Chapter 16.60
PROPERTY TAX INCENTIVES IN RESIDENTIAL TARGETED AREAS
Sections:
16.60.040 Residential targeted area designation criteria.
16.60.050 Residential targeted area designated.
16.60.060 Residential targeted area standards and guidelines.
16.60.070 Tax exemption for multifamily housing in residential targeted areas.
16.60.080 Application procedures.
16.60.090 Application review and issuance of condition certificate.
16.60.100 Application for final certificate.
16.60.110 Issuance of final certificate.
16.60.120 Annual compliance review.
16.60.130 Cancellation of tax exemption.
16.60.140 Appeals to appeal board of adjustment.
16.60.010 Purpose.
As provided in RCW 84.14.007, it is the purpose of this chapter to encourage increased residential housing opportunities, including affordable housing opportunities, within urban centers within the city of Longview where there are insufficient housing opportunities, including affordable housing opportunities. It is further the purpose of this chapter to stimulate the construction of new multifamily housing and the rehabilitation of existing vacant and underutilized buildings for multifamily housing in urban centers having insufficient housing opportunities that will increase and improve residential opportunities, including affordable housing opportunities, within such urban centers. To achieve these purposes, this chapter provides for special valuations in residentially deficient urban centers for eligible improvements associated with multiunit housing, which includes affordable housing, located within the city of Longview. (Ord. 2998 § 1, 2007).
16.60.020 Findings.
The city council has determined that the residential targeted area(s) designated in this chapter are located within an urban center; that they lack sufficient available, desirable, and convenient residential housing, including affordable housing units, to meet the needs of the public who would be likely to live in the urban center, if the affordable, desirable, convenient, attractive, and livable places to live were available; and that providing additional housing opportunities, including affordable housing, in designated areas will assist in achieving one or more of the stated purposes of this chapter. The city council further finds that development of additional housing units, including affordable housing, in the city’s urban center will attract and maintain residents, thus making the area more vibrant, through better business, entertainment and cultural activities. Development of additional housing within the urban center of the city of Longview will help to alleviate the detrimental conditions and social liability that tend to exist in the absence of a viable mixed income residential population and will help achieve the planning goals of the city consistent with the Growth Management Act under RCW 36.70A.020. The tax incentives provided in this chapter will stimulate the creation of new and enhanced residential structures, opportunities, and uses within the city’s urban center, including affordable housing opportunities, benefiting and promoting the public health, safety and welfare in the city’s urban center. (Ord. 2998 § 1, 2007).
16.60.030 Definitions.
(1) “Affordable housing” means residential housing that is rented by a person or household whose monthly housing costs, including utilities other than telephone, do not exceed 30 percent of the household’s monthly income. For the purposes of housing intended for owner occupancy, “affordable housing” means residential housing that is within the means of low or moderate-income households.
(2) “City” means the city of Longview.
(3) “Director” means the city manager or other city staff as may be designated in writing by the city manager.
(4) “Household” means a single person, family, or unrelated persons living together.
(5) “Low-income household” means a single person, family, or unrelated persons living together whose adjusted income is at or below 80 percent of the median family income adjusted for family size, for Cowlitz County, as reported by the United States Department of Housing and Urban Development.
(6) “Moderate-income household” means a single person, family or unrelated persons living together whose adjusted income is more than 80 percent but is at or below 115 percent of the median family income adjusted for family size, for Cowlitz County, as reported by the United States Department of Housing and Urban Development.
(7) “Multifamily housing” means building(s) having four or more dwelling units designated for permanent residential occupancy resulting from new construction, rehabilitation or conversion of a vacant, underutilized or substandard building.
(8) “Owner” means the property owner of record.
(9) “Permanent residential occupancy” means multifamily housing that provides either owner occupant housing or rental accommodations that are leased for a period of at least one month on a nontransient basis. This excludes accommodations that offer occupancy on a transient basis such as hotels and motels that predominately offer rental accommodations on a daily or weekly basis.
(10) “Rehabilitation improvements” means modifications to existing structures that are vacant for 12 months or longer, that are made to achieve a condition of substantial compliance with existing building codes or modification to existing occupied structures which increase the number of multifamily housing units.
