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Councilors question proposed TIF-policy changes aimed at improving LIHTC competitiveness
Summary
Staff proposed clarifying TIF eligibility definitions and fast-tracking 75%/30-year TIF consideration for LIHTC (LITEC) applicants to improve competitiveness for MaineHousing QAP scoring; several councilors urged safeguards to avoid over-subsidizing developments and to preserve fiscal oversight.
City staff presented three proposed amendments to the city's tax-increment financing (TIF) policy: add definitions and sample documents for evaluating financial necessity and capacity; automatically consider a 75% 30-year TIF for projects applying for Low-Income Housing Tax Credit (LIHTC/LITEC) to align with a new MaineHousing QAP scoring category; and allow projects seeking LITEC to undergo staff review (in-house underwriting) rather than full third-party underwriting to meet MaineHousing's QAP schedules.
Councilor Kate Sykes and others cautioned that providing maximum TIF terms without independent underwriting risks over-subsidizing projects and shifting costs to taxpayers. Sykes urged a requirement that, should an over-subsidy be discovered, the city recover value for tenants (deeper affordability) or additional units. Staff acknowledged the concerns, said the proposals were meant to help Portland projects compete statewide and offered to take the policy back for more development of safeguards and potential underwriting checks.
Staff emphasized there was no immediate deadline to act on policy amendments, but noted that QAP application and TIF submission timelines (mid-August) make the issue time-sensitive for projects targeting the LIHTC cycle. The committee did not adopt the proposed policy changes at the meeting and asked staff to return with options that balance competitiveness and fiscal oversight.
