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Housing staff say five‑year tax‑exemption program produced modest affordable‑housing gains; staff recommends continuing and improving outreach
Summary
Housing and Community Development reported 20 applications to the five‑year partial tax exemption program: 13 approvals (4 completed projects), 52 newly constructed affordable units and 130 preserved units to date. Staff recommended continuing the program and improving marketing and a holistic review with Economic Development.
Michelle Brown Peters, deputy director for Housing and Community Development, told the Land Use, Housing and Transportation Committee that the city’s five‑year partial tax exemption program has produced modest but measurable results.
“We received 20 applications; of the 20 applications, seven were deemed ineligible, and 13 applications were approved,” Peters said, adding that four projects have completed construction and are receiving the credit. She said the program has supported the creation of 52 affordable units and preservation of 130 affordable units, and that the current tax credit for the affordable portion across the four completed projects totals $253,440.
Peters said the program’s rules are specific: properties must be residential, at least 20 years old, and meet substantial rehabilitation thresholds (20% investment for single‑family conversions and 40% for multifamily). Rent on assisted units must remain capped at 30% of household income for tenants earning no more than 80% of the area median income. She described annual compliance reviews, inspections and review of rent rolls as the mechanisms to verify continued affordability.
Committee members asked how the city enforces affordability during the 15‑year abatement and whether the 20% investment threshold for single‑family homeowners is keeping owners out of the program. Peters said enforcement includes annual reviews and inspections and that income eligibility—not the investment threshold—has been the most common barrier for single‑family applicants. She advised staff will evaluate possible design changes while also recommending better outreach immediately to raise awareness and participation.
Staff recommended continuing the partial tax exemption while undertaking a more holistic review with the Department of Economic Development and refining marketing and outreach in the short term. The committee recorded follow‑up items including feasibility and legality of additional conditions such as anti‑demolition covenants and reconsideration of the 20% threshold for single‑family homes.
