Chapter 5.86
MULTI-FAMILY DWELLING TAX EXEMPTIONS
5.86.000 Chapter Contents
Sections:
5.86.010 Definitions.
5.86.020 Residential target area, hearing on resolution.
5.86.030 Residential target area designation and standards.
5.86.040 Tax exemption for multi-family housing in residential target areas authorized.
5.86.050 Project eligibility.
5.86.060 Application procedure.
5.86.070 Application review and issuance of conditional certificate.
5.86.080 Extension of conditional certificate.
5.86.090 Application for final certificate.
5.86.100 Issuance of final certificate.
5.86.110 Annual compliance review.
5.86.120 Cancellation of tax exemption.
5.86.010 Definitions
When used in this chapter, the following terms shall have the following meanings, unless the context indicates otherwise:
A. “Multi-family housing” means building(s) having four or more dwelling units designed for permanent residential occupancy resulting from new construction or rehabilitation or conversion of vacant, underutilized, or substandard buildings to multi-family housing.
B. “Owner” means the property owner of record.
C. “Urban center” means a compact identifiable district where urban residents may obtain a variety of products and services.
a. Several existing or previous, or both, business establishments that may include but are not limited to shops, offices, banks, restaurants, 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, recreating, and cultural activities in association with either commercial or office, or both, use.
D. “Director” means the Director of the City of Olympia Community Planning and Development Department or other city official designated by the City Manager to carry out this chapter.
E. “Permanent residential occupancy” means multi-unit housing that provides either rental or owner occupancy on a nontransient basis. This includes owner-occupied or rental accommodation that is leased for a period of at least one month. This excludes hotels and motels that predominately offer rental accommodation on a daily or weekly basis.
F. “Rehabilitation improvements” means modifications to existing structures that are vacant for twelve (12) months or longer, or modification to existing occupied structures which convert nonresidential space to residential space and/or increase the number of multi-family housing units.
G. “Residential target area” means an area within an urban center that has been designated by the City Council as lacking sufficient, available, desirable, and convenient residential housing to meet the needs of the public.
H. “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 thirty 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.
I. “Household” means a single person, family, or unrelated persons living together.
J. “Low-income household” means a single person, family, or unrelated persons living together whose adjusted income is at or below eighty percent of the median family income adjusted for family size, for the county where the project is located, as reported by the United States department of housing and urban development. For cities located in high-cost areas, “low-income household” means a household that has an income at or below one hundred percent of the median family income adjusted for family size, for the county where the project is located.
K. “Moderate-income household” means a single person, family, or unrelated persons living together whose adjusted income is more than eighty percent but is at or below one hundred fifteen percent of the median family income adjusted for family size, for the county where the project is located, as reported by the United States department of housing and urban development. For cities located in high-cost areas, “moderate-income household” means a household that has an income that is more than one hundred percent, but at or below one hundred fifty percent, of the median family income adjusted for family size, for the county where the project is located.
(Ord. 6618 §1, 2009; Ord. 5713 §1, 1997).
5.86.020 Residential target area, hearing on resolution
A. For the purpose of designating a residential targeted area or areas, the City Council may adopt a resolution of intention to designate an area described in the resolution. The resolution must state the time and place of a hearing to be held by the City Council to consider the designation of the area and may include such other information pertaining to the designation of the area as the City Council determines to be appropriate to apprise the public of the action intended.
B. The City Council shall give notice of a hearing held under this ordinance by publication of the notice once each week for two consecutive weeks, not less than seven days, nor more than thirty days before the date of the hearing in a paper having a general circulation in the city. The notice must state the time, date, place, and purpose of the hearing and generally identify the area proposed to be designated as a residential targeted area.
(Ord. 5713 §1, 1997).
5.86.030 Residential target area designation and standards
A. Criteria. Following a public hearing, with notice given by resolution pursuant to RCW 84.14.040, the City Council may, in its sole discretion, designate one or more residential target areas. Each designated target area must meet the following criteria, as determined by the City Council:
1. The target area is located within an urban center;
2. The target area lacks sufficient available, desirable, and convenient residential housing, including affordable housing, to meet the needs of the public who would likely live in the urban center if affordable, desirable, attractive, and livable places were available; and
3. The providing of additional housing opportunity, including affordable housing, in the target area will assist in achieving the following purposes:
a. Encourage increased residential opportunities within the target area; or
b. Stimulate the construction of new multi-family housing and the rehabilitation of existing vacant and under-utilized buildings for multi-family housing.
