Council declines to adopt nonprofit low-income housing tax exemption ordinance after split vote

The Lebanon City Council on Jan. 8 considered an ordinance to adopt the city’s portion of the nonprofit low-income housing property tax exemption authorized in Oregon Revised Statutes sections 307.540–307.548 but voted to reject the measure.

City staff presented a detailed report describing the program and local impacts. Kelly Hart and other staff explained the exemption applies only to nonprofit-owned housing that meets state income and unit-eligibility rules and that the city would initially be considering only its portion of any property tax abatement; the nonprofit would have to obtain participation from other taxing entities for a full exemption. Staff estimated two existing local properties could be eligible and reported an approximate annual general fund impact of about $8,000 for one property and about $46,100 for the other. Staff also provided a long-range example showing cumulative general-fund property tax revenue forgone of roughly $69,000 over a multi-year projection based on three properties.

Council members and members of the public debated the merits. Speakers raised fiscal concerns about reducing general fund revenue while the city faces budget pressures and new service fees. Others argued the nonprofit cited by multiple councilors provides a range of services to residents and that housing people is preferable to leaving them unsheltered.

After discussion the council moved and seconded the ordinance (listed in the agenda and read as “A bill for an ordinance adopting the provisions of Oregon revised statutes ORS sections 307.540 to 307.548 regarding nonprofit corporations, low income housing,” identified as Ordinance number 3031). The motion to approve failed on a recorded voice count: the council reported two votes in favor and four opposed and declared the motion failed.