HomeMy WebLinkAbout2019-03-26 Planning PACKET
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ASHLAND PLANNING COMMISSION
STUDY SESSION
March 26, 2019
AGENDA
I. CALL TO ORDER:
7:00 PM, Civic Center Council Chambers, 1175 E. Main Street.
II. ANNOUNCEMENTS
III. PUBLIC FORUM
A. Land Use Ordinance - Open Space Amendments
A. Vertical Housing Development Zone
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please
contact the Community Development office at 541-488-5305 (TTY phone is 1-800-735-2900). Notification 48 hours prior to
the meeting will enable the City to make reasonable arrangements to ensure accessibility to the meeting (28 CFR 35.102-
35.104 ADA Title 1).
Memo
DATE: March 26, 2019
TO: Ashland Planning Commission
FROM: Maria Harris, Planning Manager
RE: Draft open space and recreation area ordinance amendments
Summary
The Planning Commission is being asked to provide feedback to staff on the attached draft open space
and recreation area ordinance amendments.
Background
The Planning Commission discussed the open space and recreation area requirements at the January 22,
2019 meeting.
The Commission discussion seemed to indicate there was an interest in distinguishing the open space
requirements for single-family subdivisions from the recreation area requirements for developments and
subdivisions in the multi-family zones. In addition, the Commission discussed: 1) providing flexibility
in multi-family zones to locate the required recreation area in common areas, private yards or a
combination of the two, and 2) clarifying the applicability of the density bonuses related to open space
and recreation facilities.
Draft Ordinance Amendments
Attached is a draft of ordinance amendments based on the Planning Commission discussion at the
January 22, 2019 meeting. The draft document includes notes on the changes. The draft amendments
include the following key clarifications or changes.
Minimum dimension requirements for private recreation areas.
Allows recreation area (8%) to be counted towards meeting the required 5% of common open
space for a Performance Standards subdivision in a multi-family zone.
Clarifies that density bonus for open space applies after meeting the minimum 8% recreation
requirement in multi-family zones.
Clarifies that major recreational facilities for the purpose of a density bonus may be located in
the minimum area required for common open space or recreation area.
The definition of open space is revised and a definition of recreation area added.
The current land use ordinance includes over 250 references to open space, recreation and common area.
As a result, staff prepared the core changes for the Planning Commission to review and provide
feedback. If the Planning Commission believes the draft ordinance amendments are moving in the right
direction, staff will perform and provide a comprehensive update to the land use ordinance.
Page 2 of 3
Legislative History
The current definition of open space in 18.6.1.030 is below and was moved from the Performance
Standards Options chapter (previously Ashland Municipal Code (AMC) 18.88.020.H) to the Definitions
chapter in the 2015 code update.
Open Space.
A common area designated on the final plans of the development, permanently
set aside for the common use of the residents of the development. Open space area is
landscaped and/or left with a natural vegetation cover, and does not include thoroughfares,
parking areas, or improvements other than recreational facilities.
The Performance Standards Options chapter was originally developed and primarily used for
subdivisions in the single-family zones. The approval criteria for Outline Plan require natural
features of the land; such as wetlands, floodplain corridors, ponds, large trees, rock outcroppings
As a result, common
open space in Performance Standards subdivisions serve the dual purpose of preserving natural features
as well as providing other more developed forms of open space (e.g., picnic or seating areas).
Even with the provision of common open space, the development pattern in single-family zones usually
includes private open space or yard areas located on individual lots. This is because the privately-owned
lots tend to be larger and the lot coverage allowances lower than the multi-family zones. In other words,
a larger area in the single-family zones cannot be built on or covered with a dwelling unit and therefore
becomes private yard space.
In contrast, the residential design standards for development in multi-family zones was originally
designed in a flexible manner allowing open space or recreation area to be provided in common open
space and private yard areas, as shown in the code graphic below. The notable difference in the
residential standards for multi-shrubs, bark mulch, and
other ground covers that do not provide suitable surface for human use
DEPT. OF COMMUNITY DEVELOPMENT Tel: 541-488-5305
20 E. Main Street Fax: 541-552-2050
Ashland, Oregon 97520 TTY: 800-735-2900
www.ashland.or.us
Page 3 of 3
Figure 18.4.2.030
DEPT. OF COMMUNITY DEVELOPMENT Tel: 541-488-5305
20 E. Main Street Fax: 541-552-2050
Ashland, Oregon 97520 TTY: 800-735-2900
www.ashland.or.us
ORDINANCE NO.______
AN ORDINANCE AMENDING CHAPTERS 18.3.9, 18.4. AND 18.6 OF THE
ASHLAND LAND USE ORDINANCE TO AMEND THE OPEN SPACE
AND RECREATION STANDARDS FOR CLAIRITY AND CONSISTENCY
Annotated to show deletions and additions to the code sections being modified. Deletions are
bold lined throughbold underlined
and additions are . Unchanged text is grey.
