Ordinance 2115 - Exhibit A
Exhibit A Ordinance No. 2115
NMC Chapter 3.20 Multiple Unit Housing Property Tax Exemption (MUPTE)
3.20.010
Definitions
A. “Affordable” means: 1. A rental rate which does not exceed 30% of the monthly maximum Median Family Income levels for each unit size, including allowances for utilities that are either directly paid by tenants or billed back to tenants by the owner for reimbursement. No utility allowance is required for utilities paid by the owner and not reimbursed by the tenant. Measurement of household income is to be determined using the U.S. Department of Housing and Urban Development’s, or its successor agency’s, annually published Median Family Income and Rent chart for Lincoln County for a family of one person (for a studio apartment), two persons (for a one-bedroom apartment), three persons (for a two-bedroom apartment), or four persons (for a three-bedroom apartment). Gross income from all sources must be considered for any adults living in the unit. For approval purposes, applicants must document and use the utility estimates available from the Housing Authority of Lincoln County (HALC) to calculate monthly affordable rents in the pro-forma. Actual project utility expenses may be averaged and submitted to the Community Development Department for approval to be used in place of the HALC estimates after the project has been in service for one or more years. B. “Applicant” means the individual or entity who is either the owner or an authorized representative of the owner who is submitting an application for the tax exemption program. C. “Director” means the Community Development Director or designee. D. "Low income housing assistance contract" means an agreement between a public agency and a property owner that results in the production, rehabilitation, establishment or preservation of housing affordable to those with a defined level of household income. E. "Multiple-unit housing" means: 1. Rental housing that is or becomes subject to a low income housing assistance contract with an agency or subdivision of this state or the United States; or 2. Newly constructed structures, stories or other additions to existing structures and structures converted in whole or in part from other use to housing that meet the following criteria: i. Three or more rental units if it is new construction or two or more added rental units if the project involves the remodel of an existing building(s).
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ii. The structure must not be designed or used as transient accommodations, including but not limited to hotels, motels, and vacation rentals. F. “Owner” means the individual or entity holding title to the exempt project and is legally bound to the terms and conditions of an approved tax exemption, including but not limited to any Regulatory Agreement and any compliance requirements under this Chapter. G. “Project” means property on which any multiple-unit housing is located, and all buildings, structures, fixtures, equipment and other improvements now or hereafter constructed or located upon the property. H. “Transit oriented” means being located in an area defined in regional or local transportation plans to be within one-quarter mile of a fixed route transit service. I. “Vacation Rental” means a dwelling unit containing not more than five (5) guest rooms that is rented for less than 30 consecutive days. 3.20.020
Purpose
A. The City of Newport adopts the provisions of Oregon Revised Statutes 307.600 through 307.637 and administers a property tax exemption program for multiple-unit housing development authorized under those provisions. B. Goals In accordance with the legislative goals set forth in ORS 307.600, as well as the goals and policies of the City of Newport’s Comprehensive Plan, the program seeks to satisfy the following objectives: 1. Provide for the housing needs of the citizens of Newport in adequate numbers, price ranges, and rent levels that are commensurate with the financial capabilities of Newport households consistent with Housing Goal 1 of the Newport Comprehensive Plan. 2. Promote private investment in transit oriented multiple-unit housing. 3. Attract new development of multiple-unit housing, and commercial and retail property, in transit-oriented areas. 4. Stimulate the construction of transit oriented multiple-unit housing in the city’s core areas to improve the balance between the residential and commercial nature of those areas. 5. Cooperate with private developers, nonprofits, and federal, state, and local government agencies in the provision and improvement of government assisted
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and workforce housing consistent with Housing Policy 2 of the Newport Comprehensive Plan. C. Scope of Exemption 1. The project will create three or more multiple-unit housing units if it is new construction or two or more added units if the project involves the remodel of an existing building(s). 2. The exemption may not include the land or any improvements not a part of the structural improvements of the project. 3. The exemption may include: i. Parking constructed as part of the multiple-unit housing construction, addition or conversion; and ii. Commercial property to the extent that the commercial property is a required design or public benefit element of a multiple-unit housing construction, addition or conversion. iii. Only the increase in value attributable to the addition or conversion in the case of a structure to which stories or other improvements are added or a structure that is converted in whole or in part from other use to dwelling units. D. Duration of Exemption 1. The MUPTE Program provides a ten-year property tax exemption on the residential portion of the structural improvements as long as program requirements are met. During the exemption period, property owners are responsible for payment of the taxes on the assessed value of the land and any commercial portions of the project, except for those commercial improvements deemed a public benefit and approved for the exemption. The property is reassessed by the County when the exemption is either terminated for non-compliance, the owner requests to opt-out of the program, or the benefit expires after the ten years, at which point the owner begins paying full property taxes. E. At any time, the City Council may, by motion or upon request by the Lincoln County Board of Commissioners, set a limit on the maximum amount of foregone tax revenue provided as a benefit of the exemption under this Chapter. F. Extensions for low income housing 1. Extensions beyond the ten-year exemption period will be granted only for projects subject to a low income housing assistance contract with an agency or subdivision of Oregon or the United States. Extensions may be granted only for the portion of
