information
Memorial Day closure

Most City of Portland offices will be closed Monday, May 27, in observance of Memorial Day.

191695

Emergency Ordinance

*Authorize development owners to change their Inclusionary Housing compliance after issuance of their building permit to qualify for an expanded property tax exemption under the Multiple-Unit Limited Tax Exemption Program

Passed

The City of Portland ordains:

Section 1.  The Council finds:

  1. On behalf of the City of Portland, the Portland Housing Bureau (“PHB”) administers the Inclusionary Housing Program (the “IH Program”), authorized under PCC 30.01.120, and the Multiple-Unit Limited Tax Exemption Program (the “MULTE Program”) authorized under ORS 307.600 and PCC 3.103.
  2. On January 31, 2024, the City Council approved changes to the IH and MULTE Programs through Ordinance 191610 that allows buildings in high cost and moderately high-cost areas to receive the full property tax exemption under MULTE when opting to comply with the IH Program by making 10 percent of a project’s units affordable to households earning no more than 60 percent of area median income.
  3. On February 22, 2024, Multnomah County passed Resolution 2024-11, approving the expanded use of the MULTE Program for buildings making 10 percent of units affordable at 60 percent of area median income.
  4. The expanded MULTE is available to buildings that have not been issued a building permit from the Bureau of Development Services (the “BDS”) prior to March 1, 2024, or to projects which have not received final certificate of occupancy from BDS prior to March 1, 2024.
  5. PCC 30.01.120 requires that PHB provide all applicable development incentives to buildings complying with the IH Program.
  6. After buildings receive permit issuance from BDS, PHB cannot approve exemptions of system development charges through the System Development Charge Exemption Program (the “SDC Exemption Program”) because they are due and payable to the Bureaus of Environmental Services, Parks and Recreation, Transportation, and Water at building permit issuance from BDS.
  7. Buildings that have already received building permit issuance from BDS are ineligible for the SDC Exemption Program and other development incentives approved by PHB, so PHB’s Administrative Rules do not allow for buildings to change their elected IH Program option after permit issuance from BDS.
  8. To elevate the number of buildings restricting IH units at 60 percent of area median income, PHB wants to allow buildings that have already received building permit issuance from BDS to change their option from 20 percent of units restricted at 80 percent of area median income to 10 percent of units restricted at 60 percent of area median income.
  9. PHB wishes to limit the ability for buildings to change their IH Program option after permit issuance from BDS to the following buildings already under construction, but without certificate of occupancy from BDS as of March 1, 2024:
Project NameAddressPermit Number
Vibrant Cities Fargo 25 N Fargo St19-217418
Koz on N Interstate5460 N Interstate Ave20-146519
Killingsworth Apartments1341 N Killingsworth St21-096326
Cap Hill Apartments- Building A 7990 SW Capitol Hill Rd 20-203458
Cap Hill Apartments- Building B7980 SW Capitol Hill Rd 20-211439
Tabor Heights11 SE 57th Ave20-212156
Laurel Lofts 3085 SE Hawthorne Blvd 21-105873
Davis Apartments 1820 NE Davis St20-218783
  1. Development owners who elect to change their IH Program option after permit issuance from BDS will not benefit from the SDC Exemption Program.

NOW, THEREFORE, the Council directs:

  1. The buildings listed in Section 1, 9. that have not received certificate of occupancy from BDS as of March 1, 2024, may change their IH Program option after permit issuance from BDS from 20 percent of units restricted at 80 percent of area median income to 10 percent of units restricted at 60 percent of area median income so long as they do not have certificate of occupancy from BDS prior to the approval of this ordinance.
  2. These buildings are eligible under the expanded MULTE Program since they are located in an eligible area, so long as they elect to provide 10 percent of units restricted at 60 percent of area median income.
  3. PHB is not obligated to provide any development incentives that are not already approved, including SDC exemptions, for buildings changing their IH option after permit issuance from BDS.
  4. Any Affordable Housing Construction Excise Tax Exemptions, or other exemptions and incentives, already received in excess of the amount available to buildings providing 10 percent of units restricted at 60 percent of area median income option must be repaid to the City by the development owner, or otherwise recalculated, before receiving certificate of occupancy from BDS.
  5. Buildings that benefit from the increased property tax exemption under the MULTE Program may have to pay additional fees to PHB for the amount due to Multnomah County, $850 per unit up to $9,000 per building, and will pay PHB a processing fee of $800 for PHB to review the permit and update legal documents and records.

