Chapter 8.15
Multiple-Family Housing Property Tax Exemption

Sections:

8.15.010 Purpose.

8.15.020 Definitions.

8.15.030 Residential Targeted Areas – Criteria – Designation.

8.15.040 Project Eligibility.

8.15.050 Application Procedure – Fee.

8.15.060 Application Review – Issuance of Conditional Certificate-Denial – Appeal.

8.15.070 Extension of Conditional Certificate.

8.15.080 Final Certificate – Application – Issuance – Denial and Appeal.

8.15.090 Exemption – Duration – Limits.

8.15.100 Annual Certification.

8.15.110 Cancellation of Tax Exemption – Appeal.

8.15.120 Expiration of Program.

8.15.010 Purpose.

A.  The purposes of this chapter are to:

1.   encourage more multifamily housing opportunities within the city;

2.   stimulate the construction of new multifamily housing and the rehabilitation of existing vacant and underutilized buildings for multifamily housing;

3.   increase the supply of multifamily housing opportunities within the city;

4.   accomplish the planning goals required under the Growth Management Act, RCW chapter 36.70A, as implemented from time to time by the City’s current and future comprehensive plans;

5.   promote community development and neighborhood revitalization;

6.   preserve and protect buildings, objects, sites, and neighborhoods with historic, cultural, architectural, engineering or geographic significance located within the city; and

7.   encourage additional housing in areas that are consistent with planning for public transit systems.

B.  Any one or a combination of these purposes may be furthered by the designation of a residential targeted area under this chapter.

[Ord. C32575 § 1; Passed: 3/6/2000]

8.15.020 Definitions.

As used in this chapter:

A.  “Assessor” means the Spokane County assessor.

B.  “Council” means the Spokane city council.

C.  “Director” means the director of the City’s planning department or any other City office, department or agency that shall succeed to its functions with respect to this chapter, or his or her authorized designee.

D.  “Multifamily housing” means a building having four or more dwelling units designed for permanent residential occupancy resulting from new construction or rehabilitation or conversion of vacant, underutilized, or substandard buildings to multifamily housing and does not include transient accommodations, including hotels or motels.

E.  “Owner” means the property owner of record.

F.  “Permanent residential occupancy” means multifamily housing that provides either rental or owner occupancy for a period of at least one month. This excludes hotels and motels that predominately offer rental accommodation on a daily or weekly basis.

G.  “Rehabilitation improvements” means:

1.   modifications to an existing structure the residential portion of which has been vacant for at least twelve months prior to application for exemption under this chapter, that are made to achieve a condition of substantial compliance with the applicable building and construction codes contained in SMC title 11 and all applicable uniform codes adopted pursuant to SMC title 11; or

2.   modifications to an existing occupied residential structure or mixed-use structure that contains occupied residential units, that add at least four multifamily housing units.

H.  “Residential targeted area” means an area within an urban center that has been so designated by the council pursuant to this chapter.

I.  “Substantial compliance” means compliance with the applicable building and construction codes contained in SMC title 11 and all applicable uniform codes adopted pursuant to SMC title 11 that is typically required for rehabilitation as opposed to new construction.

J.  “Urban center” means a compact identifiable district where urban residents may obtain a variety of products and services and which must contain:

1.   several existing or previous, or both, business establishments that may include but are not limited to shops, offices, banks, restaurants, governmental agencies;

2.   adequate public facilities including streets, sidewalks, lighting, transit, domestic water, and sanitary sewer systems; and

3.   a mixture of uses and activities that may include housing, recreation, and cultural activities in association with either commercial or office, or both, use.

[Ord. C32575 § 2; Passed: 3/6/2000]

8.15.030 Residential Targeted Areas – Criteria – Designation.

A.  Following notice and public hearing as prescribed in RCW 84.14.040, the council may designate one or more residential targeted areas, upon a finding by the council in its sole discretion that the residential targeted area meets the following criteria:

1.   The residential targeted area is within an urban center;

2.   The residential targeted area lacks sufficient available, desirable and convenient residential housing to meet the needs of the public who would be likely to live in the urban center if desirable, attractive and livable residences were available; and

3.   Providing additional housing opportunity in the residential targeted area will assist in achieving one or more of the following purposes:

a.   encourage increased residential opportunities within the city, or

b.   stimulate the construction of new multifamily housing, or

c.   encourage the rehabilitation of existing vacant and underutilized buildings for multifamily housing.

B.  In designating a residential targeted area, the council may also consider other factors, including:

1.   whether additional housing in the residential targeted area will attract and maintain an increase in the number of permanent residents;

2.   whether an increased permanent residential population in the residential targeted area will help to achieve the planning goals mandated by the Growth Management Act under RCW 36.70A, as implemented through the City’s current and future comprehensive plans;

3.   whether encouraging additional housing in the residential targeted area is consistent with public transportation plans; or

4.   Whether additional housing may contribute to revitalization of a distressed neighborhood or area within the city.

C.  At any time the council may, by ordinance, in its sole discretion, amend or rescind the designation of a residential targeted area pursuant to the same procedural requirements as set forth in this chapter for original designation.

