The URL can be used to link to this page

Home My WebLink AboutPublic Comments to HPS Task Force RE-Housing Production Strategy through 02-2024 From: Olson,Erik To: McCaleb,Iris Subject: FIN: Property Tax Exemption Letter Date: Tuesday,October 24,2023 3:58:06 PM Attachments: Marylhurst Commons Affordable Housing-RE Tax Exemption Letter 10.24.23.pdf Hey Iris—can you add this to the record for PP 22-0005? Let me know if you have any questions, Erik From: Christopher Bendix<CBendix@mercyhousing.org> Sent:Tuesday, October 24, 2023 3:17 PM To: Olson, Erik<eolson@ci.oswego.or.us> Cc: Numanoglu,Jessica <jnumanoglu@ci.oswego.or.us>; Colin Morgan Cross<CMorgan- Cross@mercyhousing.org>; Bennett, Martha <mbennett@ci.oswego.or.us>;Joseph Thompson <Joseph.Thompson@ mercyhousing.org> Subject: Property Tax Exemption Letter CAUTION: This email originated from outside your organization. Exercise caution when opening attachments or clicking links, especially from unknown senders. Hi Erik, Thanks again for giving us the opportunity to get together at our Marylhurst property a couple weeks ago. We really appreciated your time and getting to hear from members of the Planning Commission. I have attached a memo on real estate property tax exemption that we put together following the our meeting and conversations with you and other staff. We hope this letter will be helpful in guiding the city's action on property tax exemption. As outlined in the letter, it is our hope that the city pursues a tax exemption policy ahead of the ongoing housing production work, ideally with a policy in place by July, 2024. If we can be of further assistance, please do not hesitate to be in touch. Thank you, Chris Bendix PROJECT DEVELOPER I Real Estate Development ®❑ he/him/his Mercy Housing Northwest 16930 Martin Luther King Jr Way S. 0 I Seattle, WA 98118 I 206-838-5703 Ell 171 mercyHousING To: Erik Olson, Long Range Planning Manager Jessica Numanoglu Community Development Director Martha Bennett, City Manager From: Joe Thompson, President,Mercy Housing Northwest Re: Property Tax Exemption—Affordable Housing&Marylhurst Commons As we have previously discussed with City Staff,Mercy Housing Northwest proposes to work with the City of Lake Oswego to implement a real estate property tax exemption for affordable housing. The benefits of a tax exemption for affordable housing are further outlined below. To maximize the benefits to Mercy Greenbrae at Marylhurst Commons, the future Lake Grove Affordable Housing development, and our future residents,we propose and plan to support the City in implementing a tax exemption policy that goes into effect on or before July 1, 2024 Background Mercy Housing Northwest is a non-profit, affordable housing developer, operator, and service provider. We have over 55 properties throughout western Washington,and Oregon. Mercy Housing Northwest is currently under construction at Mercy Greenbrae at Marylhurst Commons, a 100-unit affordable housing community at the former Marylhurst University Campus. We applaud and appreciate the City's strong support for developing affordable housing at Marylhurst Commons and at the Lake Grove site. We understand that affordable housing production remains a priority for the City, and we are committed to being a partner for the city to achieve its housing production goals. Property tax exemption is an important tool utilized by many jurisdictions to advance affordable housing production. For the benefits and rationale discussed in detail below,we support the City's adoption of a property tax exemption policy to promote affordable housing for Lake Oswego and its residents. We encourage the city to adopt a tax exemption policy ahead of the city's housing production strategy. Because Mercy Greenbrae is under construction and scheduled to start move-ins in April, the city has a rare opportunity to directly impact the lives of soon-to-be residents of the Mercy Greenbrae project. Furthermore, the Lake Grove affordable housing project,now in the pre-development phase,will benefit from significantly from the certainty provided by a city-wide tax exemption policy. Mercy Housing Northwest 6930 Martin Luther King Jr Way S,Seattle,Washington 98118 o 1206-838-5700 f 1206-838-5705 I mercyhousingnorthwest.orgL VE IN HOPE 4 Mercy Housing is sponsored by communities of Catholic Sisters Putting Resident Needs First Ensuring our residents have access to stable, affordable housing is core to our mission. Mercy Housing Northwest prides itself on working with residents and providing the necessary supportive services to ensure everyone has access to housing they can afford. • Reducing operating costs,including property taxes,is a critical tool for ensuring operations and services staff have the resources and flexibility they need to meet the dynamic needs of the communities they serve. • In 2020 