Lake Oswego school board approves property tax exemption for Hacienda CDC affordable housing

The Lake Oswego School District Board of Directors on Tuesday approved a resolution to grant a property tax exemption to Hacienda Community Development Corporation for a 55-unit affordable housing project in Lake Oswego.

The decision followed public testimony from community organizations, a presentation by Hacienda CEO Ernesto Fonseca and a fiscal overview from district staff. Mayor Joe Buck and several community advocates spoke in favor of the exemption, saying it would enable on-site resident services and support families who otherwise could not afford to live in the district.

District finance staff told the board Hacienda’s overall annual property tax obligation is estimated at about $120,000; staff said the district’s true net loss to its ongoing operating revenues would be substantially smaller because much of the property tax base is equalized through the state school funding formula. Staff estimated the district would forego roughly $50,000 in gross property tax revenue but that the local-option tax loss — the portion the district directly loses — would be about $10,000 per year.

Supporters, including organizers from Respond to Racism and local residents who said they work in Lake Oswego but cannot afford to live there, told the board the project includes on-site programming, community rooms and units targeted to households at or below 60% and 30% of area median income. Board materials cited 55 apartments total, including 21 two-bedroom and five three-bedroom units; speakers and packet materials estimated that between about 32 and 64 children could live in the development.

Mayor Joe Buck told the board the City Council had unanimously approved a corresponding city tax abatement and that if the school district joined the exemption the project would meet the 51% threshold used by taxing jurisdictions to exempt an entire property's tax bill. Staff also said the city has agreed to waive systems development charges (SDCs) for the project; Ketzler (district staff) estimated the waived SDCs exceed half a million dollars.

Hacienda CEO Ernesto Fonseca described the nonprofit’s work over three decades, its resident services partnerships and plans for learning and STEM supports for youth who would live at the site. He and other presenters told the board that the exemption revenue would be directed to resident services rather than operating surplus.

Board members discussed the fiscal tradeoffs before voting. Finance staff explained earlier gross numbers provided to the board were clarified after further analysis to show the smaller net impact to district operating revenue due to state equalization and the structure of debt-service levies. Several directors noted the district’s current budget constraints and the difficulty of making cuts while supporting community needs; others said the projected local-option loss was modest compared with the project’s community benefits and the city’s parallel support.

After discussion, a board member moved and another seconded the resolution. The board approved the Hacienda CDC tax-exemption resolution by voice vote.

The board indicated it will monitor implementation and expects Hacienda to coordinate resident services with district schools and city partners.

Votes at the meeting on this item and related context are recorded in meeting materials and the board minutes.