(11) “Residential targeted area” means the area within the city’s urban center that has been designated by the city council as the residential targeted area in accordance with this chapter and Chapter 84.14 RCW as found by the city council to be lacking sufficient available, convenient, attractive, affordable, livable, and desirable residential housing to meet the needs of the public.
(12) “Substantial compliance” means compliance with local building or housing code requirements that are typically required for rehabilitation as opposed to new construction.
(13) “Urban center” means a compact identifiable district where urban residents may obtain a variety of products and services. An urban center must contain:
(a) Several existing or previous, or both, business establishments that may include but are not limited to shops, offices, banks, restaurants, and governmental agencies;
(b) Adequate public facilities including streets, sidewalks, lighting, transit, domestic water, and sanitary sewer systems; and
(c) A mixture of uses and activities that may include housing, recreation, and cultural activities in association with either commercial or office, or both, use. (Ord. 2998 § 1, 2007).
16.60.040 Residential targeted area designation criteria.
Following notice and public hearing, or a continuance thereof, as prescribed in RCW 84.14.040, the city council may, in its sole discretion, designate all of or a portion of the residential targeted area described in the notice of hearing as the residential targeted area. The designated targeted area must meet the following criteria, as found by the city council in its sole discretion:
(1) The targeted area is located within an urban center as determined by the city council;
(2) The targeted area lacks sufficient available, attractive, convenient, desirable and livable residential housing, including affordable housing, to meet the needs of the public who would be likely to live in the urban center, if such places to live were available;
(3) The providing of additional housing opportunities, including affordable housing, in the targeted area will assist in achieving the stated purpose of RCW 84.14.007, namely:
(a) Encourage increased residential opportunities, including affordable housing, within the targeted area of the city of Longview; or
(b) Stimulate the construction of new multifamily housing and the rehabilitation of existing vacant and underutilized building for multifamily housing that will increase and improve residential opportunities, including affordable housing, within the city’s urban centers;
(4) In designating the residential targeted area, the city council may also consider other factors, including, but not limited to, which additional housing, including affordable housing, in the targeted area will attract and maintain a significant increase in the number of permanent residents, whether additional housing in the targeted area will help revitalize the city’s urban center, whether an increase in residential population will help improve the targeted area and whether an increase in residential population in the targeted area will help to achieve the planning goals of the city consistent with the Growth Management Act under RCW 36.70A.020. The city council may, by ordinance, amend or rescind the designation of a residential target area at any time pursuant to the same procedure as set forth in this chapter for original designation; and
(5) The notice for the hearing has met the requirements of RCW 84.14.040. (Ord. 2998 § 1, 2007).
16.60.050 Residential targeted area designated.
(1) Residential Targeted Area Designated. The area hereby declared to be the residential targeted area of the city of Longview includes all properties within the downtown commerce (D-C) zoning district and within the civic center (C-C) zoning district as denoted on the official city zoning map.
(2) If a part of any legal lot is within the residential targeted area, then the entire lot shall be deemed to lie within such area. (Ord. 2998 § 1, 2007).
16.60.060 Residential targeted area standards and guidelines.
For the designation of residential targeted area, the city council must adopt and implement basic requirements for both new construction and rehabilitation, including the following:
(1) Application processes and procedures;
(2) Requirements that address demolition of existing structures and site utilization; and
(3) Building requirements that may include elements addressing parking, height, density, environmental impact, public benefit features, compatibility with surrounding property, and such other amenities as will attract and keep permanent residents and will properly enhance the livability of the residential targeted area.
Further, the city council may adopt and implement, either as conditions to eight-year exemptions or as conditions to an extended 12-year exemption period under LMC 16.60.070(2), or both, more stringent income eligibility, rent, or sale price limits, including limits that apply to a higher percentage of units, than the minimum conditions for an extended 12-year exemption period under LMC 16.60.070(2). (Ord. 2998 § 1, 2007).
16.60.070 Tax exemption for multifamily housing in residential targeted areas.
(1) Intent. Exemptions from ad valorem property taxation for multifamily housing in the residential targeted area are intended to:
(a) Encourage increased residential opportunities, including affordable housing, within the urban center designated by the city council as a residential targeted area;
(b) Stimulate new construction or rehabilitation of existing vacant and underutilized buildings for multifamily housing in the residential targeted area to increase and improve housing opportunities, including affordable housing;
(c) Assist in directing future population growth in the designated urban center; and
(d) Achieve development densities which are more conducive to transit use in the designated urban center.
