community
needs and an extensive community outreach process. The 2010 Consolidated Plan identified a
need for affordable housing for low-income persons (those at or below 80 percent AMI) in Eugene.
In turn, the City set a goal of developing 500 new units of affordable housing by June 2015. To
date, 136 units have been completed in three developments. An additional 107 units are
anticipated to be complete prior to 2015 as part of Bascom Village and Stellar Apartments. The
addition of the proposed 216 affordable units would move the City closer to the Consolidated Plan
goal.
Eugene’s Housing Needs
Eugene’s poverty rate is more than 19 percent, and housing costs in the Eugene-Springfield area
have risen sharply over the past 20 years. In addition, there are a growing number of seniors,
persons with disabilities, and others who are unable to work given the highly competitive job
market. These factors, combined with a relatively tight housing market, have resulted in a large
number of households with moderate or severe housing cost burdens. The cost of housing,
including utility costs is generally considered to be affordable when it equals no more than 30
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percent of household income. More than 44 percent of Eugene households have a housing cost
burden.
Eugene currently experiences a lack of housing that is affordable for people with low incomes. The
March 2012 Envision Eugene recommendation includes expanding the variety of housing types
and prices available by moving toward a housing mix of 55 percent single-family/45 percent
multi-family in order to support the vision set out in the Envision Eugene pillars of providing
housing that is affordable for all income levels. More than 6,300 new units of multi-family housing
will be needed to accommodate the next 20 years of growth in Eugene.
Summary of requested tax exemption for River Road Apartments
Evergreen Housing Development Group, LLC has requested the low-income rental housing
property tax exemption to build River Road Apartments. The project includes 216 apartments
affordable to households earning 60 percent AMI or less, and will be located on a vacant 7.7 acre
site south of Beltline on River Road (Attachment B). Lower income households can include full-
time workers in jobs making minimum wage or slightly higher, new college graduates, young
professionals, families with children, seniors on limited or fixed incomes, or people with
disabilities, among others.
The project concept includes 13 three-story buildings consisting of 82 one-bedroom, 74 two-
bedroom, and 60 three-bedroom units. The developer aims to use energy efficient appliances and
water-saving features on site. The preliminary site plan (Attachment C) includes common and
play areas, covered bike parking, a leasing office building that includes community and fitness
rooms, and community garden areas. Rents are anticipated to range between $606 and $832 and
will meet requirements of the Low-Income Housing Tax Credit (LIHTC) program. Current fair
market rents for Eugene-Springfield are between $637 and $1,128. (See Attachment D for LIHTC
rent data)
The vacant property Evergreen Housing proposes to build on was annexed into the city in 2006. In
2007, a land use decision was issued approving a zone change from R-1, low-density residential to
R-2, medium-density residential, consistent with the Metro Plan. Medium-density residential
lands have a density range of 10 to 28 units per acre. River Road apartments maximizes the
allowable R-2 base density onsite by providing 216 units. Evergreen Housing has chosen not to
take advantage of the Controlled Income and Rent Housing 150 percent density increase allowed
in Eugene Code 9.2740 that would increase the total potential unit count by more than 100 units.
Based on the current proposal, no land use applications will be required to move forward with
development. Final site and development plans will be reviewed at the time of building permit for
compliance with the multi-family development standards and other applicable development
standards, such as bicycle parking and landscaping.
While the project will primarily be funded with construction and permanent loans, the applicant
has submitted an application to Oregon Housing and Community Services (OHCS) and anticipates
funding the $26 million development, in part, with four percent LIHTCs and proceeds from tax
exempt bonds that will be issued by the State.
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The Community Development Manager’s proposed Report and Recommendation evaluating the
exemption is attached (Attachment A).
Housing Policy Board Review
While not required by City Code or the adopted standards and guidelines, staff requested that the
Housing Policy Board review the application for consistency with City Code and housing policies.
