The developer of Vancouver’s downtown waterfront project will receive an eight-year property tax exemption for a 150-unit apartment building under a city program designed to encourage housing development in the downtown and Fourth Plain corridor areas.
On Monday, the Vancouver City Council approved multi-unit housing tax exemption requests for Gramor Development as well as for an 18-unit building by WDC Construction and a 92-unit building by DBG Properties. The City Center Redevelopment Authority, a city advisory board, reviewed all three projects Sept. 17 and recommended council approval.
Gramor Development’s apartment building will be part of a $1.3 billion mixed-use development called The Waterfront spanning 21 blocks on a former industrial site.
The city has used the tax exemption program since 1997 for the purpose of encouraging development that includes housing near work, shopping, entertainment and bus service.
“The whole tax exemption was created so folks would develop housing in certain parts of the city, because you need density and units in order to grow your city,” said Peggy Sheehan, Community and Economic Development program manager.
The city doesn’t lose any property tax revenue under the program, Sheehan said, “because if it wasn’t built, we don’t get any property tax from it. … It never would’ve been collected.”
To be eligible for a 12-year exemption, 20 percent of the development’s units must be affordable housing. The affordable housing must be rented or sold to people who earn less than 115 percent of the area’s median income. That figure would amount to $59,225 annually for a single person or $84,525 for a family of four. (The rent cannot be higher than 30 percent of the tenant’s income.)
The eight-year exemption doesn’t require affordable housing.
Both tax exemptions are available only for developments in the downtown and the Fourth Plain corridor areas. The program requires construction to be finished within three years of tax exemption approval. The land’s value is taxed as usual, as well as any other new construction associated with the project, and the development generates utility taxes and sales tax from construction.
Several projects, past and present, have taken advantage of the tax exemption, including Heritage Place, Vancouvercenter and Uptown Village. Prestige Plaza and the 15 West Apartment project (under construction) received 12-year exemptions.
Here are the projects the city council approved Monday for the tax exemption. All are in the Esther Short neighborhood downtown.
• Gramor Development’s 14-story, 166,300-square-foot apartment building on Block 6 will cost an estimated $52 million. Proposed rents for the 150 units range from $950 for a studio to $2,700 for a two-bedroom unit to $3,900 for a penthouse. The building will contain about 5,000 square feet of commercial space that will be assessed property tax. Factoring in the eight-year multifamily housing property tax exemption, the project is forecast to generate roughly $1.9 million in taxes over 20 years.
• WDC Construction’s three-story, 13,500-square-foot building at 1510 C St. will cost about $2.1 million. Proposed rents for the 18 units are $850 for a studio and $1,200 for a one-bedroom unit. Factoring in the eight-year tax exemption, the project is forecast to generate roughly $142,000 in taxes over 20 years.
• DBG Properties’ five-story, 75,000-square-foot building, called “13 West” at 13th and Columbia streets, will cost about $16.1 million. Proposed rents for the 92 units range from $715 for a studio to $903 for a two-bedroom unit. All are low- or moderate-income units available to people who make no more per year than 60 percent of the median income. For a single person, that would be $31,040, and for a family of four, that would be $44,340.
“This project has the potential to really help some of our vulnerable renters,” Sheehan said.
Factoring in its 12-year tax exemption, the project is forecast to generate roughly $719,000 in taxes over 20 years.