D.  The following areas are designated as residential targeted areas under this chapter:

1.   Central Business District – Riverpoint. That area bounded by the following: Commencing at the corner of Maple Street and Riverside, south on Maple Street to Sixth Avenue, east on Sixth Avenue to Division Street, north on Division Street to Sprague Avenue, east on Sprague Avenue to Hamilton Street, north on Hamilton Street to the south bank of the Spokane River, west on the south bank of Spokane River to Monroe Street, south on Monroe Street to the centerline of Main Avenue, west along the centerline of Main Avenue to the centerline of Cedar Street, south along the centerline of Cedar Street to Riverside, and west on Riverside to the point of beginning.

2.   West Central. That area bounded by the following: Commencing at the corner of Summit Boulevard and Bridge Avenue east to Bridge Avenue and Cedar, north on Cedar to Broadway, east on Broadway to Monroe, south on Monroe to the Spokane River, east on the north bank of the Spokane River to Division Street, north on Division Street to Indiana, west on Indiana to West Point Road, south on West Point Road to Summit Boulevard, and south on Summit Boulevard, to the point of beginning at Summit Boulevard and Bridge Avenue.

3.   Browne’s Addition (Peaceful Valley). That area commencing at the northwest corner of Maple Street Bridge and Riverside Avenue, thence west along the north line of Riverside Avenue to the east line of Spruce Street, thence north along the east line of Spruce Street to the northern boundary of the Browne’s Addition Neighborhood. Thence easterly along the northern boundary of Browne’s Addition to its intersection with the centerline of Short Court Street extended, thence easterly along the centerline of Short Court Street to the west line of Ash Street, thence south along the west line of Ash Street to the south line of Wilson Avenue, thence easterly along the south line of Wilson Avenue to the southwest corner of Wilson Avenue and Maple Street Bridge, thence south along the west line of the Maple Street Bridge to the point of beginning.

4.   Type 1 (CC1), Type 2 (CC2) and Type 3 (CC3) Center and Corridor Zones. That area of the center and corridor zones identified on the official zoning map designated as Type 1 (CC1), Type 2 (CC2) and Type 3 (CC3) zones.

5.   The property located at 1923 through 2003 West Clarke Avenue, with a legal description of “Lots 28 – 41, inclusive, Block 5, First Addition to West Riverside Addition, according to Plat recorded in Volume ‘C’ of Plats, Page 50, in the City of Spokane, Spokane County, Washington” consisting of eight parcels numbered 25134-3210, 25134-3211, 25134-3212, 25134-3213, 25134-3214, 25134-3215, 25134-3216, and 25134-3217.

E.  If a part of any legal lot is within a designated residential targeted area then the entire lot shall be deemed to lie within such residential targeted area. The areas designated as residential targeted areas are bound by the streets described above. Property located outside of but adjacent to the described areas is not designated as residential targeted areas.

[Ord. C33203; Passed: 4/28/2003]

8.15.040 Project Eligibility.

To be eligible for exemption from property taxation under this chapter, the property must satisfy all of the following requirements:

A.  The property must be located in a residential targeted area of an urban center.

B.  The project must be multifamily housing consisting of at least four dwelling units within a residential structure or as part of a mixed-use development in which at least fifty percent of the space within such residential structure or mixed-use development is intended for permanent residential occupancy.

C.  For new construction, a minimum of four new dwelling units must be created; for rehabilitation or conversion of existing occupied structures, a minimum of four additional dwelling units must be added. Existing multifamily vacant housing that has been vacant for twelve months or more does not have to provide additional multifamily units.

D.  For rehabilitation or conversion of an existing vacant building, the residential portion of the building shall have been vacant for at least twelve months before application for a conditional exemption and fail to comply with one or more standards of applicable building or housing codes, and the rehabilitation improvements shall achieve a condition of substantial compliance with the applicable building and construction codes contained in SMC title 11 and all applicable uniform codes adopted pursuant to SMC title 11.

E.  The project must comply with all applicable zoning requirements, land use regulations, design review requirements and building and housing code requirements contained in the Spokane Municipal Code at the time of new construction, rehabilitation or conversion.

[Ord. C32575 § 4; Passed: 3/6/2000]

8.15.050 Application Procedure – Fee.

A.  The owner of property applying for exemption under this chapter shall submit an application to the director, on a form established by the director. The owner shall verify the application by oath or affirmation. The application shall contain such information as the director may deem necessary or useful, and shall include:

1.   Information setting forth the grounds supporting the requested exemption including information indicated on the application form;

2.   A brief written description of the project and preliminary schematic site and floor plans of the multifamily units and the structure(s) in which they are proposed to be located; and

3.   A statement from the owner acknowledging the potential tax liability when the property ceases to be eligible for exemption under this chapter.