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units which meet the affordability requirements through June 30 of the tax year during which the expiration date of the contract falls. 3.20.030
Program Requirements
In order to be considered for an exemption under this Chapter, an applicant must establish that the project meets the following program requirements: A. Financial need for the exemption: 1. The project could not financially be built “but for” the tax exemption. The burden is on the applicant to demonstrate that absent of the exemption the project would not be financially viable. The project pro-forma must show that the property tax exemption is necessary for the project to be proceed. 2. The project pro-forma must include: i. Ten-year pro-forma with MUPTE. ii. Ten-year pro-forma without MUPTE. iii. Analysis of the projected ten-year cash-on-cash rates of return on investment for the proposed project. This should be calculated as the ratio of net cash flow, after debt service, to initial equity investment (cash and land). iv. List of assumptions made to create the pro-formas, including a description of how property taxes were estimated for the without MUPTE pro-forma and the affordable housing fee or rent levels. v. Development budget. vi. Sources and uses of financing, including a description and the monetary value of any other public assistance, including but not limited to grants, loans, loan guarantees, rent subsidies, fee waivers, or other tax incentives, which the property is receiving or which the applicant plans to seek. B. Project eligibility. 1. Projects must be located within the taxing jurisdiction of the City of Newport and: i. Within ¼ mile of fixed route transit service. ii. Within an R-3, R-4 or Vertical Housing Development Zone. iii. Entirely outside of known hazard areas, including Active Erosion Hazard Zones, Active Landslide Hazard Zones, High Risk Bluff Hazard Zones, High Risk Dune Hazard Zones, Other Landslide Hazard Zones, and the “XXL” tsunami inundation area boundary, as depicted on the maps titled “Local Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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Source (Cascadia Subduction Zone) Tsunami Inundation Map Newport North, Oregon” and “Local Source (Cascadia Subduction Zone) Tsunami Inundation Map Newport South, Oregon” produced by the Oregon Department of Geology and Mineral Industries (DOGAMI), dated February 8, 2013. 2. The project will be housing which is completed on or before the date specified in ORS 307.637 (Deadlines for actions required for exemption). C. The applicant must propose and agree to include in the proposed project one or more elements benefitting the general public, as detailed in NMC 3.20.040. 3.20.040 Public Benefit A. Green Building 1. Green building requirements apply only to the residential occupancy areas and common areas such as hallways, stairwells, centralized HVAC or hot water heating, and laundry facilities. The requirements do not apply to the commercial areas or ancillary amenities such as parking garages and recreation facilities. 2. The project will conform to the 2011 Oregon Reach Code OR perform at least 10% more efficiently than the performance established in the Oregon Energy Efficiency Specialty Code (OEESC) or similar code adopted by the State of Oregon. 3. City review of the project demonstrates that the building is constructed to modeled plans and has Reach Code designation or that the OEESC Compliance Package (or similar) has been provided to the Building Official prior to issuance of certificate of occupancy. B. Affordable Housing Requirement 1. A minimum of 20 percent of the number of units must be affordable to households earning 80 percent or less of the area median family income (MFI), or a minimum of 10 percent of the number of units must be affordable to households earning 60 percent or less of the area median family income. Measurement of income is to be determined using the U.S. Department of Housing and Community Development’s, or its successor agency’s, annually published Median Family Income and Rent chart for Lincoln County. Gross income from all sources must be considered for any adults living in the unit. Tenants must income qualify at lease-up, but may exceed the affordability requirement by up to 20% during the exemption period (i.e. tenants who qualify for 60% of MFI restricted units at lease-up may earn up to 80% of MFI while living in the unit, or tenants who qualify for 80% of MFI restricted units at lease-up may earn up to 100% of MFI while living in the unit). If a tenant exceeds the income requirement, plus the additional 20% allowed, then the unit is no longer considered qualified as an affordable unit. Another unit in the project may replace the affordable unit, should it otherwise meet all program criteria. The units meeting the affordability requirements must match the unit mix in the project as a whole in terms of number of bedrooms. Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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2. In lieu of providing the affordable rental housing units referenced in Subsection (1) above, the owner of the project shall pay to the City an amount equal to 10% of the total property tax exemption. The city shall place such payments into an account dedicated to funding affordable housing. C. If the proposed project does not provide the public benefits listed in Subsections (A) and (B), the applicant may request a hearing with the Planning Commission to show that the project will fulfill the purpose of the program in an alternative manner. 3.20.050 Application Procedure A. The Community Development Department, in consultation with the County Assessor, shall establish a filing deadline in the calendar year immediately prior to the first assessment year for which the exemption is requested. Applications for exemptions are to be submitted in writing on forms furnished by the Community Development Department, and shall include: 1. The applicant's name, address, and telephone number. 