(2) Duration of Exemption. The value of new construction, conversion, and rehabilitation improvements qualifying under this chapter is exempt from ad valorem property taxation as follows:
(a) For eight successive years beginning January 1st of the year immediately following the calendar year of issuance of the certificate; or
(b) For 12 successive years beginning January 1st of the year immediately following the calendar year of the issuance of the certificate, if the property otherwise qualifies for the exemption under this chapter and meets the following conditions:
(i) The applicant must commit to renting or selling at least 20 percent of the multifamily housing units as affordable housing units to low and moderate-income households; and
(ii) The property must satisfy that commitment set forth in subsection (2)(b)(i) of this section and any additional affordability and income eligibility conditions adopted by the city council under this chapter.
In the case of projects intended exclusively for owner occupancy, the minimum requirement of this subsection (2)(b) of this section may be satisfied solely through housing affordable to moderate-income households.
(3) Limits on Exemption. The exemption does not apply to the value of the land or to the value of nonhousing-related improvements not qualifying under this chapter.
(4) Project Eligibility. A proposed project must meet the following requirements for consideration for a property tax exemption:
(a) Location. The project must be located within the residential targeted area as designated pursuant to LMC 16.60.050.
(b) Tenant Displacement Prohibited. The project must not displace existing residential tenants of structures that are proposed for redevelopment. Existing dwelling units proposed for rehabilitation must have been unoccupied for a minimum of 12 months prior to submission of an application and must fail to comply with one or more requirements of the applicable building or housing codes. Applications for new construction cannot be submitted for vacant property upon which an occupied residential rental structure previously stood, unless a minimum of 12 months has elapsed from the time of most recent occupancy.
(c) Size. The project must include at least four units of multifamily housing within a residential structure. A minimum of four new units must be constructed or at least four additional multifamily units must be added to existing occupied multifamily housing. Existing multifamily housing that has been vacant for 12 months or more does not have to provide additional units so long as the project provides at least four units of new, converted or rehabilitated multifamily housing.
(d) Permanent Residential Housing. At least 50 percent of the space designated for multifamily housing must be provided for permanent residential occupancy, as defined in LMC 16.60.030, and only that portion of the space designated for multifamily housing shall be eligible for the exemption provided for herein.
(e) Proposed Completion Date. New construction multifamily housing and rehabilitation improvements must be completed within three years from the date of approval of the application, plus any extension of time granted under LMC 16.60.150.
(f) Compliance with Guidelines and Standards. The project must be designed to comply with the city’s comprehensive plan, building, housing and zoning codes, and any other applicable regulations and standards in effect for the subject property at the time the applicant submits a fully completed application to the director. For the duration of the exemption granted under this chapter, the property shall have no violations of applicable zoning requirements for which a notice of violation has been issued and is not resolved by compliance, withdrawal or other final resolution. The project must also comply with any other standards and guidelines adopted by the city for the residential targeted area in which the project will be developed. (Ord. 2998 § 1, 2007).
16.60.080 Application procedures.
A property owner who wishes to propose a project for a tax exemption shall comply with the following procedures:
(1) Prior to the application for any building permit therefor, the applicant shall submit an application to the director, on a form established by the director along with the required fees, as contained in the city’s fee schedule.
(2) A complete application shall contain such information as the director may deem necessary or useful, and shall include:
(a) A brief written description of the project and preliminary schematic site and floor plans of the multifamily units and the structure(s) in which they are proposed to be located setting forth the grounds for the exemption;
(b) A brief statement setting forth the grounds for qualifications for exemption;
(c) A statement from the owner acknowledging the potential tax liability when the project ceases to be eligible under this chapter; and
(d) Verification by oath or affirmation of the information submitted.
For rehabilitation projects, the applicant shall also submit an affidavit that existing dwelling units have not been occupied for a period of 12 months prior to filing the application and shall secure from the city verification of property noncompliance with the city’s building or housing ordinances. (Ord. 2998 § 1, 2007).
