Let's go.

Please is this for me.

Hi, good evening everyone.

Thursday, June 11 times 606.

Chair Sandhex.

Present.

Vice Chairman Taylor is absent.

Councillor Davidson.

Councilman Graves.

Councilman Peterson is absent the food president to act in the form.

Thank you.

I want to recognize our council president Rachel Miller for joining us today.

Thank you.

An ordinance amending chapter 21, revenue and finance of the province political ordinances to add Article 19.

Thank you.

So who will be presenting on idol?

I'm going to present some eight law.

Thank you.

Hi everybody.

Lovely to be here with you all.

It's been a while since this was first introduced in 2024.

So if there were buildings with de restricted affordable units and there were market rate units, this tax treatment would have just under that ordinance applied to the low-income units themselves.

Rather than like the original one apply just to the restricted units, uh that version set a threshold for affordability.

The new latest version in front of you keeps the threshold that was set, adjusts it slightly, and I'll walk through the specific specifics of that, but it also generally aligns this with other low-income housing programs and subsidies and tax credits.

Was that it can be very confusing and difficult and unnecessarily cumbersome when there's different eligibilities for all these different programs.

And counselors didn't want to add to that, right?

They counselors uh seem to want to align this with others so that those who are providing low-income housing were taxed appropriately.

Um and that's really what this is making sure they're taxed appropriately.

Um, so if you open the uh red line version of the ordinance, um so that's the substitution seeking.

What's one thing that's important to note this can be a little bit confusing?

Oftentimes when there's their red line ordinances, it's amendments to an existing ordinance.

But in this context, there is no existing ordinance.

There's nothing in the books on eight law in the code of ordinances, right?

There's the state law, and then there's a proposed municipal ordinance, and this is red lines on that proposal.

So what's confusing about this is all these words are new, whether there's a red line or not, these are all a proposed ordinance.

Does that make sense?

Okay, yes.

Um, okay, so you have your standard definitions, but let's really get into the meat of it, which starts in eligible properties, section 21314.

Um, so what this ordinance does is absent the estate definition of low-income housing for the 8% tax treatment, it sets forth exactly what the eligible properties are.

Because we know that right now when it's without any guidance, sometimes the 8% tax treatment is given to properties that have a just a few restricted units, maybe even at 100% of the area needed income, and the rest of the building maybe market rate or luxury.

Um, so this sets clear eligibility.

So you'll see in this eligible properties.

Um, if you go to two A and B, these uh say that the 8% tax treatment is only going to properties that have deed restrictions where rents are being restricted to 30% of incomes and where incomes are being restricted to the threshold set in three.

So in three here, you'll see there are two pathways to qualify for eight law the threshold and uh the uh having the eligibility for LITEC.

So you'll see these thresholds here.

If your building has 40% of units restricted to 60% or less AMI, you would qualify for the 8% tax treatment for the entire building.

If your building has 51% of units at 80% or less AMI, the building would qualify.

Um, I know that you all I imagine haven't had the chance to read, but received a letter from the administration about 20 minutes before this meeting.

Uh, in that letter, you'll see that 51% number mentioned.

So this was a change in alignment with the letter that the administration sent because there's some programs, and two of note are HUD CDG and the RI 2030 small scale rental threshold.

Those buildings use those programs use this threshold 51% of units at 80% AMI.

Um so it allows us, yes.

Um sorry, we could do just to make sure that I want to correct me.

So the administration mentioned it as uh as a concern in their letter, but it's been addressed since since they pointed out to us in a meeting.

So the letter that Emily sent is kind of uh recap of a meeting that we had on Tuesday with the administration.

Of course, uh, these are this ordinance has was introduced two years ago.

Um we met with them on Tuesday, um and they provided this feedback that you received in this letter.

So that has since been incorporated, still in your letter, um, but we have incorporated it.

Thank you.

There's other feedback in there that was not incorporated, and we can also discuss that, but um that piece was uh okay, and then the other way to um achieve eligibility um is if your property qualifies for LITEC, which is the low-income housing tax credit, the main federal tax credit for the development of affordable housing.

