PP 23-0006: Vertical Housing Development Zone Pilot Project
Pursuant to the City Council goal to, “Support business investment and job creation in Lake Oswego,” and the initiative to, “Ensure the North Anchor redevelopment stays on track,” staff is working to develop a Vertical Housing Development Zone (VHDZ) pilot program as a gap funding strategy to help implement the North Anchor Project in downtown Lake Oswego.
Planning Commission Update – 8/14/2023
The Planning Commission will receive an update at their meeting on Monday, August 14, 2023, to receive background information on vertical housing tax exemptions and a briefing on the potential VHDZ pilot program in order to provide context on housing production strategies that are currently being contemplated by the City.
As established under Oregon Revised Statutes 307.841 to 307.867, vertical housing tax exemptions provide a partial tax exemption on building improvement value for mixed-use developments that include housing with non-residential use on the ground floor. Vertical housing tax exemptions are available to projects located within areas (or a site) designated by a local jurisdiction as Vertical Housing Development Zones (VHDZs).
The intent of the VHDZ program is to encourage the private sector to build higher-density mixed-use development and affordable housing in key areas. Other benefits include an increase in the assessed value of a property as well as associated increases in the number of people and businesses located in those key areas.
On December 7, 2021, the Board of the Lake Oswego Redevelopment Agency (LORA) entered into a Disposition and Development Agreement (DDA) with Urban Development + Partners (UDP) to develop a site located at First Street and B Avenue in downtown Lake Oswego – also known as the North Anchor site – with a boutique hotel and mixed-use residential/commercial buildings. On November 15, 2022, LORA agreed to extend the closing to June 30, 2023, due to the unprecedented economic challenges at the time.
On June 20, 2023, the LORA Board approved a request from UDP to amend the DDA to provide an additional six months on the financial close-date and construction commencement on the residential development to implement strategies that would address the current challenging economic climate and attract investors. This extended the financial close-date on the residential development to December 31, 2023.
Along with this extension, UDP has requested that the City explore adopting a VHDZ pilot program for the residential portion of the North Anchor development. In response, City Council – acting in capacity as the LORA Board – directed staff to develop a pilot program to apply a VHDZ for the North Anchor properties. This VHDZ pilot program would help to facilitate the development of 67 housing units in the downtown core as a part of the North Anchor project, eight of which are workforce housing units affordable to those earning 80% of area median income.
Staff has also committed to explore expanding the VHDZ program to apply to a larger geography – beyond the North Anchor properties – as a potential strategy to meet the HPS requirements of House Bill 2003 (see PP 22-0005).
More recent progress on this project is outlined below, under Project Updates.
08/04/2023
The Planning Commission will receive an update at their meeting on Monday, August 14, 2023, to receive background information on vertical housing tax exemptions and a briefing on the potential VHDZ pilot program in order to provide context on housing production strategies that are currently being contemplated by the City.
Erik Olson Long Range Planning Manager,(503) 697-6524 or eolson@lakeoswego.city
Dec 19 2023 - 3:00pm
Sep 19 2023 - 3:00pm
Aug 14 2023 - 6:30pm
PUBLIC RECORDS FILE