*Amend approved application under the Multiple-Unit Limited Tax Exemption Program under the Inclusionary Housing Program for Burnside Apartments located at 11005 E Burnside St to increase the number of restricted units (amend Ordinance No. 190325)

To ensure Portland has economically inclusive development and neighborhoods, the city requires that new buildings being constructed (with more than 20 units ) also provide Inclusionary Housing units (“IH Units”), restricted for 99 years under the Inclusionary Housing (“IH”) Program. In exchange for providing IH Units, developers receive some benefits, including a 10-year property tax exemption – typically on all residential units in the Central City, or on only eligible rental units restricted under the IH Program outside the Central City. On March 17, 2021, the Council passed Ordinance 190325 which authorized a 10-year property tax exemption for Burnside Apartments. Under Ordinance 190325, the developer selected to provide 15% of the building’s 29 units, totaling four units, restricted to households earning no more than 80% median income for 99 years. Since the passage of the aforementioned Ordinance, the developers of the building have requested to amend their approved 10-year property tax exemption application in order to accommodate an increase in the number of IH Units by voluntarily restricting the remaining 25 units under the IH Program at 60%median income for 99 years. For the building associated with this amended ordinance, below are the options available to the developer in city code. The option selected by the developer is in bold and highlighted. On-Site Units New Off-Site Units Existing Off-Site Units Fee-in-Lieu Units at 80% of Median Income 4 Units N/A N/A N/A Bedrooms at 80% of Median Income 4 Bedrooms N/A N/A N/A Units at 60% of Median Income 25 Units 6 Units 7 Units N/A Bedrooms at 60% of Median Income 25 Bedrooms N/A N/A N/A Units at 30% of Median Income N/A 3 Units 4 Units N/A No Inclusionary Units N/A N/A N/A $326,186 The developer selected the option to provide 15% of the building’s 29 units, totaling four units, restricted to households earning no more than 80% median income for 99 years. Additionally, the project elected to restrict the remaining 25 units in the building to households earning no more than 60% median family income for 99 years under the IH Program. In total, 29 units, or 100% of the building’s units, will be authorized for a 10-year property tax exemption under the ordinance should it be adopted. Because this building is outside the Central City Plan District the tax exemption will apply to the IH Units. Overview of building and units for Ordinance No. 190325: 29-unit building at 11005 E Burnside St Market rate units: 25 units IH Units: 4 units Building Unit Summary Studio One Bedroom Two Bedroom Three Bedroom Total 29 - - - Market Rate 25 - - - Restricted to 80% of Median Income 4 - - - Average Square Footage 407 - - - Largest Square Footage 473 - - - Smallest IH Unit 380 - - - Overview of building and units for Amended Application: 29-unit building at 11005 E Burnside St Market rate units: 0 units IH Units: 29 units Building Unit Summary Studio One Bedroom Two Bedroom Three Bedroom Total 29 - - - Market Rate 0 - - - Restricted to 60% of Median Income 25 - - - Restricted to 80% of Median Income 4 - - - Average Square Footage 407 - - - Largest Square Footage 473 - - - Smallest IH Unit 380 - - - Regulated restricted rents compared to new construction market rate rents in the same neighborhood: Building Rent Summary Studio Studio One Bedroom Two Bedroom Market Rate $1,211 $1,211 - - Restricted to 60% of Median Income $967 - - - Restricted to 80% of Median Income $1,290 Monthly Rent Difference $244 ($79) - - Annual Rent Difference $2,928 ($948) - - While the building currently has a negative rent differential for studio apartments restricted at 80% of Median Income, the Housing Bureau recommends approval because the total rent discount across all IH Units provide more public benefit than is being given up in public off-sets. In addition, over the 99 years of required restriction, market rents will only continue to increase at a faster rate compared to regulated rents. If this ordinance is not approved by City Council, the development will proceed without any IH Units. ORS 307.621 and City Code Section 3.103.060(B) state that PHB will take applications to City Council for approval in the form of an ordinance and deliver approved applications to the Multnomah County Tax Assessor. This action meets those requirements.

The City paid Multnomah County a $3,400 application activation fee on July 1, 2022 for the first approved application and will pay the $5,600 application activation fee to Multnomah County, should the application move forward. This Ordinance approves a property tax exemption resulting in foregone tax revenue. The total estimated amount of the property tax revenue not collected for the 10 years of the exemption period is valued at approximately $221,943 in today’s dollars, assuming a four percent discount rate and a three percent annual assessment increase. This 10-year estimate includes taxes foregone by the City of Portland, Multnomah County and other entities which receive property taxes within Multnomah County. The reduced amount of property taxes to the City of Portland over the 10 years is roughly 33 percent of that amount, or $73,241. The City will still benefit from property taxes collected on the improved value of the land during the exemption period. Property Tax exemption value and foregone revenue for Ordinance 190325: Estimated total foregone revenue: $36,939 Estimated first year value of the tax exemption: $4,011 Estimated annual value of the tax exemption per inclusionary unit during the exemption period: $923 Estimated annual foregone revenue per inclusionary unit over 99-year restriction term: $93 Property tax exemption value and foregone revenue for amended application: Estimated total foregone revenue: $221,943 Estimated first year value of the tax exemption: $24,099 Estimated annual value of the tax exemption per inclusionary unit during the exemption period: $765 Estimated annual foregone revenue per inclusionary unit over 99-year restriction term: $77 Central City Plan District: Yes No Remaining 5-Year Cap: $12,225,777 Property Management: Not selected yet

As the largest taxing jurisdiction affected by the tax exemption programs, Multnomah County has approved the administration of the programs in order to meet shared affordable housing goals.