If you meet those their criteria for eligibility, you also meet the criteria for eight law.

So that's meant to be a really clear pathway.

It's the most common subsidy that's used.

If you're using that, you'll also be able to get this the city's um authorized at the state's tax treatment.

Um then this new this next section here, section 21315.

This is new and it's really important because it addresses a concern directly from counselors with the reintroduced version.

So this is an amendment to the reintroduced version that solves the following problem.

The problem was that so you're setting a great new threshold and eligibility going forward for this tax treatment, but there are a lot of buildings that are receiving it now, and some of them may no longer qualify under the ordinance as you're putting it forward.

Um there are some of those that are what counselors or sponsors of the ordinance have considered to be bad actors who are just restricting a few units uh and otherwise providing market rate or luxury housing.

There are others uh where they're not meeting these thresholds, but their properties uh that counselors and sponsors want to support.

Um I'll give two examples that have come up a lot in discussions as we try to solve for this problem.

Um, one is university heights, which has about 50 percent of their units restricted, deep restricted affordable, and about 50% of their units market rate.

Um but preserving their eight-law tax treatment, making sure something devastating doesn't happen there is really really important to counselors.

Um, another example is 93 Cranston Street, um, the apartments that are right behind uh Urban Greens, the co-op, uh those units are 100% deed restricted at 120% AMI, would not qualify for eight longer than new thresholds, they're what's called workforce housing and wouldn't qualify, but the concern would be what happens with those folks there um who are already living there with the restrictions that they have.

So uh what is in the ordinance in front of you today is a preservation of existing eligibility, where any property that's receiving the 8% tax treatment right now will continue to receive it if they have, and it and it's defined what this is, but if they have some real affordability in the project, um, and so what that means is an either or if at least 20% of the residential units are above 80% or sorry, 80% AMI or less, or at least 40% of residential units are uh restricted to households earning 120% or less of the AMI, um, then they will continue to receive a law going forward.

So preservation of existing eligibility for those properties.

Uh June, we continue as well recognized on the record that we're supposed to do.

Um so then the next section 21316.

Um, this is the section that says um two very important things.

So the first is is that for these properties, the eligible properties, they will be taxed at that 8% of gross scheduled uh rent.

And an important um clarification here is that the 8% tax treatment will not be used on commercial properties.

Um, as you all know, you're in litigation about it.

Um, eight percent tax treatment has been in few but some cases applied to commercial properties, often a commercial first floor uh of a otherwise residential building.

Um so this clarifies as the state law was intended.

The state law is intended for low-income housing.

This clarifies the 8% tax treatment is used for housing.

The remainder is very procedural, so the tax assessor is going to promulgate.

Uh, part of that rule will be um there's a deadline March 15th to submit all the necessary documentation.

If a developer were to miss that date, uh the assessor is going to promulgate rules um related to penalties um for uh missing the date increasingly as time goes on.

Um, and then to close it out, it'll require an annual report to the council.

So your the council will be able to keep a close eye on all properties that are receiving this tax treatment and their compliance with your expectations support yield means.

That's all I've got the huge bureau problem.

Sure, yeah, thank you for um that description, and also for the work that we've done with the administration and June and our policy team.

So just to remind us of the why of this, right?

Relatively recently within the last say 10 years, that there wasn't just a big role in how eight law could work.

And so the state intention was to make it not so much a developer intensive, but really just about nonprofit or otherwise income restricted loan how they to keep the doors open.

And given that the state law is pretty wide open.

So we know for a fact that there's students who are not themselves in any way indigent, right?

So we're just trying we're trying to keep that contained.

And the reason we're trying to keep that contained is because we all know we depend on our property taxes to do all things that are in the budget.

And we need for uh low-income restricted restrictions to actually do that and not just support uh luxury or otherwise uh commercial problem.

So this is the result of a lot of work, a lot of conversations, uh fair amountships uh since the original federation.

Um, and I'm glad that we're here.

Um yeah, I just want to before I went up to committee members and other counselors.

Just want to say um I'm super grateful to our staff in uh president for continuing uh this work.