16.60.090 Application review and issuance of condition certificate.
The director may certify as eligible an application which is determined to comply with the requirements of this chapter. A decision to approve or deny an application shall be made within 90 days of receipt of a complete application or concurrently with the issuance of the final SEPA determination for the proposed project, whichever is later. An application may be approved subject to such terms and conditions as deemed appropriate by the director to ensure the projects meet the land use regulations of the city.
(1) Approval. If an application is approved by the director, the approval, together with a contract between the applicant and the city regarding the terms and conditions of the project, signed by the applicant, shall be presented to the city council for action. Once the contract is approved by the city council and fully executed, the director shall issue a conditional certificate of acceptance of tax exemption. The conditional certificate expires three years from the date of approval unless an extension is granted as provided in this chapter.
(2) Extension of Conditional Certificate. The conditional certificate may be extended by the director for a period not to exceed 24 consecutive months. The applicant must submit a written request stating the grounds for the extension, accompanied by any applicable processing fee. An extension may be granted if the director determines that:
(a) The anticipated failure to complete construction or rehabilitation within the required time period is due to circumstances beyond the control of the owner;
(b) The owner has been acting and could reasonably be expected to continue to act in good faith and with due diligence; and
(c) All the conditions of the original contract between the applicant and the city will be satisfied upon completion of the project.
(3) Denial of Application. If the application is denied, the director shall state in writing the reasons for denial and shall send notice to the applicant at the applicant’s last known address within 10 days of the denial. An applicant may appeal a denial to the city council by filing a written appeal with the city clerk within 30 days of notification that the applicant has been denied. The appeal will be based upon the record made before the director with the burden of proof on the applicant to show that there is no substantial evidence on the record to support the director’s decision. The decision of the city council in denying or approving the application is final. All other appeals of the director’s decisions shall be made to the appeal board of adjustment. (Ord. 2998 § 1, 2007).
16.60.100 Application for final certificate.
Upon completion of the improvements provided in the contract between the applicant and the city and upon issuance of a temporary or permanent certificate of occupancy, the applicant may request a final certificate of tax exemption. The applicant must file with the director such information as the director may deem necessary or useful to evaluate eligibility for the final certificate, including:
(1) A statement of expenditures made with respect to each multifamily housing unit and the total expenditures made with respect to the entire property;
(2) A description of the completed work and a statement of qualification for the exemption;
(3) If applicable, a statement that the project meets the affordable housing requirements as described in LMC 16.60.070(2)(b); and
(4) A statement that the work was completed within the required three-year period or any authorized extension. Within 30 days of receipt of all materials required for a final certificate, the director shall determine whether the improvements satisfy the requirements of this chapter. (Ord. 2998 § 1, 2007).
16.60.110 Issuance of final certificate.
If the director determines that the project has been completed in accordance with the contract between the applicant and the city and has been completed within the authorized time periods, including, if applicable, affordable housing requirements, the city shall, within 10 days following the expiration of the 30-day period specified in LMC 16.60.100, file a final certificate of tax exemption with the Cowlitz County assessor.
(1) Denial and Appeal. The director shall notify the applicant in writing that a final certificate will not be filed if the director determines that:
(a) The improvements were not completed within the authorized time period;
(b) The improvements were not completed in accordance with the contract between the applicant and the city;
(c) If applicable, the affordable housing requirements as described in LMC 16.60.070(2)(b) were not met;
(d) The owner’s property is otherwise not qualified under this chapter; or
(e) The owner and the director cannot come to an agreement on the allocation of the value of the improvements allocated to the exempt portion of rehabilitation improvements, new construction and multi-use new construction.
(2) Within 30 days of notification by the city to the owner of the director’s denial of a final certificate of tax exemption, the applicant may file a written appeal with the city specifying the factual and legal basis for the appeal. Said appeal shall be heard by the city’s appeal board of adjustment. (Ord. 2998 § 1, 2007).
