Authorize the Regulated Affordable Multifamily Assistance Program pilot to provide utility bill discounts to multifamily properties approved for the Non-Profit Low Income Housing Limited Tax Exemption Program
The City of Portland ordains:
Section 1. The Council finds:
- Since 1995, the Portland Water Bureau (PWB) and the Bureau of Environmental Services (BES) have managed a sewer, stormwater, and water bill discount program to provide financial assistance to low-income, single family, residential customers.
- PWB and BES equity goals recognize a need to provide utility bill financial assistance to multifamily residential customers. Many multifamily properties have a single water meter and billing account in the property owner or manager’s name, making it challenging to administer a discount directly to individual income-qualified customers living in multifamily properties.
- For many years, PWB and BES have worked with community partners to find an acceptable and administratively feasible pathway to provide financial assistance to low-income customers, who live in multifamily properties.
- The Portland Housing Bureau (PHB) administers the Non-Profit Low Income Housing Limited Tax Exemption (NPLTE) Program. This long-standing program provides a tax exemption to qualified properties that benefits low-income renters by alleviating the property tax burden on non-profit agencies that provide regulated affordable housing.
- PWB, BES, and PHB will collaborate on the Regulated Affordable Multifamily Assistance Program (RAMP), which is a sewer, stormwater, and water bill discount provided to approved NPLTE properties. PWB and BES have proposed RAMP as a three-year pilot program.
- RAMP will expand the reach of the utility bureaus’ financial assistance offerings by approximately 14,700 households, nearly tripling the number of households eligible to receive financial assistance.
- RAMP will benefit the Portland community by (a) providing NPLTE properties a reduction to their sewer, stormwater, and water utility bill; and (b) reducing the tenant’s cost of living through rent reductions and other benefits.
- RAMP will be included in PWB and BES FY 2023-24 through 2025-26 Budgets. The discounts are included in the annual rate ordinances being heard by City Council on May 24,2023.
NOW, THEREFORE, the Council directs:
- That RAMP is authorized to provide utility bill discounts to multifamily properties included within the City’s NPLTE Program in accordance with Exhibit A.
Documents and Exhibits
Purpose of Proposed Legislation and Background Information
The purpose of this legislation is to authorize Portland Water Bureau and Bureau of Environmental Services to begin the Regulated Affordable Multifamily Assistance Program (RAMP). RAMP will provide a sewer, stormwater, and water utility bill discount to multifamily properties that are approved for the City’s Non-profit Low-Income Housing Limited Tax Exemption (NPLTE) Program.
Portland has experienced rising costs in housing and other essential services, resulting in an affordability crisis. During this same period, the utility charges for sewer, stormwater, and water services have increased due to rising costs, aging infrastructure, and increasing regulatory mandates.
Portland Water Bureau and Bureau of Environmental Services have worked with community partners for many years to find a legally acceptable and administratively feasible pathway for providing utility discounts to low-income customers who live in multifamily properties. For most multifamily properties, the Portland Water Bureau and Bureau of Environmental Services do not have an account with individual tenants, making it extremely challenging to find a way to deliver financial assistance to customers living in multifamily properties.
Portland Housing Bureau administers the NPLTE program to provide a property tax exemption for affordable housing held by non-profit organizations. The city provided the NPLTE to 14,698 non-single dwelling units in FY 2021–22.
RAMP is a partnership among Portland Water Bureau, Bureau of Environmental Services, and Portland Housing Bureau, (collaboratively the “Bureaus”), that leverages the existing NPLTE Program infrastructure and process to enroll properties serving low-income Portland households in a new bill discount program. RAMP will provide a sewer, stormwater, water utility bill discount to multi-family properties that are approved for the City’s NPLTE Program.
The RAMP discount will be found on the sewer, stormwater and water bill paid by the non-profit, who will then pass the benefit onto tenants by reducing rents or enabling greater services to tenants. Enrollment would last one fiscal year and be renewed annually in alignment with the NPLTE Program.