2. A legal description of the property and the assessor's property account number for the site, and indication of site control. 3. A detailed description of the project including the number, size, and type of dwelling units; dimensions of structures, parcel size, proposed lot coverage of buildings, and amount of open space; type of construction, public and private access; parking and circulation plans; landscaping; uses; and a description of the public benefit(s) which the applicant proposes to include in the project; 4. A description of the existing use of the property including a justification for the elimination of existing sound or rehabilitable housing. 5. A site plan and supporting materials, drawn to scale, which shows in detail the development plan of the entire project, including streets, driveways, sidewalks, pedestrian ways, off-street parking, and loading areas, location and dimension of structures, use of land and structures, major landscaping features, and design of structures. 6. A letter from the City Public Works Department identifying the: i. Water main sizes and locations, and pumps needed, if any, to serve the project. ii. Sewer mains sizes and locations, and pumping facilities needed, if any, to serve the project. iii. Storm drainage facilities needed, if any, to handle any increased flow or concentration of surface drainage from the project, or detention or retention
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facilities that could be used to eliminate need for additional conveyance capacity, without increasing erosion or flooding. iv. Street improvements outside of the proposed development that may be needed to adequately handle traffic generated from the proposed development. 7. Evidence that the project could not financially be built “but for” the tax exemption. A project pro-forma and list of assumptions, as detailed in NMC Section 3.20.030, must be submitted in addition to the general application. B. At the time the application is submitted, applicants shall pay an application processing fee, including costs of an independent outside professional consultant to review the project’s financial pro-forma, as determined by resolution of the City Council. 3.20.060
Application Approval and Denial
A. The City Council shall approve or deny an application within 180 days after receipt of the application. An application not acted upon within 180 days shall be deemed approved. 1. The application shall contain the information required by, and be processed in accordance with, any adopted administrative rules and the criteria described in Sections 3.20.030 and 3.20.050 of this code. 2. Following receipt of a completed application, the City shall retain an independent outside professional consultant to review the project’s financial pro-forma. 3. After receiving the review of the independent outside financial consultant, the Director shall furnish a report to the Planning Commission about whether the application meets the criteria in Section 3.20.030 and provide any other comments about the project’s financial projections to the Planning Commission in addition to the review provided by the independent outside professional consultant. After the Planning Commission receives the Community Development Department’s report and comments it shall hold a hearing to evaluate the application and provide the Council with a recommendation on the application. 4. Upon receipt of the Planning Commission's written recommendation on an application, the Council shall consider the application, the financial consultant’s review, the Planning Commission’s written recommendation, and any written comments submitted on the application. At the hearing at which the Planning Commission's recommendation on an application is considered, or at a subsequent hearing, the Council shall adopt a resolution approving the application and granting the property tax exemption, or adopt a resolution disapproving the application and denying the property tax exemption. 5. The Council shall approve an application if the Council determines that the criteria described in Section 3.20.030 of this code have been met. The resolution
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approving the exemption shall set forth any specific conditions of approval necessary to ensure program criteria will be met. 6. If the Council determines that one or more of the criteria in Section 3.20.030 of this code are not met, the Council shall deny the application. The resolution denying an application shall set forth the specific reasons for denial. B. Final action upon an application by the City shall be in the form of a resolution that shall contain the applicant’s name and address, a description of the subject multipleunit housing, either the legal description of the property or the assessor’s property account number, and the specific conditions upon which the approval of the application is based. Following approval and on or before April 1 immediately preceding the first property tax year for which the exemption or special assessment is requested, the City shall file with the County Assessor and send to the applicant at the last-known address of the applicant a copy of the resolution approving or disapproving the application. In addition, the City shall file with the County Assessor a document listing the same information otherwise required to be in a resolution under this Subsection, as to each application deemed approved under Subsection (A) of this Section. C. Applications for tax exemption must be submitted and approved prior to issuance of the project’s building permit. D. If the City Council finds that construction, addition or conversion of the multiple-unit housing was not completed by the deadlines for actions required for exemptions specified in ORS 307.637, due to circumstances beyond the control of the applicant, and that the applicant had been acting and could reasonably be expected to act in good faith and with due diligence, the City may extend the deadline for completion of construction, addition or conversion for a period not to exceed 12 consecutive months. E. If the application is denied, the City shall state in writing the reasons for denial and send notice of denial to the applicant at the last-known address of the applicant within 10 days after the denial. 3.20.070
Project Compliance
