*Authorize development owners to change their Inclusionary Housing compliance after issuance of their building permit to qualify for an expanded property tax exemption under the Multiple-Unit Limited Tax Exemption Program

The City of Portland ordains: Section 1. The Council finds: On behalf of the City of Portland, the Portland Housing Bureau (“PHB”) administers the Inclusionary Housing Program (the “IH Program”), authorized under PCC 30.01.120, and the Multiple-Unit Limited Tax Exemption Program (the “MULTE Program”) authorized under ORS 307.600 and PCC 3.103. On January 31, 2024, the City Council approved changes to the IH and MULTE Programs through Ordinance 191610 that allows buildings in high cost and moderately high-cost areas to receive the full property tax exemption under MULTE when opting to comply with the IH Program by making 10 percent of a project’s units affordable to households earning no more than 60 percent of area median income. On February 22, 2024, Multnomah County passed Resolution 2024-11, approving the expanded use of the MULTE Program for buildings making 10 percent of units affordable at 60 percent of area median income. The expanded MULTE is available to buildings that have not been issued a building permit from the Bureau of Development Services (the “BDS”) prior to March 1, 2024, or to projects which have not received final certificate of occupancy from BDS prior to March 1, 2024. PCC 30.01.120 requires that PHB provide all applicable development incentives to buildings complying with the IH Program. After buildings receive permit issuance from BDS, PHB cannot approve exemptions of system development charges through the System Development Charge Exemption Program (the “SDC Exemption Program”) because they are due and payable to the Bureaus of Environmental Services, Parks and Recreation, Transportation, and Water at building permit issuance from BDS. Buildings that have already received building permit issuance from BDS are ineligible for the SDC Exemption Program and other development incentives approved by PHB, so PHB’s Administrative Rules do not allow for buildings to change their elected IH Program option after permit issuance from BDS. To elevate the number of buildings restricting IH units at 60 percent of area median income, PHB wants to allow buildings that have already received building permit issuance from BDS to change their option from 20 percent of units restricted at 80 percent of area median income to 10 percent of units restricted at 60 percent of area median income. PHB wishes to limit the ability for buildings to change their IH Program option after permit issuance from BDS to the following buildings already under construction, but without certificate of occupancy from BDS as of March 1, 2024: Project Name Address Permit Number Vibrant Cities Fargo 25 N Fargo St 19-217418 Koz on N Interstate 5460 N Interstate Ave 20-146519 Killingsworth Apartments 1341 N Killingsworth St 21-096326 Cap Hill Apartments- Building A 7990 SW Capitol Hill Rd 20-203458 Cap Hill Apartments- Building B 7980 SW Capitol Hill Rd 20-211439 Tabor Heights 11 SE 57th Ave 20-212156 Laurel Lofts 3085 SE Hawthorne Blvd 21-105873 Davis Apartments 1820 NE Davis St 20-218783 Development owners who elect to change their IH Program option after permit issuance from BDS will not benefit from the SDC Exemption Program. NOW, THEREFORE, the Council directs: The buildings listed in Section 1, 9. that have not received certificate of occupancy from BDS as of March 1, 2024, may change their IH Program option after permit issuance from BDS from 20 percent of units restricted at 80 percent of area median income to 10 percent of units restricted at 60 percent of area median income so long as they do not have certificate of occupancy from BDS prior to the approval of this ordinance. These buildings are eligible under the expanded MULTE Program since they are located in an eligible area, so long as they elect to provide 10 percent of units restricted at 60 percent of area median income. PHB is not obligated to provide any development incentives that are not already approved, including SDC exemptions, for buildings changing their IH option after permit issuance from BDS. Any Affordable Housing Construction Excise Tax Exemptions, or other exemptions and incentives, already received in excess of the amount available to buildings providing 10 percent of units restricted at 60 percent of area median income option must be repaid to the City by the development owner, or otherwise recalculated, before receiving certificate of occupancy from BDS. Buildings that benefit from the increased property tax exemption under the MULTE Program may have to pay additional fees to PHB for the amount due to Multnomah County, $850 per unit up to $9,000 per building, and will pay PHB a processing fee of $800 for PHB to review the permit and update legal documents and records. Section 2. The Council declares that an emergency exists because timely City approval of this Ordinance is necessary to allow buildings to move forward and benefit from the expanded property tax exemption; therefore, this Ordinance shall be in full force and effect from and after its passage by the Council.