In designating a residential target area, the City Council may also consider other factors including, but not limited to: whether additional housing in the target area will attract and maintain a significant increase in the number of permanent residents; whether an increased residential population will help alleviate detrimental conditions and social liability in the target area; and whether an increased residential population in the target area will help to achieve the planning goals mandated by 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.
B. Target Area Standards and Guidelines. For each designated residential target area, the City Council shall adopt basic requirements for both new construction and rehabilitation, including the application process and procedures. These requirements may include the following:
1. Requirements that address demolition of existing structures and site utilization; and
2. Building requirements that may include elements addressing parking, height, density, environmental impact, and compatibility with the existing surrounding property and such other amenities as will attract and keep permanent residents and that will properly enhance the livability of the residential targeted area in which they are to be located.
Area 1 - Downtown Residential Target Area
All of that portion of the City of Olympia, Washington described as beginning at the intersection of the East shoreline of Capitol Lake with the Westerly extension of centerline of 15th Ave extended Westerly; thence Easterly along said centerline and its extension to the centerline of Capitol Way; thence southerly along said centerline to the centerline of 16th Ave.; thence Easterly along said centerline and its extension to the Northwesterly boundary line of Interstate 5; thence Northeasterly along said line to its intersection with the centerline of Eastside St. thence Northerly along said centerline to the centerline of State Ave.; thence Westerly along said centerline to the centerline of East Bay Dr.; thence Northerly along said centerline of East Bay Dr. to Olympia Ave; thence Westerly along said centerline to the centerline of Indian/Moxlie Creek Culvert; thence Northerly along said creek centerline to the shoreline of Budd Inlet; thence along said shoreline and the shoreline of Capitol Lake to the point of beginning; EXCEPTING THEREFROM that area lying Westerly of Water Street and Northerly of 5th Ave and Southerly of Budd Inlet.
Area 2 - Eastside Residential Target Area
All properties located along State Ave. and 4th Ave. which are bounded by Eastside St. on the West and Fir St. on the East; said area limited to a half block North of State Ave. and a half block south of 4th Ave.; ALSO all properties located North of State Ave between East Bay drive and Eastside St. and South of Olympia Ave.; EXCEPTING THEREFROM the North half of the block which lies between Pear Street and Quince St., and Olympia Ave. and State St.; ALSO EXCEPTING THEREFROM the three lots located at the Southwest corner of Eastside St. and Olympia. Ave.
Area 3 - Westside Residential Target Area
All properties located along Harrison Avenue which is currently bounded by: Cushing Street on the west; Foote Street on the east; extending only two lots deep both north and south of Harrison Avenue. Also included is the third lot north, located at the northeast corner of Harrison Avenue and Milroy Street; the third and fourth lot north, located at the northeast corner of Harrison Avenue and Decatur Street; the third and fourth lots south, located at the southwest corner of Harrison Avenue and Decatur Street; and the block bounded by Perry Street on the west, Garfield Street on the north, Plymouth Street on the east and Harrison Avenue on the south; EXCEPT any portion lying within Woodruff Park.
(Ord. 6643 §1, 2009; Ord. 6618 §1, 2009; Ord. 5734 §1; Ord. 5713 §1, 1997).
5.86.040 Tax exemptions for multi-family housing in residential target areas authorized
A. Duration of Exemption. The value of improvements qualifying under this chapter will be exempt from ad valorem property taxation, as follows:
1. For properties for which applications for certificates of tax exemption eligibility are submitted under Chapter 84.14 RCW before the effective date of Chapter 430, Laws of 2007, the value is exempt for ten (10) successive years beginning January 1 of the year immediately following the calendar year after issuance of the Final Certificate of Tax Exemption.
2. For properties for which applications for certificates of tax exemption eligibility are submitted under Chapter 84.14 RCW on or after the effective date of Chapter 430, Laws of 2007, the value is exempt:
a. For eight successive years beginning January 1st of the year immediately following the calendar year of issuance of the certificate; or
b. For twelve successive years beginning January 1st of the year immediately following the calendar year of issuance of the certificate, if the property otherwise qualifies for the exemption under chapter 84.14 RCW and meets the conditions in this subsection. For the property to qualify for the twelve-year exemption under this subsection, the applicant must commit to renting or selling at least twenty percent of the multi-family housing units as affordable housing units to low and moderate-income households, and the property must satisfy that commitment and any additional affordability and income eligibility conditions adopted by the City. In the case of projects intended exclusively for owner occupancy, the minimum requirement of this subsection may be satisfied solely through housing affordable to moderate-income households.