SECTION 1.
Section 18.4.2.030.H \[Residential Development Open Space\] of the Ashland
Land Use Ordinance is hereby amended as follows:
18.4.2.030 Residential Development
H. Recreation AreaOpen Space. Residential developments that are subject to the provisions
of this chapter shall conform to all of the following standards.
1. Recreation Area. An area equal to at least eight percent of the lot area shall be
dedicated to open space for to outdoor recreational use by the tenantsresidents of
the development. Recreation area may be located in common area, a private yard or
a combination thereof.
a. Performance Standards Option (PSO) Overlay.Recreation area dedicated to
meet the requirements of subsection 18.4.2.030.H, above, shall also satisfy the
common open space requirement of subsection 18.3.1.050.A.3 for land
divisions exercising the Performance Standards option in Chapter 18.3.9 and
located a multiple family zone (i.e., R-2, R-3 or multi-family zone in a special
district).
Commented \[MH1\]: Recreation area in a multi-family
zones can also be counted as the required 5% of common
b. Density Bonus. Density bonuses shall be awarded to recreation area in excess
open space for a PSO subdivision in a multi-family zone.
of the eight percent required in subsection 18.4.2.030.H, above. The minimum
recreation area required in multiple family zones cannot be counted for the
award of density bonus points in section 18.2.5.080 and 18.3.1.050.
Commented \[MH2\]: Clarifies that density bonus for open
space applies after meeting the minimum 8% requirement.
2. Surfacing. Areas covered by shrubs, bark mulch, and other ground covers that do not
provide suitable surface for human use may not be counted towards this requirement.
3. Decks and Patios.Decks, patios, and similar areas are eligible for open space.
Commented \[MH3\]: The current definition of open space
43. Play Areas. Play areas for children are required for projects of greater than 20 units that
PSO chapter prior to 2015. As a result, a common area
requirement was not applied to developments in the multi-
are designed to include families. Play areas are eligible for recreation area open
family zones and private open spaces such as decks, patios
space.
and porches were counted towards satisfying the recreation
area requirement.
4. Recreation Area Design Standards.
Moved below to 4.b.i (next page).
a. Common Area. Recreation area provided in common area shall conform to the
following standards.
i. Physically constrained areas such as wetlands or steep slopes cannot be
counted towards the recreation area requirement.
1
ii.Incidental open space that has no realistic use by residents of a
development for outdoor enjoyment and leisure activities cannot be
counted towards the recreation area requirement. For example, isolated
walkways that are limited to providing pedestrian access to dwelling units
or buildings and are not part of larger recreation area cannot be counted
towards the recreation area requirement.
Commented \[MH4\]: To address past examples of
counting walkways as recreation area.
b. Private Yard. Recreation area provided in private yards shall conform to the
following standards.
i. Decks, patios, porches and similar areas are eligible for recreation area.
Commented \[MH5\]: Existing standards, moved from
above.
ii. The dimensions of private recreation areas shall be a minimum of six feet.
Commented \[MH6\]: Unenclosed porches are required to
iii. Area needed for ingress and egress to a building or structure (e.g., be a minimum of 6 feet in depth.
walkway to dwelling unit door, area needed to access storage or bicycle
rack) cannot be counted toward the recreation area requirement.
Commented \[MH7\]: Again, to address past examples of
counting porch area in front of door as recreation area.
SECTION 2.
Section 18.3.9.050 \[Performance Standards Option and PSO Overlay
Performance Standards for Residential Developments\] of the Ashland Land Use Ordinance is
hereby amended as follows:
18.3.9.050 Performance Standards for Residential Developments
A. Base Densities. The density of the development shall not exceed the density established
by this section. The density shall be computed by dividing the total number of dwelling units
by the acreage of the project, including land dedicated to the public. Fractional portions of
the final answer, after bonus point calculations, shall not apply towards the total density.
Accessory residential units are not required to meet the density requirements of this chapter
in accordance with section 18.2.3.040.
1. The base density, for purposes of determining density bonuses allowed under this
section, for developments other than cottage housing, is as provided in Table
18.3.9.050.
Table 18.3.9.050.A.1 Base Densities for Determining Allowable
Density Bonus with Performance Standards Option
Zone Allowable Density
(dwelling units per acre)
WR-2 0.30 du/acre
WR-2.5 0.24 du/acre
WR-50.12 du/acre
WR-10 0.06 du/acre
WR-20 0.03 du/acre
RR-1 0.60 du/acre
RR-.5 1.2 du/acre
R-1-10 2.40 du/acre
R-1-7.5 3.60 du/acre
R-1-5 4.50 du/acre
R-1-3.5 7.2 du/acre
R-2 13.5 du/acre
2
R-3 20 du/acre
2. The base density for cottage housing developments, for purposes of determining density
bonuses, allowed under this section is as provided in Table 18.3.9.050.A.2.
