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Cities and developers support extending vertical housing tax exemption; LRO presents usage data
Summary
The committee heard public testimony and LRO analysis on House Bill 2,074, which would extend the partial property tax exemption for vertical housing development projects. Testimony from Beaverton's mayor and tax policy advocates described local use and recent growth in program uptake.
Chair Nathanson opened a public hearing on House Bill 2,074, which would move the sunset for the partial property tax exemption for vertical housing development projects from December 31, 2025 to December 31, 2031. The Legislative Revenue Office presented background on the exemption’s policy purpose, mechanics and program usage.
LRO staff explained the exemption is a partial 10‑year exemption for newly constructed or rehabilitated mixed‑use projects in designated vertical housing development zones. The partial exemption can reach up to 80% of assessed value depending on a formula that considers the share of residential floor area, the number of stories (two through five), and the percentage of units reserved for low‑income households; in some configurations the exemption can also apply to land value.
Lacey Beatty, mayor of Beaverton, described local use: Beaverton has used the vertical housing exemption for nine multifamily developments that together account for hundreds of units. “These developments are moving forward in part due to the vertical housing property tax exemption,” Beatty said, and she urged the committee to extend the tool, calling it “a very important tool for us.” Tax Fairness Oregon’s Richard Swift also testified in support of extending the sunset for this and related housing exemptions, saying the measures “have resulted in a net positive regarding low income and workforce housing.”
Committee members asked detailed questions about the exemption’s application mechanics and program usage. LRO explained how applicants calculate exemption amounts and noted changes in law around 2017 that affected zone designation and rehabilitation thresholds; the office presented usage trends showing account counts and average assessed value per exempt account have increased in recent years and that program growth is not limited to the Portland tri‑county area.
The committee closed the public hearing on HB 2,074 without taking further action at the meeting. LRO materials and submitted written testimony are part of the committee record.