Um something that we have all spent uh a lot of time and energy discussing over the years of literally all four years of our term, um, which is it's important, it's just something to talk about overall.

But I council President Miller said um, we just want people to pay their fair share that we want to close in ruples while also um very importantly providing the people that deserve and um use the proper eligibility to receive the shield because it is a strong tool uh when it comes to to affordable housing development um and attaining um those uh depression for people that really need it uh here's in house.

So I was also saying that I'm super proud of the work that we've done to get here.

Um, and I would love to move this forward.

Um yeah, anyone else has any questions, comments?

Uh counselor you're sitting like also big.

Thank you.

No, I actually just want to kind of tackle some of those components.

I really appreciate that there was a um a robust conversation with nonprofits, which is where um my main concern always was where we wanted to make sure that we were fitting their need as well in this particular ordinance.

So um, I really appreciate that you took into consideration their um their perspective on all of this and made it so that it's um equitable for them as well.

Yeah, I will say we've had great great conversations with all of them.

Um some of them, these conversations were two years ago, and then it was just a matter of solving some of these kind of really specific problems in the time since, but um really great conversations with them and um have you know assurances from the nonprofit developers that for the most part this change just won't affect them, right?

They're they received 8% tax treatment, the vast majority of them exclusively develop affordable housing.

So 100% of the units are under even lower percentages of AMI, and so um they do receive it now, they will continue to receive it uninterrupted.

If for some reason they had a property that otherwise wouldn't have uh met the threshold, then it'll be preserved um through this change, but uh they are unaffected by this, and it's the for-profit developers um specifically the ones who are taking advantage of this would be affected.

Okay, counselor.

I was just gonna say the same thing.

I mean after that battle that we had never um in the kind of loss that we ended up having, you know.

I'm I'm glad that was you know, kept just going back to that one.

Um I think the thing is a pretty good idea.

I really think we kind of definitely put in the main ones that we really went in as well.

Um, and make me sure that people believe.

So I I hope everybody got playing in on work on that.

Um yeah, the the section around preservation of existing eligibility.

Um, you mentioned two specific properties.

Um I assume that many of the other existing low income properties would clearly fit into this category.

But I'm curious if we either have a list of or an understanding of other properties that might have had a different treatment in the past.

I'm just trying to anticipate what might be come down right.

It's a great question.

Umfortunately, because qualification for a law is quite laissez-faire right now.

They're not close, the city's not closely tracking X percentage of units or under Y percentage AMI uh for the existing property.

So I can share with you and with any other interested counselors, uh, what we do have from the tax assessor, which is the full list of properties receiving 8% tax treatment, and then just has an A and I number.

Um, so I can share that with you all.

Um, definitely public information.

Um, and you're welcome to take a look.

I think the intention here with these thresholds was these are pretty generous thresholds for this preservation of existing properties, so it's capturing well beyond just I mean, any property.

I think that you would if you found one and we're like, I want to make sure that this one is in.

We're very confident that these are generous enough threshold that it will be.

Um, but I think that you know, in the next couple weeks as this moves towards passage.

An interesting thing to do would be that you're gonna continue that survey of your neighbors and reach out to us and we'll help you make sure that this actually does cover it.

But I say that with confidence.

Well, appreciate that.

And uh just let's just say I didn't follow up for uh, yeah.

Obviously, I am although as a resident of the city, I certainly was aware of these conversations.

Um, but you know, as somebody sitting here apparently knew, so I can say thank you.

Good job.

So both both sort of um supporting, but also in being able to discuss the next decision.

So I definitely have had meeting company already.

What you can what is going on with how this effect on all of those, so yeah.

Awesome because yeah, just to speak to uh the preservation of existing that was uh why it's been sitting in pain for so long, apparently because uh I don't know if I know you were willing to move forward with something that would ultimately raise events, even in for abilities that were tired pushals to consider low income.

Um there wasn't one or course housing was um old built in token anyway.

Um so this solves that problem and it does it in a way that doesn't kind of open the door for um people take advantage of the system.

Um I think you know it just goes back to we want to preserve um more now.

We want the support more thing.

