Chapter 18A.68
MULTI-FAMILY HOUSING INCENTIVE AREAS

Sections:

18A.68.010    Purpose.

18A.68.020    Applicability.

18A.68.030    Definitions.

18A.68.040    Residential Targeted Area Designation Criteria.

18A.68.050    Residential Targeted Area Amendments and Rescission.

18A.68.060    Residential Targeted Area Standards and Guidelines.

18A.68.070    Designated Residential Targeted Areas.

18A.68.080    Property Tax Exemption – Requirements and Process.

18A.68.010 Purpose.

A.    As provided in Chapter 84.14 RCW, the purpose of this Chapter is to provide limited exemptions from ad valorem property taxation for multi-family housing in designated residential targeted areas to:

1.    Encourage increased residential opportunities, including affordable housing units, within urban unincorporated areas of Pierce County designated by the Pierce County Council as residential targeted areas;

2.    Stimulate new construction or rehabilitation of existing vacant and underutilized buildings for multi-family housing in designated residential targeted areas to increase and improve housing opportunities, including affordable housing;

3.    Assist in directing future population growth to designated residential targeted areas, thereby reducing development pressure on single-family residential neighborhoods;

4.    Achieve development densities which are more conducive to transit use in designated residential targeted areas; and

5.    Stimulate housing opportunities near college campuses to promote dense, transit-oriented, walkable college communities.

(Ord. 2014-42 § 6 (part), 2014; Ord. 2012-42s § 1 (part), 2012)

18A.68.020 Applicability.

This Chapter is applicable to multi-family housing projects located in designated residential targeted areas resulting from new construction or rehabilitation or conversion of vacant, underutilized, or substandard buildings which seek limited exemptions from ad valorem property taxation in accordance with Chapter 84.14 RCW. (Ord. 2014-42 § 6 (part), 2014; Ord. 2012-42s § 1 (part), 2012)

18A.68.030 Definitions.

As used in this Chapter, the following terms shall have the following meanings:

A.    "Affordable housing" means residential housing that is rented by a person or household whose monthly housing costs, including utilities other than telephone, do not exceed 30 percent of the household's monthly income. For the purposes of housing intended for owner occupancy, "affordable housing" means residential housing that is within the means of low or moderate-income households.

B.    "Household" means a single person, family, or unrelated persons living together.

C.    "Low-income household" means a single person, family, or unrelated persons living together whose adjusted income is at or below 80 percent of the median family income adjusted for family size, for the county where the project is located, as reported by the United States Department of Housing and Urban Development.

D.    "Moderate-income household" means a single person, family, or unrelated persons living together whose adjusted income is more than 80 percent but is at or below 115 percent of the median family income adjusted for family size, for the county where the project is located, as reported by the United States Department of Housing and Urban Development.

E.    "Multi-family housing" means building(s) having four or more dwelling units designed for permanent residential occupancy resulting from new construction or rehabilitation or conversion of vacant, underutilized, or substandard buildings.

F.    "Owner" means the property owner of record.

G.    "Permanent residential occupancy" means multi-family housing that provides either rental or owner occupancy for a period of at least one month. This excludes hotels and motels that predominantly offer rental accommodation on a daily or weekly basis.

H.    "Rehabilitation improvements" means modifications to existing structures that are vacant for 12 months or longer that are made to achieve a condition of substantial compliance with existing building codes or modification to existing occupied structures which increase the number of multi-family housing units.

I.    "Residential targeted area" means an area within an urban center that has been designated by the Pierce County Council as a residential targeted area in accordance with Chapter 84.14 RCW.

(Ord. 2014-42 § 6 (part), 2014; Ord. 2012-42s § 1 (part), 2012)

18A.68.040 Residential Targeted Area Designation Criteria.

A.    Criteria. Following a public hearing, the Council may, in its sole discretion, designate one or more residential targeted areas. Each designated residential targeted area must meet the following criteria, as determined by the Council:

1.    The targeted area is located within an urban center;

2.    The targeted area lacks sufficient available, desirable, and convenient residential housing to meet the needs of the public who would likely live in the urban center if desirable, attractive, and livable places were available; and

3.    The providing of additional housing opportunity in the targeted area will assist in achieving the following purposes:

a.    Encourage increased residential opportunities within the targeted area;

b.    Stimulate the construction of new multi-family housing and the rehabilitation of existing vacant and underutilized buildings for multi-family housing; and

c.    Stimulate housing opportunities near college campuses to promote dense, transit-oriented, walkable college communities.

B.    The Council may also consider other factors in addition to the criteria set forth in PCC 18A.68.040 A. in designating a residential targeted area including, but not limited to: whether additional housing in the target area will attract and maintain a significant increase in the number of permanent residents; whether an increased residential population will help alleviate detrimental conditions and social liability in the target area; and whether an increased residential population in the target area will help to achieve the planning goals mandated by the Growth Management Act under RCW 36.70A.020.