A volunteer committee of the board held a public meeting on October 23, 2012. The meeting was
attended by neighbors, neighborhood leaders, and the applicant. Committee members discussed
each code criteria, the standards and guidelines, and the applicant’s responses. The members of
the Housing Policy Board Committee agreed the application met criteria set forth in City Code, yet
ended the meeting with a request that staff follow up with the City Attorney regarding the
applicability of the Housing Dispersal Policy (HDP). After review, the City Attorney advised that
the HDP’s policy of discouraging more than 60 units of “subsidized housing” is expressly limited
by the HDP to housing for families at or below the 50 percent of median income. Since the
Evergreen Housing project is for families at 60 percent of median income level, the City Attorney
advised that the HDP policy is not applicable.
Summary of the low-income rental housing property tax exemption program
The City adopted the low-income rental housing property tax exemption program in 1990. Since
then, Eugene has approved tax exemptions for more than 20 developments with over 1,000 units.
In 2011, the council unanimously approved extending the 20-year low-income rental housing
property tax exemption program for an additional 10 years. The approved ordinance also permits
recipients to reapply for the 20-year low-income rental housing property tax exemption after the
initial 20-year period has expired.
The council reviews each tax exemption request on a case-by-case basis. Most recently, the council
approved a low-income rental housing tax exemption for St. Vincent de Paul’s Stellar Apartments
in July 2012.
Approval of the low-income rental housing property tax exemption
If an application meets the substantive criteria [EC 2.939(2)(a)-(i) or EC 2.939(3)(a)-(e)] as
referenced in the Community Development Manager’s Draft Report and Recommendation
(Attachment A), the City must grant the exemption by resolution. A decision to deny the
exemption cannot be made by simple motion or inaction; it would need to be made by a resolution
that explains how the applicant has failed to demonstrate that the tax exemption meets applicable
criteria for approval.
RELATED CITY POLICIES
The proposed tax exemption supports multiple City priorities and policies including the Eugene-
Springfield 2010 Consolidated Plan, Growth Management Policies, the Housing Dispersal Policy,
and Envision Eugene.
Eugene-Springfield 2010 Consolidated Plan - As noted previously, the proposed project directly
supports the goals of the Plan by creating 216 units for low-income families and individuals.
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Eugene Adopted Growth Management Policies - The City of Eugene affordable housing
development programs and River Road Apartments support multiple Growth Management
Policies including:
Promote construction of affordable housing.
Encourage in-fill, mixed-use, redevelopment, and higher density development.
Provide for a greater variety of housing types.
Support the existing Eugene Urban Growth Boundary by taking actions to increase density
and use existing vacant land and under-used land within the boundary more efficiently.
Housing Dispersal Policy - While portions of the Housing Dispersal Policy do not apply to this
development due to the income level of the population served, the policy seeks to maximize
housing choices for low-income families and integrate subsidized housing throughout the City of
Eugene. Evergreen Housing is providing an additional 216 units of affordable housing along a
transit corridor, close to employment, schools, and services.
Envision Eugene – The Envision Eugene Community Vision was endorsed by the City Council on
June 13, 2012. The vision identifies strategies and goals (pillars) that help the City of Eugene plan
for growth over the next 20 years. The Housing Affordability pillar includes strategies to meet the
growing and changing housing needs of Eugene residents by increasing the proportion of multi-
family housing in the community (adjusting the housing mix), densifying residential development
along key transportation corridors, and supporting subsidized affordable housing developments.
Continuing to provide property tax exemptions to low-income rental housing developments was
identified as an action to help successfully implement these strategies.
COUNCIL OPTIONS
No formal action is required at this time.
CITY MANAGER’S RECOMMENDATION
This is a public forum only; no action is required on this item.
SUGGESTED MOTION
None; action on this item is scheduled for November 26.