B. Limits on Exemption. The exemption does not apply to the value of land or to the value of improvements not qualifying under this ordinance, nor does the exemption apply to increases in assessed valuation of land and nonqualifying improvements. In the case of rehabilitation of existing buildings, the exemption does not include the value of improvements constructed prior to submission of the completed application required under this ordinance. This chapter does not apply to increases in assessed valuation made by the assessor on nonqualifying portions of building and value of land nor to increases made by lawful order of a county board of equalization, the department of revenue, or a county, to a class of property throughout the county or specific area of the county to achieve the uniformity of assessment or appraisal required by law.
(Ord. 6618 §1, 2009; Ord. 5713 §1, 1997).
5.86.050 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 a residential target area as designated in 5.86.030.
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 twelve (12) months prior to submission of an application and must have one or more violations of the City’s minimum housing code. Applications for new construction cannot be submitted for vacant property upon which an occupied residential rental structure previously stood, unless a minimum of twelve (12) months has elapsed from the time of most recent occupancy.
C. Size. The project must include at least four (4) units of multi-family housing within a residential structure or as part of an urban development. A minimum of four new units must be constructed or at least four (4) additional multi-family units must be added to existing occupied multi-family housing. Existing multi-family housing that has been vacant for twelve (12) months or more does not have to provide additional units so long as the project provides at least four (4) units of new, converted, or rehabilitated multi-family housing.
D. Proposed Completion Date. New construction multi-family housing and rehabilitation improvements must be completed within three (3) years from the date of approval of the application.
E. 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 in effect at the time the application is approved. The project must also comply with any other standards and guidelines adopted by the City Council for the residential target area in which the project will be developed.
F. At least fifty percent (50%) of the space in a new, converted, or rehabilitated multiple unit must be for permanent residential housing. In the case of existing occupied multi-family development, the multi-family housing must also provide for a minimum of four additional multi-family units. Existing multi-family vacant housing that has been vacant for twelve months or more does not have to provide additional units;
G. The applicant must enter into a contract with City approved by City Council under which the applicant agrees to the implementation of the development on terms and conditions satisfactory to the City Council.
(Ord. 6618 §1, 2009; Ord. 5713 §1, 1997).
5.86.060 Application procedure
A property owner who wishes to propose a project for a tax exemption shall complete the following procedures:
A. Prior to April 1 of any year, file with the Director the required application along with the required fees. The application fee to the City shall be One Hundred Dollars and No Cents ($100).
B. A complete application shall include:
1. A completed City of Olympia application form setting forth the grounds for the exemption;
2. Preliminary floor and site plans of the proposed project;
3. A statement acknowledging the potential tax liability when the project ceases to be eligible under this chapter; and
4. Verification by oath or affirmation of the information submitted.
For rehabilitation projects, the applicant shall also submit an affidavit that existing dwelling units have been unoccupied for a period of twelve (12) months prior to filing the application and shall secure from the City verification of property noncompliance with the City’s applicable building or housing codes.
(Ord. 5713 §1, 1997).
5.86.070 Application review and issuance of conditional 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 ninety (90) calendar days of receipt of a complete application.
A. Approval. The Director may approve the application if he/she finds that:
1. A minimum of four new units are being constructed or in the case of occupied rehabilitation or conversion a minimum of four additional multifamily units are being developed;
2. If applicable, the proposed multiunit housing project meets the affordable housing requirements as described in RCW 84.14.020;
3. The proposed project is or will be, at the time of completion, in conformance with all local plans and regulations that apply at the time the application is approved;
4. The owner has complied with all standards and guidelines adopted by the city under this ordinance; and
5. The site is located in a residential targeted area of an urban center that has been designated by the City Council in accordance with procedures and guidelines of this ordinance.
B. If an application is approved, the applicant shall enter into a contract with the City, approved by the City Council, regarding the terms and conditions of the project. Upon City Council approval of the contract, the Director shall issue a Conditional Certificate of Acceptance of Tax Exemption. The Conditional Certificate expires three (3) years from the date of approval unless an extension is granted as provided in this chapter.
