Board did not vote on city's request to implement tax exemption for nonprofit low-income housing

PMG FILE PHOTO - The Victorian Apartments complex on East Columbia Avenue is one of four existing properties that would have been eligible for a nonprofit low-income housing tax exemption under a city proposal.The Scappoose School Board has declined to move forward on a city proposal to exempt nonprofit low-income housing providers from property taxes.

City Planner Laurie Oliver, along with other city staff and consultants from the firm ECONorthwest, has been searching for ways to increase low-income housing availability in Scappoose. The Scappoose City Council reviewed a handful of potential methods and directed city staff to move forward on implementing a low-income housing tax exemption.

The exemption would save low-income apartments like the Victorian Apartments complex on East Columbia Ave more than $4,000 per year by exempting them from all property taxes. City staff identified just four properties in the city that would potentially qualify for the exemption, but the hope was that an exemption would draw in more housing development and demonstrate the city's support for affordable housing.

But the exemption appears to be a lost cause, after the School Board declined to bring the proposal to a vote.

"These are going to be housing projects that are in somebody's neighborhood," Scappoose School Board member Lisa Maloney said. "We don't live here to be in an urban area with low-income housing projects popping up. We live here for the way of life how we have it."

To qualify for low-income housing, tenants would need to be making less than 60% of the area median income. The area median income in the Portland metro area is $92,000, meaning that households making less than $55,000 would be eligible. Many professionals would qualify for low-income housing, including teachers in Scappoose schools who start out making less than $40,000.

Board member Jim Hoag said he didn't see the proposal to support low-income housing "as a blight on the city.

"To my fellow board members, as one sitting here listening, that's kind of how I saw it being presented, that we didn't want, quote, 'low-income,'" Hoag said at a School Board meeting.

He added, "I don't consider a construction worker, necessarily, or a nursing assistant or a social worker as low-income earners. Quite opposite... We will not sustain the school system as older people like me come and buy homes, because we won't have those kids in those homes. So there's a little bit of me that says, we should at least give this a trial."

The growing population in Scappoose has included many older residents who want to retire in a more rural area.

The tax exemption would be implemented if the governing boards representing at least 51% of the property tax rate for the affected apartment complexes sign on. School district and city taxes are the two highest property tax rates for Scappoose residents and reach that 51% mark together. The city can't institute the tax exemption on its own.

City Planner Laurie Oliver first presented the plans to the School Board at its Oct. 12 meeting.

Approving the tax exemption would have lost the school district an estimated $3,249 for the 2021 tax year, based on the four eligible properties. That's a fraction of the district's total revenue of $36 million, which includes per-student funding from the Oregon Department of Education, but Maloney and other School Board members expressed concern with the potential impact of exempting property taxes for hundreds of new housing units.

A Scappoose housing needs analysis completed in 2017 identified a need for 584 new affordable housing units by 2038. Losing out on property tax revenue for hundreds of units could create a more significant budget shortfall for the district.

However, the city's analysis also estimated that Scappoose's population would increase by 42% between 2018 and 2038, resulting in a need for 1,229 new homes — most of which would not be exempt from property taxes.

"These are people who are already in your schools," Oliver told board members.

Sixty Scappoose students were homeless in the 2019-20 school year, according to the Oregon Department of Education. That amounts to 2.5% of students, an increase of 0.4% from the year before.

School Board member Will Kessi proposed having the district re-evaluate the exemption every few years, but city representatives expressed concern that an uncertain future would deter potential nonprofit housing developers from starting projects in the city.

"I'm not saying we're going to pull the plug in five years," Kessi said. "We're stewards of our district's money, and I think it's a good idea just to keep an end date on where they have to come back to us and just talk to us about a little bit."

Maloney said she wouldn't be comfortable without a limit on the number of units that could receive the exemption.

"It's a pretty big housing boom, right now. And maybe this is an opportunity for someone to come in, and they want to be able to (build a) thousand low-income housing (units) all of a sudden. Too much, too soon," Maloney said.

Some board members said they felt the proposal was rushed and weren't ready to take action on it. But since the discussion ended without any board member requesting that the proposal be brought back at a later date, Board Chair Michelle Graham said the matter was closed.

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