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Medford offers tax break for housing By Damian Mann Updated: Sep 16, 2022 03:33 PM A A A 6-year property tax waiver for downtown low-income housing projects aimed at spurring development An architectural rendering shows the Genesis Project, an apartment building going up in downtown Medford at the corner of Eighth and Holly streets. Medford City Council passed a six-year property tax waiver program Thursday to spur more downtown housing projects. [courtesy illustration] Medford City Council unanimously approved a six-year property tax waiver program Thursday to spur downtown housing projects. Developers who qualify for the program would see a property tax waiver that would last for 10 years. Over the next six years, the city hopes to see 1,032 new rental units to keep up with demand, but trends indicate only 444 will be built. To stimulate more development, the city will allow a maximum of 600 units over the six-year period, with the potential to increase the number or extend the program. In any given year, a maximum of 200 new units could qualify for the program. The area where the tax waiver would apply is roughly McAndrews Avenue to the north, 10th Street to the south, Crater Lake Avenue to the east and Newtown Street to the west. Councilor Mike Zarosinski pointed out that the city would be losing out on property tax revenues as it’s going to consider raising fees for city services. “It seems counterintuitive that you would then reduce the most flexible money we would have,” he said. Zarosinski said the city at the same time has considerable gaps in the amount of housing available for residents, so he threw his support behind a program that would act as an incentive to developers. The maximum amount of property tax waivers that could be offered is $375,000 annually, or $3,750,000 over the 10-year period. The city is reaching out for support from other taxing districts, such as Medford School District, which would see a decline in its revenues. A real estate tax waiver would apply only to the land improvements, not to the land itself, which would still continue to increase significantly in value after the development. For years, Medford has hoped to attract more housing in the downtown, particularly low-income housing, with the 62-unit Genesis apartment complex near City Hall as one example. The council also approved a separate tax waiver program that specifically targets developments by nonprofits to create housing for families earning on average 60% of the median income, or $40,980 for a family of four based on federal Housing and Urban Development data. This program would be offered citywide, and a proposed 115-unit apartment complex on Central Avenue next to Les Schwab Tire Center could qualify. The property is owned by Medford Urban Renewal Agency, and the developer is Rubicon Investments and Edlen & Co. Known as the Dolores Huerta Apartments, the $48 million project applied for $12.5 million from the Local Innovation and Fast Track state grant program but didn’t qualify this year. The developer plans to apply for it again in 2023. Typically it takes two or three funding cycles to get approval for these competitive grants. If approved for the exemption, the property owner has to show annually that the units are being occupied by low-income residents to continue to qualify for the exemption. To provide more flexibility, the council approved allowing the exemption at or below 60% of area median income for the first year, and below 80% of area median income in subsequent years. The council is approaching other taxing districts to see whether they would also support the tax exemption program. If 51% of the districts agree, then the exemption would apply to all the taxing districts. If less than 51% agree, only Medford’s portion of the property tax would be affected. Reach freelance writer Damian Mann at [email protected].