16.60.120 Annual compliance review.
(1) Within 30 days after the first anniversary of the date of filing the final certificate of tax exemption and each year thereafter, for the tax exemption period, the property owner shall file a notarized declaration with the director indicating the following:
(a) A statement of occupancy and vacancy of the multifamily units during the previous year;
(b) A certification that the property continues to be in compliance with the contract with the city, and, if applicable, that the property has been in compliance with the affordable housing requirements as described in LMC 16.60.070(2)(b);
(c) A description of any subsequent improvement or changes to the property; and
(d) Any additional information requested by the city in regards to the units receiving a tax exemption.
City staff shall also conduct on-site verification of the declaration. Failure to submit the annual declaration may result in the tax exemption being cancelled.
(2) The city shall report annually by December 31st of each year, beginning in 2007, to the Washington State Department of Community, Trade, and Economic Development. The report must include the following information:
(a) The number of tax exemption certificates granted;
(b) The total number and type of units produced or to be produced;
(c) The number and type of units produced or to be produced meeting affordable housing requirements;
(d) The actual development cost of each unit produced;
(e) The total monthly rent or total sale amount of each unit produced;
(f) The income of each renter household at the time of initial occupancy and the income of each initial purchaser of owner-occupied units at the time of purchase for each of the units receiving a tax exemption and a summary of these figures for the city; and
(g) The value of the tax exemption for each project receiving a tax exemption and the total value of tax exemptions granted. (Ord. 2998 § 1, 2007).
16.60.130 Cancellation of tax exemption.
If at any time the director determines the owner has not complied with the terms of the contract or with the requirements of this chapter, or that the property no longer complies with the terms of the contract or with the requirements of this chapter, or for any reason no longer qualifies for the tax exemption, including, if applicable, affordable housing requirements, the tax exemption shall be cancelled and additional taxes, interest and penalties imposed pursuant to state law. This cancellation may occur in conjunction with the annual review or at any other time when noncompliance has been determined. If the owner intends to convert the multifamily housing to another use, or, if applicable, if the owner intends to discontinue compliance with the affordable housing requirements as described in LMC 16.60.070(2)(b) or any other condition to exemption, the owner must notify the director and the Cowlitz County assessor within 60 days of the change in use or intended discontinuance. Upon such change in use, the tax exemption shall be cancelled and additional taxes, interest and penalties imposed pursuant to state law.
(1) Effect of Cancellation. If a tax exemption is cancelled due to a change in use or other noncompliance, the Cowlitz County assessor shall comply with applicable state law to impose additional taxes, interest and penalties on the property, and a priority lien may be placed on the land, pursuant to state law.
(2) Notice and Appeal. Upon determining that a tax exemption is to be cancelled, the director shall notify the property owner by certified mail return receipt requested. The property owner may appeal the determination by filing a notice of appeal with the city within 30 days, specifying the factual and legal basis for the appeal. The appeal board of adjustment will conduct a hearing at which the applicant and the city will be heard and all competent evidence received. The appeal board of adjustment may affirm, modify, or repeal the decision to cancel the exemption based on the evidence received. (Ord. 2998 § 1, 2007).
16.60.140 Appeals to appeal board of adjustment.
(1) The city’s land use appeal board of adjustment is hereby provided jurisdiction to hear appeals of the decisions of the director under this chapter. Said appeals shall be as follows:
(a) Appeal of a decision of the director that the owner is not entitled to a final certificate of tax exemption, filed with the city clerk within 30 days of notification by the city to the owner of denial of a final certificate of tax exemption.
(b) Appeal of a cancellation of tax exemption, filed with the city clerk within 30 days of the notification by the city to the owner of cancellation.
(2) The appeal board of adjustment’s procedures shall apply to hearings under this chapter to the extent they are consistent with the requirements of this chapter and Chapter 84.14 RCW. The appeal board of adjustment shall give substantial weight to the director’s decision and the burden of overcoming the weight shall be on the appellant. The decision of the appeal board of adjustment constitutes the final decision of the city. An aggrieved party may appeal the decision to superior court under RCW 34.05.510 through 34.05.598 if the appeal is properly filed within 30 days of notification by the city of the appellant of that decision. (Ord. 2998 § 1, 2007).
16.60.150 Extension.
If a project is unable to be completed within the three-year period specified in LMC 16.60.070, one or more extensions of time, for periods not more than 180 days each, may be granted by the director. The extension shall be requested in writing and justifiable cause demonstrated. (Ord. 2998 § 1, 2007).