B.  In the case of rehabilitation or where demolition or new construction is required, the owner shall secure from the City, before commencement of rehabilitation improvements or new construction, verification of property noncompliance with applicable building and housing codes.

C.  At the time of initial application under this section, the applicant shall pay to the City an initial application fee as set forth in SMC 8.02.0695. If the City denies the application, the City will retain that portion of the fee attributable to its own actual administrative costs and refund the balance, if any, to the applicant.

D.  The director shall notify the applicant within twenty-eight days of the application being filed if the director determines that an application is not complete and shall identify what additional information is required before the application will be complete. Within twenty-eight days of receiving additional information, the director shall notify the applicant in writing if the director determines that the application is still not complete, and what additional information is necessary.

E.  An application shall be deemed to be complete if the director does not notify the applicant in writing by the deadlines in this section that the application is incomplete; however, a determination of completeness does not preclude the director from requiring additional information during the review process if more information is needed to evaluate the application according to the criteria in this chapter.

F.  Except as otherwise provided in subsection (G) of this section, the application shall be submitted any time before an application for a building or other construction permit under SMC chapter 11.04.

G.  If, on the effective date of this chapter, the applicant has applied for a building or other construction permits, then application for exemption under this section may be submitted any time prior to issuance of a building permit; provided, that for new construction, the applicant shall have completed, or be in the process of completing review if any as required under this chapter, or shall have obtained a certificate of approval, permit, or other approval as provided under this chapter.

[Ord. C32575 § 5; Passed: 3/6/2000]

8.15.060 Application Review – Issuance of Conditional Certificate-Denial – Appeal.

A.  The director may approve the application if he or she finds that:

1.   A minimum of four new units are being constructed or in the case of occupied rehabilitation or conversion a minimum of four additional multifamily units are being developed;

2.   The proposed project is or will be, at the time of completion, in conformance with all local plans and regulations that apply at the time the application is approved;

3.   The owner has complied with all standards and guidelines adopted by the city under this chapter; and

4.   The site is located in a residential targeted area of an urban center that has been designated by the governing authority in accordance with procedures and guidelines indicated in RCW 84.14.040.

B.  The director shall approve or deny an application under this chapter within sixty days after receipt of the completed application. If the application is approved, the applicant shall enter into a contract with the City, subject to approval by resolution of the city council, regarding the terms and conditions of the project and eligibility for exemption under this chapter. The city council’s resolution to approve the applicant’s contract with the City shall take place within thirty days of the director’s approval of the completed application. Upon council approval of the contract, the director shall execute the contract as approved by the city council, and the director shall issue a conditional certificate of acceptance of tax exemption. The conditional certificate shall expire three years from the date of approval unless an extension is granted as provided in this chapter.

C.  If the application is denied, the director shall state in writing the reasons for the denial and send notice of denial to the applicant at the address listed on the application within ten days of the denial.

D.  An applicant may appeal the director’s denial of the application to the city council within thirty days of receipt of the denial. The appeal before the city council will be based upon the record before the director, and the director’s decision will be upheld unless the applicant can show that there is no substantial evidence on the record to support the director’s decision. The city council’s decision on appeal is final.

[Ord. C32575 § 6; Passed: 3/6/2000]

8.15.070 Extension of Conditional Certificate.

The conditional certificate may be extended by the director for a period not to exceed twenty-four consecutive months. The applicant shall submit a written request stating the grounds for the extension together with the appropriate fee as set forth in SMC 8.02.0695 for the City’s administrative cost to process the request. The director may grant an extension if the director determines that:

A.  The anticipated failure to complete construction or rehabilitation within the required time period is due to circumstances beyond the control of the owner; and

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 applicant and the City will be satisfied upon completion of the project.

[Ord. C32575 § 7; Passed: 3/6/2000]

8.15.080 Final Certificate – Application – Issuance – Denial and Appeal.

A.  Upon completion of the rehabilitation improvements or new construction as provided in the contract between the applicant 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 applicant may request a final certificate of tax exemption. The applicant shall file with the director such information as the director may deem necessary or useful to evaluate eligibility for the final certificate, and shall include:

1.   A statement of the amount of rehabilitation or construction expenditures made with respect to each multifamily housing unit and the total expenditures made in the rehabilitation or construction of the entire property;

2.   A description of the completed work and a statement that the rehabilitation improvements or new construction of the owner’s property qualify the property for the exemption; and

3.   A statement that the work was completed within the required three years of the issuance of the conditional certificate of tax exemption.

B.  At the time of application for final certificate under this section, the applicant shall pay the appropriate fees as set forth in SMC chapter 8.02.