(Ord. 2014-42 § 6 (part), 2014; Ord. 2012-42s § 1 (part), 2012)

18A.68.050 Residential Targeted Area Amendments and Rescission

Following a public hearing, the Council may, by Ordinance, amend or rescind the designation of a residential targeted area at any time pursuant to the same procedure as set forth in this Chapter for original designation. (Ord. 2014-42 § 6 (part), 2014; Ord. 2012-42s § 1 (part), 2012)

18A.68.060 Residential Targeted Area Standards and Guidelines.

A.    For each designated residential targeted area, the Council shall adopt standards and guidelines for both new construction and rehabilitation supported by the property tax exemption for multi-family housing including the following:

1.    Requirements that address demolition of existing structures and site utilization; and

2.    Building requirements that may include elements addressing parking, height, density, environmental impact, public benefit features, compatibility with the surrounding property, and such other amenities as will attract and keep permanent residents and will properly enhance the livability of the residential targeted area. The required amenities shall be relative to the size of the proposed project and the tax benefit to be obtained.

(Ord. 2014-42 § 6 (part), 2014; Ord. 2012-42s § 1 (part), 2012)

18A.68.070 Designated Residential Targeted Areas.

A.    Residential Targeted Areas. The following areas are designated as residential targeted areas for the purposes of this Chapter:

1.    Garfield Residential Targeted Area (Ord. 2012-45 § 1, 2012; effective 9/08/12)

(Ord. 2014-42 § 6 (part), 2014; Ord. 2012-42s § 1 (part), 2012)

18A.68.080 Property Tax Exemption – Requirements and Process.

A.    Intent. Limited exemptions from ad valorem property taxation for multi-family housing urban centers are intended to:

1.    Encourage increased residential opportunities within mixed-use centers designated by the Council as residential targeted areas;

2.    Stimulate new construction or rehabilitation of existing vacant and underutilized buildings for multi-family housing in residential targeted areas to increase and improve housing opportunities;

3.    Assist in directing future population growth to designated mixed-use centers, thereby reducing development pressure on single-family residential neighborhoods; and

4.    Achieve development densities which are more conducive to transit use in designated mixed-use centers.

B.    Duration of Exemption. The value of improvements qualifying under this Chapter will be exempt from ad valorem property taxation for 12 successive years beginning January 1 of the year immediately following the calendar year of issuance of the Final Certificate of Tax Exemption.

C.    Limits on Exemption. The exemption does not apply to the value of land or to the value of improvements not qualifying under this Chapter, nor does the exemption apply to increases in assessed valuation of land and non-qualifying improvements. In the case of rehabilitation of existing buildings, the exemption does not include the value of improvements constructed prior to submission of the completed application required under this Chapter.

D.    Rehabilitation Provisions. Property proposed to be rehabilitated must fail to comply with one or more standards of the applicable state or local building or housing codes on or after July 23, 1995.

E.    Project Eligibility. A proposed project must meet the following requirements for consideration for a property tax exemption:

1.    Location. The project must be located within a residential targeted area, as designated in PCC 18A.68.070.

2.    Size. The project must include at least four units of multi-family housing within a residential structure or as part of a mixed-use development. A minimum of four new units must be constructed or at least four additional multi-family units must be added to existing occupied multi-family housing. Existing multi-family housing that has been vacant for 12 months or more does not have to provide additional units so long as the project provides at least four units of new, converted, or rehabilitated multi-family housing.

3.    Permanent Residential Occupancy. At least 50 percent of the space designated for multi-family housing must be provided for permanent residential occupancy.

4.    Proposed Completion Date. New construction multi-family housing and rehabilitation improvements must be scheduled to be completed within three years from the date of approval of the application.

5.    Compliance with Guidelines and Standards. The project must be designed to comply with the Pierce County Comprehensive Plan, building, housing, and zoning codes, and any other applicable regulations in effect at the time the application is approved. The project must also comply with any other standards and guidelines adopted by the Council for the residential targeted area in which the project will be developed.

6.    Vacancy Requirement. Property proposed to be rehabilitated must fail to comply with one or more standards of the applicable state or local building or housing codes on or after July 23, 1995. If the property proposed to be rehabilitated is not vacant, an applicant shall provide each existing tenant with housing of comparable size, quality, and price and a reasonable opportunity to relocate;

7.    Affordable Housing Requirement. The applicant must commit to renting or selling at least 20 percent of the multi-family housing units as affordable housing units to low and moderate-income households, and the property must satisfy that commitment and any additional affordability and income eligibility conditions adopted by the County under this Chapter. In the case of projects intended exclusively for owner occupancy, the minimum requirement of this subsection may be satisfied solely through housing affordable to moderate income households.

F.    Application Procedure. A property owner who wishes to propose a project for a tax exemption shall complete the following procedures:

1.    File with the Planning and Public Works Department the required application along with the required fees.

2.    A complete application shall include:

a.    A completed application form setting forth the grounds for the exemption;

b.    Preliminary floor plan, site plan, and building elevation of the proposed project;

c.    A statement acknowledging the potential tax liability when the project ceases to be eligible under this Chapter;

d.    Verification by oath or affirmation of the information submitted; and

e.    For rehabilitation projects and for new development on property upon which an occupied residential rental structure previously stood, the applicant shall also submit an affidavit that the dwelling units have been unoccupied for a period of six months prior to filing the application. In addition, for rehabilitation projects, the applicant shall secure from the County verification of the property's noncompliance with minimum building code requirements.