Financial and Budgetary Impacts
Providing financial assistance to Portlanders living in multifamily properties is an issue the Bureaus have worked to address in the past. The most recent attempt to provide financial assistance to customers living in multifamily properties was the Multifamily Housing Eviction Prevention Program (MHEPP). The Bureaus have a partnership with Home Forward to provide crisis assistance for multifamily customers at risk for eviction. The MHEPP developed under this partnership was consistently underutilized, serving 271 households in FY 2020-21. This was due in part to the limitations of whom this program can help, and the flood of CARES Act funding, which was prioritized by the agency partners.
The bureaus will sunset the partnership with Home Forward on June 30, 2023, and the budget for this program, a combined $600,000 per year from both bureaus, will be repurposed to RAMP.
The Bureaus will co-manage RAMP with duties and responsibilities outlined in a separate Interagency Agreement. RAMP will be funded by rates and charges paid by all customers. The financial impact of RAMP translates to a 0.92% increase for Bureau of Environmental Services rates and a 0.2% increase for Portland Water Bureau rates. This equates to an approximate 0.63% overall increase of the utility bill and an increase in $0.85 per month for the typical single-family bill.
RAMP will offer two tiers. Tier A is for properties with most of the square footage dedicated to affordable housing. Tier B will be for mixed income and mixed-use properties.
· Tier A: For properties with 70%-100% of their square footage serving low-income tenants, the discount for sewer, stormwater service will be 50% and the water service discount will be 20%.RAMP Tier A will provide an estimated $325 per year discount per unit.
· Tier B: For all other properties, the discount for sewer, stormwater service will be 35% and the water service discount will be 14%.RAMP Tier B will provide a $227 per year discount per unit.
Community Impacts and Community Involvement
- RAMP will expand the reach of utility financial assistance by creating a pathway to reach approximately 14,700 households, nearly tripling the number of households eligible to receive financial assistance (from approximately 7,600 to 22,300).
- RAMP will provide an estimated average benefit of $325 per unit annually. The RAMP benefit equates to a 4% reduction in rent for a family of three at 30% Median Family Income.
- By leveraging the NPLTE program, RAMP will reach members of our community living with low incomes. Each year, nonprofit applicants must certify the ways they will use the benefits to support their tenants and the community. Additionally, RAMP allows the Bureaus to work together and leverage resources.
- RAMP is available to all NPLTE enrolled properties within the City of Portland. Full NPLTE program information is available: Non-Profit Low Income Housing Limited Tax Exemption (NPLTE) | Portland.gov
- A limitation of RAMP is that by focusing on the NPLTE properties, the discount is not available to a broader set of multifamily properties. The Bureaus understand this limitation but believe that the effort to reach properties within the existing, long-standing NPLTE program is a place to start. The Bureaus recognize that there is ongoing need to continue to expand the multifamily discount to other affordable and market-rate properties in the future.
100% Renewable Goal
Budget Office Financial Impact Analysis
This Ordinance authorizes the RAMP pilot project, which will provide a utility bill discount to multifamily properties that are approved for the City’s Nonprofit Low-Income Housing Limited Tax Exemption (NPLTE) program. The costs generated by the program have been included in both the BES and the PWB FY 2023-24 Requested Budgets and 5-year rate forecasts. The RAMP program increases both Water and Sewer rates—with a 0.92% increase for Bureau of Environmental Services rates and a 0.2% increase for Portland Water Bureau rates. This equates to an approximate 0.63% overall increase of the utility bill and an increase in $0.85 per month for the typical single-family bill. It is expected to reach 12% or 15,000 multifamily housing units in Portland and is expected to provide a benefit of $325 per unit, annually. The benefit equates to a 4% reduction in rent for a family of three at 30% MFI.
392 Regular Agenda in May 17-18, 2023 Council Agenda
Referred to Commissioner of Public Safety