What is Urban Renewal? Urban renewal is a powerful funding tool currently in place in over 75 communities across Oregon. It is used to help areas that are not performing well and/or that lack public infrastructure by funding projects that fix identified problems and spur private investment that would otherwise not happen under normal market conditions.
What does Urban Renewal do? Urban renewal uses property taxes from within an area to fix identified problems in that same area. It often focuses on improving an area’s transportation and utility infrastructure since these kinds of improvements can unlock an area’s development potential. Urban renewal is also used to attract and retain small businesses and develop public spaces such as parks, plazas, and trails.
Is Urban Renewal a new tax? Urban renewal is not a new tax on property anywhere in the city—urban renewal only changes how tax revenue is allocated. The revenue to pay for projects in an urban renewal area is self-generated by new development and property appreciation in the urban renewal area. Tax bills for property owners within an urban renewal area do not increase because of urban renewal; urban renewal only changes how tax revenues are allocated. Read more about how it all works below.
Proposed Expanded Downtown Urban Renewal Area
The City Center (Downtown) Urban Renewal Plan was approved by voters in 2006. Funding for projects was limited by the Great Recession. The proposed area expansion would fund more projects from the original plan. The proposed expansion includes the addition of 7 new tax lots.
Proposed Projects Include: - Public spaces for community gatherings - Fanno Creek Park & Trail improvements - Mixed-use development projects - Street network & sidewalk improvements
Projects Completed or Underway - 165-unit mixed-use development (attracted $31M in private investment) - 20 grants to downtown businesses for property improvements - Complete reconstruction of Main Street & Burnham Street
The Triangle has a lot to offer. It also has significant infrastructure problems. Urban renewal can help overcome these problems with projects that improve walkability, address transportation issues, and help businesses grow in Tigard.
Existing Problems: - Dirt roads/lack of sidewalks - No sewer/broken sewer - Red Rock Creek erosion - Traffic congestion - Flooding
Proposed Projects: - New streets and sidewalks - New trails and parks - Major sewer line repairs - Red Rock Creek restoration - Intersection improvements - Small business support
Why Propose Urban Renewal Here? Urban renewal is helpful in fixing infrastructure deficiencies and supporting catalytic development in the Triangle since the type of development desired by the community (and allowed by zoning) is not supported by market conditions. Urban renewal, and the funding it brings, can help get pioneering projects off the ground with incentives, partnerships, and financial or technical assistance. It can get the ball rolling, so to speak, and effectively change the market conditions in the Triangle to align with the community’s vision.
Urban renewal also signals to the development community that the city is committed to the area. In emerging mixed-use areas, private investment typically follows this kind of public commitment.
Lastly, the Triangle meets the legal definition for blight, which is a requirement for forming an urban renewal area. Blighted areas generally have old or deteriorated buildings, failing or inadequate utilities, incomplete streets, or other obstacles to development. The Triangle meets the definition for blight due to its many infrastructure deficiencies and number of vacant and underdeveloped lots.
If passed, the benefits to the proposed urban renewal in the Triangle are:
Improves Tigard’s long-term financial health By bringing new businesses into the Triangle, urban renewal increases Tigard’s tax base over time which, in turn, helps fund future city services for all Tigard residents.
Provides a stable funding source By creating a stable long-term funding source (without creating a new tax), the city can build or fix infrastructure that it may otherwise delay or never be able to afford
Steers investment toward an area ready for change By focusing on the Triangle, which is already zoned for commercial and residential density, urban renewal steers investments toward an area of the city that is the most ready for change.
Furthers Tigard’s walkability goal By changing the character of the Triangle from an auto-oriented district with suburban offices and big-box stores into a pedestrian-oriented district with a diverse mix of destinations and activities, urban renewal can help further the city’s goal of becoming a more walkable, interconnected and healthy community.
Supports travel by alternate modes By fostering the creation of a complete community—one which has jobs, housing, services, and transit—urban renewal can make travel by alternate modes (travel by foot, bike, or transit) more possible and desirable. This could alleviate traffic congestion or, at the very least, not contribute to it allowing the city to reap the benefits of growth without some of the impacts of growth.
How does Urban Renewal work? Urban renewal is funded through Tax Increment Financing (TIF). When an urban renewal area (URA) is established, the County Assessor determines the current assessed value of all property within the area, and freezes that tax base. Tax revenue from this “frozen base” continues to go to taxing districts annually for the life of the URA. Tax revenue on any increase in property value that would occur anyway—from new development and/or appreciation—is allocated to the Urban Renewal Agency for projects in the URA. This increase above the frozen base is also called the “increment.” When the urban renewal area expires, the frozen base also expires, and the local taxing districts resume receiving taxes on the full assessed value of the area.
Who is affected by Urban Renewal? Urban renewal has a financial effect on local taxing districts, but the impact is different for schools than for other districts. An urban renewal area does not directly affect school districts because schools are funded through the State School Fund. Property tax revenues are an offset under the statewide school funding formula, and property tax revenues foregone by school districts because of urban renewal may be replaced with other State School Fund revenues.
Other taxing districts, such as Tualatin Valley Fire & Rescue, are directly affected by urban renewal. While an urban renewal area is active, revenue from that area is frozen, which means that taxing districts will not receive as much money as they would have otherwise received for the life of the urban renewal area. In essence, taxing districts forego some revenue now in exchange for an increase in their total property tax base later as a result of urban renewal investments. Since the goal of urban renewal is to spur development that would otherwise not have occurred, taxing districts can expect to receive more tax revenue in the future than they would have had urban renewal never existed.
Why does Urban Renewal show up on my tax bill? Voters approved the formation of an urban renewal area in Downtown Tigard in 2006. If you own property in the city, urban renewal shows up as a line item on your tax bill whether or not you own property in the urban renewal area, which can be confusing.
Technically, a portion of your taxes are going to the urban renewal area, but that’s only because of a 2002 court decision and subsequent 2003 legislation that requires the County Assessor to calculate the division of taxes in a very specific way. Even though the Downtown Tigard urban renewal area is not a taxing district, your tax bill treats it like a taxing district by showing it as a line item with a separate tax rate as required by law. In actuality, however, this line item does not represent a new tax, or result in a larger tax bill than would otherwise occur. Instead, it represents a division of tax dollars, collected from all properties in the city in an amount equal to the growth in assessed value inside the urban renewal area. When the Downtown Tigard urban renewal area expires, your property tax bill will not decrease. Your tax dollars will simply be redistributed to the existing taxing districts.