and 2021, affordable housing providers experienced high resident receivables, as families were unable to pay their rent due to pandemic related job-impacts. MHNW committed to a total rent freeze and moratorium on evictions in a way to ensure resident housing stability,which put strain on operating budgets. Measures that reduce ongoing operating costs,including property taxes,have a direct impact on an organization's ability to work with residents during challenging economic times to ensure housing stability. It also ensures every property can cover its costs and retain a high standard of maintenance and operations. Ensuring Long-Term Stability for Mission-focused Affordable Housing Providers Property tax exemption for affordable housing properties supports long-term financial stability. As mission-oriented,long-term owners, operators, and service providers, our organizational mission is to ensure our properties are places where families can thrive. • Typically, affordable housing owners operate with thin financial margins, often operating at near break-even operating budgets to maintain the deepest long-term affordability for residents most in need of the housing we provide. Unanticipated events can create long- term challenges for affordable housing developers and operators, as the combination of thin margins and strictly regulated rents limit our ability to recoup losses. • Having predictable annual expenses helps ensure our properties are more financially resilient, and able to absorb changing economic conditions. The last several years have been especially challenging with the COVID-19 pandemic and associated supply chain challenges, and more recently with dramatic increases in wages, benefits, and property insurance premiums. Advancing the City's Goals for Housing Production A property tax exemption for affordable housing helps the city adhere with Title 7 of Metro's Urban Growth Management Functional Plan,which requires cities to "include in their plans actions and implementation measures designed to maintain the existing supply of affordable housing as well as to increase the opportunities for new dispersed affordable housing." Exempting affordable housing from property taxes helps existing affordable housing properties (we are aware of two other affordable housing properties in Lake Oswego) conduct maintenance and make capital improvements, and serve their low-income residents with on-site services. For new affordable housing production, a tax exemption helps developers secure competitive Metro Mercy Housing Northwest 6930 Martin Luther King Jr Way S,Seattle,Washington 98118 o 1206-838-5700 f 1206-838-5705 mercyhousingnorthwest.org Mercy Housing is sponsored by communities of Catholic Sisters and State funding for new, dispersed affordable housing by adding more certainty to on-going operating costs. Many peer cities have adopted property tax exemption policies using ORS 307.540,including Wilsonville,Milwaukie,and Hillsboro. Property tax exemption is proven to be an effective tool that directly improves the feasibility of affordable housing developments and would support additional affordability in the City consistent with Title 7. Substantial Benefits at Minimal Cost to the City The cost of an affordable housing property tax exemption to the city is relatively small,but an exemption would have substantial benefits for sustainable operations of affordable housing, and substantial benefits for current and future low-income residents. The Marylhurst Commons property is currently, and has been historically,tax-exempt. • Existing Affordable Housing: We are aware of two other affordable housing properties in Lake Oswego, both owned by Northwest Housing Alternatives. Combined, we estimate that the City of Lake Oswego collects about $3,200 per year from the two properties. • Creating New Affordable Housing: We estimate that the city's portion of annual property taxes owed by the Mercy Greenbrae project will be approximately$18,000 per year. We are also aware that the Lake Grove property is slated for redevelopment as affordable housing.That site is also current city-owned and tax exempt. Collectively,we estimate that exempting these two properties, and the two existing properties outlined above,would reduce the city's total annual property tax revenue by an estimated $30,000 per year,less than .001% of the city's total annual property tax revenue. While a marginal decrease to the city, the benefits ensure decades of operational stability for the non-profit organizations that own the properties, ensuring the properties are well-maintained and adequately staffed. Furthermore,we expect the revenue foregone as a result of a tax exemption program for affordable housing will be small given the limited number of properties suitable for affordable housing projects within the City. Finally, ensuring