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- What is a Vertical Housing Development Zone (VHDZ)?
A Vertical Housing Development Zone is an area designation approved by the Oregon Economic and Community Development Department under ORS 285C.450 to 285C.480. The area must be entirely within either a light rail station area, a transit oriented area, a core area of an urban center, or an existing central business district or downtown area. Certified projects developed within a VHDZ may qualify for partial property tax exemption for up to 10 years.
- What are the boundaries of the VHDZ in Springfield?
Springfield’s VHDZ is the area bordered by South A Street on the south, 10th Street on the east, B Street on the north and Mill Street on the west. View VHDZ map
- What is the purpose of a VHDZ?
The State of Oregon developed the VHDZ program to help revitalize downtowns and urban core areas throughout the state by encouraging the construction of housing over commercial spaces in these areas. Providing housing opportunities in these areas may stimulate economic, social and cultural growth, and can be a tool for cities to use in their efforts to bring new energy and vitality to depressed or stagnant downtown areas.
- Is this a low-income housing program?
No. Housing built under the VHDZ program can address all segments of the housing market, from affordable housing for students to upscale units for the urban professional. A logical progression would be that the first projects will address affordability, and then as economic conditions improve in the VHDZ, other projects will be developed to address market rate and higher end housing needs. Furthermore, the ground floor of any project built under the program must be used for commercial activities. The VHDZ program promotes both housing and commercial activities in the downtown.
- How is the VHDZ program related to the HOME and CDBG programs offered by the City?
Except for the fact that HOME and CDBG funds may be used to assist with the development of some of these projects, they are not related. HOME and CDBG are federal programs, and the VHDZ is a program of the State of Oregon.
- How will it affect a Local Taxing District’s authority to collect taxes?
It is important to understand that the property tax exemption provided by the VHDZ program is only applied to the real market value increase directly attributable to the construction, reconstruction or rehabilitation of real property improvements associated with the program. Taxing districts will continue to collect taxes assessed on the value of the property before improvements (status quo). Districts will also collect taxes assessed on a portion of the increased value created by the new improvements. The portion of the increased value that will be assessed ranges from 20-80%, depending on the number of floors of housing being built. A VHDZ designation will not cause a local taxing jurisdiction to collect less in taxes than they currently collect.
- Won’t this result in a flood of housing in Downtown Springfield?
Although the VHDZ provides an incentive to develop housing in the downtown, the actual number and types of units that will be built will be determined by the forces driving the housing market. Developers will build only enough housing that the local market can support. The incentive provided by the VHDZ program may cause developers to take a closer look at the downtown as a potential site for new housing, something that hasn’t happened for over 50 years.
- Will every property in the VHDZ be tax exempt?
No. Only those properties on which a certified VHDZ project is developed will be eligible for a partial tax exemption, and then only on the increased value brought about by the new improvements.
- Can a Local Taxing District elect not to participate in the VHDZ program?
The State has allowed certain “Special Districts” to elect not to participate in the VHDZ program. A definition of these districts can be found in ORS 198.010 and ORS 198.180. Local taxing districts not defined in ORS 198.010 or ORS 198.180 do not have this option and are required by the State to participate in the program, if they have taxing authority on properties located in a VHDZ. All Special Districts elected to participate in the Springfield VHDZ program.
- Won’t an increase in housing just exacerbate the public safety problems that already exist downtown?
Increasing the number of people who live downtown will improve public safety. Residents of an area tend to be more protective of their homes and neighborhood by engaging in such activities as neighborhood watch, neighborhood associations and other programs designed to make community participation, pride and safety the rule rather than the exception.
- Why is the City encouraging more tax exemptions, when it is already struggling with budget deficits?
The VHDZ does provide partial and temporary tax exemption for certified projects, however, a VHDZ designation will not cause a local taxing jurisdiction to collect less in taxes from an affected property than they currently collect. Furthermore, the benefit that is lost due to the partial tax exemption is outweighed by the economic and social benefits derived from residents who will contribute to the vitality of downtown by their presence (neighborhood safety), their patronage of downtown businesses, and a demonstration to other investors that downtown is a desirable place to live, work and shop.
- Is the VHDZ promoting some other policies adopted by the City, such as the Consolidated Plan or Metropolitan Plan?
The City Council has placed redevelopment of the downtown at or near the top of their highest priority goals list for the past 10 years. Inherent to the successful redevelopment of any neighborhood is the infusion of new or remodeled dwellings and an increase in the number of people residing in the area. More residents also equal more customers for downtown merchants. This relationship furthers the Council goal of a stronger, more diverse but local economy. It is also consistent with the transportation strategy of reducing individual vehicle trips by placing homes, jobs, goods and services in close proximity and accessible via public transportation.
- Who can I contact for more information about the VHDZ program?
For more information about the Vertical Housing Development Zone program in Springfield, please contact: Kevin Ko, Community Planning and Revitalization, (541) 736-2302, kko@ci.springfield.or.us
View VHDZ Map
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