Table 18.3.9.050.A.2 Base Densities for Determining Allowable Density Bonus with Performance Standards
Option
Minimum
Maximum
number of Minimum lot size
Maximum number of Maximum
cottages per (accommodates
Zones Cottage cottages per Floor Area
cottage minimum number
Density cottage housing Ratio (FAR)
housing of cottages)
development
development
1 cottage
R-1-5,
dwelling unit per
NN-1-5 3 12 7,500 sq.ft.0.35
2,500 square
NM-R-5
feet of lot area
1 cottage
R-1-7.5 dwelling unit per
3 12 11,250 sq.ft. 0.35
NM-R-1-7.5 3,750 square
feet of lot area
3. Open Space Required. All developments with a base density of ten units or greater shall
be required to provide a minimum of five percent of the total lot area in Open Space
common open space; that area is not subject to bonus point calculations, however,
density bonuses shall be awarded to open space in excess of the five percent
required by this subsection. The common open space shall be designated on the
Outline and Final Plan submittals and permanently set aside for the use of
residents of the development.
a. Multiple Family Zones. Recreation area dedicated to meet the requirements in
subsection 18.4.2.030.H shall also satisfy the common open space requirement
of subsection 18.3.1.050.3, above, for land divisions exercising the
Performance Standards option and located in a multiple family zone (i.e., R-2,
R-3 or multi-family zone in a special district).
Commented \[MH8\]: Recreation area in a multi-family
zones can also be counted as the required 5% of common
b. Density Bonus. Density bonuses shall be awarded to common open space in
open space for a PSO subdivision in a multi-family zone.
Same issue as H.1.a on page 1.
excess of the minimum required in single-family zones in subsection
18.3.1.050.A.3, above, and to recreation area in excess of the minimum area
required in multiple family zones in subsection 18.4.2.030.H.The minimum
recreation area required in multiple family zones cannot be counted for the
award of density bonus points in section 18.2.5.080 and 18.3.1.050.
Commented \[MH9\]: Clarifies that density bonus for open
space applies after meeting the minimum 8% requirement.
B. Density Bonus Point Calculations. The permitted base density shall be increased by the
percentage gained through bonus points. In no case shall the density exceed that allowed
under the Comprehensive Plan. The maximum density bonus permitted shall be 60 percent
(base density x 1.6), pursuant to the following criteria.
1. Conservation Housing. A maximum 15 percent bonus is allowed. One-hundred percent
of the homes or residential units approved for development, after bonus point
calculations, shall meet the minimum requirements for certification as a Earth Advantage
home, as approved by the Ashl
3
Advantage program as adopted by resolution 2006-06.
2. Provision of Common Open Space. A maximum ten percent bonus is allowed, pursuant
to the following.
a. Purpose. Common open spaces may be provided in the form of natural areas,
wetlands, playgrounds, active or passive recreational areas, and similar areas in
common ownership. All areas set aside for common open space may be counted for
base density, unless otherwise excluded by subsection 18.3.9.050.A.23. However,
for the purposes of awarding density bonus points, the Planning Commission shall
consider whether or not the common open space is a significant amenity to project
residents, and whether project residents will realistically interact with the open space
on a day-to-day basis. The purpose of the density bonus for common open space is
to permit areas, which could otherwise be developed, or sold as individual lots, to be
retained in their natural state or to be developed as a recreational amenity. It is not
the purpose of this provision to permit density bonuses for incidental open spaces
that have no realistic use by project residents on a day-to-day basis. Open space
provided in cottage housing developments, meeting the standards of section
18.2.3.090 Cottage Housing, is not eligible for density bonus points.
Commented \[MH10\]: Moved below to c.
b. Standard. Developments with fewer than ten units that provide more than two
percent of the project area for common open space, or for developments of ten units
or greater that provide more than five percent open space, a one percent bonus shall
be awarded for each one percent of the total project area in common open space,
except as specified in subsection 18.3.9.050.A.3, above.
c. Cottage Housing. Open space provided in cottage housing developments,
meeting the standards of section 18.2.3.090 Cottage Housing, is not eligible for
density bonus points.