affordable housing operators have the resources to provide necessary on-site services can reduce financial burdens on other public services,like schools,parks and recreation, emergency response, and libraries. When residents have resources and support from their home community, they rely less heavily on other resources. Promoting Community Goals with Additional Funding Reducing property taxes allows projects to leverage more private funding. By reducing operating costs, affordable housing projects can secure additional debt from private lenders, reducing the need for public resources, and enabling projects to invest in additional durability, sustainability, and livability measures. • At the Mercy Greenbrae project,reducing the operating costs associated with property taxes would directly enable the project to invest in a larger solar photovoltaic array, Mercy Housing Northwest 6930 Martin Luther King Jr Way S,Seattle,Washington 98118 o 1206-838-5700 f 1206-838-5705 mercyhousingnorthwest.org Mercy Housing is sponsored by communities of Catholic Sisters reducing the building's energy usage,reducing on-going operating costs, and improving resilience in extreme weather. • Reduced property taxes will also allow existing and future projects to pursue sustainability and resilience upgrades like conversion to 100% electric operations, upgrading to higher efficiency heating and cooling systems, and on-site power generation through solar photovoltaic arrays or other means of renewable energy production. In closing, a city property tax exemption policy will have an immediate impact on the Mercy Greenbrae project: Mercy Housing Northwest will be able to make additional investments in durability and sustainability if the policy is adopted in 2024. Thank you for your consideration of this request and we look forward to continuing to work with the City staff to advance the City's housing production goals and affordability. Sincerely, .F______ Joe Thompson, President Mercy Housing Northwest 6930 Martin Luther King Jr Way S,Seattle,Washington 98118 o 1206-838-5700 f 1206-838-5705 mercyhousingnorthwest.org Mercy Housing is sponsored by communities of Catholic Sisters From: Mike Perham To: LO-Housing Subject: HPS Task Force Date: Monday,December 4,2023 3:12:49 PM CAUTION: This email originated from outside your organization. Exercise caution when opening attachments or clicking links, especially from unknown senders. Hi, I'd like to add my support for substantial zoning and code reform to enable greater housing production. I know of two people in my immediate family who could not move closer to us in LO because of the home prices. This is directly due to restrictions on housing production. We are hurting ourselves, our kids and our family members by forcing everyone to pay $1 m just to buy a home here. I'd like to see apai tiiients legal everywhere. Legalize single stair building codes[1] so the apartment buildings we do build look nice and can support large, family sized units, not just studios and 1BR. Get rid of parking, FAR, height and setback restrictions which force all neighborhoods and properties to look like suburban sprawl. Once we legalize density, roads and curbs will slowly become a nightmare because we are so car-dependent. We have to invest in(1) denser transportation options and(2) legalizing light commercial in our neighborhoods so we don't have to drive for daily errands. Give us safe, protected paths for biking and walking to destinations and safe routes to school for kids to walk/bike (my kid can't even safely get to LOJ from 1 stAdd on his own because Country Club Rd is basically a highway). Start charging for public curb and garage parking downtown(and use that revenue to pay for those denser options!). 1: https://www.treehugger.com/single-stair-buildings-united-states-5197036 Change can be scary but I hope our Council and planners will show a positive vision for regulatory reform in LO, not just a few band-aids. Best, Mike First Addition From: Ramon Morera Montserrat To: LO-Housing Subject: HPS Task Force Date: Wednesday,December 6,2023 11:35:55 AM CAUTION: This email originated from outside your organization. Exercise caution when opening attachments or clicking links, especially from unknown senders. Good morning, I'd like to add my support for substantial zoning and code reform to enable greater housing production. We moved to Oregon 4 years ago and since then the increase of Real Estate prices have been dramatic. To the point that for us staying in Lake Oswego is highly challenging: rent prices are up and buying a house is at the limit of not being possible for us. We are originally from Spain and our experience in high density areas is really positive as the sense of community increases. And it is also positive for business (retail and others). Best, Ramon First Addition