A. The owner of a project approved for exemption will be required to sign a Regulatory Agreement to be recorded against the title to the property. B. During the exemption period, the owner or a representative shall submit annual documentation of tenant income and rents for the affordable units in the project to the Community Development Department through Tenant Income Certification Forms furnished by the Community Development Department. C. Upon termination or expiration of the tax exemption or in the case that a tenant no longer income qualifies for an affordable unit, the owner or a representative must provide written notice meeting the requirements mandated by state law to the tenant Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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before a tenant must begin paying market rate rent or need to vacate the unit, assuming the tenant has met all other terms of the rental agreement. D. During the exemption period, the owner or a representative shall submit annual documentation, in the form of standard lease agreements or equivalent, showing that units are not being used as vacation rentals. E. Documentation referenced in subsections (B) and (D) shall be filed before March 1st of each year of the exemption. F. If a project has not met the affordability requirements approved, the non-compliance must be cured by the next reporting year, or the project will be considered noncompliant. G. If the City determines that the number and unit mix of affordable units is less than the approved percentage or does not match the unit mix of the project, the next available units must be rented to households meeting the income requirements until noncompliance is cured. H. Projects for which annual compliance documentation is not submitted in accordance with this Section will have the tax exemption terminated according to Section 3.20.090. 3.20.080 Transfer of the Exemption A. The provisions of the MUPTE program may transfer with the property upon sale or other transfer of the project during the exemption period. The Community Development Department needs to receive updated contact information and information about the new entity, in addition to a Consent to Transfer and Assignment and Assumption Agreement to be executed and recorded against the title to the property, in a form acceptable to the City. 3.20.090
Termination of the Exemption
A. If, after an application has been approved, the Director finds that construction of multiple-unit housing was not completed on or before the deadlines for actions required for exemptions specified in ORS 307.637, or that any provision of NMC 3.20.010 to 3.20.100 is not being complied with, or any agreement made by the owner or requirement made by the City Council is not being or has not been complied with, the Director shall send a notice of termination of the exemption to the owner's last known address. B. The notice of termination shall state the reasons for the proposed termination, and shall require the owner to appear before the City Council at a specific time, not less than twenty days after mailing the notice, to show cause, if any, why the exemption should not be terminated. C. If the owner fails to appear and show cause why the exemption should not be terminated, the Director shall further notify every known lender and shall allow the Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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lender a period of not less than thirty days, beginning with the date that the notice of failure to appear and show cause is mailed to the lender, to cure any non-compliance or to provide assurance that is adequate, as determined by the Director to assure the City that the non-compliance will be remedied. D. If the owner fails to appear and show cause why the exemption should not be terminated, and a lender fails to cure or give adequate assurance that any noncompliance will be cured, the City Council shall adopt a resolution stating its findings and terminating the exemption. A copy of the resolution shall be filed with the County Assessor and a copy sent to the owner at the owner's last known address, and to any lender at the lender's last known address, within ten days after its adoption. E. Upon the County Assessor’s receipt of the governing body’s termination findings: 1. The exemption granted to the housing unit or portion under this chapter shall terminate immediately, without right of notice or appeal; 2. The county officials having possession of the assessment and tax rolls shall correct the rolls in the manner provided for omitted property under ORS 311.216 to 311.232, to provide for the assessment and taxation of any property for which exemption was terminated by the city or county, or by a court, in accordance with the finding of the city, county or the court as to the tax year in which the exemption is first to be terminated. The County Assessor shall make such valuation of the property as shall be necessary to permit such correction of the rolls. The owner may appeal any such valuation in the same manner as provided for appeals under ORS 311.216 to 311.232. The property shall become taxable beginning January 1 of the assessment year following the assessment year in which the noncompliance first occurred. Any additional taxes becoming due shall be payable without interest if paid in the period prior to the 16th of the month next following the month of correction. If not paid within such period, the additional taxes shall be delinquent on the date they would normally have become delinquent if timely extended on the roll or rolls in the year or years for which the correction was made. F. The owner may request a termination of exemption at any time, and the City Council shall adopt a resolution terminating the exemption within 60 days of the request. The termination shall proceed in the manner specified in Subsection (E) of this Section. 3.20.100
Implementation
A. The Newport City Council may adopt, amend and/or repeal Administrative Rules, establish procedures, and prepare forms for the implementation, administration and compliance monitoring consistent with the provisions of this Chapter. B. Annual Reporting. The Community Development Department will furnish an annual report on applications received, their approval status, and project details for approved projects for each fiscal year in which applications for the MUPTE program are received. Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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NMC Chapter 3.20 Multiple Unit Housing Property Tax Exemption (MUPTE)
