Property tax exemptions for housing are encouraging – Medford News, Weather, Sports, Breaking News
The City of Medford is taking aggressive steps to encourage more downtown housing construction. Other tax districts should consider helping.
City Council on Thursday night approved a six-year program that offers eligible developers 10 years of property tax exemptions. The program would be limited to 200 apartments per year and a total of 600 units over the six-year life of the program.
Housing has long been scarce, and the shortage was further exacerbated when homes were destroyed in the Almeda fire in 2020.
Ideally, city officials would like to see more than 1,000 new homes built over the next six years, but at the current rate less than 500 will be built.
The tax incentive will cost the city’s property tax revenue for 10 years, but it will increase the tax base in the long term while attracting more residents to downtown, which will boost the city’s economy by benefiting restaurants and retail businesses.
Since the tax relief will apply to the value of the improvements but not to the land, tax revenues will continue to increase as the value of the land increases. For example, the Genesis project, an apartment complex currently under construction at Eighth and Holly streets, will make this 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 also offers a separate tax exemption program for nonprofit developers who create homes for families earning 60% of median income, or just under $50,000 a year for a family of four.
New housing projects already underway or planned around the city are a sign of hope for the future of Medford.
In addition to the Genesis project, a proposed 115-unit low-income housing complex called the Delores Huerta Apartments is awaiting grant funding. The former Inn at the Commons is being converted to apartments, as are the Best Value Inn and the Redwood Inn on North Riverside Avenue.
Tax exemption programs are a powerful incentive for developers, and city council members have decided that the temporary loss of some revenue is a reasonable price to pay to spur downtown growth. But the city’s decision only affects the property taxes it collects. Waivers will have more value if other tax entities such as the Medford School District agree to participate.
The district and other taxing entities should take this consideration seriously, balancing the short-term loss of revenue against the long-term benefits of a broader tax base and a thriving downtown.