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2810 ORDINANCE 2810 AN ORDINANCE OF THE LAKE OSWEGO CITY COUNCIL ESTABLISHING SYSTEM DEVELOPMENT CHARGE EXEMPTIONS FOR AFFORDABLE HOUSING Whereas, the Lake Oswego City Council finds that the lack of affordable housing is a serious concern locally and throughout the region; and Whereas, it is in the public interest to encourage affordable housing through system development charge exemptions for accessory dwelling units and for multiple family developments that meet certain affordability criteria. The City of Lake Oswego ordains as follows: Section 1. Section 39.05.105 of the Lake Oswego Code is amended by adding the text shown in bold. double-underlined type and deleting the text shown in strikethrough type, as shown on the attached Exhibit 1. Section 2. Severability. The provisions of this ordinance are severable. If any portion of this ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this ordinance. Section 3. Effective Date. As provided in Section 35.C. of the Lake Oswego Charter, this ordinance shall take effect on the 30th day following enactment. Enacted at the regular meeting of the City Council of the City of Lake Oswego held on the 4th day of December 2018. AYES: Mayor Studebaker, O'Neill, Buck, Manz, LaMotte, Gudman, Kohlhoff NOES: None ABSTAIN: None EXCUSED: None Kent Studebaker, Mayor ATTEST: Anne-Marie Simpson, City Record6r Ordinance 2810 Page 1 of 2 APPROVED AS TO FORM: David Powell, City Attorney Ordinance 2810 Page 2of2 Exhibit 1 to Ordinance 2810 39.06.105 Exemptions, Reductions and Waivers. 1. Structures and uses established and existing on or before July 1, 1991 are exempt from a system development charge, except water and sewer charges, to the extent of the structure or use then existing and to the extent of the parcel of land as it is constituted on that date. Structures and uses affected by this subsection shall pay the water or sewer charges pursuant to the terms of this ordinance upon the receipt of a permit to connect to the water or sewer system. 2. An alteration, addition, replacement or change in use that does not increase the parcel's or structure's use of the public improvement facility is exempt from all portions of the system development charge for that facility. 3. A system development charge may be proportionately reduced if: a. Evidence indicates that the construction, alteration, addition, replacement or change in use does not increase the parcel's or structure's use of a system or systems to the degree calculated in or anticipated by the methodology for the particular system development charge; and b. Any future construction, alteration, addition, replacement or change in use that would or could increase the use of the system or systems would require a development permit that would permit imposition of a system development charge under this Chapter. 4. The Parks and Recreation system development charge may be waived or reduced by the City where the City requires a developer to dedicate or reserve more than the minimum amount of open space pursuant to LOC Chapter 50 or where a property owner voluntarily donates a conservation easement pursuant to LOC 59.04.015 (1). 5. The following percentages of all portions of the systems development charge for non profit or state or fedc'd a'od low to moderate cost housing for elderly and disabled persons may be deferred by the City Manager. Such defrral rn y be made upon a showing, to tho ��fcotion of the City Manager, that the deforral is necessary to make the project economically feasible within tha manimum rental rate o:acbli;.hed by the funding agency, or for projects with interest rate subsidies only, to bring the monthly rental rates within 10% of tha provailing rates for oimilx h Statistical Area. Maximum No—ef Interest Rental-Rates Units Subsidy 75% 1 30 50%, 35% 31 15 3544, 25% 16 60 20% Maximum No:-ef Interest Rental Rates Units Subsidy 0 If a project changes in ats .s to one which would not qualify for a deferral, th total amount of the deferral, terms cf this c"e?ems 5. Affordable Housing Exemptions. a. The following are exempt from payment of all system development charges, so long as all conditions of this subsection (5) are met: i. An accessory dwellina unit. as that term is defined in LOC 50.10.003; or ii. A multi-family development of twenty or more units where at least 10% of the units are continuously rented. leased or made available for an amount of rent plus expenses associated with occupancy. such as utilities and fees. totaling not more than 30% of the income level that is 80% of Area Median Income according to the Clackamas County Housing Authority's "Income Limits" for affordable housinat adjusted for household size. b. The building permit must be issued on December 1, 2018 or later: c. In the case of an accessory dwellina unit. the applicant must submit a covenant. in a form approved by the City Attorney. that prohibits for at least ten years the use of the accessory dwelling unit or any other structure on the property as a premises rented to occupants for fewer than 31 consecutive days. and includes provisions for monitoring compliance. d. In the case of a multi-family development. the applicant must submit a covenant. in a form approved by the City Attorney. that requires the development to comply with all of the requirements of Subsection (5)(a)(ii) for a period of not less than ten years, and includes provisions for monitoring compliance. e. The applicant must record the covenant required under Subsection (c) or(d) in the deed records for the property before the City issues the building permit. f. If the covenant is violated. or if the covenant is terminated according to its terms before the expiration date: i. A processina fee will be imposed in an amount established by resolution of the City Council. ii. The exemption will be terminated and all previously exempt portions of system development charaes. plus the processina fee. toaether with interest on th.e system development charges from the date of the building permit at a rate established by the City Council, will become immediately due and payable by the then-owner of the property. iii. The City Manager shall furnish a notice of the violation or termination. together with a statement of the charaes and fees under this subsection (5)(e). ands description of the objection and hearing process. to the then-owner of the property in person or by certified mail. return receipt requested, addressed to the owner at the last-known address as shown in the count property tax assessment records. If no objection is filed with the City Recorder within 15 days from the date the notice is mailed. the reinstated system development charges. processing fees. interest. and all other charaes under this subsection (51(e) shall be a lien aaainst the property. iv. If an objection is filed with the 15-day period. the City Council shall hold a public hearing. upon not less than 15 days' notice to the owner. to consider the oral and written testimony and materials provided by the City Manager.the owner, or other interested persons. Followina the hearina. the City Council shall determine whether the terms of the covenant have been violated, or whether the covenant has been terminated according to its terms before expiration, and, if so, the amount of the fees and charaes that are due and payable under this subsection (5)(f). The amount determined by the City Council shall be a lien against the property. The City Council's decision shall be final, v. The City Manager shall docket the lien in the lien docket. The lien will be enforceable in the manner provided in ORS Chapter 223. vi. In addition to the above remedies. any failure to comply with the terms of the covenant shall be a civil violation, enforceable as provided in Article 34.04 of this Code. Exhibit 1 to Ordinance 2810 39.06.105 Exemptions, Reductions and Waivers. 