We just gotta do it in a way that also lets everybody have and make sure that our property tax that's been paid our function.

So this case is key with heat, um, and they're built up.

Also, um if there's no any other questions or comments, I will take a motion to approve item one.

As amended as amended motion made by counselor Graves, so I think we'll do it.

All those in favor, aye, can be made sessions, any discussions, ayes one is approved.

Oh at this time I will uh ask the uh clerk to read item two an ordinance amending chapter 21 revenue and finance of the code of ordinance in the city of Providence to have article 19 Providence build act.

Thank you.

I just have to take a motion to substitute item to motion to substitute item two motion made by Council agreed, second by counselor.

Yes, all those in favor, aye, any discussions, any questions, and expenses.

The eyes have it looks like our definitions are garner is gonna go over item two, and then we'll ask any questions or comments.

Absolutely.

Thank you.

Uh chair chairman.

Um so what I'll do is um I will go over just a little bit of background as to the you know why this was introduced, some of the main things that were um that the ordinance does.

And in addition to, I will walk through you know some of the red lines that you see um in the ordinance before you in the substitute.

Um, and as June commented previously, you know, the red lines that you see in the ordinance are actually a product of the collaboration that we had with the administration, um, that letter speaks to the changes that I would walk through there.

Um, so yes, this is the Providence Build Act.

And um, just to jump in, I'll say that um this is to address the shortage of housing, you know, in the city.

I think that with all of the policy you know items, ordinances that are being discussed, but we're trying to tackle the problem.

One of the big things that's you know in the background is the fact that there is a shortage and we need to build as much as we can.

Um, so this is you know the build act, but it's ultimately you know a tax stabilization ordinance, and it is largely for the most part modeled after things that we already have on the books, but it was tailored for this you know particular purpose.

Um, and again, the intent is to allow developers to build affordable you know, housing units um homes um without barriers, and as I mentioned, um those red lines are the changes that we got back from the admin.

So the the why um is that you know during the construction period, there's you know projects that you know are taxed based on you know the increased property values that we had um in the city, um, even when units are not you know completed, basically during the construction period.

So this is uh meant to address that.

So the ordinance creates a predictable you know short-term structure intended to help you know, qualifying affordable housing projects reach completion without granting a long-term subsidy because um it's intended to address um properties that will eventually qualify for eight law.

So it's not only for rental properties, um, it is for home ownership as well, with certain you know caveats because you know pay rent on the home.

Um, it would not be eight law, so I can discuss pieces on that as well.

Um, but the what it does ultimately is that it establishes a two-year tax stabilization for these qualifying affordable you know, housing construction projects.

Um, it requires rental projects at this time in the current language to include include either at least 40 percent of the units at or below 80 percent AMI or 30 percent of um affordable um at 60 percent AMI or below, and you can't move forward, you you know, developers cannot apply unless there already is a long-term deed restriction in on the you know the properties um or the land.

So um so during the the stabilization period, completed units are completed units or taxed at 8% of the you know annual approved income the same way that we looked at from state law.

However, it should be understood that the intent is to have no taxes um due um during that construction period.

Um, with a lot of the collaboration that we've had with you know developers and CDCs here in the city, that's one of the things that they have highlighted as being the biggest barrier in terms of penciling projects in.

Um so when it comes to a home ownership, you know, it also you know provides that qualifying affordable home ownership projects will also hold no property tax during the stabilization period, but at the end of when the you know property is occupied, that would actually be taxed under the same standards under Ryan General Laws because eight law would not provide home ownership.

So um the ordinance also permits qualified qualified mixed use projects to receive the stabilization, including commercial portions, but only while it's under development.

Um when it comes online, it would be taxed at the commercial tax rate.

And I think that's uh you know uh a choice to have in there to you know grow the tax base and allow for you know mixed use research residential and commercial like production, and it really does help if you build communities and neighborhoods.

Um so ultimately those are like you know the big overarching you know pieces of the ordinance, um, but then to move on directly to the red line.

If you'll open that up, I will speak to some little changes, and as I mentioned, um they were influenced by um our colleagues in with the administration.

