PUBLIC HEARING, WORK SESSION: SB 839

PUBLIC HEARING: SB 996, SB 847

 

TAPES 79, 80 A-B

 

SENATE REVENUE COMMITTEE

MARCH 29, 2005   8:30 AM   STATE CAPITOL BUILDING

 

Members Present:                  Senator Ryan Deckert, Chair

                                                Senator Gary George

                                                Senator Rick Metsger

                                                Senator Floyd Prozanski

                                                Senator Charles Starr, Vice Chair

                       

Witnesses Present:                Richie Weinman, Urban Services Manager, Eugene

                                                Jean Tate, Metropolitan Affordable Housing, Eugene                                                                         Ed McNamara, Portland

                                                Chip Lazenby, Portland Development Commission

                                                Sen. Margaret Carter, District 22

                                                Rep. Gary Hansen, District 44

                                                Marge Kafoury, City of Portland

                                                Brian Morisky, Portland Development Commission  

                                                Barbara Sack, Portland Development Commission

                                                Phil Donovan, Association of Oregon Housing Authorities, NOAH

                                                Bill Van Vliet, NOAH               

                                                Jerry Croft, Salem Housing Authority

                                                John Blatt, Association of Oregon Community Development Orgs.

                                                Diana Critanovich, Linn Co. Affordable Housing

                                                Jamie Bishop, resident of Carolina Court in Lebanon

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Lizbeth Martin-Mahar, Economist

                                                Mary Ayala, Economist

                                                Barbara Guardino, Committee Assistant

 

 

TAPE 79, SIDE A

005

Chair Deckert

Calls meeting to order at 8:37 a.m.

 

WORK SESSION, SB 839

022

Mary Ayala

Gives overview of SB 839-1 amendments. Extends the sunset provision from January 2006 to January 2012 for a statute that provides a property tax exemption for multi-family rental units that are located in (a) light rail station areas, (b) in transit-oriented areas, or (3) in designated areas. See Revenue Impact of Proposed Legislation (EXHIBIT 1), Staff Measure Summary (EXHIBIT 2), and proposed SB 839-1 amendment (EXHIBIT 3).

 

039

Ayala

Gives background on the bill. There are affordability issues.

 

060

Chair Deckert

Recesses work session, opens public hearing.

 

PUBLIC HEARING, SB 839

065

Richie Weinman

Testifies in favor of SB 839. See written testimony: Support for extending the Multiple Unit Property Tax Exemption (MUPTE) (EXHIBIT 4). This is one of the few tools available to encourage downtown housing. Without this tax exemption, projects would not go forward in Eugene.

 

094

Jean Tate

Comments on a project that her company is involved in. It is contingent on receiving this exemption.

 

099

Sen. George

Asks whether there is any way to assure that the people who are transit oriented and need this are the ones receiving the benefits.

 

108

Weinman

Eugene doesn’t have a transit oriented community. Does not know the answer.

 

112

Tate

Her project is directed toward elderly people who may no longer be able to drive. She and her husband will live there.

 

133

Ed McNamara

Testifies in favor of SB 839. See written testimony paraphrased (EXHIBIT 5). Addresses three points in response to prior core questions:

1)      Purpose of the multifamily tax abatement program

 

170

McNamara

2)      Amount of the partial abatement

 

185

McNamara

3)      Cost effectiveness of the multifamily tax abatement linked with affordable housing

 

201

Sen. Prozanski

Asks, what is the life span of the type of building he is constructing?

 

205

McNamara

His project is a 100-year building. Continues testimony addressing how this cap is used to develop affordable housing. Notes, there are two ways to use this to produce affordable housing.

1)      Requiring affordable units as a percentage of a market-rate abatement building

2)      Using the partial abatement for an affordable project with a for-profit developer.

 

 

 

291

McNamara

Concludes, this is the most cost-effective tool developers have. Urges committee’s support.

 

297

Sen. George

Asks question whether reducing the abatement from 10 years to six would affect his decision-making.

 

311

McNamara

Responds, six years is better than none. There are long lead times on these projects. Developers have to know when they begin their feasibility whether this project will be in place through development. Explains his project has 210 units. People have to verify their income to move there.

 

340

Chip Lazenby

Testifies in support of extension. This is an important financing tool PDC uses to bring private developers into the affordable housing market. Will supply the committee with data showing that Portland uses this for affordable and low-income housing. Discusses long-range potential in Portland.

 

432

Vice Chair C. Starr

Wonders why the committee would consider less than a 10-year extension.

 

439

Chair Deckert

Responds, he could be persuaded to extend it to 10 years. Explains his reasoning for requesting the six-year extension. For the sake of accountability, he wants lawmakers to revisit the sunset in four years.