G.    Application Review and Issuance of Conditional Certificate. The Director may certify as eligible an application which is determined to comply with the requirements of this Chapter. A decision to approve or deny an application shall be made within 90 days of receipt of a complete application.

1.    Approval. If an application is approved, the applicant shall enter into a contract with the County, subject to approval by resolution of the Council, regarding the terms and conditions of the project. Upon Council approval of the contract, the Director shall issue a Conditional Certificate of Acceptance of Tax Exemption. The Conditional Certificate expires three years from the date of approval unless an extension is granted as provided in this Chapter.

2.    Denial. The Director shall state in writing the reasons for denial and shall send notice to the applicant at the applicant's last known address within ten days of the denial. An applicant may appeal a denial to the Hearing Examiner within 30 days of receipt of notice. On appeal, the Director's decision will be upheld unless the applicant can show that there is no substantial evidence on the record to support the Director's decision. The Hearing Examiner's decision on appeal will be final.

H.    Extension of Conditional Certificate. The Conditional Certificate may be extended by the Director one time for a period not to exceed 24 consecutive months. The applicant must submit a written request stating the grounds for the extension, accompanied by the required processing fee. An extension may be granted if the Director determines that:

1.    The anticipated failure to complete construction or rehabilitation within the required time period is due to circumstances beyond the control of the owner;

2.    The owner has been acting and could reasonably be expected to continue to act in good faith and with due diligence; and

3.    All the conditions of the original contract between the applicant and the County will be satisfied upon completion of the project.

I.    Application for Final Certificate. Upon completion of the improvements agreed upon in the contract between the applicant and the County and upon issuance of a temporary or permanent certificate of occupancy, the applicant may request a Final Certificate of Tax Exemption. The applicant must file with the Planning and Public Works Department the following:

1.    A statement of expenditures made with respect to each multi-family housing unit and the total expenditures made with respect to the entire property;

2.    A description of the completed work and a statement of qualification for the exemption;

3.    A statement that the work was completed within the required 3-year period or any authorized extension; and

4.    A statement that the project meets the affordable housing requirements described in PCC 18A.68.080 E.7. Within 30 days of receipt of all materials required for a Final Certificate, the Director shall determine which specific improvements satisfy the requirements of this Chapter.

J.    Issuance of Final Certificate. If the Director determines that the project has been completed in accordance with the contract between the applicant and the County and has been completed within the authorized time period, the County shall, within ten days, file a Final Certificate of Tax Exemption with the Pierce County Assessor.

1.    Denial and Appeal. The Director shall notify the applicant in writing that a Final Certificate will not be filed if the Director determines that:

a.    The improvements were not completed within the authenticated time period;

b.    The improvements were not completed in accordance with the contract between the applicant and the County; or

c.    The owner's property is otherwise not qualified under this Chapter.

2.    Within 14 days of receipt of the Director's denial of a Final Certificate, the applicant may file an appeal with the Hearing Examiner, as provided in Chapter 1.22 PCC.

K.    Annual Compliance Review. Within 30 days after the first anniversary of the date of filing the Final Certificate of Tax Exemption and each year thereafter for a period of 12 years, the property owner shall file a notarized declaration with the Director indicating the following:

1.    A statement of occupancy and vacancy of the multi-family units during the previous year;

2.    A certification that the property continues to be in compliance with the contract with the County and, if applicable, a certification of affordability based on documentation that the property is in compliance with the affordable housing requirements as described in PCC 18A.68.080 E.7.; and

3.    A description of any subsequent improvements or changes to the property. County staff shall also conduct on-site verification of the declaration. Failure to submit the annual declaration may result in the tax exemption being canceled.

L.    Cancellation of Tax Exemption. If the Director determines the owner is not complying with the terms of the contract, the tax exemption will be canceled. This cancellation may occur in conjunction with the annual review or at any other time when noncompliance has been determined. If the owner intends to convert the multi-family housing to another use, the owner must notify the Director and the Pierce County Assessor within 60 days of the change in use.

1.    Effect of Cancellation. If a tax exemption is canceled due to a change in use or other noncompliance, the Pierce County Assessor may impose an additional tax on the property, together with interest and penalty, and a priority lien may be placed on the land pursuant to State legislative provisions.

2.    Notice and Appeal. Upon determining that a tax exemption is to be canceled, the Director shall notify the property owner by certified mail. The property owner may appeal the determination by filing a notice of appeal with the Planning and Public Works Department within 30 days specifying the factual and legal basis for the appeal. The Hearing Examiner will conduct a hearing at which all affected parties may be heard and all competent evidence received. The Hearing Examiner will affirm, modify, or repeal the decision to cancel the exemption based on the evidence received.

(Ord. 2017-12s § 2 (part), 2017; Ord. 2014-42 § 6 (part), 2014; Ord. 2012-42s § 1 (part), 2012)