Article 24.06
Demolition Tax

Sections:

24.06.010    Purpose.

24.06.020    Definitions.

24.06.030    Demolition Tax Imposed; Use of Revenue.

24.06.040    Exemptions.

24.06.050    Tax Reduction for Deconstruction of Residential Structures.

24.06.060    Authority of City Manager.

24.06.070    Failure to Comply with Requirements of Exemption for Affordable Housing or Reduction for Deconstruction.

24.06.080    Violations.

    Editor’s Note: Section 3 of Ordinance 2831 provides, “The provisions of this ordinance shall be null, void and of no further force and effect, and the Code amendments adopted under this ordinance shall be repealed, on and after January 2, 2023.”

24.06.010 Purpose.

The demolition of residential structures in the City of Lake Oswego has reduced the diversity of housing stock and decreased the availability of affordable housing within the City. Subsequent redevelopment has contributed to increases in housing prices that make it more difficult to provide affordable housing. The permit fees relating to building demolitions cover the administrative costs of the regulatory program, but do not address other impacts of demolition of residential structures. The tax imposed under this article is not for the purpose of recovering administrative costs and is not regulatory in any manner. The tax is strictly for revenue purposes, to provide funding to maintain City park properties and facilities. The tax shall be in addition to any regulatory demolition permit fees established from time to time by the City Council and all other applicable regulatory fees and charges.

(Ord. 2831, Added, 12/03/2019)

24.06.020 Definitions.

As used in this article, unless the context requires otherwise:

Certified Deconstruction Contractor means a contractor licensed with the Oregon Construction Contractors Board (CCB) that has successfully completed the deconstruction training and certification program offered by the Building Material Reuse Association, or other program recognized by the City Manager, and that has been approved as a credentialed Certified Deconstruction Contractor by the Director of the City of Portland Bureau of Planning and Sustainability, or the Director’s designee. A firm will be considered certified if at least one person currently employed by the firm is certified.

City Manager means the person holding the position of City Manager of the City of Lake Oswego, or that person’s designee.

Deconstruction means the systematic dismantling of a structure, typically in the opposite order from which it was constructed, in order to maximize the salvage of materials for reuse, in preference over salvaging materials for recycling, energy recovery or disposal in a landfill.

Demolition or Demolish means as defined in LOC 45.12.100(1)(b).

Demolition Permit means the permit required under LOC 45.02.200.

Residential Structure means a single-family dwelling or a duplex, as defined in LOC 50.10.003.2.

Reuse means the utilization of a product or material that was previously installed for the same or similar function to extend its life cycle. Materials salvageable for reuse include but are not limited to cabinets, doors, hardware, fixtures, flooring, siding, and framing lumber.

(Ord. 2831, Added, 12/03/2019)

24.06.030 Demolition Tax Imposed; Use of Revenue.

1.    On or after January 2, 2020, the owner of property that includes a residential structure for which a demolition permit is issued shall pay a tax to the City in the sum of $15,000. The tax shall be paid at the time the demolition permit is issued.

2.    Revenue received from the tax imposed in subsection (1) of this section shall be used solely to maintain City park properties and facilities, including, without limitation, repair, renovation and replacement of existing improvements.

(Ord. 2831, Added, 12/03/2019)

24.06.040 Exemptions.

1.    The demolition tax imposed in LOC 24.06.030 shall not apply if:

a.     A complete and unexpired application for a demolition permit for the residential structure was on file with the City before January 2, 2020;

b.    A complete and unexpired application for a development permit under LOC Chapter 50 was on file with the City before January 2, 2020, for development that, as proposed in the application, necessitates demolition of the residential structure; or

c.     An unexpired development permit under LOC Chapter 50 issued before January 2, 2020, for the property containing the residential structure approves development that necessitates demolition of the residential structure, or includes a condition of approval that requires demolition of the residential structure.

2.    The demolition tax imposed in LOC 24.06.030 shall not apply to:

a.    Any residential structure being demolished due to a catastrophic loss such as fire, landslide, flood, earthquake or other disaster;

b.    Any residential structure that is subject to a vacation or demolition order by the City Building Official by reason of being an unsafe building or structure under LOC 45.09.060, or a dangerous building under LOC 45.09.065;

c.    Any residential structure located on publicly owned property; or

d.    Any residential structure being demolished to clear a site for development of multi-family affordable housing described in LOC 39.06.105(5)(a)(ii); provided, that:

i.    The owner of the property including the residential structure has received a development permit for development on the property that qualifies for the system development charge exemption under LOC 39.06.105(5);

ii.    The covenant required by LOC 39.06.105(5) based upon the approved development is recorded; and

iii.    All of the terms of the covenant are complied with.

3.    Any demolition tax paid under LOC 24.06.030 shall be refunded to the property owner if, within one year following issuance of the demolition permit:

a.    The property owner obtains a building permit for development of multi-family affordable housing described in LOC 39.06.105(5)(a)(ii) on the property from which the residential structure was removed;

b.    The development has qualified for the system development charge exemption under LOC 39.06.105(5); and

c.    The covenant required by LOC 39.06.105(5) is recorded.

