HomeMy WebLinkAboutORD 5400Amends ORDs:5061,5192
5249,
CITY OF RENTON,WASHINGTON
ORDINANCE NO.5400
AN ORDINANCE OF THE CITY OF RENTON,WASHINGTON,
AMENDING CHAPTER 1,ADMINISTRATION AND ENFORCEMENT,
OF TITLE IV (DEVELOPMENT REGULATIONS)OF ORDINANCE NO.
4260 ENTITLED "CODE OF GENERAL ORDINANCES OF THE CITY
OF RENTON,WASHINGTON,"BY MODIFYING THE DESIGNATED
RESIDENTIAL TARGETED AREAS,IMPLEMENTING THE
PROVISIONS OF HOUSE BILL 1910,INCORPORATING AFFORDABLE
HOUSING,AND MODIFYING PROJECT ELIGIBILITY AND FEES.
WHEREAS,on December 22,2003,the Renton City Council adopted Ordinance No.
5061 (codified in RMC 4-1-220)to establish a limited property tax exemption to encourage
multi-family housing development in designated residential targeted areas;and
WHEREAS,the provisions of Section 4-1-220,Property Tax Exemption for Multi-
Family Housing in Residential Targeted Areas,have been useful in helping to encourage
increased residential opportunities and stimulate new construction of multi-family housing in
residential targeted areas;and
WHEREAS,the Renton City Council desires to modify the residential targeted areas for
future multi-family housing projects eligible for the property tax exemption;and
WHEREAS,the State Legislature passed House Bill 1910 in 2007 amending Chapter
84.14 RCW relating to the multi-family housing property tax exemption;and
WHEREAS,the Renton City Council desires to amend RMC 4-220 to implement the
changes from House Bill 1910 and revise the project eligibility and fees;and
WHEREAS,the Renton City Council desires to incorporate affordable housing into the
property tax exemption program and establish the designated residential targeted areas as areas
targeted for low-income housing serving households at or below eighty percent (80%)of the
median income;and
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WHEREAS,on June 23,2008,the Renton City Council conducted a public hearing and
considered all testimony;
NOW,THEREFORE,THE CITY COUNCIL OF THE CITY OF RENTON,
WASHINGTON,DOES ORDAIN AS FOLLOWS:
SECTION I.Section 4-1-220,Property Tax Exemption for Multi-Family
Housing in Residential Targeted Areas,of Chapter 1,Administration and Enforcement,of Title
IV (Development Regulations)of Ordinance No.4260 entitled "Code of General Ordinances of
the City of Renton,Washington,"is hereby entirely amended to read as follows:
4-1-220 PROPERTY TAX EXEMPTION FOR MULTI-FAMILY
HOUSING IN RESIDENTIAL TARGETED AREAS:
A.PURPOSE:
As provided for in chapter 84.14 RCW,the purpose of this Section is to provide
limited,eight (8),ten (10),or twelve (12)year exemptions from ad valorem
property taxation for qualified new multi-family housing located in designated
residential targeted areas.
B.DEFINITIONS:
In construing the provisions of this Section,the following definitions shall be
applied:
1."Administrator"means the Administrator of the Renton Department of
Community and Economic Development,or any other City office,department
or agency that shall succeed to its functions with respect to this Section,or his
or her authorized designee.
2."Affordable housing"means residential housing that is rented by a low
income household whose monthly housing costs,including rent and utilities
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other than telephone,do not exceed thirty percent (30%)of the household's
monthly income.For the purposes of housing intended for owner occupancy,
"affordable housing"means residential housing that is within the means of
and purchased by low or moderate income households.
3."Household"means a single person,family,or unrelated persons living
together.
4."Low income household"means a single person,family,or unrelated
persons living together whose adjusted income is at or below eighty percent
(80%)of the median income,as further defined in subsection (C)(1)(b)(ii)(a)
below.
