HomeMy WebLinkAboutITEM VIII-A-4
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CIT'Y OF
AGENDA BILL APPROVAL FORM
WASH[NGTON
Agenda Subject: Ordinance No. 6257 Date: August 11, 2009
Department: Planning, Attachments: Ordinance No. 6257 Budget Impact:
Building, and Community '
Administrative Recommendation:
City Council introduce and adopt Ordinance No. 6257.
Background Summary:
The City originally adopted Ordinance No. 5779 creating Auburn City Code (ACC) Chapter 3.94, Multi-
Family Property Tax Exemption. This chapter allowed a property tax exemption for ten years for projects
that created 30 or more permanent occupancy units, with an investment of at least $200,000.
In 2007, the State Legislature amended RCW Chapter 84.14, which permits cities to enact this type of
legislation, to incorporate affordable housing. If a project included a certain percentage of affordable
housing then the property tax exemption could be realized for finrelve years. With no affordable housing in
the project then only eights years of exemption can be obtained.
The proposed ordinance amends various sections of ACC Chapter 3.94 to address changes to RCW
84.14. As mentioned above, the significant change is difference in how long the property exemption
applies to a project; eight years for no affordable housing and twelve years if affordable housing, for low
or moderate income households, is included in the project.
At the Planning and Community Development Committee meeting on August 10, 2009, the Committee
reviewed the proposed code amendment and did not have any changes. The Finance Committee has
also reviewed the proposed code amendments.
L0817-1
F6.6.9
Reviewed by Council & Committees: Reviewed by Departments 8 Divisions:
❑ Arts Commission COUNCIL COMMITTEES: ❑ Building ❑ M&O
❑ Airport 0 Finance ❑ Cemetery ❑ Mayor
❑ Hearing Examiner ❑ Municipal Serv. ❑ Finance ❑ Parks
❑ Human Services 0 Planning & CD ❑ Fire ~ Planning
❑ Park Board ❑ Public Works ED Legal ❑ Police
❑ Planning Comm. ❑ Other ❑ Public Works ❑ Human Resources
❑ Information Services
Action:
Committee Approval: ❑Yes ❑No
Council Approval: ❑Yes ❑No Call for Public Hearing
Referred to Until
Tabled Until
Councilmember: Norman Staff: Baker
Meetin Date: Au ust 17, 2009 Item Number: VIII.A.4
AUBURN * MORE THAN YOU IMAGINED
ORDINANCE NO. 6 2 5 7
AN ORDINANCE OF THE CITY OF AUBURN,
WASHINGTON, AMENDING CHAPTER 3.94 OF
THE AUBURN CITY CODE RELATING TO MULTI-
FAMILY PROPERTY TAX EXEMPTION
WHEREAS, in 1995 the Washington State Legislature adopted Chapter
84.14 RCW, to encourage increased residential opportunities in cities required to
plan under the Growth Management Act, by providing for special property tax
valuation for eligible multi-family housing in targeted urban, residential areas;
and
WHEREAS, Chapter 84.14 further authorized cities with a population of at
least fifteen-thousand to adopt procedures to implement the special property tax
valuations; and
WHEREAS, the City of Auburn adopted the Auburn Comprehensive Plan,
to implement the planning requirements of the Growth Management Act, RCW
36.70A; and
WHEREAS, the Auburn Comprehensive Plan establishes a need for
multi-family housing and expressly designates the downtown as a location for
multifamily housing; and
WHEREAS, the City of Auburn adopted the Auburn Downtown Plan as a
complement to the Auburn Comprehensive Plan; and
WHEREAS, the Auburn Downtown Plan demonstrates a need for the
redevelopment of the downtown and establishes a plan for the redevelopment
that includes the new construction of multifamily housing; and
Ordinance No. 6257
August 11, 2009
Page 1
WHEREAS, an assessment of available properties indicates a need for
new construction in the target area; and
WHEREAS, in order to justify the tax abatement program, it is appropriate
that the residential development to which the tax abatement program would
apply establish a long term benefit to the City; and
WHEREAS, the residential development to which the tax abatement
program would apply should also reflect a minimum investment; and
WHEREAS, the advantages of new construction to the City therefore
outweigh disadvantages; and
WHEREAS, as an Urban Center the City is obligated to increase densities
in its urban center; and
WHEREAS, the Downtown Plan establishes certain development criteria
intended to promote development in the downtown area; and
WHEREAS, to further promote such development, the Auburn' City
Council desires to adopt procedures for the application for and approval of
property tax incentives for qualifying multifamily housing within the downtown;
and
WHEREAS, the state legislature amended RCW 84.14 and the in order to
be eligible for a multi-family property tax exemption certain changes to Chapter
3.94 are warranted.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN
DO ORDAIN as follows:
Ordinance No. 6257
August 11, 2009
Page 2
Section 1. Amendment to Citv Code. That Chapter 3.94, Multi-Family
Property Tax Exemption, of the Auburn City Code be and the same hereby is
amended to read as follows:
3.94.020 Purpose.
As provided for in Chapter 84.14, RCW, the purpose of this Chapter is to
provide limited, ei ht (M_}e;-k4-9~-year exemptions from ad valorem property
taxation for qualified new multifamily and rehabilitated multi-familv housing
constructed in the Downtown Core and 12(twelve) vear exemptions from ad
valorem propert_y taxation for qualified new affordable multifamily and
rehabilitated multifamilv housinq constructed in the Downtown Core in order to:
A. Accomplish the planning goals of the Growth Management Act,
RCW 36.70A and the City of Auburn Comprehensive and Downtown Plansi a-nd
B. Encourage residential opportunities, includinq affordable housinq
opportunities, within the Downtown Csorei a-d
C. Stimulate new construction of multifamily housing in the Downtown
~ Core to increase housing opportunitiesi apA
D. Assist in directing future population growth into the City's
Downtown Core thereby encouraging the most efficient use of the City's
~ infrastructurei apA
E. Achieving development densities that enhance the use of the
community's mass transit opportunities and the public investment in such
opportunitiesi and
F. Promote community development and Downtown Core
revitalization in fulfillment of the City's Downtown Plan.
3.94.030 Definitions.
In construing the provisions of this Chapter, the following definitions shall
be applied:
A. Assessor means the King County Assessor.
B. Affordable Housinq means residential housinq that is rented by a
person or household whose monthly housinq costs, includinq utilities other than
telephone do not exceed thirty percent of the household's monthly income. For
the purposed of housing intended for owner occupancy, "affordable housing"
means residential housinq that is within the means of low or moderate-income
households.
CB. Director means the Director of the City of Auburn DepaFtrnen
Dl+nrinn .,nd r„m,,,,,.,;+., no„ol„nmo.,+Planninq, Buildinq, and Communitv
Department or any other City office, department or agency that shall succeed to
its functions with respect to this Chapter, or his/her authorized designee.
D. High cost area means a county where the third quarter median
house price for the previous year as reported by the Washington center for real
estate research at Washington State University is equal to or qreater than one
Ordinance No. 6257
August 11, 2009
Page 3
hundred thirty percent of the statewide median house price published during the
same time period.
E. Low-income household means a sinqle person, family, or
unrelated persons living toqether whose adjusted income is at or below eiqhty
percent of the median family income adjusted for family size, for the countv
where the project is located as reported by the United States department of
housinq and urban development. For cities located in hiqh-cost areas, "low-
income household" means a household that has an income at or below one
hundred percent of the median family~income adjusted for family size, for the
countv where the proiect is located.
F. Moderate-income household means a single person, familv, or
unrelated persons livinq together whose adjusted income is more than eiqhtv
percent but is at or below one hundred fifteen percent of the median family
income adousted for family size for the county where the project is located, as
reported by the United States department of housinq and urban development.
For cities located in hiqh-cost areas, "moderate-income household" means a
hausehold that has an income that is more than one hundred percent, but at or
below one hundred fifty percent of the median family income adjusted for family
size, for the county where the project is located.
GG. Multifamily housing means a building having-thirt x (30) four 4 or
more dwelling units designed for permanent residential occupancy.
I Hg. Owner means the property owner of record_
1& Permanent residential occupancy means multifamily housing that
provides either rental or owner occupancy for a period of at least one (1) month.
This excludes hotels and motels that predominately offer rental accommodation
on a daily or weekly basis.
J. Rehabilitation improvements means modifications to existinq
structures that are vacant for twelve manths that are made to achieve a condition
of substantial compliance with existing building codes or modification to existinq
occupied structures which increase the number of multifamily housinq units.
