Taxing, service districts would share burden of foregone revenue

In an effort to spur development of affordable housing options in the central city, the city of Beaverton is considering an inter-jurisdictional property tax exemption plan for nonprofit housing providers.

The City Council took no action on the matter on Tuesday night, but reacted enthusiastically to a presentation on the program by a local consulting group with whom the city is working to develop a tax exemption proposal.

“We’ve never, ever been able to do near enough to help (citizens) with low-income housing,” said Councilor Catherine Arnold. “We’ve never had near enough resources to do anything about it. There’s never been one pot (of revenue) big enough to put these things together.”

An outgrowth of housing goals set forth in the city’s 2011 Civic Plan, the proposal would apply to nonprofit agencies developing housing considered affordable for residents earning 60 percent or less of the area’s median income ($43,800 for a four-member household; $30,700 for an individual).

The proposal is made possible through a state statute that allows qualifying land parcels to be exempt from property taxes provided more than 51 percent of the affected tax districts and special services providers, such as Tualatin Valley Fire & Rescue, agree to waive their share of property tax revenue.

The city’s Economic and Community Development Department staff touted benefits to the city including ensured affordability of housing, improved property maintenance, increased downtown development opportunities, alleviating a burden on city social services and revenue that’s foregone — as uncollected property taxes — rather than expended to achieve housing goals. That loss would be shared among the city, county and special districts.

The U.S. Department of Housing and Urban Development defines “affordable” when tenants pay no more than 30 percent of their income for housing and utility expenses. Based on guidelines city officials provided, a family of three earning $19,750, or 30 percent of the median income, would pay approximately $444 a month, after utility payments, in rent.

Based on an existing program in Tigard — where 278 units have qualified for the program — economic development staff calculated the city, based on an average of 32 units entering, would forego $101 per qualifying unit. Based on existing projects in Beaverton that could potentially qualify, the city’s expenditure in foregone property tax revenue would be $25,239, or 23 percent of total tax collected for the property.

“If it’s really only $25,000 a year, I would support that,” Arnold said. “That’s just a small amount (to assist) people in different places trying to make things work.”

The program would only apply to new housing development, said Don Mazziotti, the city’s economic and community development director. Properties would be required to apply annually for the exemptions.

The council agreed to study the idea and reconvene at a later meeting to consider it further.

“I strongly support the concept,” said Councilor Marc San Soucie. “I really want to see us move forward with implementation.”

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