5."Median income"means the median family income adjusted for family
size for King County,as reported by the United States Department of Housing
and Urban Development (HUD).In the event that HUD no longer publishes
median income figures for King County,the City may use or determine such
other method as it may choose to determine the King County median income,
adjusted for household size.
6."Mixed-use"means a multi-family housing residential project with at least
one (1)other non-residential use in one (1)or more multi-family housing
buildings in the project,such as retail,office,entertainment,schools,
conference centers or a use approved in writing by the (CED)Administrator.
The purpose of the mixed-use requirement is to implement the intent of the
land use district,maximize the efficient use of land,support transit use,and
encourage the development of well-balanced,attractive,convenient,and
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vibrant urban residential neighborhoods.The additional use excludes any
accessory functions related to the residential use.Unless otherwise modified
or waived in writing by the Administrator,the non-residential mixed-use shall
occupy at a minimum the ground floor along the street frontage with a depth
of at least thirty feet (30')for any building in the project.
7."Moderate income household"means a single person,family,or umelated
persons living together whose adjusted income is at or below one hundred
twenty percent (120%)of the median income,as further defined in subsection
(C)(1 )(b )(ii)(b)below.
8."Multi-family housing"means one or more new buildings designed for
permanent residential occupancy,each with four (4)or more dwelling units.
9."Permanent residential occupancy"means multi-family housing that
provides either owner occupancy or rental accommodation on a nontransient
basis.This definition includes rental accommodation that is leased for a period
of at least one (1)month but excludes,for example,hotels and motels that
predominantly offer rental accommodation on a daily or weekly basis.
C.TAX EXEMPTION:
1.Duration of Exemption:The value of improvements qualifying under
RMC 4-1-220D is exempt from ad valorem property taxation as follows:
a.For properties for which applications are submitted before July 22,
2007,the value is exempt for ten (10)successive years beginning January
1 of the year immediately following the calendar year of issuance of the
final certificate of tax exemption;and
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b.For properties for which applications are submitted on or after July 22,
2007,the value is exempt:
i.For eight (8)successive years beginning January 1st ofthe year
immediately following the calendar year of issuance of the final
certificate of tax exemption;or
ii.For twelve (12)successive years beginning January 1st of the year
immediately following the calendar year of issuance of the final
certificate of tax exemption,if the property otherwise qualifies for the
exemption and the applicant/owner rents or sells at least twenty
percent (20%)of the multi-family housing units as affordable housing
to low and moderate income households as further defined in
subsection (C)(1 )(b )(ii)(a)and (C)(l )(b )(ii)(b)below.
(a)For rental projects,at least twenty percent (20%)of the multi-
family housing units in the project must be rented throughout the
duration of the twelve (l2)-year exemption period as affordable
housing to low income households at eighty percent (80%)or less
of median income.
(b)For ownership projects,at least twenty percent (20%)of the
multi-family housing units in the project must be sold as affordable
housing to low or moderate income households at one hundred
twenty percent (120%)or less of median income.
c.The owner may use any combination of studio,one (1 )-bedroom,two
(2)-bedroom,and/or three (3)-bedroom units to comply with the minimum
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twenty percent (20%)requirement m subsection (C)(1)(b)(ii)(a)and
(C)(1 )(b )(ii)(b)above.
d.If,in calculating the minimum twenty percent (20%)of the multi-
family housing units in the project for affordable housing in subsection
(C)(1 )(b)(ii),the number contains a fraction,then the minimum number of
multi-family housing units for affordable housing shall be rounded up to
the next whole number.
e.When the project includes more than one building with multi-family
housing units,all of the affordable housing units required in subsection
(C)(1 )(b )(ii)may not be located in the same building.
2.Limits on Exemption:The exemption does not apply to the value of land
or to the value of nonhousing-related improvements not qualifying under
RMC 4-1-220D,nor does the exemption apply to increases in assessed
valuation of land and nonqualifying improvements.This Section also does not
apply to increases in assessed valuation made by the county assessor on
nonqualifying portions of building and value of land,nor to increases made by
lawful order of a county board of equalization,the Department of Revenue,or
a 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 law.
