003-19 - Ordinance - Amending Chapter 3.48 Expanding Residential Targeted Area for Multifamily Property Tax ExemptionoRDtNANCE NO. 003-19
AN ORDINANCE OF THE CITY OF PORT ORCHARD, WASH NGTON,
AMEND NG PORT ORCHARD MUN C PAL CODE CHAPTER 3.48;
EXPAND NG THE RES DENTIAL TARGETED AREA FOR MULTIFAM tY
PROPERTY TAX EXEMPT ON; AMENDING THE DESIGNATED RESIDENTIAL
TARGETED AREA AND REQUIREMENTS FOR 12-YEAR MULT FAMILY TAX
EXEMPT ONS; PROV D NG FOR SEVERAB LITY AND CORRECTIONS; AND
SETTING AN EFFECT VE DATE.
WHEREAS, on July 26, 20t6, the City Council adopted Ordinance No. O23-L6, which
created Chapter 3.48 of the Port Orchard Municipal Code (Multifamily Property Tax Exemption);
and
WHEREAS, Figure L: Alternative 1 in Chapter 3.48.030 POMC shows the designated
residential targeted area for multifamily property tax exemption; and
WHEREAS, Section 3.48.030(3) POMC provides that the City Council may amend the
designated residential targeted area; and
WHEREAS, the City has received a request to modify the designated residential targeted
area to include additional properties located on the south side of SE Sedgwick Rd, near the
intersection of Bethe! Rd SE and SE Sedgwick Rd (Assessor's File Nos. L223OL-2-064-2OO3, L223OL-
2-063-2004 a nd L223OL-2-053-2006); a nd
WHEREAS, the additional properties requested for inclusion meet the criteria for the
multifamily property tax exemption as defined by Chapter 84.L4.O40 RCW, which include the
requirements that a designated targeted area must be located within an urban center, and the area
must lack sufficient available, desirable and convenient residential housing, including affordable
housing; and
WHEREAS, the City Council desires to include these additional properties in the designated
residential targeted area, to encourage additional, affordable housing; and
WHEREAS, Figure 1: Alternative L in Section 3.48.030 POMC has been revised to reflect the
inclusion of the additional properties in the designated residentialtargeted area, as shown in Exhibit
1 of this Ordinance; and
WHEREAS, the current market rate for rental housing costs in Port Orchard is significantly
below the average rental cost for Kitsap County's other cities, and
WHEREAS, the City Council wishes to further the City's goals of redevelopment and
additional, affordable residential units within the City's downtown area, which is likely to have
higher costs for development and redevelopment due to the nature of building below-grade parking
and building on shoreline fill; and
Ordinance No.003-19
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WHEREAS, the City Counci! therefore desires to amend the boundaries of the designated
residentia! targeted area, so that the 12-year tax exemption shall apply to only the downtown area,
as indicated in Figure 1 of Exhibit 1; and
WHEREAS, on December 18,2Ot8, the City Council held a properly-noticed public hearing
according to the requirements of RCW 84.74.040 and Section 3.48.030(3) POMC; now, therefore,
THE CITY COUNCIT OF THE C W OF PORT ORCHARD, WASHINGTON, DOES HEREBY
ORDAIN AS FOIIOWS:
SECTION 1. Findings. The City Council hereby adopts the above recitals as findings in support of
this ordinance.
SECTION 2. The Port Orchard Municipal Code Chapter 3.48.040, is here by amended to read as
follows:
3.48.040 TERMS OF THE TAX EXEMPTION.
(1) Duration of Exemption. The value of new housing construction, conversion, and rehabilitation
improvements qualifying under this chapter is exempt from ad valorem property taxation, as follows:
(a) Within the areas shown as "8 Year Eligible Area" and"72 Year Eligible Area" in Figure 1of
this chapter, for eight (8) successive years beginning January 1st of the year immediately following the
calendar year of issuance of the certificate. No requirements for affordable housing are required for an
eight-year tax exemption within either of these areas; or
(b) Within the area shown as"!2 Year Eligible Area in Figure 1of this chapter, fortwelve (12)
successive years beginning January Lst of the year immediately following the calendar year of issuance of
the certificate, if the property otherwise qualifies for the exemption under this chapter and meets the
conditions in this subsection (1Xb). For the property to qualify for the twelve (12) year exemption under
this subsection, the applicant must commit to renting or selling at least twenty (20) percent of the
multifamily housing units as affordable housing units to !ow- and moderate-income households, and the
property must satisfy that commitment and any additional affordability and income eligibility conditions
adopted by the City under this chapter. ln the case of projects intended exclusively for owner occupancy,
the minimum requirement of this subsection may be satisfied solely through housing affordable to
moderate-income households.