3.20.010
Definitions
A. “Affordable” means: 1. A rental rate which does not exceed 30% of the monthly maximum Median Family Income levels for each unit size, including allowances for utilities that are either directly paid by tenants or billed back to tenants by the owner for reimbursement. No utility allowance is required for utilities paid by the owner and not reimbursed by the tenant. Measurement of household income is to be determined using the U.S. Department of Housing and Urban Development’s, or its successor agency’s, annually published Median Family Income and Rent chart for Lincoln County for a family of one person (for a studio apartment), two persons (for a one-bedroom apartment), three persons (for a two-bedroom apartment), or four persons (for a three-bedroom apartment). Gross income from all sources must be considered for any adults living in the unit. For approval purposes, applicants must document and use the utility estimates available from the Housing Authority of Lincoln County (HALC) to calculate monthly affordable rents in the pro-forma. Actual project utility expenses may be averaged and submitted to the Community Development Department for approval to be used in place of the HALC estimates after the project has been in service for one or more years. B. “Applicant” means the individual or entity who is either the owner or an authorized representative of the owner who is submitting an application for the tax exemption program. C. “Director” means the Community Development Director or designee. D. "Low income housing assistance contract" means an agreement between a public agency and a property owner that results in the production, rehabilitation, establishment or preservation of housing affordable to those with a defined level of household income. E. "Multiple-unit housing" means: 1. Rental housing that is or becomes subject to a low income housing assistance contract with an agency or subdivision of this state or the United States; or 2. Newly constructed structures, stories or other additions to existing structures and structures converted in whole or in part from other use to housing that meet the following criteria: i. Three or more rental units if it is new construction or two or more added rental units if the project involves the remodel of an existing building(s).
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ii. The structure must not be designed or used as transient accommodations, including but not limited to hotels, motels, and vacation rentals. F. “Owner” means the individual or entity holding title to the exempt project and is legally bound to the terms and conditions of an approved tax exemption, including but not limited to any Regulatory Agreement and any compliance requirements under this Chapter. G. “Project” means property on which any multiple-unit housing is located, and all buildings, structures, fixtures, equipment and other improvements now or hereafter constructed or located upon the property. H. “Transit oriented” means being located in an area defined in regional or local transportation plans to be within one-quarter mile of a fixed route transit service. I. “Vacation Rental” means a dwelling unit containing not more than five (5) guest rooms that is rented for less than 30 consecutive days. 3.20.020
Purpose
A. The City of Newport adopts the provisions of Oregon Revised Statutes 307.600 through 307.637 and administers a property tax exemption program for multiple-unit housing development authorized under those provisions. B. Goals In accordance with the legislative goals set forth in ORS 307.600, as well as the goals and policies of the City of Newport’s Comprehensive Plan, the program seeks to satisfy the following objectives: 1. Provide for the housing needs of the citizens of Newport in adequate numbers, price ranges, and rent levels that are commensurate with the financial capabilities of Newport households consistent with Housing Goal 1 of the Newport Comprehensive Plan. 2. Promote private investment in transit oriented multiple-unit housing. 3. Attract new development of multiple-unit housing, and commercial and retail property, in transit-oriented areas. 4. Stimulate the construction of transit oriented multiple-unit housing in the city’s core areas to improve the balance between the residential and commercial nature of those areas. 5. Cooperate with private developers, nonprofits, and federal, state, and local government agencies in the provision and improvement of government assisted
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and workforce housing consistent with Housing Policy 2 of the Newport Comprehensive Plan. C. Scope of Exemption 1. The project will create three or more multiple-unit housing units if it is new construction or two or more added units if the project involves the remodel of an existing building(s). 2. The exemption may not include the land or any improvements not a part of the structural improvements of the project. 3. The exemption may include: i. Parking constructed as part of the multiple-unit housing construction, addition or conversion; and ii. Commercial property to the extent that the commercial property is a required design or public benefit element of a multiple-unit housing construction, addition or conversion. iii. Only the increase in value attributable to the addition or conversion in the case of a structure to which stories or other improvements are added or a structure that is converted in whole or in part from other use to dwelling units. D. Duration of Exemption 1. The MUPTE Program provides a ten-year property tax exemption on the residential portion of the structural improvements as long as program requirements are met. During the exemption period, property owners are responsible for payment of the taxes on the assessed value of the land and any commercial portions of the project, except for those commercial improvements deemed a public benefit and approved for the exemption. The property is reassessed by the County when the exemption is either terminated for non-compliance, the owner requests to opt-out of the program, or the benefit expires after the ten years, at which point the owner begins paying full property taxes. E. At any time, the City Council may, by motion or upon request by the Lincoln County Board of Commissioners, set a limit on the maximum amount of foregone tax revenue provided as a benefit of the exemption under this Chapter. F. Extensions for low income housing 1. Extensions beyond the ten-year exemption period will be granted only for projects subject to a low income housing assistance contract with an agency or subdivision of Oregon or the United States. Extensions may be granted only for the portion of