 

TAPE 80, SIDE A

REOPEN WORK SESSION, SB 839

030

Chair Deckert

Closes public hearing on SB 839, reopens work session, SB 839.

 

 

 

032

Sen. Metsger

Expresses support for SB 839-1 amendment. It strikes a balance and gives lawmakers an opportunity to review whether projects are still on track, and assumptions are still valid.

 

040

Vice Chair C. Starr

Expresses concern that a shorter sunset could deter developers from going forward with projects. If the six-year provision is adopted, he would request revisiting the sunset in two years instead of waiting four years.

 

052

Chair Deckert

This bill sunsets in January 2006. It brings folks back to show data so lawmakers can make sure they are getting results.

 

060

Sen. Prozanski

Two years is not enough time to collect data. Suggests compromise of eight years. Is comfortable with SB 839-1 amendments.

 

084

Sen. George

Would prefer a 10-year extension, although SB 839-1 is better than nothing.

 

090

Chair Deckert

Asks Paul Warner whether it is possible to do a conceptual amendment to change six years to eight.

 

109

Sen. Metsger

There’s nothing to prohibit people from returning next session with an extension request.

 

117

Vice Chair C. Starr

MOTION: MOVES ADOPTION OF SB 839-1.

 

122

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS.

VOTE: 5-0-0

MEMBERS VOTING AYE: GEORGE, METSGER, PROZANSKI, STARR, DECKERT

 

124

Vice Chair C. Starr

MOTION: MOVES SB 839 AS AMENDED TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

126

Chair Deckert

VOTE: 5-0-0

MEMBERS VOTING AYE: GEORGE, METSGER, PROZANSKI, STARR, DECKERT

 

PUBLIC HEARING, SB 847

130

Ayala

Gives overview of SB 847. See Staff Measure Summary (EXHIBIT 6) and Revenue Impact statement (EXHIBIT 7). Provides an exemption from property tax for newly-constructed, single-unit, owner-occupied housing units that are located in a city’s “distressed” area.

 

196

Sen. Margaret Carter

Gives opening remarks in favor of SB 847. See written testimony, paraphrased (EXHIBIT 9). “I am pleading and begging on bended knee that you will not allow this bill to go the way of last session. This bill is vitally needed.” This is a very successful program in assisting low-income families to home ownership. Invites the committee to Portland to see a HOST development, Charleston Place. HOST is Home Ownership a Street at a Time.

 

265

Chair Deckert

Expresses support for SB 847.

 

270

Rep. Gary Hansen

Testifies in favor of bill. Served as Northeast Portland county commissioner during a time when this program was being used heavily. It made a great difference. The infusion of quality homes in struggling neighborhoods has helped make dramatic changes. This is vitally important for North and Northeast Portland. This is a great bill, desperately needed.

 

342

Marge Kafoury

Testifies in favor of renewal of SB 847. Gives a brief history of the bill, which did not pass in 2001 and 2003. City of Portland has to go through a process that identifies and designates stressed areas. Portland can only designate up to 20% of its land area. Gives reasons for wanting to expand the program to include condominiums. They are more affordable and cheaper to build.

 

416

Sen. Metsger

Asks questions regarding school funding issues. If this program were to go forward, would the public school portion of tax be exempted?

 

445

Kafoury

Responds, the city is required to go to other taxing jurisdictions for permission. There has been declining enrollment and schools are closing. The program benefits school districts by re-encouraging families to return to the districts.

 

 

 

TAPE 79, SIDE B

038

Brian Morisky

Testifies in favor of SB 847. See written testimony paraphrased (EXHIBIT 10). This program is currently used as a tool for affordable housing. It has a price cap of $170,000; maximum family income is $67,900 for a family of four. Homes need to be owner-occupied. Urges the committee to reauthorize the program.

 

070

Chair Deckert

Asks, what are the ramifications of renewing a program that’s been inactive for a few years?

 

076

Kafoury

Refers members to Section 10, a look-back provision that allows stranded families who were in the process of applying before the program ended to be processed.

 

086

Chair Deckert

Asks how many people were stranded.

 

090

Morisky

Responds, about 230 people. Most will say they can’t afford to purchase homes now that the program is down.

 

120

Kafoury

Restates, Section 10’s intent is for only those who are already in line for the tax abatement. It is not retroactive.

 

PUBLIC HEARING, SB 996

158

Phil Donovan

Introduces the panel who will testify on behalf of the Association of Oregon Housing Authorities and Oregon Housing Alliance. Notes photographs being circulated among committee members of Southview Terrace Apartments in Salem (EXHIBIT 11).