3. Provision of Major Recreational Facilities. A maximum ten percent bonus is allowed,
pursuant to the following.
a. Purpose. Points may be awarded for the provision of major recreational facilities
such as tennis courts, swimming pools, playgrounds, or similar facilities, except as
Commented \[MH11\]: May need updating.
specified in subsection 18.3.9.050.A.3, above. Major recreational facilities may
be located in the minimum area required for common open space in
subsection 18.3.9.050.A.3, above, or for recreation area in subsection in
18.4.2.030.H.
b. Standard. For each percent of total project cost devoted to recreational facilities, a
six percent density bonus may be awarded up to a maximum of ten percent bonus.
Total project cost shall be defined as the estimated sale price or value of each
residential unit times the total number of units in the project. Estimated value shall
include the total market value for the structure and land. A qualified architect or
engineer shall prepare the cost of the recreational facility using current costs of
recreational facilities.
c. Cottage Housing. Major recreational facilities provided in cottage housing
developments, meeting the standards of section 18.2.3.090 Cottage Housing, are not
eligible for density bonus points.
4
4. Affordable Housing.A maximum bonus of 35 percent is allowed. Developments shall
receive a density bonus of two units for each affordable housing unit provided.
Affordable housing bonus shall be for residential units that are guaranteed affordable in
accordance with the standards of section 18.2.5.050 Affordable Housing Standards.
SECTION3.
Section 18.6.1.030 \[Definitions Definitions\] of the Ashland Land Use Ordinance
is hereby amended to read as follows:
Active Recreation. Active recreation is primarily physical activity in an outdoor setting.
Examples of active recreation areas include play equipment, court games and
community gardens.
Commented \[MH12\]: Used in definition of open space
below and throughout existing code.
Buildable Area. That portion of an existing or proposed lot that is free of building
restrictions.
Commented \[MH13\]: This definition was inadvertently
deleted in the 2015 update.
Common Area. Land jointly owned to include open space, landscaping, parking or recreation
facilitiesarea e. g., may be managed by a homeowners' association).
Open Space. A common area designated on the final plans of the development,
permanently set aside for the common use of the residents of the development. Open
space area is landscaped and/or left with a natural vegetation cover, and does not
include thoroughfares, parking areas, or improvements other than recreational
facilities. Any parcel or area of land or water set aside, dedicated, designated or
Commented \[MH14\]: The current definition of open
reserved for the outdoor use and enjoyment of residents and their guests. Open
in the PSO chapter prior to 2015. As a result, a common
space can range from highly maintained environments such as playing fields and
area requirement was not applied to developments in the
playgrounds to relatively natural landscapes, and can include areas for active and
multi-family zones and private open spaces such as decks,
patios and porches were counted towards satisfying the
passive recreation. Open space does not include thoroughfares, parking areas or
recreation area requirement.
improvements other than recreational facilities, except when associated with public open
space (i.e., public park).
-
Open Space, Common. Land within or related to a development, not individually
owned or dedicated for public use, that is designed, intended and designated on
the final plans of the development for the common outdoor use or enjoyment of
the residents of the development and their guests.
-
Open Space, Private. An area for outdoor use or enjoyment limited to the
occupants of a single dwelling unit, building or property.
-
Open Space, Public. Land owned and maintained by a public agency for the
outdoor use and enjoyment of the general public. Examples of public open space
include parks, green spaces and greenways.
-
Recreation Area. Land within or related to a development, located in common area
or a private yard, that is designed and intended for outdoor sports and leisure-
time activities by the residents of the development. Recreation areas are improved
5
with suitable surfaces for human use.
Passive Recreation. Passive recreation generally involvesundeveloped areas for
observing and walking in nature. Examples of passive recreation areas include
wetlands and stream corridors.
Commented \[MH15\]: Used in the definition of open
space and throughout the code.
Unbuildable Area. All areas outside of building envelopes and within open space. Unbuildable
area includes but is not limited to required yards, setback areas, easements, and
Flood Plain Corridor and Severe Constraints Lands as classified in section
18.3.10.060.
Commented \[MH16\]: This definition was inadvertently
deleted in the 2015 update.
Yard. An openoutdoor space on a lot which is unobstructed by a structure, and measured from
a lot line to the nearest point of a building. May also be an area defined by required
setbacks (e.g., between a building or structure and nearest property line).
-
Yard, Front. A yard between side lot lines and measured horizontally at right angles to
the front lot line from the front lot line to the nearest point of the building.
-
Yard, Side. An open spaceyard between the front and rear yards measured
horizontally and at right angles from the side lot line to the nearest point of the building.
-
Yard, Rear. A yard between side lot lines and measured horizontally at right angles to
the rear yard line from the rear yard line to the nearest point of the building.
SECTION 4. Savings
. Notwithstanding this amendment/repeal, the City ordinances in existence
at the time any criminal or civil enforcement actions were commenced, shall remain valid and in
full force and effect for purposes of all cases filed or commenced during the times said
ordinances(s) or portions thereof were operative. This section simply clarifies the existing
situation that nothing in this Ordinance affects the validity of prosecutions commenced and
continued under the laws in effect at the time the matters were originally filed.
