TO: Mayor and City Council
THROUGH: Krishna Namburi, City Manager
FROM: Kristin Retherford, Director, Community Planning and Development
SUBJECT:
title
Resolution 2026-02; A Resolution to Terminate Property Tax Exemptions Granted to Two Non-profit Low Income Housing Properties.
Ward(s): 6
Councilor(s): Vang
Neighborhood(s): ELNA
Result Area(s): Welcoming and Livable Community.
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SUMMARY:
summary
Two United Way of Mid-Willamette Valley properties were granted tax exemptions in 2022 under the Salem Non-Profit Low Income Housing Tax Exemption Program (SRC 2.850-2.910). The program provides that development must occur on properties within three years of obtaining the tax exemption. The two properties were not developed with the three-year threshold. A show-cause hearing was held to determine if the properties should have their tax exemption terminated. The Hearings Officer recommended Council adopt a resolution terminating the exemption. There is no prohibition to reapplying for the Non-profit Low Income Housing Tax Exemption Program. The United Way of Mid-Willamette Valley has reapplied for the tax exemption for the two properties.
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ISSUE:
Shall City Council adopt Resolution 2026-02 terminating the tax exemption granted to two properties under the Non-profit Low Income Housing Tax Incentive Program?
RECOMMENDATION:
recommendation
Adopt Resolution 20226-02 terminating the tax exemption granted to two properties under the Non-profit Low Income Housing Tax Incentive Program.
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FACTS AND FINDINGS:
The two United Way of Mid-Willamette Valley pre-development properties were granted tax exemptions in 2022 under the Salem Non-Profit Low Income Housing Tax Exemption Program. The tax exemptions are for 4396 Market St NE, tax account 576472 and 4446 Market St NE, tax account 547831.
SRC 2.870 (a), Criteria for exemption, provides that a property is exempt from property taxation as provided by sections 2.850 - 2.910 if:
(3) at the time the application is filed, the property is:
(b) held for a period not to exceed three years from the date the exemption is granted, for the purpose of developing low-income housing.
SRC 2.890, Application for initial exemption, provides:
(a)(5) if, at the time the application is submitted, the property being held for future low-income housing development, a declaration that:
a. The low-income housing development will be completed and a certificate of occupancy obtained, for uses consistent with the exemption within three years of the date that exemption is granted.
The Hearings Officer held a show cause hearing on December 10, 2025, to determine if the properties should have their tax exemption terminated. The Hearings officer in Finding 4 held that: Salem Revised Code (SRC) 2.850(1) adopts the provisions of ORS 307.540 to 307.548. SRC 2.870(a) provides, in part, that a property is exempt from property taxation if it is owned or being purchased by a corporation described in section 501(c)(d) or (4) of the Internal Revenue Code that is exempt from income taxation under section 501(a) of the Internal Revenue Code and is held for a period not to exceed three years from the date of exemption is granted, for the purpose of developing low income housing.
The Hearings Officer in Finding 15 stated: United Way of Mid-Willamette Valley’s CEO verified that as of the date of the December 10, 2025, “show cause” hearing on this matter, the properties at 4396 and 4446 Market Street NE, Salem, Oregon, remained undeveloped.
The Hearings Officer concluded that: The three-year tax exemption granted to United Way of Mid-Willamette Valley in 2021 for the properties that have a current address of 4396 and 4446 Market Street NE, Salem, Oregon has expired as no development on these properties has occurred within three years of the City’s approval of the tax exemption.
The Hearings Officer recommended that the Salem City Council adopt a resolution with findings supporting the termination for cause of the tax exemption granted to United Way of Mid-Willamette Valley for the properties located at 4396 and 4446 Market Street NE, Salem, Oregon and that this resolution be filed with the Marion County Assessor within ten (10) days of its adoption.
BACKGROUND:
The City started the Non-Profit Low-Income Housing Tax Exemption Program in 2018 under the provisions of ORS 307.540. The lots in question were sold by the City to the United Way of Mid-Willamette Valley in 2022 for the purpose of low-income housing development.
Michael Brown
Manager of Housing Production Programs and Incentives
Attachments:
1. Resolution 2026-02 A Resolution of the City of Salem Terminating Property Tax Exemptions for Two Non-Profit Low-Income Housing Properties.
2. Hearings Officer’s Finding of Fact, Conclusions of Law, and Recommendation.