D.PROJECT ELIGIBILITY:
To qualify for exemption from property taxation under this Section,the project
must satisfy all of the following requirements:
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1.Location:The property must be located in one of the designated
"residential targeted areas"listed below in subsection (D)(1 )(a)or (D)(1 )(b)
of this Section which are targeted for low-income housing serving households
at or below eighty percent (80%)of the median income.If a part of any legal
lot is within a residential targeted area,then the entire lot shall be deemed to
lie within the residential targeted area.
a.Highlands:Within the Center Village Comprehensive Plan designation
and in one of the following:the Center Village (CV)zone,the Residential
Multi-Family (RM-F)zone,or the Residential 14 Dwelling Units/Acre (R-
14)zone;or
b.Downtown:In the Center Downtown (CD)zone,Residential Multi-
Family Urban Center (RM-U)zone,or Residential Multi-Family
Traditional (RM-T)zone.
2.Size and Structure:
a.If the project is located in the Residential Multi-Family Traditional
(RM-T)zone or within the Center Village Comprehensive Plan
designation and in either the Residential Multi-Family (RM-F)zone or the
Residential 14 Dwelling Units/Acre (R-14)zone,the project must (i)
consist of a minimum total of ten (10)new dwelling units of multi-family
housing,and (ii)be located within a new residential structure(s)or a new
mixed-use development as allowed by the RMC for the specific zone.At
least fifty percent (50%)of the space within the project shall be intended
for permanent residential occupancy.
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b.If the project is located in the Residential Multi-Family Urban Center
(RM-U)zone,the Center Downtown (CD)zone or is within the Center
Village Comprehensive Plan designation and in the Center Village (CV)
zone,the project must (i)consist of a minimum total of thirty (30)new
dwelling units of multi-family housing and (ii)be located in a new mixed-
use development,unless otherwise waived by the Administrator.If the
Administrator waives the mixed-use development requirement,the multi-
family housing must be located in a new residential structure(s).At least
fifty percent (50%)of the space within the project shall be intended for
permanent residential occupancy.
3.Exception for Existing Residential Structure:In the case of an existing
occupied residential structure that is proposed for demolition and
redevelopment as new multi-family housing,the project must provide as a
minimum number of dwelling units in the new multi-family housing project,
the greater of:
a.Replace the existing number of dwelling units and,unless the existing
residential rental structure was vacant for twelve (12)months or more
prior to demolition,provide for a minimum of four (4)additional dwelling
units in the new multi-family housing project;or
b.Provide the number of dwelling units otherwise required in subsection
(D)(2)ofthis section.
4.Completion Deadline:The project must be completed within three (3)
years from the date of approval of the contract by the City Council as
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provided in RMC 4-1-220F2 or by any extended deadline granted by the
Administrator as provided in RMC 4-1-2201.
E.APPLICATION PROCEDURE:
1.Form:The owner of property applying for exemption under this Section
shall submit an application to the Administrator on a form established by the
Administrator.The owner shall verify the correctness of the information
contained in the application by hislher signature and affirmation made under
penalty of perjury under the laws of the State of Washington.The application
shall contain such information as the Administrator may deem necessary or
useful,which at a minimum shall include:
a.A completed City application form,including information setting forth
the grounds for tax exemption and whether the owner elects to rent or sell
at least twenty percent (20%)of the multi-family housing units as
affordable housing to low and moderate income households to qualify for
the twelve (12)-year exemption defined in subsection (C)(1)(b)(ii)above;
b.A brief written description of the project,and schematic site and floor
plans of the multi-family dwelling units and the structure(s)in which they
are proposed to be located;
c.Floor and site plans of the proposed project,which plans may be
revised by the owner provided such revisions are made and presented to
the Administrator prior to the City's final action on the exemption
application;
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d.A statement from the owner acknowledging the potential tax liability
when the property ceases to be eligible for exemption under this Section.