SECTION 5. Severability
. The sections, subsections, paragraphs and clauses of this ordinance
are severable. The invalidity of one section, subsection, paragraph, or clause shall not affect the
validity of the remaining sections, subsections, paragraphs and clauses.
SECTION 6. Codification
. Provisions of this Ordinance shall be incorporated in the City Code
word, and the sections of this Ordinance may be renumbered, or re-lettered, provided however
that any Whereas clauses and boilerplate provisions (i.e. Sections 1-14) need not be codified and
the City Recorder is authorized to correct any cross-references and any typographical errors.
The foregoing ordinance was first read by title only in accordance with Article X,
Section 2(C) of the City Charter on the _____day of ______________, 2019,
and duly PASSED and ADOPTED this _____ day of ________________, 2019.
6
_______________________________
Melissa Huhtala, City Recorder
SIGNED and APPROVED this day of , 2019.
________________________
John Stromberg, Mayor
Reviewed as to form:
_______________________________
David H. Lohman, City Attorney
7
Memo
DATE: March 26, 2019
TO: Ashland Planning Commission
FROM: Maria Harris, Planning Manager
RE: Vertical Housing Development Zone (VHDZ)
Summary
This is an informational item to update the Planning Commission. The City Council directed staff to
prepare a Vertical Housing Development Zone (VHDZ) and associated program at the March 19, 2019
meeting.
Background
The vertical housing development zone (VHDZ) is a partial property tax exemption for mixed-use
buildings that is allowed under state law. The City Council approved the Transit Triangle (TT) overlay
and land use ordinance amendments in December 2018 and directed staff to bring back an incentive
program similar to the vertical housing tax credit to a future study session.
Fregonese Associates created and analyzed several building scenarios to test the impacts of a partial
property tax exemption and presented their analysis at the March 19, 2019 Council Business Meeting.
Council Business Meeting
March 19, 2019
Agenda Item
Vertical Housing Development Zone
From
Maria Harris Planning Manager
Contact
maria.harris@ashland.or.us (541) 552-2045
SUMMARY
The vertical housing development zone (VHDZ) is an informational item to discuss the partial property tax
exemption for mixed-use buildings that is allowed under state law and review how a VHDZ could affect
building valuation and property tax revenues in the Transit Triangle (TT) overlay. The City Council
approved the Transit Triangle (TT) overlay and land use ordinance amendments in December 2018 and
directed staff to bring back an incentive program similar to the vertical housing tax credit to a future study
session at the January 16, 2018 meeting.
Fregonese Associates created and analyzed several building scenarios to test the impacts of a partial property
tax exemption and will present their analysis at the March 19, 2019 Council Business Meeting. A memo
from Fregonese Associates summarizing the building scenarios is attached.
CźŭǒƩĻ Њʹ ƩğƓƭźƷ ƩźğƓŭƌĻ ΛΜ hǝĻƩƌğǤ
Page 1 of 5
POLICIES, PLANS & GOALS SUPPORTED
promote the development of a mix of housing units and businesses
adjacent to the bus route designed in a way that encourages walking, bicycling and transit use (Ashland
Municipal Code 18.3.14.010).
The Ashland Comprehensive Plan includes a goal in the Housing Element ensure a variety of dwelling
types and provide housing opportunities for the total cross-
preserving the character and appearance of the city (6.10).
The Ashland Comprehensive Plan includes a goal in the Economic Element ensure that the local
economy increases in its health, and diversifies in the number, type, and size of businesses consistent with
the local social needs, public service capabilities, and the retention of a high quality environment (7.07.03)
and Ashland Street will not primarily be automobile-oriented, but will also include attractive landscaping and
designs that encourage pedestrian, bicycle, and mass transit forms of travel.(7.07.03.c.2).
included in the Transportation Element regarding development of Ashland Street as a -
(10.09.02.7).
The Economic Development Strategy includes an reate incentives for development applications
that meet certain predefined economic development eligibility criteria (Action 7.2).