C. Denial. 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 ten (10) calendar days of the denial. An applicant may appeal a denial to the City Council within thirty (30) calendar days of receipt of notice by filing an appeal with the Director with a $100 fee. The appeal will be based on the record made by the Director. The Director’s decision will be upheld unless the applicant can show that there is no substantial evidence on the record to support the Director’s decision. The City Council’s decision on appeal will be final.
(Ord. 6618 §1, 2009; Ord. 5713 §1, 1997).
5.86.080 Extension of conditional certificate
The Conditional Certificate and time for completion of the project may be extended by the Director for a period not to exceed a total of twenty-four (24) consecutive months. The applicant must submit a written request stating the grounds for the extension, accompanied by a Fifty Dollar ($50) 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.
(Ord. 5713 §1, 1997).
5.86.090 Application for final certificate
Upon completion of the improvements agreed upon 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 the following:
A. A statement of expenditures made with respect to each multi-family housing unit and the total expenditures made with respect to the entire property;
B. A description of the completed work and a statement of qualification for the exemption; and
C. If applicable, a statement that the project meets the affordable housing requirements as described in RCW 84.14.020; and
D. A statement that the work was completed within the required three-year period or any authorized extension.
Within thirty (30) calendar days of receipt of all materials required for a Final Certificate, the Director shall determine whether the specific improvements, and the affordability of the units, satisfy the requirements of the contract, application, and this ordinance.
(Ord. 6618 §1, 2009; Ord. 5713 §1, 1997).
5.86.100 Issuance of final certificate
If the Director determines that the project has been completed in accordance with this ordinance and the contract between the applicant and the City has been completed within the authorized time period, the City shall, within ten (10) calendar days of the expiration of the thirty-day review period above, file a Final Certificate of Tax Exemption with the Thurston County Assessor.
A. Denial and Appeal. The Director shall notify the applicant in writing that a Final Certificate will not be filed if the Director determines that:
1. The improvements were not completed within the authorized time period;
2. The improvements were not completed in accordance with the contract between the applicant and the City; or
3. The owner’s property is otherwise not qualified under this chapter.
Within fourteen (14) calendar days of receipt of the Director’s denial of a Final Certificate, the applicant may file an appeal with the City’s Hearing Examiner, as provided in Chapter 18.82 of the Olympia Municipal Code upon payment of a $100 fee. No appeal is provided from the Hearing Examiner to the City Council. The applicant may appeal the Hearing Examiner’s decision to the Thurston County Superior Court if the appeal is filed within thirty (30) calendar days of his/her receiving notice of that decision.
(Ord. 5713 §1, 1997).
5.86.110 Annual compliance review
Within thirty (30) calendar 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 multi-family units during the previous year;
B. A certification that the property continues to be in compliance with the contract with the City and this ordinance and, if applicable, that the property has been in compliance with the affordable housing requirements as described in RCW 84.14.020 since the date of the approved certificate; and
C. A description of any subsequent improvements 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 may also conduct on-site verification of the declaration. Failure to submit the annual declaration shall result in a review of the exemption per RCW 84.14.110.
(Ord. 6618 §1, 2009; Ord. 5713 §1, 1997).
5.86.120 Cancellation of tax exemption
If the Director determines the owner is not complying with the terms of the contract or this ordinance, the tax exemption will be canceled. 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 multi-family housing to another use, the owner must notify the Director and the Thurston County Assessor within sixty (60) calendar days of the change in use.
A. Effect of Cancellation. If a tax exemption is canceled due to a change in use or other noncompliance, the provisions of RCW 84.14.110(1) will apply.
B. Notice and Appeal. Upon determining that a tax exemption is to be canceled, the Director shall notify the property owner by mail, return receipt requested. The property owner may appeal the determination by filing a notice of appeal with the Director within thirty (30) calendar days, specifying the factual and legal basis for the appeal. The Hearing Examiner will conduct a hearing at which all affected parties may be heard and all competent evidence received. The Hearing Examiner will affirm, modify, or repeal the decision to cancel the exemption based on the evidence received. An aggrieved party may appeal the Hearing Examiner’s decision to the Thurston County Superior Court.
(Ord. 5713 §1, 1997).