(i) lf calculations for the minimum twenty (20) percent of the multifamily housing units
required under this subsection result in a fraction, then the minimum number of multifamily
housing units for affordable housing shall be rounded up to the next whole number.
(ii) ln projects granted L2-year exemptions, housing units identified for households with
low, affordable, or moderate annua! income shall continue to be made available to low,
affordable, or moderate households for the length of the exemption period.
(iii) The mix and configuration of housing units (e.9., studio, one-bedroom, two-bedroom)
used to meet the requirement for affordable units under this subsection shall be substantially
proportional to the mix and configuration of the total housing units in the project.
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Ordinance No.003-19
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(iv) When a project includes more than one building with multifamily housing units, all of
the affordable housing units required in this subsection must not be located in the same building.
(21 Limits on Exemption. The exemption does not apply:
(a) To the value of land or to the value of non-housing-related improvements not qualifying
under this chapter.
(b) ln the case of rehabilitation of existing buildings, to the value of improvements constructed
prior to submission of the completed application required under this chapter.
(c) To increases in assessed valuation made by the Kitsap County Assessor on non-qualifying
portions of building or other improvements and value of !and nor to increases made by lawful order of a
County board of equalization, the Department of Revenue, or Kitsap County, to a class of property
throughout the County or specific area of the County to achieve the uniformity of assessment or appraisal
required by !aw.
(3) Conclusion of Exemption. At the conclusion of the exemption period, the new or rehabilitated
housing cost shall be considered as new construction for the purposes of Chapter 84.55 RCW.
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Ordinance No.003-L9
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SECTION 3. Severability. Should any section, paragraph, sentence, clause, or phrase of this
ordinance, or its application to any person or circumstance, be declared unconstitutional or otherwise
invalid by a court, board, or tribunal of competent jurisdiction, for any reason, or should any portion of
this ordinance be pre-empted by state or federal law or regulation, such decision or preemption shall not
affect the validity of the remaining portions of this ordinance or its application to other persons or
circumstances.
SECTION 4. Corrections. Upon the approval of the City Attorney, the City Clerk is authorized to
make any necessary corrections to this ordinance including, but not limited to, the correction of
scrivener's/clerical errors, references, ordinance numbering, section/subsection numbers, and any
reference thereto.
SECTION 5. Effective Date ; Publication. This ordinance shall take effect and be in full force
immediately upon its passage. An approved summary of this ordinance consisting of the title shal! be
published in the officia! newspaper of the City.
PASSED by the City Council of the City of Port Orchard, APPROVED by the Mayor and
attested by the Clerk in authentication of such passage this 15th day of Janua ttlttw.=
ATTEST:
Bran Rinearson, MMC, City Clerk
APPROVED AS TO FORM:
Cates, City Attorney
Rob ert Putaansuu, Mayor
SPONSOR:
Scott Diener, Councilmember
PUBLISHED:
EFFECTIVE DATE:
January 25,2OL9
January 75,2OL9
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NOTICE OF CITY OF PORT ORCHARD
ORDINANCE
The following is a summary of an Ordinance approved by the Port Orchard City Council at their Work Study Council
meeting held January 15, 2019.
ORDINANCE NO. 003-19
AN ORDINANCE OF THE CITY OF PORT ORCHARD, WASHINGTON,
AMENDING PORT ORCHARD MUNICIPAL CODE CHAPTER 3.48;
EXPANDING THE RESIDENTIAL TARGETED AREA FOR MULTIFAMILY
PROPERTY TAX EXEMPTION; AMENDING THE DESIGNATED RESIDENTIAL
TARGETED AREA AND REQUIREMENTS FOR 12-YEAR MULTIFAMILY TAX
EXEMPTIONS; PROVIDING FOR SEVERABILITY AND CORRECTIONS; AND
SETTING AN EFFECTIVE DATE.
Copies of Ordinance No. 003-19 are available for review at the office of the City Clerk of the City of Port Orchard.
Upon written request, a statement of the full text of the Ordinance will be mailed to any interested person without
charge. Thirty days after publication, copies of Ordinance No. 003-18 will be provided at a nominal charge.
City of Port Orchard
Brandy Rinearson
City Clerk
Published: Friday, January 25, 2019