The Climate and Energy Action Plan stablish policies to support
development near transit hubs without displacing disadvantaged populations. Transit-oriented development
(TOD) increases housing density within walking distance of transit hubs. Creating a TOD zoning overlay or
similar policy could reduce car use, but Ashland will need to design any policy carefully to avoid unintended
consequences, such as gentrification that threatens housing affordability and could displace vulnerable
populations (CEAP ULT-1-3
The Climate and Energy Action Plan (CEAP) includes an action to evise community development plans to
favor walkable neighborhoods and infill density. Ashland has a series of long-range planning documents that
guide development across Ashland districts, neighborhoods, and natural areas. Revisiting these plans to
ensure that they support climate-ready development needs, such as walking, biking, transit, parking
management, and climate adaptation features, will ensure that Ashland development is consistent with the
climate goals and commitments. It will be important to ensure that these activities do not come at the
expense of higher housing costs, which could disadvantage low-income populations (CEAP ULT-4-
PREVIOUS COUNCIL ACTION
The Council directed staff to bring back an incentive program similar to the vertical housing tax credit to a future
study session at the January 16, 2018 meeting.
BACKGROUND AND ADDITIONAL INFORMATION
The VHDZ was established under state law in 2001 to provide local jurisdictions a tool to encourage the private
sector to build higher density "mixed-use" buildings that include commercial uses and residential housing. A mixed-
use building typically includes commercial uses on the first floor and residential housing on one or more upper
floors.
Page 2 of 5
The program offers a 10-year partial property tax exemption on the value of a new, qualifying structure or
rehabilitated structure. The exemption does not include the value of the land, unless the project includes a floor or
more of low income housing (i.e., no greater than 80 percent of area median income).
The partial tax exemption is calculated based on the number of floors above the ground floor that are allocated to
residential housing. The program grants a tax exemption of 20 percent for each floor of housing that is incorporated
above the ground floor, with a maximum tax exemption of 80 percent for any single project. For example, a three-
story mixed-use building with residential housing on the second and third floors would have a 40 percent tax
exemption on the value of the construction of the building. In addition, 50 percent of the ground floor is required by
state law to be in nonresidential uses.
Aproject that receives the partial property tax exemption is required to commit to maintaining and operating in a
manner consistent with the application for the partial tax exemption for at least the number of tax years for which the
project is intended to be partially exempt from property taxes.
1. Application Process
In order to be eligible for a partial property tax exemption, state law includes the following requirements.
The project must be entirely located in an established VHDZ.
The project must be a multi-story building including a mix of nonresidential uses (e.g., commercial) and
residential housing.
public street must be committed
to nonresidential uses.
Construction or rehabilitation must have started on each building included on the project
The process for approving a project for a partial tax exemption is outlined in state law and involves the following
steps.
a.The project owner/developer applies to a local jurisdiction (city or county) that has established a VHDZ for
certification, prior to any relevant residential unit being ready for occupancy.
b.The local jurisdiction reviews the application and approves or denies the certification request based on
whether the application meets the requirements of Oregon Revised Statue (ORS) 307.841 to 307.867, as
well as additional criteria established by the local jurisdiction that are consistent with the applicable ORS.
c. by the local jurisdiction, the local jurisdiction sends a copy of the
certification to the county assessor.
d.The vertical housing development project property owner notifies the local jurisdiction when the project is
ready for occupancy.
e.The local jurisdiction sends a second notice to the county assessor informing the assessor that the project is
about to be occupied and is certified.
State law establishes that the determination by the local jurisdiction to approve or deny certification for the partial
administrative review.
2. Sample Building Scenarios for the TT Overlay
Fregonese Associates created and analyzed several sample building scenarios for the TT overlay to test the
impacts of a partial property tax exemption. A summary of the results is included in the attached memo and
will be presented at the March 29, 2019 Council Business Meeting.
Page 3 of 5
The sample building scenarios are at the site or development level and include a scenario for a one-story
commercial building, a three-story mixed-use building and a four-story mixed-use building. A one-story
commercial building was created to use as the base line to compare the results of the multi-story mixed-use
buildings. A one-story commercial building is used as the base line because this type of development is
reflective of the most of the new development in the TT overlay over the last past several decades. Examples
of past one-story commercial developments in the TT overlay include Rogue Credit Union at 1661 Ashland
nd Sherwin-Williams Paint
Store at 2220 Ashland St.
In the short to medium-term, the initial analysis indicates the property taxes collected on a three or four-story
mixed-use building with a partial tax exemption for 10 years will exceed the taxes collected on a one-story
commercial building with no tax exemption for the same 10-year period. This is because the value of a multi-
story, mixed-use building is higher than that of a one-story commercial structure.
In the long term, any multi-story mixed-use buildings developed in the TT overlay using a partial tax
exemption would be fully taxed after 10 years when the exemption expires. Again, this would add higher
value multi-story buildings to the tax base.
The financial analysis for the VHDZ is focused on the impacts to property taxes and to the financial
feasibility of developing three and four-story buildings. The analysis does not capture the costs or benefits of
other goals associated with the TT overlay such as creating opportunities for the development of more
apartments, stimulating more commercial growth, and increasing the number of residents and businesses near
the bus route to encourage walking, bicycling and transit use.
