HomeMy WebLinkAboutHabitat for Humanity HOLTE letter 05-01-24 ..
itr Habitat for Humanity®
Portland Region
May 1, 2024
Re: HOLTE in Lake Oswego
Dear Mayor Buck and Lake Oswego City Council,
We are writing to commend the City of Lake Oswego and the Housing Production Strategies
Taskforce for considering property tax tools to make affordable housing development more
viable and we'd like to propose an additional strategy geared towards catalyzing affordable
homeownership.
With steep interest rates and escalating construction costs, homeownership is farther out of
reach for low- and moderate-income households and building affordable homes for sale
requires increasingly complex financing. The HOLTE program, which provides a 10-year
property tax exemption on the improvements for lower-income homebuyers in new, affordably
priced homes, allows Habitat to partner with families for whom homeownership is a truly
transformational opportunity. Currently, Portland is the only city in our program's footprint
that has implemented HOLTE.
HOLTE makes homeownership work for lower-income households because a reduction in
property taxes translates into increased purchasing power. For some families who partner with
our program to buy a home, this savings is the critical difference that allows the household to
qualify for an affordable mortgage.
In consultation with the Clackamas County Tax Assessor, we have estimated that our
homeowners in the Habitat for Humanity West Lake Grove development in Lake Oswego will
pay property taxes of$333/month for 3-bedroom homes and $375/month for 4-bedroom
homes. To set homebuyers up for success, their total monthly payment (mortgage principal &
interest, HOA fee, Proud Ground fee, insurance, and property taxes) should be 30% of their
monthly income. Every lever that can reduce those monthly costs lowers the income threshold
that families need to meet to qualify for a mortgage.
The West Lake Grove Townhomes will be established as part of the Community Land Trust, in
partnership with Proud Ground. Resale restrictions attached to the deed keep Community Land
Trust properties affordable in perpetuity. Those affordability restrictions reduce the property's
appraised value and come with a property tax discount. That helps, but $333-$375 per month
is still a significant cost for families with limited disposable income.
Habitat Portland Region supports the City's swift action to implement a nonprofit low-income
housing property tax abatement. That program, however, will not impact the property taxes
that Habitat homeowners pay; once Habitat homes are sold, they are owned by the
homeowners, not a nonprofit.
Homeownership remains our country's most proven strategy for long-term housing stability
and generational wealth-building. The stability of a fixed affordable mortgage allows families to
save for emergencies and college, and to pass an asset to the next generation. Given rapidly
escalating housing costs, our region needs to embrace an array of proactive strategies so that
homeownership is not just an exclusive privilege for a select few. We hope you'll consider
HOLTE.
Thank you for your service to the community.
*Yr/A!FIEN
Steve Messinetii
President & CEO
Habitat for Humanity Portland Region