• The Multifamily Tax Exemption Program (VMC 3.22) is designed as an incentive for developers to build new private multi-family development in targeted areas of the City.
  
  
• A development applicant is requesting an 8-year property tax exemption where 20% of the total units are reserved for tenants earning up to 100% area median income.
  
  
• The requested exemption facilitates an estimated $9.7 million in new construction for a mixed-use development including 74 apartment units, 7,694 square feet of retail space and 33 on-site parking spaces in the downtown area that may not occur otherwise. This amount does not include any indirect employment associated with construction.
  
  
• The exemption accelerates construction of a project that will be on the tax rolls for decades beyond the end of the 8-year exemption period; the commercial space will not be exempt from property taxes during the exemption period.
  
  
• When the tax exemption period ends the residential units will return to the tax rolls as if it were new construction.
  
  
• The project will include 15 units (20% of the total units) as income restricted to households at 100% AMI as determined by HUD.
  
  
• Over the 20-year period following construction, the project – with the exemption - will generate nearly $2.11 million in taxes benefiting all taxing districts (ports, schools, county, city, etc.) and a total of $682,000 in taxes benefiting the City of Vancouver.

Goal 3, Objective 3.2: Improve services available to underserved or vulnerable residents.

Goal 8, Objective 8.1: Make downtown Vancouver a vibrant destination for the community and the region.

Goal 8, Objective 8.2: Strengthen neighborhood business districts.

Hurley Development LLC is requesting a multifamily tax exemption for a new mixed-use development. The proposed development will be a three-story mixed-use building containing 74 apartment units, 7,694 square feet of ground floor retail space and 33 on-site parking spaces. The project will meet minimum parking requirements through additional off-site spaces, adjacent on-street spaces, and allowable reductions.

The project site is located in the Vancouver City Center Vision District northwest of the intersection of Washington Street and W 17th Street. The project site consists of four existing buildings, two commercial and two single family residential. Three of the structures will be demolished to accommodate the new development. The larger commercial building facing Washington Street will be retained and integrated into the new building (residential units will be built above the existing ground floor retail space). The applicant has notified the existing tenants of the proposed project and is is working with the remaining tenants to relocate.

The requested tax exemption is for 8 years where 20% of the total units are reserved for tenants earning 100% area median income or less. Currently the HUD 100% area median income in the Portland/Vancouver MSA for a four-person household is $92,100. Limiting the monthly housing costs to 30% of the gross monthly income, the maximum monthly affordable rent for this income level would be $2,302.50 per month. The area median income changes overtime and is recalculated annually by HUD.

The proposed residential portion of the development will include studio, 1-bedroom, and 2-bedroom units, 15 of which will be income restricted units.

Per the applicant the unit types and rents will be:

• 48 studio units at $1,299 per month
• 20 loft/studios units at $1,499 per month
• 4 one-bedroom units at $1,599 per month
• 2 two-bedroom units at $1,999 per month

The total estimated development cost is $9.7 million. The City Center Redevelopment Authority reviewed the design of the development on December 3, 2020, and recommended approval to staff. The CCRA reviewed the multi-family tax exemption request on February 18, 2021.

Over 20 years (with the exemption) the project is estimated to generate nearly $2.11 million in taxes benefiting all taxing districts (ports, county, city, etc.) with $682,000 specifically generated for the City of Vancouver.  Potentially foregone revenue during the exemption is estimated at $613,000 for all taxing districts and $153,000 specifically for Vancouver. Without the proposed development and exemption, the site might remain primarily vacant foregoing the higher developed site tax revenues as well as income restricted residential housing units. Following the 8-year tax exemption period the project will return to the tax rolls at full taxable value.    

1. Adds 74 new multifamily units in the VCCV subarea district.
2. Adds 15 income restricted units for households earning 100% or less of the area median income for the next 8 years.
3. Rehabilitation of 7,694 square feet of leasable ground floor commercial space which will continue to generate tax revenue