3. Establishing a VHDZ and Local Program
A local jurisdiction that wishes to provide partial tax exemption as an incentive for higher density, mixed-use
development including commercial uses and residential housing is required to establish a VHDZ and the
associated program. The local jurisdiction is also responsible for administering the program and monitoring
approved projects for compliance with state law and any additional local requirements.
The process for establishing a VHDZ is outlined in state law as follows.
a.The local jurisdiction designates an area within the city or county as a VHDZ.
b.The local jurisdiction must notify the local taxing districts that have territory in the proposed VHDZ
of the local intention to designate a VHDZ.
c.Any taxing district not agreeing to participate in the VHDZ must notify the local jurisdiction within
30 days of receiving the notice.
d.The local jurisdiction adopts an ordinance or resolution designating the VHDZ and any additional
local criteria. The local jurisdiction is required to wait at least 60 days after sending the notice to the
local taxing districts before adopting an ordinance or resolution designating the VHDZ.
e.After adopting a resolution or ordinance, the local jurisdiction notifies the county assessor of the
designation of the zone and the districts that elect not to participate in the zone.
A local jurisdiction that establishes a VHDZ is permitted to terminate the zone at any time. Termination of a
VHDZ does not affect any exemptions that were granted under the zone prior to the termination date.
4. Next Step
Staff will schedule an item at a future meeting requesting direction from the City Council as whether to move
forward with the formation of a VHDZ in the TT overlay.
Page 4 of 5
FISCAL IMPACTS
If the City were to establish a VHDZ and associated program, staff time would be required to administer the
program and monitor certified projects that received the tax exemption. The number of developments using
a partial tax exemption will impact the associated work load. At the same time, it is difficult to predict the
potential projects that will pursue the incentive if it is established.
STAFF RECOMMENDATION
Not applicable because this is an informational item.
ACTIONS, OPTIONS & POTENTIAL MOTIONS
Not applicable because this is an informational item.
REFERENCES & ATTACHMENTS
Attachment 1: Memo from Scott Fregonese, February 25, 2019
Page 5 of 5
DATEFebruary 25, 2019
TO Bill Molnar, Maria Harris& Brandon Goldman
FROM Scott Fregonese,Fregonese Associates, Inc.
RETransit Triangle –Vertical Housing Development Zone
Introduction
Through working with the City of Ashland on the Transit Triangle Infill Strategies Project,
Fregonese Associates has gained an understanding of the need for creating a greater
concentration of multi-family residential and retail within the study area. Fregonese
Associates has been researching and analyzingof the effects of implementing a Vertical
Housing Development Zone within the Transit Triangle Overlay.
A Vertical Housing Development Zone incentivizes mixed-use residential/commercial
developments by providing a partial property tax exemption on qualified projects in
areas designated by communities. Within the Ashland Transit Triangle, a Vertical
Housing Development Zone has the potential to be a valuable tool that encourages
moderately-priced housing, jobs, and commercial spaces in an area well-served by
regional transit.
Return on Investment (ROI) Analysis using Building Prototypes
A range of building types or “prototypes” were modeled for each of the zone districts
within the Transit Triangle using the ET pro forma model. The building prototypes
include the physical attributes of buildings, such as height and landscaping, andthe
financial attributes, such as rents and construction costs.
The ET pro forma model is used to evaluate the financial feasibility of the building
prototypes. The model can then be used to look at different scenarios or changes to
building and site characteristics and see if the financial feasibility of the development is
impacted. For example, changes to the amount of parking required for a mixed-use
building with office and residential units can be evaluated to see how the return on
investment (ROI) is impacted.
What is a Vertical Housing Development Zone?
A Vertical Housing Development Zone (VHDZ) is designed to encouragethe private
sector to build higher-density mixed-use development (firstfloor commercial with
1525 SW Park Avenue, Suite 200 Portland, OR 97201 503-228-3054 Fax 503-525-0478
residential above) in targeted areas of a city and provides a partial tax exemption, or
Vertical Housing Tax Credit (VHTC) on increased property value for qualified projects.
The VHDZ provides qualified development projects a 10-year property tax exemption on
the value of new construction or rehabilitation for 20 percent per residential floor for
floors above a commercial ground floor with total exemption limited to no more than 80
percent. Additional exemption may be available for projects with affordable housing.
