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Woodburn civic leaders grapple with affordable housing challenges when non-profit group pitches local option for tax exemption

PMG PHOTO: JUSTIN MUCH - Catholic Community Services Foundation currently operates Villa Esperanza, a 16 unit multi-family affordable housing complex located in Woodburn.Any mission aimed at realizing more affordable housing within a given community can be a complex, arduous undertaking.

Woodburn City Council discovered this during its Sept. 23 meeting.

Numerous voices chimed into the topic during a discussion that consumed more than an hour and ended with, perhaps, a little more insight but no clear direction. No action was taken, but the agenda item is not at rest either.PMG FILE PHOTO - Woodburn City Administrator Scott Derickson

Initiating the dialogue was a straight-forward report from City Manager Scott Derickson outlining a request by Catholic Community Service Foundation for the city to implement a state local option law that provides a property tax exemption for nonprofits providing low-income housing.

The report was followed up by a panel of housing advocates whose discourse leant favorably toward the local option. Other voices, including Woodburn Fire Chief Joe Budge, would point out some caveats inherent to the tax-exemptions.

Still others uncovered nuances, such has who oversees or provides for those in the tax-exempt housing, who picks up the financial slack left in the tax-exemption wake and why does the housing question appear to be one laid onto local laps, as if the state is avoiding it.

"(The statute language) feels like maybe a deal couldn't get done at the state legislature, and now it's (sent) down to us to make our decisions about things that are happening in our community that we all live in that we all pay taxes in," Councilor Eric Morris mused. "We need to talk about once we pull the trigger on this, what's the impact going to be going down the road?"

The proposal

The quartet who approached the city council and spoke favorably of the local option were CCSF acting Executive Director Joshua Graves, Marion County Commissioner Colm Willis, State Rep. Teresa Alonzo Leon and Jackie Franke a CCSF board member and spokesperson.

"Providing low-income housing is not a profitable venture," Graves emphasized. "Sometimes breaking even can be a challenge, even without the burden of property taxes."PMG FILE PHOTO - Woodburn City Councilor Eric Morris

Graves, who will become CCSF's executive director in 2020, entreated the council from a multiple-service perspective, whereby the lack of one crucial need, housing, magnifies the need for other services.

"Health and Human Services and Housing are critical right now. If there is one thing we've learned as a community and as a state, it's that in affordable housing you have to link health and human services. If you don't, the amount of services that are needed from police and fire raise exponentially," he said.

"Affordable housing is a social determinant of health," Franke added. "So, in essence, we will strengthen the health of our community by providing affordable housing."

Willis also broached an economic angle.

"We have a serious shortage of housing in Marion County," Willis said. "And I spent the better part of last year trying to understand why that is. And the conclusion that I have come to is that it is directly linked to inter-generational poverty.

"What this means is that we can't fix our housing crisis by raising taxes and building public housing – it's just not possible," he continued. "Even if we wanted to, it costs too much."

Marion County and Salem are among jurisdictions within the state that have enabled the low-income housing tax exemption option.

Willis touted the approach as akin to a provision of tools that help people fix unfavorable conditions; affordable housing units act as ladders that help people climb out of poverty. The commissioner also extolled CCSF as an amazing entity for building these types of ladders.

"Visit them and see the people they've helped," he advised.


The only complex in Woodburn that currently fits the nonprofit affordable housing description is the CCSF operated Villa Esperanza, a 16-unit array of apartments off Lincoln Street. If other similar complexes are proposed, they could apply for the exemption.PMG PHOTO: JUSTIN MUCH - Catholic Community Services Foundation currently operates Villa Esperanza, a 16 unit multi-family affordable housing complex located in Woodburn.

The city would be the only taxing district automatically affected if the program is implemented, but others could become so.

"We are talking about the city's operating levy that we have now," Derickson said. "Other taxing districts would not be subject to this under the city's ordinance, unless they signed on after the city were to adopt this ordinance."

Other taxing districts would include Woodburn Public Schools, Woodburn Fire District, Chemeketa Community College and Marion County.

The city would not have the discretion to dictate how the exempted tax is utilized; it could not, for example, require that the tax savings be allocated to ensure that rents are lowered. The beneficiaries would be the nonprofit overseeing the housing.