Section 2. The Council declares that an emergency exists because timely City approval of this Ordinance is necessary to allow buildings to move forward and benefit from the expanded property tax exemption; therefore, this Ordinance shall be in full force and effect from and after its passage by the Council. 

An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)

Passed by Council

Auditor of the City of Portland
Simone Rede

Impact Statement

Purpose of Proposed Legislation and Background Information

The purpose of the proposed legislation is to allow a limited number of development projects to make changes to the compliance option selected during the permit application process to benefit from recent changes to the Inclusionary Housing (IH) and Multiple-Unit Limited Tax Exemption (MULTE) Programs.

On January 31, 2024, the City Council approved changes to the IH and MULTE Programs that allows buildings in high cost and moderately high-cost areas to receive the full property tax exemption under MULTE when opting to comply with the IH Program by making 10 percent of a project’s units affordable to households earning no more than 60 percent of area median income. Multnomah County likewise approved the expanded use of the MULTE Program for buildings making 10 percent of units affordable at 60 percent of area median income on February 22, 2024.

The expanded MULTE is available to buildings that have not been issued a building permit from the Bureau of Development Services (BDS) prior to March 1, 2024, or to projects which have not received final certificate of occupancy from BDS prior to March 1, 2024, and are located within a designated eligible area.

PCC 30.01.120 requires that PHB provide all applicable development incentives to buildings complying with the IH Program. PHB’s Administrative Rules do not allow for buildings to change their elected IH Program option after permit issuance from BDS. Buildings that have already received building permit issuance from BDS are ineligible for the SDC Exemption Program and other development incentives approved by PHB.

Eight buildings that have already had permits issued under the Inclusionary Housing option to restrict 20% of the total units at up to 80% of area median income, are unable to receive the expended tax exemption approved by the City and County since the IH administrative rules prevent them from changing their option after permit issuance to meet the requirement for the expanded MULTE that 10% of units be restricted at 60% of area median income.

Through this ordinance, the following eight buildings will be allowed to change their IH option after permit issuance but will not be able to benefit from any of the development incentives that would have been available had they opted for this option before permit issuance: 

Project NameAddressPermit Number
Vibrant Cities Fargo 25 N Fargo St19-217418
Koz on N Interstate5460 N Interstate Ave20-146519
Killingsworth Apartments1341 N Killingsworth St21-096326
Cap Hill Apartments- Building A 7990 SW Capitol Hill Rd 20-203458
Cap Hill Apartments- Building B7980 SW Capitol Hill Rd 20-211439
Tabor Heights11 SE 57th Ave20-212156
Laurel Lofts 3085 SE Hawthorne Blvd 21-105873
Davis Apartments 1820 NE Davis St20-218783

Financial and Budgetary Impacts

This limited change has a very minimal direct financial impact and no budgetary impacts. The value of the property tax exemption for these buildings will change from being limited to the value of the restricted income units to applying to the entire value of the residential improvements as allowed under the changes approved by City Council and the County Commission. PHB will benefit from a processing fee of $800 from any of the eight buildings changing their IH option to cover staff review of permits again, executing new legal documents, and updating records. 

Property taxes will still be generated on any non-residential uses and on the value of the land. Additionally, new development triggers a property tax reassessment which will increase the value of the land, partially offsetting foregone revenue. 

Community Impacts and Community Involvement

PHB staff are working directly with the eight projects impacted by this ordinance to help them access the extended tax exemption.

100% Renewable Goal

This legislation does not have an impact on the City’s renewable energy goals.

Budget Office Financial Impact Analysis

PHB believes that this limited change will have minimal direct financial impacts and no budgetary impacts, noting that the value of the property tax exemption for these buildings will change from being limited to the value of the restricted income units to applying to the entire value of the residential improvements as allowed under the changes approved by City Council and the County Commission. PHB will benefit from a processing fee of $800 from any of the eight buildings changing their Inclusionary Housing option to cover staff review of permits again, executing new legal documents, and updating records. Property taxes will still be generated on any non-residential uses and on the value of the land. Additionally, new development triggers a property tax reassessment which will increase the value of the land, partially offsetting foregone revenue.

Agenda Items

332 Consent Agenda in April 24-25, 2024 Council Agenda

Passed

  • Commissioner Dan Ryan Yea
  • Commissioner Rene Gonzalez Yea
  • Commissioner Mingus Mapps Yea
  • Commissioner Carmen Rubio Yea
  • Mayor Ted Wheeler Yea

Contact

Jennifer Ori

Director's Executive Assistant

Requested Agenda Type

Consent

Date and Time Information

Requested Council Date