VHDZ Benefits
Ashland could potentially see many benefits to the Transit Triangle area through the
implementation of a VHDZ. These benefits include:
Encouragingnew mixed-use development (residential and commercial)
Stimulatingmore commercial growth in the Transit Triangle, increasing the value
of surrounding properties
Enhancing opportunities for a live/work community
Supporting commercial development by increasing the number of residents
Creating long-term community wealth through, mixed-use buildings that will be
fully taxed after the partial abatement expires
Encouraging more walkable neighborhoods by locating goods and services near
residents
VHTC Eligibility
Qualified new development projects within a VHDZ are eligible to receive a 10-year
property tax exemption on the value of new construction or rehabilitation of 20 percent
per residential floor for the first four floors above ground floor commercial. Total
property tax abatement of the new construction is limited to no more
than 80 percent. The exemption applies to all taxing jurisdictions that do not opt out
when the zone isestablished. After 10years, the full value ofthe project is placed on
the tax rolls.To be eligible for a VHTC, the following criteria must be met:
1.Project must be entirely located within a vertical housing development zone
2.Project must be a multi-story building used for residential and non-residential
uses
3.At least 50 percent of the project's ground floor that fronts the primary public
street must be committed to non-residential use
VHTC incentives differ depending on the number of floors. For each full floor of
residential above non-residential there is a 20% property tax exemption. VHTC
incentivizes five story or taller buildings to achieve maximum property tax exemption of
80% percent of the building value.The tax exemption for various buildings heights is as
follows:
2
2 story building – Typically will not use VHTC, as it would only result in a 20%
property tax exemption
3 story building – 40% property tax exemption
4 story building – 60% property tax exemption
5 story building – 80% property tax exemption
6+ story building – 80% property tax exemption
Vertical Housing Case Studies
Developers have taken advantage of the VHTC in several Oregon citiesthat have
implemented Vertical Housing Development Zones, including Tigard and Milwaukie.
Tigard, Oregon:
The City of Tigard adopted a Vertical Housing Development Zone in 2014. Since then, it
has been used for two developments, Attwell Off Main and The Adrian. Combined,
these two projects are expected to generate $7.8 million in property taxes over twenty
years.
Attwell Off Main
165 Residential Units
o
1,819 sq. ft. Commercial Space
o
The Adrian
12,000 sq. ft. Mixed-Use
o
Office/Apartments
o
For more information: http://www.tigard-or.gov/business/EcDev/DIXreprint1217.pdf
Milwaukie, Oregon:
The City of Milwaukie adopteda Vertical Housing Development Zone in December 2017.
Axletree is the first project in the city to use the VHTC. The projectis located on the
former Bernard’s Garage site in the heart of Downtown Milwaukie. Guardian purchased
the property in May 2017 and plans to develop a five-storymixed-use building with 110
apartment units and 7,300 sf of retail space. This will be the first newly constructed
multifamily development that the city has seen in over ten years and is conveniently
located on the MAX Orange Line. The development broke ground in 2018 with
completion expected in 2019.
For more information: https://www.gres.com/projects/block-37/
Testing VHTC in the Transit Triangle
Fregonese Associates used Envision Tomorrow prototypes to test the impacts of the
VHTC for three different building types in the Transit Triangle. The models were ableto
determine the total tax exemption of a ten-year period, the tax exemption per unit over
that same time period, and potential public revenue for each of the buildings.
3
3 Story Mixed-Use Example (TT Overlay - R-2 and R-3 Zones)
Generic 150ft by 150ft lot = 22,500 sq. ft.
1,300 sq. ft. retail/office net
28 units (650 sq. ft. average)
28 parking spaces
Percent improvement exemption = 40%
Total tax exemption over 10 years = $245,200
Tax exemption per unit over 10 years = $8,864
Potential public revenue (10-year property tax) = $753,000
4 Story Mixed-Use Example (TT Overlay - C-1 and E-1 Zones)
Generic 150 ft by 150 ft lot = 22,500 sq. ft.
1,600 sq. ft. retail/office net
34 Units (650 sq. ft. average)
34 parking spaces
Percent improvement exemption = 60%
Total tax exemption over 10 Years = $457,000
Tax exemption per unit over 10 Years = $13,337
Potential public revenue (10-year property tax) = $903,000
1 Story Commercial Example (TT Overlay - C-1 and E-1 Zones)
Generic 150 ft by 150 ft lot = 22,500 sq. ft.
8,600 sf retail/office net
26 Parking Spaces
Percent Improvement Exemption = 0%
Potential Public Revenue (10 Year Property Tax) = $382,000
Key Conclusions
The research and prototype modeling completed by Fregonese Associates has produced
a number of conclusions that may be useful for the City of Ashland as they explore the
implementation of a VHDZ in the Transit Triangle:
There is more incentive to use VHTC when building 4 story buildings in the C-1
and E-1 Zones (within the TT overlay)
60% Abatement for 4 Story (C-1 and E-1 Zones)
40% Abatement for 3 Story (R-2 and R-3 Zones)
VHTC are not generally used for 2 story buildings because they only a receive
20% property tax exemption
4