Property tax waivers for housing are encouraging
The city of Medford is taking aggressive steps to encourage more housing construction in the center of town. Other taxing districts should consider helping out.
The City Council Thursday night approved a six-year program that offers qualifying developers 10 years of property tax waivers. The program would be limited to 200 apartment units per year, and a total of 600 units over the six-year life of the program.
Housing has been in short supply for a long time, and the shortage was made even worse when homes were destroyed in the Almeda Fire of 2020.
Ideally, city officials would like to see more than 1,000 new units built over the next six years, but at the current rate, fewer than 500 will be constructed.
The tax incentive will cost the city property tax revenue for 10 years, but it will add to the tax base over the long term while attracting more residents to the downtown area, which will boost the city’s economy by benefiting restaurants and retail businesses.
Because the tax break will apply to the value of the improvements but not the land, tax revenue will still increase as land values rise. For example, the Genesis Project, an apartment complex now under construction at Eighth and Holly streets, will make that parcel worth more than the parking lot that was there before.
The housing shortage has contributed to rising rents as well as scarcity, making affordable housing a challenge for community planners. The city is also offering a separate tax waiver program to nonprofit developers that create housing for families earning 60% of the median income, or just under $50,000 a year for a family of four.
New housing projects already in the works or planned around town are a hopeful sign for the future of Medford.
In addition to the Genesis Project, a proposed 115-unit complex of low-income housing units called the Delores Huerta Apartments is waiting on grant funding. The former Inn at the Commons is being converted into apartments, as are the Best Value Inn and the Redwood Inn on North Riverside Avenue.
Tax waiver programs are a powerful incentive for developers, and City Council members have decided the temporary loss of some revenue is a reasonable price to pay to spur downtown growth. But the city’s decision affects only the property taxes it receives. The waivers will have more value if other taxing entities such as the Medford School District agree to participate.
The district and other taxing entities should give that serious consideration, balancing the short-term revenue loss against the long-term benefit of a bigger tax base and a thriving downtown.