"The property tax savings belongs to the organization or the property owner that would otherwise be paying the tax," Derickson surmised. "So, if a corporation is paying the tax or a community foundation or a nonprofit is paying the tax, as a corporate entity they would receive the benefit of the tax savings."

Applications for the exemption would need to meet specific criteria within the statute established by the state, and each nonprofit would have to reapply annually to ensure that it continues to meet those criteria.

Willis noted that Salem, which has a population of roughly 170,000, enabled the option in 2017 and has seen just six successful applicants since.

Questions, concerns and caveats

Morris wondered why the state invested this authority to the smaller jurisdictions.

"I believe the reason why they are allowing local cities to make their own decision is because every community is different," Alonzo Leon said.

Leon viewed the exemption as an investment in the community; something that enables a family to concentrate on improving its situation without the distraction of worrying about a roof over their heads.

Councilor Debbie Cabrales agreed.

"I think this is a good opportunity for us to give back to our community," Cabrales said. "Yeah, we're worried about taxes and stuff, but these people are worried about where they are going to be living."

Councilor Mary Beth Cornwell joined Morris in speculating how enabling the local option would affect the balance of the community in light of the city's estimated 26 percent poverty rate.

Councilor Sharon Schaub asked if the tax exemption simply gets passed on to other taxpayers?

"I don't know that that tax would be redistributed among existing taxpayers," Derickson explained. "But the property tax revenue does pay for general fund services that are consumed by the community."

Woodburn resident Michael Martin asked if the process would open the doors to subsequent charities that meet the statute criteria entering into the local-option arena, regardless of how the city deems that particular entity or its usefulness to the community.

"I think there is an overarching policy decision that is clearly the council's," City Attorney N. Robert Shields said. "You have one qualifying charity making one request, and that's what we know about right now. Everything else is in the future."

Budge was necessarily non-partial regarding the ordinance. He did note that if a number of larger entities, such as the school district, were to enable the tax exemption, the district could be obliged to follow suit.

"By far and away the biggest demand for our services is residential areas," Budge said. "With an increase in the residential population, so is an increase in the demand for services of the fire services. An increase in the demand of services without an increase in funding puts a strain on our budget."

The chief stressed that the fire department's response threshold is a critical factor to consider, and additional demand for services would require increased staff, hence funds, in order to maintain an acceptable response threshold.PMG FILE PHOTO - Woodburn City Councilor Lisa Ellsworth

Councilor Lisa Ellsworth stressed that not all nonprofits are operationally equal.

"I can tell you from my own experience, depending on which nonprofit is in charge will tell you how well the residents are cared for," Ellsworth said. "I know that when certain nonprofits were running this home (in her neighborhood), I was calling the police for elder abuse and abuse of the residents."

She described a scenario where inadequate oversight resulted in poor treatment of the tenants as well as shoddy upkeep of the facility and its grounds. She clarified that CCSF is not of that ilk, but not all nonprofits necessarily uphold the same standards as CCSF.

"That's a horrible thing to live next to…" she said. "I want to make sure that whatever we approve protects all of our citizens – all of them."

To be continued...

More discussion, and potentially action, will likely emerge surrounding the local option proposal at future city council meetings.

"We obviously have strong opinions amongs ourselves tonight," Councilor Rober Carney said. "The implication of that to me is clear: it requires further study...We probably need to examine this in greater detail before we come to a conclusion."

Further work is needed as well.

"We don't have an enabling ordinance before you tonight because we are not at that stage," Shields said. "You have to make that policy decision one way or another."

Shields noted that city staff as put considerable research into the subject, and that Salem's local option document serves as a good model.

Derickson noted that he and Shields will further research specific eligibility conditions allowed within the current law that the council could consider if it elects to move forward with a local option.

"It'll likely take us a few weeks to complete this work. In terms of process, we'll finish our research before determining next steps," Derickson said.


Catholic Community Services Foundation

CCSF has been providing low-income housing since 2007 and has increased its inventory to 261 units.

Locally: In December of 2018 the group opened the 16-unit Villa Esperanza in Woodburn.

Quote: "Our goal is not just to avoid homelessness for families, but to also improve their lives so that they can become contributing members of the community." – CCSF Deputy Director Joshua Graves

Web: Visit Catholic Community Services of the Mid-Willamette Valley at

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