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units which meet the affordability requirements through June 30 of the tax year during which the expiration date of the contract falls. 3.20.030
Program Requirements
In order to be considered for an exemption under this Chapter, an applicant must establish that the project meets the following program requirements: A. Financial need for the exemption: 1. The project could not financially be built “but for” the tax exemption. The burden is on the applicant to demonstrate that absent of the exemption the project would not be financially viable. The project pro-forma must show that the property tax exemption is necessary for the project to be proceed. 2. The project pro-forma must include: i. Ten-year pro-forma with MUPTE. ii. Ten-year pro-forma without MUPTE. iii. Analysis of the projected ten-year cash-on-cash rates of return on investment for the proposed project. This should be calculated as the ratio of net cash flow, after debt service, to initial equity investment (cash and land). iv. List of assumptions made to create the pro-formas, including a description of how property taxes were estimated for the without MUPTE pro-forma and the affordable housing fee or rent levels. v. Development budget. vi. Sources and uses of financing, including a description and the monetary value of any other public assistance, including but not limited to grants, loans, loan guarantees, rent subsidies, fee waivers, or other tax incentives, which the property is receiving or which the applicant plans to seek. B. Project eligibility. 1. Projects must be located within the taxing jurisdiction of the City of Newport and: i. Within ¼ mile of fixed route transit service. ii. Within an R-3, R-4 or Vertical Housing Development Zone. iii. Entirely outside of known hazard areas, including Active Erosion Hazard Zones, Active Landslide Hazard Zones, High Risk Bluff Hazard Zones, High Risk Dune Hazard Zones, Other Landslide Hazard Zones, and the “XXL” tsunami inundation area boundary, as depicted on the maps titled “Local Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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Source (Cascadia Subduction Zone) Tsunami Inundation Map Newport North, Oregon” and “Local Source (Cascadia Subduction Zone) Tsunami Inundation Map Newport South, Oregon” produced by the Oregon Department of Geology and Mineral Industries (DOGAMI), dated February 8, 2013. 2. The project will be housing which is completed on or before the date specified in ORS 307.637 (Deadlines for actions required for exemption). C. The applicant must propose and agree to include in the proposed project one or more elements benefitting the general public, as detailed in NMC 3.20.040. 3.20.040 Public Benefit A. Green Building 1. Green building requirements apply only to the residential occupancy areas and common areas such as hallways, stairwells, centralized HVAC or hot water heating, and laundry facilities. The requirements do not apply to the commercial areas or ancillary amenities such as parking garages and recreation facilities. 2. The project will conform to the 2011 Oregon Reach Code OR perform at least 10% more efficiently than the performance established in the Oregon Energy Efficiency Specialty Code (OEESC) or similar code adopted by the State of Oregon. 3. City review of the project demonstrates that the building is constructed to modeled plans and has Reach Code designation or that the OEESC Compliance Package (or similar) has been provided to the Building Official prior to issuance of certificate of occupancy. B. Affordable Housing Requirement 1. A minimum of 20 percent of the number of units must be affordable to households earning 80 percent or less of the area median family income (MFI), or a minimum of 10 percent of the number of units must be affordable to households earning 60 percent or less of the area median family income. Measurement of income is to be determined using the U.S. Department of Housing and Community Development’s, or its successor agency’s, annually published Median Family Income and Rent chart for Lincoln County. Gross income from all sources must be considered for any adults living in the unit. Tenants must income qualify at lease-up, but may exceed the affordability requirement by up to 20% during the exemption period (i.e. tenants who qualify for 60% of MFI restricted units at lease-up may earn up to 80% of MFI while living in the unit, or tenants who qualify for 80% of MFI restricted units at lease-up may earn up to 100% of MFI while living in the unit). If a tenant exceeds the income requirement, plus the additional 20% allowed, then the unit is no longer considered qualified as an affordable unit. Another unit in the project may replace the affordable unit, should it otherwise meet all program criteria. The units meeting the affordability requirements must match the unit mix in the project as a whole in terms of number of bedrooms. Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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2. In lieu of providing the affordable rental housing units referenced in Subsection (1) above, the owner of the project shall pay to the City an amount equal to 10% of the total property tax exemption. The city shall place such payments into an account dedicated to funding affordable housing. C. If the proposed project does not provide the public benefits listed in Subsections (A) and (B), the applicant may request a hearing with the Planning Commission to show that the project will fulfill the purpose of the program in an alternative manner. 3.20.050 Application Procedure A. The Community Development Department, in consultation with the County Assessor, shall establish a filing deadline in the calendar year immediately prior to the first assessment year for which the exemption is requested. Applications for exemptions are to be submitted in writing on forms furnished by the Community Development Department, and shall include: 1. The applicant's name, address, and telephone number. 