Housing Conservation District Advisory Group March 28, 2018 Recap - - PowerPoint PPT Presentation

March 28, 2018

Housing Conservation District Advisory Group

Poverty Rates by Census Tracts

2

Co Communit ity mem embers and stakeh ehold lders gen enerall lly exp xpres essed:

• Support for overall

l goa

• als of
• f th

the e dis istric ict

• In

Interest in in:

• addin

ing units its with ithin exis xisti ting g build ildin ings (i.e (i.e. Engli glish basement units its)

• additi

itional op

• pti

tions for

• r tr

transferring develo elopment righ rights ts

• smalle

ler dwell ellin ing units its

• clea

clear per ermit itting processes and exp xpectations

• ptions and incentives that don’t require “strings” or large investments
• updates to
• th

the e exis xisting Multif ltifamil ily Reh ehabili litation Part rtia ial Property Tax x Exempti tion program

• miti

itigating pot

• ten

ential l im impacts to

• lo

low in income ren enters dis ispla laced th through HC HCD in incen centives

• property tax

x ben enefit its for

• r providers of
• f affordable hou
• using

Recap on Initial Community Engagement

Poverty Rates by Census Tracts

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• Eligib

ligible le owners of

• f mult

ltif ifamil ily propertie ies rec eceiv ive an exemption on

• n th

the e in incre crease in in asses essed ed valu lue due e to

• reh

ehab/renovation wor

• rk.
• The exempti

tion is is for 15 years but t is is phased ou

• ut

t in in 20% in increments for th the la last t 5 yea ears.

• Countywide
• Must have 5+ dwelling units
• No affordability requirements
• Assessed building value must increase by 20% or more
• Square footage cannot increase more than 30%
• Building must be at least 25 years old
• Must apply for program prior to undertaking rehab work

Multifamily Rehabilitation Partial Property Tax Exemption

Poverty Rates by Census Tracts

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Properties Currently Using the Program

Property Owner Exempt Units Year Exemption Began 2018 Total Value (includes exempt value) Exemption Value Exemption Value/Unit One Year of Foregone Tax Revenue (1.006 Tax Rate) Columbia Heights Apartments (Monterey) Silverwood Companies 154 2005 $14,053,200 $4,439,000 $28,825 $44,125 Wildwood Towers [1] Dittmar Company 134 2005 $31,028,800 $6,194,900 $46,231 $61,580 Gates of Ballston AHC Inc. 464 2008 $80,354,700 $19,764,600 $42,596 $196,467 Dolley Madison [1] Dittmar Company 364 2009 $109,796,300 $52,981,600 $145,554 $526,656 Westover Apartments AHC Inc. 152 2011 $24,223,300 $3,697,300 $24,324 $36,752 Buchanan Gardens APAH 111 2013 $17,183,700 $6,005,300 $54,102 $59,695 Colonial Village Wesley 162 2013 $26,797,300 $4,692,000 $28,963 $46,640 2nd and Wayne [1,2] Wayne and 2nd Street Apt. Owners 16 2015 $5,799,800 $647,700 $40,481 $6,438 Woodland Hills Senior Apartments Woodland Hills Preservation Association 235 2015 $34,548,500 $8,210,300 $34,937 $81,613 Pierce Queen Apartments [3] Wesley 20 2017 $58,540,200 $678,000 $33,900 $6,740 William Watters Wesley 21 2018 $3,036,500 $976,700 $46,510 $9,709 Total

• 1,833
• - $405,362,300 $108,287,400

$59,077 $1,089,371

• 1. Units are market rate.
• 2. Exemption only applies to 16 of total 32 units.
• 3. Exemption applies only to 20 of total 192 units.

Poverty Rates by Census Tracts

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Properties Pending for the Program

Property Owner Exempt Units 2018 Total Value Culpepper Garden Culpepper Garden 1 Inc. 204 $15,693,100 Shirlington House [1] Shirlington House LLC 437 $88,081,800 Dominion Arms [1] 333 S Glebe LLC 188 $34,169,600 Courtland Towers [1] Courtland Towers Ass. LLC 575 $192,262,100 Potomac Towers [1] Snell Construction 406 $88,457,300 Fisher House APAH 68 $8,528,200

• 1. Units are market rate only

$800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD

Average Asking Rent Per Unit* Wildwood Towers Dolley Madison 60% AMI Rent 80% AMI Rent

Poverty Rates by Census Tracts

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Comparison of Rent Levels for Recently-Renovated MARKS

Beg Began Ex Exemptio ion

Da Data Sou Sources: Cos Costar and and Ar Arlington Co County *One bedroom units built prior to 2000

