191270

The City of Portland ordains:

Section 1. The Council finds that:

1. On behalf of the City of Portland, the Portland Housing Bureau ("PHB") administers the Multiple-Unit Limited Tax Exemption Program (the "MULTE Program"), authorized under ORS 307.600-307.637 and City Code Chapter 3.103.

2. The MULTE Program provides a ten-year property tax exemption on all or a portion of the residential structural improvements of a multiple-unit housing development (“housing development”) so long as program requirements are met. During the exemption period, property owners remain responsible for the payment of taxes on the assessed value of the land and any commercial portions of the housing development.

3. Prior to the implementation of the Inclusionary Housing Program ("IH" or the "IH Program") on February 1, 2017, the MULTE Program was an incentive available to housing developments voluntarily restricting at least twenty percent of the developments’ units to be affordable up to either sixty or eighty percent of the area median family income for a period of ten years in exchange for a ten-year limited property tax exemption.

4. The current MULTE Program is administered solely in connection with the IH Program, which includes mandatory affordability restrictions.

5. The MULTE Program has an annual cap limiting the approval of new property tax exemptions to no more than $3 million of new estimated foregone revenue that is calculated on a five-year rolling basis.

6. Current tenant protections limiting annual rent increases do not apply to housing developments built within fifteen years.

7. Regulated rents at eighty percent of the area median family income are comparable to current market rents, however regulated rents at sixty percent of the area median family income are twenty-one percent below market rents.

8. PHB wants to allow up to sixteen housing developments with expiring tax exemptions previously approved under the MULTE Program with applications submitted before February 1, 2017, when IH went into effect, to receive an additional five years of tax exemption so long as the housing developments voluntarily continue restricting rents, totaling up to 279 units to households earning sixty percent or less of the area median income, for another five years (referred to as the “MULTE Extension Program”).

NOW, THEREFORE, the Council directs:

1. The MULTE Extension Program will be available to housing developments with expiring tax exemptions previously approved under the MULTE Program with applications submitted before February 1, 2017, when IH went into effect, to continue receiving a tax exemption for five years so long as the housing developments voluntarily continue restricting affordable units for another five years and the following criteria are met:
   1. During the term of the MULTE Extension Program, each development continues to restrict the same number of units reflected in the ordinances from when the developments were initially approved for the MULTE Program;
   2. The restricted units must be affordable to households earning sixty percent or less of the area median family income; and
   3. The conditions within the developments’ individually approved ordinances continue to apply.
2. Any estimated foregone revenue for tax exemptions of housing developments approved under the MULTE Extension Program will not be included in the annual $3 million cap that is calculated on a five-year rolling basis.
3. Housing developments will receive a tax exemption on all the residential structural improvements, including parking used by tenants, so long as program requirements are met.
4. Applications must meet the additional MULTE program requirements adopted by PHB.
5. This ordinance is binding City policy.

Section 2. The Council declares that an emergency exists because timely City approval of this ordinance is necessary for PHB to consider approval for the extension of the expiring tax exemption of at least one housing development prior to July 1, 2023, as required by ORS 307.600; therefore, this Ordinance shall be in full force and effect from and after its passage by the Council.