PORT ANGELES — The Port Angeles City Council is considering a property tax exemption to spur multi-family housing development.
The first step would be to create “targeted areas” where property tax-exempted projects could be considered.
Last month, the City Council passed a resolution notifying the public of its intent to designate certain areas in the city as residential targeted areas for the tax incentive program and to schedule a required public hearing.
The public hearing will begin at 6:30 p.m. today or shortly thereafter in the City Council chambers at City Hall, 321 E. Fifth St.
“I’m excited that we’re moving forward with the multifamily tax exemption process, and I’m hoping that people come to the hearing,” Council member Lindsey Schromen-Wawrin said in an interview.
Chapter 84.14 in the Revised Code of Washington authorizes a special property tax “to encourage increased residential opportunities, including affordable housing opportunities,” in cities with insufficient housing or affordable housing.
The rental vacancy rate in Clallam County was just 1.8 percent in 2016 according to the latest U.S. Census American Communities Survey, Schromen-Wawrin said in a telephone interview.
Under state law, residential targeted area must be in an urban center and lack “sufficient available, desirable and convenient residential housing” to meet the needs of would-be city dwellers.
Multi-unit housing is defined as four or more units.
“This incentive is really a financial incentive to help developers make the bottom line of their development work financially,” Schromen-Wawrin said at the council’s Dec. 18 meeting.
“It doesn’t change zoning. It doesn’t change all of the other requirements that we’ve done in planning for how the city develops over time in a reasonable way that preserves the multiple interests that people have for a walkable, livable city with a variety of housing types and choices.”
The residential targeted areas will be discussed at the public hearing Tuesday.
Schromen-Wawrin had suggested that the entire city be included for the purposes of the tax incentive program.
“Just by advocating that the entire city could be the residential target area does not mean that the entire city would be multi-family housing,” Schromen-Wawrin said.
“It would just mean that a developer who wants to do multi-family housing has another financial tool to make that possible. They would still have to go through all the zoning in order to make that work.”
The City Council voted 6-0 to adopt the resolution of intent. Council member Michael Merideth was excused prior to the vote.
City Attorney Bill Bloor said the public hearing is the “first step in the statutory process that leads to the creation of a multi-unit tax exemption.”
“The tax exemption applies only in eligible areas, and those eligible areas have to be designated by the City Council,” Bloor said.
After setting the targeted areas, the council would then decide whether to impose restrictions on developments that qualify for the tax incentive and whether to make the tax incentive available for affordable multi-unit housing or all multi-unit housing.
“Those are all decisions down the road for us,” Schromen-Wawrin said.
Deputy Mayor Kate Dexter said the property tax exemption would be an incentive to build more housing for Peninsula College students in the downtown area.
“I think it encourages greater participation in the community,” Dexter said.
Council member Jim Moran said RCW 84.14 offers more potential for success than the Emerald Coast Opportunity Zone, a development incentive effort for low-income areas being piloted by tribes, city governments and economic development groups.
“I’m not discounting the Opportunity Zone as a possibility here,” Moran said, adding that the tax exemption could provide a greater return on investment.
“This is a great idea.”
Council member Mike French suggested that Eighth Street and Race Street corridors be included in the residential targeted areas.
“These are areas that I think have opportunities, and in some of those cases actually have land available,” French said.
“I think that that’s a consideration that we should recognize.”
Council member Cherie Kidd agreed that the tax exemption could spur “very positive growth” but cautioned against expanding the program too far.
“Some people want to live in a single-family home,” Kidd said.
“We really have to protect those areas, too, because we have to protect our property values.
“We’re trying to get greater density, but we still have to protect the values of single-family homes,” Kidd added.
“I think we really need to consider both sides.”
French stressed the need for small increases in density throughout the city.
“Large, quick increases do threaten the way people live,” French said.
“But opposition to any increase in density is how cities die, and it’s how our budgets spiral out of control. So we need to be open to small, reasonable increases in density.”
Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at [email protected].