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Medford council weighs tax break for affordable downtown housing

Affordable housing crisis: Ashland move aimed at increasing housing stock.

Medford City Council wants to boost its supply of low-income housing by offering a property tax break to encourage development.

On Thursday night, the council discussed creating a boundary around the downtown area where affordable housing would be eligible for the tax exemption.

An analysis by the city shows 1,600 units of affordable housing will be needed over the next 10 years.

The area that could be eligible for these projects is roughly bounded by McAndrews Road on the north, 10th Street on the south, Crater Lake Avenue on the east and Newtown Street on the east.

A number of different bus routes must be located within this boundary, according to state regulations.

“It has to be a transit-oriented district,” said Matt Brinkley, Medford planning director.

Before the city embarks on this program, it needs to reach out to other taxing districts, including schools and the county, because they would be impacted by reduced revenues from the property tax exemption.

“You’re going to be avoiding collecting taxes on these projects for 10 years,” Brinkley said.

Property taxes would continue to be paid on the land, but not on the buildings and other improvements.

The tax exemption would be available for new construction or remodeling of five or more units.

A developer would be required to pay a $1,200 fee to start the application with the city.

The council will need to act quickly because one large low-income housing complex already needs the tax exemption to make the project work.

The Medford Urban Renewal Agency Thursday approved an option agreement with Rubicon Investments and Edlen & Co. that begins a lengthy process to build a $48 million apartment complex.

The four-story complex with 115 one- to three-bedroom units would be built adjacent to Les Schwab on a 3.25-acre Central Avenue property in the Liberty Park neighborhood.

To complete the project, the developers need to secure federal, state and conventional sources to pay for it.

MURA would invest $4.2 million into the project along with providing the 3.25-acre property. State dollars will bring in $12.5 million from the Local Innovation and Fast Track (LIFT) Housing Program, and another $20 million is expected in federal money. The remainder would come from a conventional bank loan.

The rents would be $725 a month for a one-bedroom, $867 for a two-bedroom and $997 for a three-bedroom. The housing would be built specifically for families that earn 60% or less of area median income, or $41,000 annually for a family of four.

Rubicon will submit applications for these funds later this month but will need council approval for the property tax exemption to meet the filing deadlines.

“This is coming fast and furious,” Brinkley told the council, which is expected to vote on the property tax exemption later this month.

“Without the abatement, we would have a $2.1 million gap,” Brinkley said.

Reach freelance writer Damian Mann at dmannnews@gmail.com.