*Amend approved application under the Multiple-Unit Limited Tax Exemption Program under the Inclusionary Housing Program for SW Park Avenue Apartments located at 2061 SW Park Ave to increase the number of restricted units (amend Ordinance No. 190642)

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 December 15, 2021 the Council passed Ordinance 190642 which authorized a 10-year property tax exemption for SW Park Avenue Apartments. Under Ordinance 190642, the developer selected to provide 100% of the building’s 91 units, restricted to households earning no more than 60% 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 Project’s total units and to extend the rent-restriction to additional units in the Project for 99 years. The total number of IH Units has increased compared to the initial application. The amended application proposes 98 units, or 100 percent, of the Project’s 98 units would be restricted to households earning no more than 60 percent of MFI at the time of lease-up. 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 . On-Site Units New Off-Site Units Existing Off-Site Units Fee-in-Lieu Units at 80% of Median Income 15 Units N/A N/A N/A Bedrooms at 80% of Median Income 15 Bedrooms N/A N/A N/A Units at 60% of Median Income 8 Units 20 Units 25 Units N/A Bedrooms at 60% of Median Income 8 Bedrooms N/A N/A N/A Units at 30% of Median Income N/A 10 Units 15 Units N/A No Inclusionary Units N/A N/A N/A $921,173 The developer selected the option to provide eight percent of the building’s 98 units, totaling eight units, restricted to households earning no more than 60% median income for 99 years and will voluntarily restrict the remaining 90 units, totaling 100% of the building’s units, restricted to households earning no more than 60% median family income for 99 years under Inclusionary Housing. In total, 98 units, or 100% of the building’s units, will be authorized for a 10-year property tax exemption under the ordinance amendment 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. 190642: 91-unit building at 2061 SW Park Ave Market rate units: 0 units IH Units: 91 units Studio One Bedroom Two Bedroom Three Bedroom Total 91 - - - Market Rate 0 - - - Restricted to 60% of Median Income 91 - - - Average Square Footage 309 - - - Largest Square Footage 360 - - - Smallest IH Unit 288 - - - Overview of building and units for Amended Application: 98-unit building at 2061 SW Park Ave Market rate units: 0 units IH Units: 98 units Studio One Bedroom Two Bedroom Three Bedroom Total 98 - - - Market Rate 0 - - - Restricted to 60% of Median Income 98 - - - Average Square Footage 309 - - - Largest Square Footage 360 - - - Smallest IH Unit 288 - - - Regulated restricted rents compared to new construction market rate rents in the same neighborhood: Studio One Bedroom Two Bedroom Three Bedroom Market Rate $1,313 - - - Restricted to 60% of Median Income $1,119 - - - Monthly Rent Difference $194 - - - Annual Rent Difference $2,328 - - - 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 will pay the $9,000 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 $687,522 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 $226,882. 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 190642: Estimated total foregone revenue: $587,318 Estimated first year value of the tax exemption: $63,771 Estimated annual value of the tax exemption per inclusionary unit during the exemption period: $645 Estimated annual foregone revenue per inclusionary unit over 99-year restriction term: $65 Property tax exemption value and foregone revenue for amended application: Estimated total foregone revenue: $687,522 Estimated first year value of the tax exemption: $74,651 Estimated annual value of the tax exemption per inclusionary unit during the exemption period: $702 Estimated annual foregone revenue per inclusionary unit over 99-year restriction term: $71 Central City Plan District: Yes No Remaining 5-Year Cap: $12,234,350 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.