C.  Within thirty days of receipt of all materials required for a final certificate, the director shall determine whether the completed work is consistent with the contract between the City and owner and is qualified for exemption under this chapter, and which specific improvements satisfy the requirements of this chapter.

D.  If the director determines that the project has been completed in accordance with the contract between the applicant and the City and the requirements of this chapter, the City shall file a final certificate of tax exemption with the assessor within ten days of the expiration of the thirty-day period provided under subsection (C) of this section.

E.  The director is authorized to cause to be recorded, or to require the applicant or owner to record, in the real property records of the Spokane County assessor, the contract with the City required under SMC 8.15.060(B), or such other document(s) as will identify such terms and conditions of eligibility for exemption under this chapter as the director deems appropriate for recording.

F.  The director shall notify the applicant in writing that the City will not file a final certificate if the director determines that the project was not completed within the required three-year period or any approved extension was not completed in accordance with the contract between the applicant and the City and the requirements of this chapter or if the owner’s property is otherwise not qualified.

G.  The applicant may file an appeal of the director’s decision that a final certificate will not be issued by filing a notice of appeal with the city clerk within thirty days of receipt of the director’s decision. The appeal shall be heard by the hearing examiner pursuant to SMC chapter 11.02. The hearing examiner’s decision may be appealed to the Spokane County superior court within thirty days of receiving notice of that decision.

[Ord. C32575 § 8; Passed: 3/6/2000]

8.15.090 Exemption – Duration – Limits.

A.  The value of new housing construction and rehabilitation improvements qualifying under this chapter will be exempt from ad valorem property taxation for ten successive years as provided in RCW 84.14.020(1).

B.  The exemption does not apply to the value of land or to the value of improvements not qualifying under this chapter, nor does the exemption apply to increases in assessed valuation of land and nonqualifying improvements, or to increases made by lawful order of the Spokane County board of equalization, the Washington State Department of Revenue, State Board of Tax Appeals, or Spokane County, to a class of property throughout the county or a specific area of the county to achieve uniformity of assessment or appraisal as required by law. In the case of rehabilitation of existing buildings, the exemption does not include the value of improvements constructed prior to submission of the completed application required under this chapter.

[Ord. C32575 § 9; Passed: 3/6/2000]

8.15.100 Annual Certification.

A.  Within thirty days after the first anniversary of the date the City filed the final certificate of tax exemption and each year thereafter, for a period of ten years, the property owner shall file a certification with the director, verified upon oath or affirmation, which shall contain such information as the director may deem necessary or useful, and shall include the following information:

1.   A statement of occupancy and vacancy of the multifamily units during the previous year;

2.   A certification that the property has not changed use since the date of filing of the final certificate of tax exemption, and continues to be in compliance with the contract with the City and the requirements of this chapter; and

3.   A description of any improvements or changes to the property made after the filing of the final certificate or last declaration, as applicable.

B.  Failure to submit the annual declaration may result in cancellation of the tax exemption.

[Ord. C32575 § 10; Passed: 3/6/2000]

8.15.110 Cancellation of Tax Exemption – Appeal.

A.  If at any time the director determines that the property no longer complies with the terms of the contract or with the requirements of this chapter, or for any reason no longer qualifies for the tax exemption, the tax exemption shall be canceled and additional taxes, interest and penalty imposed pursuant to state law.

B.  If the owner intends to convert the multifamily housing to another use, the owner must notify the director and the Spokane County assessor within sixty days of the change in use. Upon such change in use, the tax exemption shall be canceled and additional taxes, interest and penalty imposed pursuant to state law.

C.  Upon determining that a tax exemption shall be canceled, the director, on behalf of the city council, shall notify the property owner by certified mail, return receipt requested. The property owner may appeal the determination by filing a notice of appeal with the city clerk within thirty days, specifying the factual and legal basis for the appeal. The hearing examiner will conduct a hearing pursuant to SMC chapter 11.02 at which all affected parties may be heard and all competent evidence received. The hearing examiner will affirm, modify, or repeal the decision to cancel the exemption based on the evidence received. The hearing examiner shall give substantial weight to the director’s decision and the burden of overcoming that weight shall be upon the appellant. An aggrieved party may appeal the hearing examiner’s decision to the Spokane County superior court as provided in RCW 34.05.510 through 34.05.598.

[Ord. C32575 § 11; Passed: 3/6/2000]

8.15.120 Expiration of Program.

The program established by this chapter shall expire six years after the effective date of the ordinance codified in this chapter, unless extended by the city council by ordinance. Upon expiration, no further applications for a conditional certificate of tax exemption shall be accepted. Incomplete applications shall be returned to the applicant. Pending complete applications for a conditional certificate, extension of conditional certificate and final certificate shall be processed as provided in this chapter.

[Ord. C32575 § 12; Passed: 3/6/2000]