Beg Began Ex Exemptio ion

Poverty Rates by Census Tracts

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Locally-Defined Parameters

Arlington’s Requirement St State Allo lows s Us s to to Modif ify? Min inim imum Num umber of

• f

Dw Dwelli ling Unit its 5 Yes Must be be rental pr property Yes Yes Age e of

• f St

Structure Not less than 25 years Yes (not less than 15 years) Incr Increase in Asses ssessed Valu lue fr from

• m Rehabili

litation 20% Yes (no limit in VA code) Maximum Inc Increase se in GF GFA 30% Yes Ter erm of

• f Ex

Exemptio ion 10 years with 5 year step down Yes (no longer than 15 years) Appli licatio ion Fee ee $250 Yes (not to exceed $250) Loc Location of

• f Bu

Build ilding Countywide Can be limited to districts Type of

• f Acti

ctivit ity Rehabilitation only Yes (+replacement)

Poverty Rates by Census Tracts

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In In focus groups, owners s fr frequently cit cited property tax relie lief as as a a desi sirable le in ince centive. Staff an and th the community have id identifie ied 4 4 pot

• tential

l property tax mechanis isms:

• Exemption
• Property tax cr

credit

• De

Deferment or

• r ab

abeyance

• Reimbursement

Property Tax Incentives

Poverty Rates by Census Tracts

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Multifamily Rental Assessed Value Within the HCD

Multifamil ily Rental Property Taxes All l HCD HCD apa apartment pr property asse assess ssments $1,0 $1,091,1 ,125,200 HC HCD CA CAF F Asses ssessments $117 $117,043,9 ,900 Multifamil ily asse assessments ne net t of

• f CA

CAFs $974 $974,081,3 ,300 Taxes fr from

• m HCD

HCD MARKs $9,7 $9,799,2 ,260 HC HCD MARK un unit its 5245 5245 Average pr property tax per per un unit it $1,8 $1,868 Monthly per per un unit tax $156 $156

$156 translates into 6 to 7.5% of AMI affordability

Poverty Rates by Census Tracts

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Exemptions - Florida, North Carolina, California, and others

• Property tax exemptions for non-profits providing affordable housing.
• Units must be provided as affordable housing as defined by statute.

Montgomery County, MD property tax credit

• Property tax credit for units rented at reduced rent for elderly or disabled

tenants.

• Property tax credit allowed for 50% of the amount of reduced rent.
• Tax credit cannot exceed property tax amount.
• Must demonstrate reduction from market rate rent in same building.
• Program limited to $250,000 per fiscal year.

Deferral – Florida

• Available only to affordable housing providers.

National Precedents for Tax Incentives

Poverty Rates by Census Tracts

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Illinois - Housing Opportunity Area Tax Incentive Act

• Located in low poverty area (Less than 10% poverty rate)
• Unit must be occupied by tenant with rent subsidy (Housing Choice

Vouchers)

• Maximum of 20% of units (or 2 units in buildings with less than 10 units)
• 81% reduction of property tax on eligible units.

National Precedents for Tax Incentives

Poverty Rates by Census Tracts

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Potential Property Tax Incentive Considerations

Mechanis ism Imp Impact to to Cou County Revenue Imp Impact to to APS PS Revenue Requires s St State Leg Legisla latio ion Li Lien Pl Placed

• n
• n Property

Exemption    Tax Credit    Deferral Short-term Short-term   Reimbursement 

Reven enue im impacts fr from tax x in incen centiv ives wou

• uld lik

likely ely be e con

• nsid

idered as for

• regone

reven enue and wou

• uld be

e vie viewed in in ligh light t of

• f th

the e overall ll budget for affordable hou

• using

g exp xpenditu tures. An of

• ffset for th

the e budget im impact wou

• uld have

e to

• be

e id iden entif tified.

Poverty Rates by Census Tracts

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Potential Property Tax Incentive Considerations

Should there be a tim ime commit itment? What affordabil ility requir irements would ld be appropriate?

Poverty Rates by Census Tracts

14 14

Potential Property Tax Incentive Considerations

Should their ir be a min inim imum number or share of unit its elig ligible wit ithin a property? Should there be a maxi ximum number or share of unit its elig ligible wit ithin a property?

Poverty Rates by Census Tracts

15 15

Potential Property Tax Incentive Considerations

How sh should ld the County guarantee that part rtic icip ipatin ing unit its meet t healt lth and sa safety standards (C (Code)? )?

Should an in incentive program in inclu lude a lim limit it on

• verall fis

iscal im impact to County?

Poverty Rates by Census Tracts

16 16

Potential Property Tax Incentive Considerations

Any y other factors/components the County should ld consid ider? Should the in incentiv ive cover the full ll assessment for each elig ligib ible unit it, , or should ld it it cover a portion

• f that amount?