2.Fee:At the time of initial application under this Section,the owner shall
pay to the City an initial application fee of one thousand dollars ($1,000.00).
3.Deadline:The application shall be submitted prior to the issuance of the
building permit for the project.The Administrator shall approve or deny an
exemption application within ninety (90)days of receipt of a complete
application.
F.APPLICATION APPROVAL:
1.Approval:The Administrator may approve an application if he or she
finds that:
a.The owner has complied with all of the requirements of this Section,
including but not limited to the project eligibility requirements contained
in RMC 4-1-220D and the application requirements contained in RMC 4-
1-220E;and
b.The proposed project is or will be,at the time of completion,in
conformance with all approved plans,and all applicable requirements of
the Renton Municipal Code or other applicable requirements or
regulations in effect at the time the application is approved.
2.Contract Required:If the application is approved,the owner shall enter
into a contract with the City,approved by the City Council,regarding the
terms and conditions ofthe project under this Section.
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3.Issuance of Conditional Certificate:Following Council approval of the
contract,the Administrator shall issue a conditional certificate of acceptance
of tax exemption.The conditional certificate shall expire three (3)years from
the date of Council approval of the contract unless an extension is granted as
provided in RMC 4-1-2201.
G.APPLICATION DENIAL:
1.Denial:The Administrator shall deny an application if the criteria in RMC
4-1-220F 1 are not met.The Administrator shall state in writing the reasons for
the denial and send notice of denial to the owner's last known address within
ten (10)days of the denial.
2.Appeal:An owner may appeal a denial of a tax exemption application to
the City Council by filing a notice of appeal with the City Clerk within thirty
(30)calendar days of receipt of notice of the denial.The appeal before the
City Council shall be based upon the record before the Administrator,and the
Administrator's decision will be upheld unless the owner can show that there
is no substantial evidence on the record to support the Administrator's
decision.The City Council's decision on appeal is final.
H.AMENDMENT OF CONTRACT:
An owner may request an amendment(s)to the contract by submitting a request in
writing to the Administrator,together with a fee of five hundred dollars
($500.00),at any time within three (3)years of the date of the approval of the
contract as provided for in RMC 4-1-220G2.The date for expiration of the
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conditional certificate shall not be extended by contract amendment unless all the
conditions for extension set forth in RMC 4-l-22OI are met.
I.EXTENSION OF CONDITIONAL CERTIFICATE:
1.Application:The conditional certificate may be extended by the
Administrator for a period not to exceed twenty four (24)consecutive months.
The owner shall submit a written request stating the grounds for the extension
together with a fee oftwo hundred fifty dollars ($250.00).
2.Approval:The Administrator may grant an extension if the Administrator
finds that:
a.The anticipated failure to complete construction within the required
time period is due to circumstances beyond the control of the owner;
b.The owner has been acting,and could reasonably be expected to
continue to act,in good faith and with due diligence;and
c.All the conditions of the original contract between the owner and the
City will be satisfied upon completion of the project.
3.Denial -Appeal:If an extension is denied,the Administrator shall state in
writing the reason for denial and shall send notice to the owner's last known
address within ten (10)calendar days ofthe denial.An owner may appeal the
denial of an extension to the Hearing Examiner by filing a notice of appeal
with the City Clerk within fourteen (14)calendar days after issuance of the
notice of the denial.The appeal before the Hearing Examiner shall follow the
provisions ofRMC 4-8-110E.The owner may appeal the Hearing Examiner's
decision to the King County Superior Court according to the procedures
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contained in RCW 34.05.510 through 34.05.598,as provided in RCW
84.14.090(6),within thirty (30)days of notification by the City to the owner
of the decision.
