Chapter 888 Oregon Laws 2001

AN ACT

SB 763

Relating to vertical housing zones.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Sections 2 to 10 of this 2001 Act are added to and made a part of ORS chapter 285B.

SECTION 2. As used in sections 2 to 10 of this 2001 Act:

(1) “Light rail station area” has the meaning given that term in ORS 307.605.

(2) “Transit oriented area” has the meaning given that term in ORS 307.605.

(3) “Vertical housing development project” means the construction, reconstruction or rehabilitation of a building, or a group of buildings, so that each building that is constructed, reconstructed or rehabilitated consists of a first floor, or first floor and other floors, to be used for commercial uses, and one or more floors located on floors above the commercial use floor or floors to be used for residential uses.

(4) “Vertical housing development zone” or “zone” means an area that has been designated a vertical housing development zone under section 5 of this 2001 Act.

SECTION 3. (1) A city or a county may apply to the Director of the Economic and Community Development Department for designation of an area within the city or county as a vertical housing development zone.

(2) With the prior consent of the governing body of the city, a county may apply to the director on behalf of a city for designation of any area within that city as a vertical housing development zone.

(3) A city and a county, or any combination of cities and counties, may apply to the director for designation of an area situated partly within the city and partly in unincorporated territory within the county as a vertical housing development zone.

(4) A district listed in ORS 198.010 or 198.180 may elect not to participate in a vertical housing development zone. A district that elects not to participate may continue to impose taxes on property otherwise exempt from ad valorem property tax under section 9 of this 2001 Act.

(5) An application for designation of a vertical housing development zone shall be in such form and contain such information as the Economic and Community Development Department may require by rule, including:

(a) A list of local taxing districts, other than the applicant, that have territory in the proposed vertical housing development zone.

(b) A copy of a written notification mailed to the districts listed pursuant to paragraph (a) of this subsection that:

(A) Describes the proposed vertical housing development zone;

(B) Explains the exemption described in section 9 of this 2001 Act that would apply if the proposed zone is designated; and

(C) Explains the process by which a district listed in ORS 198.010 or 198.180 may elect not to participate in the vertical housing development zone.

(c) A statement signed by the applicant attesting that the notification described in paragraph (b) of this subsection was sent by regular mail to each district listed pursuant to paragraph (a) of this subsection.

(6) The application shall:

(a) Be filed on behalf of one or more local government units as described in subsections (1) to (3) of this section by action of the governing body of each applicant;

(b) Contain a description of the area sought to be designated as a vertical housing development zone, including proposed zone boundaries; and

(c) Contain information sufficient to allow the director to determine if the criteria established in section 5 of this 2001 Act are met.

(7) The applicant shall submit to the director within 30 days following the date the application is filed with the department a list of the districts that elected not to participate in the vertical housing development zone.

SECTION 4. (1) The Director of the Economic and Community Development Department shall review each application filed under section 3 of this 2001 Act and shall approve or disapprove each application within 60 days of the date the application is filed.

(2) The director may approve an application and thereby designate the area that is the subject of the application as a vertical housing development zone if the director determines that the area meets the criteria set forth in section 5 of this 2001 Act.

(3) The determination of the director to approve or disapprove an application is a discretionary determination. The determination is final and may not be appealed.

SECTION 5. The Director of the Economic and Community Development Department shall:

(1) Designate a vertical housing development zone upon application made under section 3 of this 2001 Act if the proposed zone constitutes a core area of an urban center of this state, a light rail station area or a transit oriented area.

(2) Notify the county assessor of the county in which the vertical housing development zone is located of the designation of that zone and of the districts that elected not to participate in the zone.

SECTION 6. (1) Following vertical housing development zone designation under section 5 of this 2001 Act, if the Director of the Economic and Community Development Department receives a request to terminate a vertical housing development zone from the applicant for zone designation under section 3 of this 2001 Act, the director shall terminate the zone.

(2) The termination of a zone under this section does not affect the exemption of any property from tax under section 9 of this 2001 Act if an application for the exemption was approved prior to the zone termination.

SECTION 7. (1) Following the designation of a vertical housing development zone under section 5 of this 2001 Act, a person proposing to construct a vertical housing development project and seeking the partial property tax exemption set forth in section 9 of this 2001 Act shall apply to the Economic and Community Development Department for certification.

(2) The application shall be on a form prescribed by the department and shall contain any information required by the department, including all of the following:

(a) The address of the proposed vertical housing development project;

(b) A description of the existing state of the property;

(c) A description of the proposed construction, including the number of floors to be constructed;

(d) A description of the commercial uses to which the first floor or lower floors are to be put; and

(e) A description of the residential housing to be located on the upper floor or floors of the proposed vertical housing development project.

(3) The application must be filed under this section on or before the date residential units that are a part of the vertical housing development project are ready for occupancy.

(4) The department shall review each application submitted under this section and shall certify or deny certification based on whether the proposed vertical housing development project meets the criteria set forth in section 8 of this 2001 Act.

(5) The department may request any documentation or undertake any investigation necessary to ascertain the veracity of any statement made on an application under this section.

(6) The department shall certify or deny certification within 60 days following the date the application is filed with the department.

(7) A denial of certification may be appealed to the department in the manner of a contested case under ORS 183.310 to 183.550.

SECTION 8. (1) The Economic and Community Development Department shall certify a proposed project as eligible for the partial property tax exemption under section 9 of this 2001 Act if the application for certification describes a vertical housing development project and the project is to be constructed in a vertical housing development zone.

(2) The department shall send a copy of the certification to the county assessor of the county in which the vertical housing development project is to be located.

SECTION 9. (1) For the first tax year in which, as of the assessment date, a vertical housing development project is occupied or ready for occupancy following certification under section 8 of this 2001 Act, and for the next nine consecutive tax years, the vertical housing development project shall be partially exempt from ad valorem property taxes imposed by local taxing districts, other than the districts that elected not to participate in the vertical housing development zone as described in section 3 (4) of this 2001 Act, according to the following schedule:

(a) If the project consists of one floor of residential housing, the project shall be 20 percent exempt.

(b) If the project consists of two floors of residential housing, the project shall be 40 percent exempt.

(c) If the project consists of three floors of residential housing, the project shall be 60 percent exempt.

(d) If the project consists of four or more floors of residential housing, the project shall be 80 percent exempt.

(2) During the period in which property would otherwise be partially exempt under this section, property shall be disqualified from exemption under this section if a floor used for residential housing is converted to another use.

SECTION 10. (1) Following the designation of a vertical housing development zone under section 5 of this 2001 Act, the city or county in which the zone is located may acquire real property within the zone for the purpose of developing the property. The development may be undertaken by the city or county independently, jointly or in partnership with a private entity. The entities undertaking the development of property under this section may own and operate the developed property or may sell or otherwise dispose of the property at any time during or after development. The property may be sold at the property’s real market value or at a lesser value.

(2) The development of property under this section may be undertaken only if the governing body of the city or county determines that the development will encourage high-density vertical residential housing or the efficient use of mass transit facilities within the vertical housing development zone.

Approved by the Governor July 31, 2001

Filed in the office of Secretary of State July 31, 2001

Effective date January 1, 2002

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