2. A legal description of the property and the assessor's property account number for the site, and indication of site control. 3. A detailed description of the project including the number, size, and type of dwelling units; dimensions of structures, parcel size, proposed lot coverage of buildings, and amount of open space; type of construction, public and private access; parking and circulation plans; landscaping; uses; and a description of the public benefit(s) which the applicant proposes to include in the project; 4. A description of the existing use of the property including a justification for the elimination of existing sound or rehabilitable housing. 5. A site plan and supporting materials, drawn to scale, which shows in detail the development plan of the entire project, including streets, driveways, sidewalks, pedestrian ways, off-street parking, and loading areas, location and dimension of structures, use of land and structures, major landscaping features, and design of structures. 6. A letter from the City Public Works Department identifying the: i. Water main sizes and locations, and pumps needed, if any, to serve the project. ii. Sewer mains sizes and locations, and pumping facilities needed, if any, to serve the project. iii. Storm drainage facilities needed, if any, to handle any increased flow or concentration of surface drainage from the project, or detention or retention
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facilities that could be used to eliminate need for additional conveyance capacity, without increasing erosion or flooding. iv. Street improvements outside of the proposed development that may be needed to adequately handle traffic generated from the proposed development. 7. Evidence that the project could not financially be built “but for” the tax exemption. A project pro-forma and list of assumptions, as detailed in NMC Section 3.20.030, must be submitted in addition to the general application. B. At the time the application is submitted, applicants shall pay an application processing fee, including costs of an independent outside professional consultant to review the project’s financial pro-forma, as determined by resolution of the City Council. 3.20.060
Application Approval and Denial
A. The City Council shall approve or deny an application within 180 days after receipt of the application. An application not acted upon within 180 days shall be deemed approved. 1. The application shall contain the information required by, and be processed in accordance with, any adopted administrative rules and the criteria described in Sections 3.20.030 and 3.20.050 of this code. 2. Following receipt of a completed application, the City shall retain an independent outside professional consultant to review the project’s financial pro-forma. 3. After receiving the review of the independent outside financial consultant, the Director shall furnish a report to the Planning Commission about whether the application meets the criteria in Section 3.20.030 and provide any other comments about the project’s financial projections to the Planning Commission in addition to the review provided by the independent outside professional consultant. After the Planning Commission receives the Community Development Department’s report and comments it shall hold a hearing to evaluate the application and provide the Council with a recommendation on the application. 4. Upon receipt of the Planning Commission's written recommendation on an application, the Council shall consider the application, the financial consultant’s review, the Planning Commission’s written recommendation, and any written comments submitted on the application. At the hearing at which the Planning Commission's recommendation on an application is considered, or at a subsequent hearing, the Council shall adopt a resolution approving the application and granting the property tax exemption, or adopt a resolution disapproving the application and denying the property tax exemption. 5. The Council shall approve an application if the Council determines that the criteria described in Section 3.20.030 of this code have been met. The resolution
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approving the exemption shall set forth any specific conditions of approval necessary to ensure program criteria will be met. 6. If the Council determines that one or more of the criteria in Section 3.20.030 of this code are not met, the Council shall deny the application. The resolution denying an application shall set forth the specific reasons for denial. B. Final action upon an application by the City shall be in the form of a resolution that shall contain the applicant’s name and address, a description of the subject multipleunit housing, either the legal description of the property or the assessor’s property account number, and the specific conditions upon which the approval of the application is based. Following approval and on or before April 1 immediately preceding the first property tax year for which the exemption or special assessment is requested, the City shall file with the County Assessor and send to the applicant at the last-known address of the applicant a copy of the resolution approving or disapproving the application. In addition, the City shall file with the County Assessor a document listing the same information otherwise required to be in a resolution under this Subsection, as to each application deemed approved under Subsection (A) of this Section. C. Applications for tax exemption must be submitted and approved prior to issuance of the project’s building permit. D. If the City Council finds that construction, addition or conversion of the multiple-unit housing was not completed by the deadlines for actions required for exemptions specified in ORS 307.637, due to circumstances beyond the control of the applicant, and that the applicant had been acting and could reasonably be expected to act in good faith and with due diligence, the City may extend the deadline for completion of construction, addition or conversion for a period not to exceed 12 consecutive months. E. If the application is denied, the City shall state in writing the reasons for denial and send notice of denial to the applicant at the last-known address of the applicant within 10 days after the denial. 3.20.070
Project Compliance
