TO: Mayor and City Council
THROUGH: Keith Stahley, City Manager
FROM: Kristin Retherford, Urban Development Director
SUBJECT:
title
Revision to the Salem Revised Code Section 2.825 related to the Multiple Unit Housing Tax Incentive Program
Ward(s): Wards 1 and 2
Councilor(s): Stapleton and Nishioka
Neighborhood(s): CANDO, SESNA, NEN, SCAN, Highland
Result Area(s): Good Governance; Strong and Diverse Economy; Welcoming and Livable Community
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SUMMARY:
summary
As an incentive to create multiple-unit housing in the downtown core, the City of Salem offers an abatement of ad valorem taxes through its Multiple Unit Housing Tax Incentive Program (Program). In recent coordination with other taxing districts with which the City partners, there is a desire that future projects utilizing the Program include an affordable housing component. The proposed revisions will set requirements to which applicants must adhere to be considered for participation in the Program.
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ISSUE:
Shall the City Council pass Ordinance Bill No. 19-22 to amend SRC 2.825 related to Multiple-Unit Housing Tax Incentive Program amending the requirements of the Program?
RECOMMENDATION:
recommendation
Pass Ordinance Bill No. 19-22 to amend SRC 2.825 related to Multiple-Unit Housing Tax Incentive Program amending the requirements of the Program.
body
FACTS AND FINDINGS:
If approved by the City Council, Ordinance No. 19-22 (Attachments 1-2) will amend SRC 2.825 to require that any project considered for application in the Program meet the following criterion:
If the project contains 50 or more units of housing, the applicant will provide at least 15 percent of the units at rents affordable to households at 80 percent of the average median income or less for the duration of the incentive.
Affordability threshold shall be defined as 80% or less of area median income as defined by the Department of Housing and Urban Development.
BACKGROUND:
In June 1976, Council approved an ordinance creating a special boundary and implemented provisions of the legislative act Oregon Revised Statue 307.600-690. The most recent action taken by City Council was in 2021 to extend the program to January 1, 2032, in conjunction with an amendment to the state law. Additionally, City Council included a requirement that if a project is proposed to include 100 or more units of housing, the applicant will provide at least 15 percent of the units at rents affordable to households at 80 percent of the average median income or less for the duration of the incentive or meet at least two of the public benefit criteria.
The Program provides up to a ten-year property tax abatement for new or converted, transit supportive, non-transient housing units constructed within the defined core area (Attachment 3) that provide one or more public benefits as defined in the ordinance. Extending the sunset date for the Program is not an approval of projects. Each application requesting approval is evaluated on a case-by case-basis and considered by Council.
Since 1976, 11 properties have been approved by Council for the Program:
DD Salem Center Two LLC (157 units) - 420 Center Street NE
Tax Exemption expires in 2034
990 Broadway LLC (23 units) - 990 Broadway Street NE
Tax Exemption expires in 2033
SAMAX LLC (2 units) - 227-233 Commercial Street NE
Tax exemption expires in 2028
Parke 325 (30 units) - 325 13th Street NE
Tax exemption expires in 2032.
Koz on State Street/Nishioka Building (142 units) - 260 State Street
Tax exemption period expires in 2031.
The Court Yard Apartments (40 units) - 211 Court Street NE
Tax exemption period expires in 2030.
South Block Apartments (178 units, Phases I & II) - 315 Commercial Street SE
Tax exemption period expires in 2025 & 2027 (Phases I & II respectively).
The Residences at Riverfront Park (118 units) - 230 Front Street SE
Project cancelled prior to construction.
Willamette Landing Apartments (89 units) - 1601-1675 Water Street NE
Tax exemption period expired in 2000.
Forum Apartments (62 units) - 350 13th Street SE
Tax exemption period expired 1990.
Mill Bridge Terrace Apartments (24 units) - 728 Church Street NE
Tax exemption period expired in 1987.
Clint Dameron
Real Property Services Manager
Attachments:
1. Ordinance No. 19-22
2. Exhibit A to Ordinance No. 19-22
3. Core Area Map