ATTACHMENTS
A.Draft Report and Recommendation
B.Area Map
C.Site Plan
D.LIHTC Rent Data
FOR MORE INFORMATION
Staff Contact: Becky L. Wheeler
Telephone: 541-682-5532
Staff E-Mail: becky.l.wheeler@ci.eugene.or.us
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ATTACHMENT A
PROPOSED
REPORT AND RECOMMENDATION
of the Community Development Manager
of the Planning and Development Department
Application of Evergreen Housing Development Group, LLC
For Low Income Rental Housing Property Tax Exemption
(Section 2.937 to 2.940 of the Eugene Code, 1971)
for Property adjacent to 1410 River Road, Eugene, Oregon
The Community Development Manager of the Planning and Development
Department of the City of Eugene finds that:
1. Evergreen Housing Development Group, LLC entered into a Purchase and
Sale Agreement for the acquisition of real property located adjacent to 1410 River Road,
Eugene, Oregon, 97404 (Assessor’s Map 17-04-13-33; Tax Lot No. 04601; Assessor’s
Property Account Number 1837937). Evergreen Housing Development Group, LLC (“the
applicant”), located at PO Box 31879, Seattle, WA 98103 has submitted an application
pursuant to Subsection 2.939(2) of the Eugene Code, 1971, for an exemption from ad
valorem taxes under the City's Low-Income Rental Housing Property Tax Exemption
Program (Sections 2.937 to 2.940 of the Eugene Code, 1971).
2. I have reviewed the application and find that the applicant has submitted
all materials, fees and documents required by the application, and is in compliance with
the provisions of EC 2.939(2). Specifically I find:
(a) The property, or portion thereof subject to the property tax
exemption, will be occupied solely as a residence for low-income persons.
(b) The required rent payment reflects the full value of the property
tax exemption.
(c) The housing units on the property are anticipated to be
constructed in 2013.
(d) The applicant has complied with the policies set forth in the
Standards and Guidelines for Low-Income Rental Housing Property Tax
Exemption adopted by council Resolution No. 5028.
(e) The proposed development is consistent with the city's housing
dispersal policy.
(f) The proposed development does not cause the displacement of
low-income persons.
(g) The proposed development does not cause destruction of historic
properties.
(h) The proposed development is or will be required to be otherwise
consistent with the Eugene Code and adopted city regulations and policies.
(i) The applicant has executed, and agrees to maintain in effect for
the duration of the tax exemption period, a Rent Regulatory Agreement.
(j) The applicant has consented in writing that for the duration of the
tax exemption period, the city may inspect the property for which the exemption
is granted.
3. Comments have been solicited from interested City departments,
agencies, and the affected neighborhood groups.
Therefore, based on the above findings, the proposed project conforms or will
conform with all applicable City Code provisions, local plans, planning regulations, the
Metropolitan Area General Plan, and the criteria set forth in the City’s adopted
Standards and Guidelines for Low-Income Rental Housing Property Tax Exemption, and I
recommend that the application be approved.
Dated this ____ day of November, 2012.
Print: Michael C. Sullivan Sign:
Community Development Manager of the Planning and Development Department
ATTACHMENT B – River Road Apartments Area Map
ATTACHMENT C – River Road Apartments Site Plan
ATTACHMENT D
20 Year Low-income Rental Housing Property Tax Exemption
LOW-INCOME HOUSING TAX CREDIT PROGRAM RENTS
The following Median Family Income (MFI) information for Lane County was excerpted
from the State of Oregon’s Low-income Housing Tax Credit Program Rents website.
This information is updated annually by the State of Oregon and is based on HUD’s
published Section 8 Income Limits.
Using 1 person for 0 bedroom and 1.5 persons per bedroom for 1-4 bedroom units,
deduct utility allowances from these rents to get gross allowable rents. Consult tax
advisor to assure your management plan’s compliance with program Section 8 income
limits by county.
Rents based on Actual Income Limits 2012
% MFI 0 Bdrm 1 Bdrm 2 Bdrm 3 Bdrm 4 Bdrm 5 Bdrm
30% $311 $333 $399 $462 $515 $568
35% $363 $388 $466 $539 $601 $663
40% $415 $444 $533 $616 $687 $758
45% $466 $500 $599 $693 $772 $853
50% $518 $555 $666 $770 $858 $948
55% $570 $611 $732 $847 $944 $1,042
60% $622 $666 $799 $924 $1,030 $1,137
80% $830 $889 $1,066 $1,232 $1,374 $1,517
See the State of Oregon’s Low-income Housing Tax Credit Program website for more
information about the rent level information:
http://www.ohcs.oregon.gov/OHCS/APMD/HPM/docs/2012/Lane_2012IncomeLimits.pdf