(Ord. 2831, Added, 12/03/2019)

24.06.050 Tax Reduction for Deconstruction of Residential Structures.

1.    The demolition tax imposed in LOC 24.06.030 shall be reduced by $5,000 where the demolition permit is issued for removal of a residential structure through deconstruction by a certified deconstruction contractor.

2.    To be eligible for the demolition tax reduction, a pre-deconstruction form, in a form approved by the City Manager, must be completed and submitted as part of the application for the demolition permit. The form must be completed by the certified deconstruction contractor assigned to the project. Information required on the form must include, but is not limited to:

a.    Name of the certified deconstruction contractor;

b.    Whether heavy machinery will be used on the deconstruction project (exclusive of foundation removal);

c.    List of materials that are intended to be salvaged for reuse;

d.    List of materials that are not salvageable and the reason why the materials cannot be salvaged; and

e.    Expected dates for deconstruction activity.

3.    A post-deconstruction form, in a form approved by the City Manager, must be completed by the certified deconstruction contractor assigned to the project and submitted to the City Manager no more than 30 days after completion of the deconstruction work. The City Manager must review and approve the post-deconstruction form before the demolition permit can be finaled. The form must include responses to all of the following in order to be considered complete:

a.    Name of the certified deconstruction contractor.

b.    List of materials salvaged for reuse.

c.    List of materials not salvaged for reuse, as indicated on the pre-deconstruction form, and the reasons materials were not salvaged.

d.    Copies of the following:

i.    Itemized receipt of materials and quantities donated to a nonprofit.

ii.    Itemized receipts for materials and quantities sold.

iii.    Photos of salvaged material that will be reused on site or at another site.

iv.    Transaction receipts of weight tickets for the disposal of hazardous material abated during the course of deconstruction.

v.    List and photos of materials given or sold to members of the public.

(Ord. 2831, Added, 12/03/2019)

24.06.060 Authority of City Manager.

The City Manager is authorized to adopt rules, procedures, and forms to implement the provisions of this article.

(Ord. 2831, Added, 12/03/2019)

24.06.070 Failure to Comply with Requirements of Exemption for Affordable Housing or Reduction for Deconstruction.

1.    This section shall apply when:

a.    An exemption from the demolition tax has been granted under LOC 24.06.040(2)(d), or a demolition tax has been refunded under LOC 24.06.040(3), but the covenant is violated, or is terminated according to its terms before the expiration date; or

b.    A reduction of the demolition tax has been granted under LOC 24.06.050, but the residential structure is not removed through deconstruction that complies with all requirements of that section and all applicable rules and procedures adopted by the City Manager.

2.    The current owner of the property on which the residential structure was located shall pay the City a processing fee in an amount established by resolution of the City Council.

3.    The exemption, reduction or refund will be terminated and the entire exempted, reduced or refunded amount of the demolition tax, plus the processing fee, together with interest from the date the exemption, refund, or permit with tax reduction was granted at a rate established by the City Council, shall become immediately due and payable by the current owner of the property.

4.    The City Manager shall furnish a notice of the noncompliance under subsection (1)(a) or (1)(b) of this section, together with a statement of the charges and fees under this section and a description of the objection and hearing process, to the current owner of the property in person or by certified mail, return receipt requested, addressed to the current owner at the last known address as shown in the county property tax assessment records. If no objection is filed with the City Recorder within 15 days of the date the notice is mailed, the reinstated demolition tax amount, processing fee, and interest shall be a lien against the property.

5.    If the current owner files an objection within the 15-day period, the City Council shall hold a public hearing, upon notice sent to the current owner by first class mail not less than 15 days in advance, to consider the oral and written testimony and materials provided by the City Manager, the current owner, or other interested persons. Following the hearing, the City Council shall determine whether the events described in subsection (1)(a) or (1)(b) of this section have occurred and, if so, the amounts that are due and payable under this section. The amounts determined by the City Council shall be a lien against the property on which the residential structure was located. The City Council’s decision shall be final.

6.    The City Manager shall docket the lien in the City lien docket. The lien shall be enforceable in the manner provided in ORS Chapter 223.

(Ord. 2831, Added, 12/03/2019)

24.06.080 Violations.

1.    Violation of any provision of this article shall constitute a civil violation that shall be processed according to the procedures established in LOC Article 34.04. Each violation of a separate provision of this article shall constitute a separate offense and each day that a violation is committed or permitted to continue shall constitute a separate offense. Without waiving the generality of the foregoing, it shall be a violation for any person to:

a.    Fail or refuse to pay the tax established in this article;

b.    Provide any false or fraudulent information, or fail to provide any required information or documentation, with relation to the tax imposed or the exemptions, reductions or refunds allowed under this article;

c.    Demolish a residential structure other than by the required deconstruction after being granted a tax reduction for deconstruction under LOC 24.06.050;

d.    Construct development on property on which a residential structure has been demolished other than by the required deconstruction after a demolition tax reduction has been granted under LOC 24.06.050, unless the entire amount of the reduction together with the processing fee and interest, have been paid to the City under LOC 24.06.070; or

e.    Fail to comply with the requirements of a covenant under LOC 24.06.040(2)(d) or (3)(c).

2.    The remedies provided in this section are not exclusive and shall not prevent the City from exercising any other remedy available under the law.

(Ord. 2831, Added, 12/03/2019)