KF. Residential targeted area means an area within an urban center
that has been designated by the City Council as a residential targeted area in
accordance with this Chapter.
1. Pursuant to this Section, the Auburn Downtown Core, as
designated by "Exhibit A" attached is designated the residential targeted
area.
2. If a part of any legal lot is within the residential targeted
area, then the entire lot shall be deemed to lie within the residential
targeted area.
~ L6. Urban center means a compact identifiable district where urban
residents may obtain a variety of products and services. An urban center must
contain:
1. Several existing or previous, or both, business
establishments that may include but are not limited to shops, offices,
banks, restaurants, governmental agencies;
Ordinance No. 6257
August 11, 2009
Page 4
2. Adequate public facilities including streets, sidewalks,
lighting, transit, domestic water, and sanitary sewer systems; and
3. A mixture of uses and activities that may include housing,
recreation, and cultural activities in association with either commercial or
office, or both, use.
3.94.040 Tax Exemption - Duration - Valuation - Exceptions.
A. Exemption, Duration of. The value of new housinq construction,
conversion and rehabilitation improvements for market rate property qualifying
under this Chapter, is exempt from ad valorem property taxation for te-n-eight
(4-98) successive years beginning January 1St of the year immediately following
the calendar year of issuance of the Final Certificate of Tax Exemption and
twelve (12) successive years beginninq January 1St of the year immediatelv
following the calendar year of issuance of the Final Certificate of Tax Exemption
for affardable housing qualifying under this Chapter.
B. Limits on exemption. The exemption does not apply to the value of
land or to the value of non-housing improvements, nor does the exemption apply
to increases in assessed valuation of land and non-qualifying improvements.
This Chapter also does not apply to increases in assessed valuation made by
the assessor on non-qualifying portions of building and value of land, nor to
increases made by lawful order of a county board of equalization, the
Department of Revenue, or a county, to a class of property throughout the
county or specific area of the county achieve the uniformity of assessment or
appraisal required by law. In the case of rehabilitation of existinq buildinas, the
exemption does not include the value of improvements constructed prior to the
submission of the application required under RCW Chapter 84.14.
C. Only newly constructed or rehabilitated market rate units with a
minimum investment of $200,000 per unit annually adjusted for inflation by the
Consumer Price Index as of the passage date of this document or newly
constructed ar rehabilitated market rate units with a minimum investment of
$200 000 per unit annually adiusted for inflation by the Consumer Price Index as
of the passage date of this document and 20% or more of the units priced as
affordable units shall qualify for the exemption.-
3.94.050 Project eligibility.
To qualify for exemption from property taxation under this Chapter, the
property must satisfy all of the following requirements:
A. The property must be located in the designated residential targeted
I area_
B. The project must consist of at least #hi#y (30)four 4-dwelling' units
of multifamily housing, located within a residential structure or a mixed use
development, in which at least fifty (50) percent of the space within such
residential structure or mixed use development is intended for permanent
residential occupancy.
Ordinance No. 6257
August 11, 2009
Page 5
C. The property must be used and/or developed in a way that
increases or preserves property valuation, and the use or development of the
property must represent an increased investment in the property and property
maintenance that results in an increase in the over-all property values in the
target area.
D. The project must comply with all zoning requirements, land use
regulations, and building code requirements contained in the Auburn City Code
and applicable upon land use permit approval or submittal of a complete building
permit application, whichever occurs sooner.
E. For the duration of the exemption granted under this Chapter, the
property shall have no violations of applicable zoning requirements, land use
regulations, or building code requirements contained in the Auburn city Code for
which the City of Auburn and/or its departments or divisions have issued a"stop
work order" or notice of violation and order to correct that are not resolved by a
voluntary correction agreement, vacation by the hearing examiner, or action of
the property owner in compliance with the applicable code requirements as
determined by the Director, within the time period for compliance as provided in
such notice(s) and any extension of the time period for compliance granted by
the Director.
F. New construction of multifamily housing must be completed within
three (3) years from the date of approval of the application or by any extended
deadline granted by the Director pursuant to Section 3.94.070(C), ACC.
G. The owner must enter into a written agreement with the' City,
~ approved by the Director1 and signed by the Mayor, in which the owner has
agreed to the implementation of the development on terms and conditions
satisfactory to the City.