J.FINAL CERTIFICATE:
1.Application:Upon completion of the construction as provided in the
contract between the owner and the City,and upon issuance of a temporary
certificate of occupancy,or a permanent certificate of occupancy if no
temporary certificate is issued,the owner may request a final certificate of tax
exemption.The owner shall pay a fee of one thousand dollars ($1,000.00)
and file with the Administrator such information as the Administrator may
deem necessary or useful to evaluate eligibility for the final certificate,which
shall at a minimum include:
a.A statement of expenditures made with respect to each multi-family
housing unit and the total expenditures made with respect to the entire
property;
b.A description of the completed work and a statement of qualification
for the exemption;
c.The total monthly rent or total sale amount of each multi-family
housing unit rented or sold to date;
d.The income of each renter household to date at the time of initial
occupancy and the income of each initial purchaser of owner-occupied
multi-family housing units to date at the time of purchase;
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e.If applicable,a statement that the project meets the affordable housing
requirements in subsection (C)(l)(b)(ii)above,along with the number,
type,and specific multi-family housing units rented or sold to date,as
applicable,to meet the affordable housing requirements;
f.Any additional information requested by the City pursuant to meeting
any reporting requirements under RCW 84.14;and .
g.A statement that the work was completed within the required three (3)
year period or any approved extension.
2.Determination:Within thirty (30)days of receipt of all materials required
for a final certificate,the Administrator shall determine whether.the
completed work is consistent with the contract between the City and owner,
whether all or a portion of the completed work is qualified for exemption
under this Section and,if so,which specific improvements satisfy the
requirements of this Section.
3.Filing with County Assessor:For projects that comply with the
requirements of RMC 4-1-22011,the City shall file a final certificate of tax
exemption with the county assessor within ten (l0)days of the expiration of
the thirty (30)day period provided in the prior subsection.
4.Recording:The Administrator is authorized to cause to be recorded,at the
owner's expense,in the real property records of the King County Department
of Records and Elections,the contract with the City required under RMC 4-1-
220F2,as amended under RMC 4-1-220H,if applicable,and/or such other
document(s)as will identify such terms and conditions of eligibility for
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exemption under this Section as the Administrator deems appropriate for
recording.
5.Denial:The Administrator shall notify the owner in writing that the City
will not file a final certificate if:(a)the Administrator determines that the
project was not completed within the required three (3)year period or any
approved extension,or was not completed in accordance with the contract
between the owner and the City and the requirements of this Section,or the
owner's property is otherwise not qualified for the limited exemption under
this Section;or (b)the owner and Administrator cannot come to an agreement
on the allocation of the value of the improvements allocated to the exempt
portion of the project.
6.Appeal:The owner may appeal the Administrator's decision to the
Hearing Examiner by filing a notice of appeal with the City Clerk within
fourteen (14)calendar days after issuance of the notice of the denial.The
appeal before the Hearing Examiner shall follow the provisions for appeal
contained in RMC 4-8-110E.The owner may appeal the Hearing Examiner's
decision to the King County Superior Court according to the procedures
contained in RCW 34.05.510 through 34.05.598,as provided in RCW
84.14.090(6),within thirty (30)days of notification by the City to the owner
of the decision.
K.ANNUAL CERTIFICATION AND REPORT:
Within thirty (30)days after the first anniversary of the date the City issued the
final certificate of tax exemption and each year thereafter for the duration of the
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tax exemption period,the property owner shall file an annual report with the
Administrator.Failure to submit the annual report may result in cancellation of
the tax exemption.The certification shall contain such information as required by
RCW 84.14 and as the Administrator may deem necessary or useful,and shall at a
minimum include the following information:
1.A statement of occupancy and vacancy of the multi-family dwelling units
during the twelve months ending with the anniversary date;
2.A certification that the property has not changed use and,if applicable,that
the property has been in compliance with the affordable housing requirements
as described in subsection (C)(l )(b)(ii)above since the date the City issued
the final certificate of tax exemption and that the project continues to be in
compliance with the contract with the City and the requirements of this
Section;
3.A description of any improvements or changes to the property made after
the City issued the final certificate of tax exemption;
4.The total monthly rent of each multi-family housing unit rented or the total
sale amount of each multi-family housing unit sold to an initial purchaser
during the twelve months ending with the anniversary date;
5.The income of each renter household at the time of initial occupancy and
the income of each initial purchaser of owner-occupied multi-family housing
units at the time of purchase during the twelve months ending with the
anniversary date;
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6.If applicable,a breakdown of the number,type,and specific multi-family
housing units rented or sold during the twelve months ending with the
anniversary date,as applicable,to meet the affordable housing requirements in
subsection (C)(1 )(b )(ii)above;and
7.Any additional information requested by the City pursuant to meeting any
reporting requirements under RCW 84.14.