So in the first you know, section, when it comes to the definitions, as I mentioned, this was largely modeled after our 21 TSA ordinance, um, the Providence Tax Stabilization Investment Act, um, which is on the books.

Um, one of the things that we did is we streamlined it, removed you know multiple definitions for clarity um that were you know either not necessarily referenced um here in this ordinance or were just very clear and they made you know absolute sense.

Um so those are those reglines there, and then you will see in you know section 213.5 the eligible project um projects, you'll see that as I mentioned, those thresholds for you know, um, eligibility are outlined here.

And that it was changed from the initial introduction because we would like to make it more um aligned with the actual eight law qualifications that makes the most sense for um both ordinances to be aligned.

Um additionally, through some you know, feedback with the you know administration, we do have the language here because home ownership and you know rental properties are you know completely different.

Um one of the things that the administration wanted to add um in this ordinance was that proof from the developer that you know with this stabilization, it's actually gonna have an effect on you know lowering the sale price.

That was fairly you know a good thing to point out.

We didn't include language and allows the director of you know housing and human services to certify that in languages here.

Um let's see, moving along.

So one thing too, although the intent was clearly to allow for this um treatment for commercial spaces during the construction period, um, we decided to include a clause that made that explicit um so it's not questioned in terms of the intent of the ordinance.

Um, and then again, another clause there that speaks to the fact that homes after you know completion will be taxed at the regulatory under Rhode Island General Law.

Again, um, you know, for you know, recommendations for the city's long-term fiscal health.

It was also a recommendation that these short-term stabilizations be two years only without the ability to extend.

And after speaking with the developers, they did agree that um two years is what they'll need to complete these these projects.

Um, so that is something that you know does work and it makes sense.

Um also when it comes to the application process, uh again, as I mentioned, we have a you know TSA ordinance where we have department directors, they review and certify you know all things that are in these applications.

Um, however, with this here, we wanted to make it faster.

We wanted to streamline this, and the recommendation from the administration, which we agreed with, was to streamline and allow housing and human services and the department of planning development to go around um with the departments to ensure um that everything is you know above board.

There's no you know litigation open with the city, no taxes are due, um, and that sort.

Um, and you'll see the you know struck out language for all of the other departments that you know would have been involved and are involved in the other you know, ordinance.

Um so let's see.

Um, another although it is um, in my opinion, you know, somewhat explicit.

Um, we were also asked to add a clause to make sure um it's clear that you know these will these short-term agreements will be enacted under like you know the qualifications that are required under Island General Law, you know, it has to be individualized, there needs to be public hearings, and it needs to be findings.

Um, and that's all outlined in you know title you know 4439.

Um we made sure we made references that so make sure moving forward, all of these agreements would be you know under that uh process.

Additionally, um, you will see where are we at which section is this?

Um 213 18.

Um there was a change to the prohibited uses section, and honestly, this is just to make things easy.

Sometimes you like to refer to things that are already in the code rather than regurgitate it in our actual 21 um ordinance.

Um, these uses are already been, so this ordinance would refer to you know those band uses.

So additionally, the reporting requirements, um, we've streamlined those to make sure it's very clear that these developers would only be you know submitting annual reports to the council about the current progress of their projects.

And then the last change that you will actually see is the default notice and cure period.

Um, it was just um streamlined and tightened when compared to our other tax stabilization ordinance, given the fact that let's see, these agreements would be much shorter, two-year agreements as opposed to the other ordinance and allow for five, 10, 20 year agreements.

Um, and then sometimes when it comes to a developer making promises to you know make good on what's required, that can be a little bit of back and forth and can take a little time.

However, um, this was just streamlined so that it'll be a shorter time period because it's very, very important for you know an agreement that is only two years.

Like if you are going back and forth of 16 and 70 days about commenced minute performance and what have you, um, it doesn't work with this ordinance.

So we did accept that recommendation from um the administration and work with the law department on the language that you see here.

Um so that outlines all of the changes, and I think I tried um to give an overview of what we're trying to do and what is in this ordinance, but with that said, I'd be happy to you know answer any questions that you may have.