3.94.060 Application procedure. The owner of property applying for exemption under this Chapter shall
submit an application to the director on a form established by the Director. The
owner shall verify the correctness of the information contained in the application
by his/her signature and affirmation made under penalty of perjury under the
laws of the State of Washington. The application shall contain such information
as the Director may deem necessary or useful, which at a minimum shall include:
A. A completed City of Auburn application form, including information
setting forth the grounds for tax exemption
B. A brief written description of the project, and schematic site and
floor plans of the multifamily units and the structure(s) in which they are
proposed to be located;
C. Floor and site plans of the proposed project, which plans may be
revised by the owner provided in the opinion of the Director, such revisions do
not materially alter the nature of the project or the rationale substantiating the
exemption application;
D. A statement from the owner acknowledging the potential tax liability
when the property ceases to be eligible for exemption under this Chapter
Ordinance No. 6257
August 11, 2009
Page 6
E. At the time of initial application under this section, the owner shall
pay to the City an initial application fee of one thousand dollars ($1,000), plus an
amount necessary to cover recording fees under Section 3.94.100 ACC.
F. Except as otherwise provided in Section 3.94.070, ACC, the
application shall be submitted any time before the earlier of (1) an application for
a land use approval process and (2) an application for a building or other
construction permit
G. If on the effective date of this Chapter, the owner has applied. for a
permit identified in Subsection 6 of this section, then application for exemption
under this section may be submitted any time prior to issuance of a building
permit.
3.94.070 Application Review - Approval - Required findings - Issuance of
conditional certificate - Denial - AppeaL
A. The director may approve an application if he or she finds that:
1. When a new structure is being created, or an existinq
structure is beinq rehabilitated a minimum of th+Fty (39)- four 4 new
multi-family units are being constructed; or an existing structure
vacant for 12 months or more has a minimum of four(4) units being
rehabilitated;
2. The proposed project is or will be, at the time of completion,
in conformance with all approved plans, and all applicable
requirements of the Auburn City Code or other applicable
requirements or regulations in effect at the time the application is
approved;
3. The owner has complied with all of the requirements of this
Chapter, including but not limited to project eligibility requirements
contained in Section 3.94.050 ACC, and application requirements
contained in Section 3.94.060 ACC; and
4. The project site is located within a designated residential
targeted area.
B. The Director shall deny an application if the foregoing criteria are
not met.
C. If the application is approved, the owner shall enter into a contract,
the Director shall issue a conditional certificate of acceptance of tax exemption.
The conditional certificate shall expire three (3) years from the date of approval
unless an extension is granted as provided in Section 3.94.090, ACC.
D. Following his/her approval of the contract, the Director shall issue a
conditional certificate of acceptance of tax exemption. The conditional certificate
shall expire three (3) years from the date of approval unless an extension is
granted as provided in Section 3.94.090, ACC.
E. If the application is denied, the Director shall state in writing the
reasons for the denial and send notice of denial to the owner's last known
address within ten (10) working days of the denial.
Ordinance No. 6257
August 11, 2009
Page 7
F. An owner may appeal a denial of a tax exemption application to the
Hearings Examiner by filing a notice of appeal with the City Clerk within thirty
(30) calendar days of receipt of notice of the denial. The appeal before the
Hearings Examiner shall be based upon the record before the Director, and the
Director's decision will be upheld unless the owner can show that there is no
substantial evidence on the record to support the director's decision.
Section 2. Severabilitv. That if any provision of this Ordinance
or the application thereof to any person or circumstance is held to be invalid, the
remainder of such code, ordinance or regulation or the application thereof to
other person or circumstances shall not be affected.
Section 3. Implementation. The Mayor is hereby authorized to
implement such administrative procedures as may be necessary to carry out the
directions of this legislation.
Section 4. Effective Date. This Ordinance shall be in full force and
effect five days from and after its passage and publication as provided by law..
INTRODUCED:
PASSED:
APPROVED:
PETER B. LEWIS, MAYOR
ATTEST:
Danielle E. Daskam, City Clerk
Ordinance No. 6257
August 11, 2009
Page 8
APP ED S TO FORM: ,
1 ;
i
\
aniel B. Heid, City Attorney _
PUBUSHED:
Ordinance No. 6257
August 11, 2009
Page 9