A. The owner of a project approved for exemption will be required to sign a Regulatory Agreement to be recorded against the title to the property. B. During the exemption period, the owner or a representative shall submit annual documentation of tenant income and rents for the affordable units in the project to the Community Development Department through Tenant Income Certification Forms furnished by the Community Development Department. C. Upon termination or expiration of the tax exemption or in the case that a tenant no longer income qualifies for an affordable unit, the owner or a representative must provide written notice meeting the requirements mandated by state law to the tenant Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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before a tenant must begin paying market rate rent or need to vacate the unit, assuming the tenant has met all other terms of the rental agreement. D. During the exemption period, the owner or a representative shall submit annual documentation, in the form of standard lease agreements or equivalent, showing that units are not being used as vacation rentals. E. Documentation referenced in subsections (B) and (D) shall be filed before March 1st of each year of the exemption. F. If a project has not met the affordability requirements approved, the non-compliance must be cured by the next reporting year, or the project will be considered noncompliant. G. If the City determines that the number and unit mix of affordable units is less than the approved percentage or does not match the unit mix of the project, the next available units must be rented to households meeting the income requirements until noncompliance is cured. H. Projects for which annual compliance documentation is not submitted in accordance with this Section will have the tax exemption terminated according to Section 3.20.090. 3.20.080 Transfer of the Exemption A. The provisions of the MUPTE program may transfer with the property upon sale or other transfer of the project during the exemption period. The Community Development Department needs to receive updated contact information and information about the new entity, in addition to a Consent to Transfer and Assignment and Assumption Agreement to be executed and recorded against the title to the property, in a form acceptable to the City. 3.20.090
Termination of the Exemption
A. If, after an application has been approved, the Director finds that construction of multiple-unit housing was not completed on or before the deadlines for actions required for exemptions specified in ORS 307.637, or that any provision of NMC 3.20.010 to 3.20.100 is not being complied with, or any agreement made by the owner or requirement made by the City Council is not being or has not been complied with, the Director shall send a notice of termination of the exemption to the owner's last known address. B. The notice of termination shall state the reasons for the proposed termination, and shall require the owner to appear before the City Council at a specific time, not less than twenty days after mailing the notice, to show cause, if any, why the exemption should not be terminated. C. If the owner fails to appear and show cause why the exemption should not be terminated, the Director shall further notify every known lender and shall allow the Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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lender a period of not less than thirty days, beginning with the date that the notice of failure to appear and show cause is mailed to the lender, to cure any non-compliance or to provide assurance that is adequate, as determined by the Director to assure the City that the non-compliance will be remedied. D. If the owner fails to appear and show cause why the exemption should not be terminated, and a lender fails to cure or give adequate assurance that any noncompliance will be cured, the City Council shall adopt a resolution stating its findings and terminating the exemption. A copy of the resolution shall be filed with the County Assessor and a copy sent to the owner at the owner's last known address, and to any lender at the lender's last known address, within ten days after its adoption. E. Upon the County Assessor’s receipt of the governing body’s termination findings: 1. The exemption granted to the housing unit or portion under this chapter shall terminate immediately, without right of notice or appeal; 2. The county officials having possession of the assessment and tax rolls shall correct the rolls in the manner provided for omitted property under ORS 311.216 to 311.232, to provide for the assessment and taxation of any property for which exemption was terminated by the city or county, or by a court, in accordance with the finding of the city, county or the court as to the tax year in which the exemption is first to be terminated. The County Assessor shall make such valuation of the property as shall be necessary to permit such correction of the rolls. The owner may appeal any such valuation in the same manner as provided for appeals under ORS 311.216 to 311.232. The property shall become taxable beginning January 1 of the assessment year following the assessment year in which the noncompliance first occurred. Any additional taxes becoming due shall be payable without interest if paid in the period prior to the 16th of the month next following the month of correction. If not paid within such period, the additional taxes shall be delinquent on the date they would normally have become delinquent if timely extended on the roll or rolls in the year or years for which the correction was made. F. The owner may request a termination of exemption at any time, and the City Council shall adopt a resolution terminating the exemption within 60 days of the request. The termination shall proceed in the manner specified in Subsection (E) of this Section. 3.20.100
Implementation
A. The Newport City Council may adopt, amend and/or repeal Administrative Rules, establish procedures, and prepare forms for the implementation, administration and compliance monitoring consistent with the provisions of this Chapter. B. Annual Reporting. The Community Development Department will furnish an annual report on applications received, their approval status, and project details for approved projects for each fiscal year in which applications for the MUPTE program are received. Ord. No. 2115 – Exhibit A - Multiple-Unit Housing Property Tax Exemption
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