L.CANCELLATION OF TAX EXEMPTION:
1.Cancellation:If at any time the Administrator determines that:(a)the
property no longer complies with the terms of the contract or with the
requirements of this Section;(b)the use of the property is changed or will be
changed to a use that is other than residential;(c)the project violates
applicable zoning requirements,land use regulations or building code
requirements;or (d)the property for any reason no longer qualifies for the tax
exemption,the tax exemption shall be canceled and additional taxes,interest
and penalties imposed pursuant to State law.Upon determining that a tax
exemption shall be canceled,the Administrator shall notify the property
owner by certified mail,return receipt requested.
2.Appeal:The property owner may appeal the determination by filing a
notice of appeal with the City Clerk,within thirty (30)days after issuance of
the decision by the Administrator,specifying the factual and legal basis for
the appeal.The appeal before the Hearing Examiner shall follow the
procedures set forth in RMC 4-8-110E.At the appeal hearing,all affected
parties may be heard and all competent evidence received.The Hearing
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Examiner shall affirm,modify,or repeal the decision to cancel the exemption
based on the evidence received.The Hearing Examiner shall give substantial
weight to the Administrator's decision to cancel the exemption,and the
burden of proof and the burden of overcoming the weight accorded to the
Administrator's decision shall be upon the appellant.An aggrieved party may
appeal the Hearing Examiner's decision to the King County Superior Court in
accordance with the procedures in RCW 34.05.510 through 34.05.598,as
provided in RCW 84.14.11 0(2),within thirty (30)days after issuance of the
decision of the Hearing Examiner.
3.Change of Use:If the owner intends to convert the multi-family housing
to another use,the owner must notify the Administrator and the County
assessor within sixty (60)days of the change in use.Upon such change in use,
the tax exemption shall be canceled and additional taxes,interest and penalties
imposed pursuant to State law.
M.SUNSET OF EXEMPTION FOR APPLICATIONS FOR
CONDITIONAL CERTIFICATES:
The City shall not accept new applications for conditional certificates as provided
in RMC 4-1-220E after December 31,2009,unless extended by City Council
action.Incomplete applications for conditional certificates as of December 31,
2009,shall be returned to owners.Notwithstanding the above,the City shall
process (l)pending complete applications for a conditional certificate as of
December 31,2009,and (2)applications for an extension of the conditional
certificate and/or a final certificate received after December 31,2009,as provided
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in this Section under RMC 4-1-220D through 4-1-2201.RMC 4-1-220C and 4-1-
220J through 4-1-220L shall continue to apply to all properties that have been or
are issued a final certificate of tax exemption under this Section until expiration,
termination or cancellation of the tax exemption.
SECTION II.This ordinance shall be effective upon its passage,approval,and
five (5)days after its publication.
PASSED BY THE CITY COUNCIL this 14th day of __Ju_l-=y~,2008.
Bonnie 1.Walton,City Clerk
APPROVED BY THE MAYOR this 14th dayof July ,2008.
~~
Denis Law,Mayor
;J:p ed as to form:
A..o '"~r&-~-te<::")?A.'G.,~~...~6/VV""(•.....--.
Lawrence J.Warren,City Attorney
Date of Publication:7/19/2008 (s urnrna ry )
ORD.1487:6/25/08:scr
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