1. Structures and uses established and existing on or before July 1, 1991 are exempt from a system development charge, except water and sewer charges, to the extent of the structure or use then existing and to the extent of the parcel of land as it is constituted on that date. Structures and uses affected by this subsection shall pay the water or sewer charges pursuant to the terms of this ordinance upon the receipt of a permit to connect to the water or sewer system. 2. An alteration, addition, replacement or change in use that does not increase the parcel's or structure's use of the public improvement facility is exempt from all portions of the system development charge for that facility. 3. A system development charge may be proportionately reduced if: a. Evidence indicates that the construction, alteration, addition, replacement or change in use does not increase the parcel's or structure's use of a system or systems to the degree calculated in or anticipated by the methodology for the particular system development charge; and b. Any future construction, alteration, addition, replacement or change in use that would or could increase the use of the system or systems would require a development permit that would permit imposition of a system development charge under this Chapter. 4. The Parks and Recreation system development charge may be waived or reduced by the City where the City requires a developer to dedicate or reserve more than the minimum amount of open space pursuant to LOC Chapter 50 or where a property owner voluntarily donates a conservation easement pursuant to LOC 59.04.015 (1). 5. The following percentages of all portions of the systems development charge for non profit or state or fedc'd a'od low to moderate cost housing for elderly and disabled persons may be deferred by the City Manager. Such defrral rn y be made upon a showing, to tho ��fcotion of the City Manager, that the deforral is necessary to make the project economically feasible within tha manimum rental rate o:acbli;.hed by the funding agency, or for projects with interest rate subsidies only, to bring the monthly rental rates within 10% of tha provailing rates for oimilx h Statistical Area. Maximum No—ef Interest Rental-Rates Units Subsidy 75% 1 30 50%, 35% 31 15 3544, 25% 16 60 20% Maximum No:-ef Interest Rental Rates Units Subsidy 0 If a project changes in ats .s to one which would not qualify for a deferral, th total amount of the deferral, terms cf this c"e?ems 5. Affordable Housing Exemptions. a. The following are exempt from payment of all system development charges, so long as all conditions of this subsection (5) are met: i. An accessory dwellina unit. as that term is defined in LOC 50.10.003; or ii. A multi-family development of twenty or more units where at least 10% of the units are continuously rented. leased or made available for an amount of rent plus expenses associated with occupancy. such as utilities and fees. totaling not more than 30% of the income level that is 80% of Area Median Income according to the Clackamas County Housing Authority's "Income Limits" for affordable housinat adjusted for household size. b. The building permit must be issued on December 1, 2018 or later: c. In the case of an accessory dwellina unit. the applicant must submit a covenant. in a form approved by the City Attorney. that prohibits for at least ten years the use of the accessory dwelling unit or any other structure on the property as a premises rented to occupants for fewer than 31 consecutive days. and includes provisions for monitoring compliance. d. In the case of a multi-family development. the applicant must submit a covenant. in a form approved by the City Attorney. that requires the development to comply with all of the requirements of Subsection (5)(a)(ii) for a period of not less than ten years, and includes provisions for monitoring compliance. e. The applicant must record the covenant required under Subsection (c) or(d) in the deed records for the property before the City issues the building permit. f. If the covenant is violated. or if the covenant is terminated according to its terms before the expiration date: i. A processina fee will be imposed in an amount established by resolution of the City Council. ii. The exemption will be terminated and all previously exempt portions of system development charaes. plus the processina fee. toaether with interest on th.e system development charges from the date of the building permit at a rate established by the City Council, will become immediately due and payable by the then-owner of the property. iii. The City Manager shall furnish a notice of the violation or termination. together with a statement of the charaes and fees under this subsection (5)(e). ands description of the objection and hearing process. to the then-owner of the property in person or by certified mail. return receipt requested, addressed to the owner at the last-known address as shown in the count property tax assessment records. If no objection is filed with the City Recorder within 15 days from the date the notice is mailed. the reinstated system development charges. processing fees. interest. and all other charaes under this subsection (51(e) shall be a lien aaainst the property. iv. If an objection is filed with the 15-day period. the City Council shall hold a public hearing. upon not less than 15 days' notice to the owner. to consider the oral and written testimony and materials provided by the City Manager.the owner, or other interested persons. Followina the hearina. the City Council shall determine whether the terms of the covenant have been violated, or whether the covenant has been terminated according to its terms before expiration, and, if so, the amount of the fees and charaes that are due and payable under this subsection (5)(f). The amount determined by the City Council shall be a lien against the property. The City Council's decision shall be final, v. The City Manager shall docket the lien in the lien docket. The lien will be enforceable in the manner provided in ORS Chapter 223. vi. In addition to the above remedies. any failure to comply with the terms of the covenant shall be a civil violation, enforceable as provided in Article 34.04 of this Code.