 

 

 

196

Bill Van Vliet

Gives brief background of NOAH. Responds to earlier question, what is state’s role in meeting affordable housing needs. State should focus on programs that leverage private capital. The Oregon Affordable Housing Tax Credit (OAHTC) does that.

 

227

Van Vliet

Directs members’ attention to handout (EXHIBIT 12). Notes, in order to serve same population without benefit of OAHTC, a loan would have to be reduced by $500,000. All benefit goes to renters in the form of lower rents; lenders get no benefit from this credit.

 

251

Van Vliet

Page 2: OAHTC Impact Analysis gives graphic examples of households with and without this program. All the benefit goes to the tenants in the form of lower rent. More than 100% of the tax credit goes to achieving the public policy objective. This is very rare.

 

289

Van Vliet

Looks at middle chart on page 2 – Lower Rents With OAHTC. The current cap of $6 million has been reached and has resulted in fewer allocations being moved forward. Asks to raise cap to $11 million. Would like to see the sunset provision extended.

 

316

Van Vliet

Comments on the third chart – Lower Rents Without OAHTC. At $11 million the program becomes self-sustaining. In closing, asks for increase and extension of the sunset. Benefits include job creation and affordable housing.

 

364

Jerry Croft

Testifies in favor of SB 996. See written information (EXHIBIT 13) and related photographs of Southview Terrace Apartments on Fairview Avenue in Salem (exhibit 11). Gives profile of Southview. Points to table at bottom of page 1.

 

446

Tate

Testifies in favor of SB 996. Ms. Tate is an unpaid nonprofit developer. Metropolitan Affordable Housing has built a number of projects in Eugene; in the OAHTC project, they were able to lower rental rates. They have a waiting list over 150. Asks the committee to continue this.

 

 

 

TAPE 80, SIDE B

024

Weinman

See written testimony paraphrased (EXHIBIT 14). Eugene has been experiencing a housing crisis for 15-20 years. The number of affordable housing units has not kept up with the need. Indirect cost to the community is significant, in public safety, education and other issues. Having a short sunset creates more difficulties.

 

059

Sen. Prozanski

Commends Ms. Tate for continuing to put her energies into low income housing development.

 

075

John Blatt

Introduces a panel from the Association of Oregon Community Organizations who will testify in favor of SB 996. See written testimony (EXHIBIT 15).

 

089

Diana Critanovich

Without access OAHTC, the organization could not do projects in rural areas. Gives example of units in Lebanon and Sweet Home. Development costs are rising because cities need to raise their fees. Interest rates are increasing and the housing authority is seeing reductions in subsidies.

 

 

 

137

Jamie Bishop

Recently transitioned back into the work force. She’s a single mother of three, and half of her income goes to day care costs. Now she is looking forward to purchasing her first home. Could not do this paying market rate.

 

176

Blatt

Comments on the economic impacts of these developments in rural areas.

 

199

Chair Deckert

Closes public hearing SB 996. Adjourns meeting at 10:12 a.m.

 

 

 

 

 

Tape Log Submitted by,

 

 

 

Barbara Guardino, Committee Assistant                                                      

 

Exhibit Summary:

1.      SB 839, Revenue Impact of Proposed Legislation, 3/28/05, Ayala, 1 pp.

2.      SB 839, Staff Measure Summary, 3/28/05, Ayala, 1 pp.

3.      SB 839, -1 amendments, 3/28/05, Ayala, 1 pp.

4.      SB 839, testimony of Richard Weinman, 3/29/05, 1 pp.

5.      SB 839, testimony of Ed McNamara, 3/29/05, 4 pp.

6.      SB 847, Staff Measure Summary, 3/29/05, Ayala, 1 pp.

7.      SB 847, Revenue Impact of Proposed Legislation, 3/29/05, Ayala, 1 pp.

8.      SB 847, letter from Tom Walsh & Co., 3/24/05, 1 pp.

9.      SB 847, testimony of Sen. Margaret Carter, District 22, 3/29/05, 3 pp.

10.  SB 847, testimony by City of Portland, Portland Development Commission, 3/29/05, Morisky, 2 pp.

11.  SB 996, photographs of Southview Terrace Apartments, Donovan, 6 pp.

12.  SB 996, Oregon Affordable Housing Tax Credit (OAHTC) Information, 3/29/05, Van Vliet, 3 pp.

13.  SB 996, Salem Housing Authority, Southview Terrace Apartments profile, 3/29/05, Croft, 2 pp.

14.  SB 996, testimony of Richard Weinman, 3/29/05, 1 pp.

15.  SB 996, testimony of John Blatt, executive director of AOCDO, 3/29/05, 1 pp.

16.  SB 996, Revenue Impact of Proposed Legislation, 3/28/05, staff, 1 pp.