Uh I can ask that we have a question.

No, I don't have any questions.

The um thank you, Aaron.

That's beautiful.

The main um thing that I would add or just share is this is the answer to the question that um we've been done all first where uh individual projects come to us, and they're like behind on financing because they have to pay taxes on land that will eventually be eight law, but they have to create a full commercial race because I'm happy about it because that's just how eight law instructed work as it should.

Um, so in order to and in in case in several cases this term, that process has been waiting on out, like you know, you can get to the accessory state.

So, in order to just create a path to you have the land, you have the project, you're ready to build.

Um, this team has that.

So it creates the TSA, each one's supposed to come before us and before the uh committee, and then back to the body, but there's just a direct path that didn't exist before that's the main thing.

Thank you.

Thank you.

Um questions, comments.

Very uh stop at a very good job presenting this comprehensive bill in that word uh sit on behind it.

Thank you.

Much appreciated.

We've really been working hard.

I guess uh one questions I didn't get a chance to read those letters.

We just got it a few minutes ago.

Is there anything in the line that we didn't cover in the I I don't believe so, but however, I will admit it only had 15 minutes to you know people get before coming over, but um I can take a quick um look at this year.

Um I feel like you'd be a very good one teacher also.

Yes, that's another nice time.

So uh the sentence that says not requested in the oriented, but it is now, right?

This that there's a sentence in this letter that says uh revisions that are not requested in the ordinance.

They are reflected.

There I'm going over these, and I'm not seeing any the one thing that was um say a recommendation was you know to still collect a you know nominal fee from some of these developers during the construction period.

Um, however, that was something that you know the sponsors did not agree with, and they want this to be as streamlined as possible.

I think that was one of the main recommendations, recommendations that wasn't taken.

Awesome thing is at this time I will have to get a motion to approve item two as amended.

What should we like counselor innocent second for counselor graves and uh all those in favor?

Aye, any a's and extensions, and sessions.

I know two is as amended is approved.

Uh item three by the clerk, can we go to the record?

Resolution endorsing and urging passage by the general assembly of House Bill 2026, H7775 and Senate Bill 2026 S-2897 and accelerating to taxation copy subject to taxation.

Awesome.

When there's a solutions or so um I understand uh this bill has passed uh correct.

Um, I would I would always have the triple check and moving things so fast right now.

I did see that some of those were scheduled.

However, the general assembly has been like you know, very on top of municipalities asking for these specific resolutions to get sent up.

So when it doesn't get passed so that we can communicate that, but if it is if it has been passed, that is good in the good spot, but I'm not 100% sure.

If this was my eight question, what is the function of this if it's already passed?

Well, the thing is something you know, they do the general assembly, they just have their traditional thing where they want to see that you know uh chief executive and a counselor of each city is supportive of things.

However, um, when certain like you know, officials may call directly and speak to these things, they are sometimes willing to move without that when they understand you know time is of the essence.

Uh the road, I think yeah.

That is the case in this and I just can't remember if that's the case in this revolution, but in the past, because I worked out like last few weeks.

Um they said to these and then um I had the phone call with folks in the statehouse saying we fixed this, there are concepts of a reported of it, we expect it to pass, right?

So that might be one.

Oh, yeah, absolutely.

Um if I may chair, I just checked the status of item on the house side was recommended that it would be also further study in House Municipal Government on the Senate side, the committee on actually on Tuesday.

So the housing municipal government put in the passage of summary.

So it's a substitution in the optional the provides the short so exception by the two December 31st, 2025.

Yeah, so what's gonna happen here is like the House has been much more like restrictive than the Senate on these specific things.

So what's gonna happen now is after this is passed uh committee, I'm able to call up and send some emails to let them know that this is happening.

That's that's the best case scenario for us now.

Yeah, we make any motion.

All right, any other questions, comments?

No, sorry motion is to approve item three, please.

Motion made by counselor graves, uh second by counselor Davidson, all of the favor, I mean ascensions, any discussion.

This time I will entertain a motion to make sense like yeah, you're already seriously uh this are thank you.