As permitted by state law, a property tax exemption may be approved for the construction of new residential units when there is a demonstrated need for the construction in designated locations. The assessed value attributable to the new residential units may be granted an exemption for a maximum of 10 years total if five or more residential units are constructed and for a maximum of two years if fewer than five residential units are constructed. In addition to the requirements in Chapter 8.08 FNSBC, the requirements in this section must be fully complied with.
A. Application. A completed Borough-approved application must be submitted by the property owner prior to construction of new residential units; applications that are submitted after construction begins shall be rejected. Applications for an exemption under this section will only be accepted on or before December 31, 2023. The Assessor must forward a completed application to the Clerk with a recommendation for approval or denial no later than 30 days after receipt. If the Assessor recommends approval, they shall also forward an ordinance sponsored by the Assembly for placement on the next agenda. In addition to any information required by the Assessor, the application shall contain:
b. Five or More Residential Units. A map or other proof that the entire property is within a military facility zone, within the boundaries of the city of North Pole or the City of Fairbanks, or in a location suitable for high density residential development. A location will be deemed suitable for high density residential development if public sewer and water systems are available, there is fire and road service, and the property is zoned for multiple-family residential uses.
b. Approximate square footages of all new units;
c. Plans showing the construction will increase the total number of residential units on the property.
d. If construction is for five or more residential units, plans showing that the units are contained within a single multiple-family dwelling.
3. An acknowledgement by the applicant that the residential units will be taxable when the residential units are no longer eligible for tax exemption under this chapter.
4. Documents describing how the project (a) serves an area in which demand for housing exceeds available inventory; (b) serves a need with respect to cost and type of construction; and (c) meets or exceeds an Alaska Housing Finance Corporation energy rating of 5 Star, or of an equivalent commercial energy use index (EUI) score using the AKWarm or similar program.
5. The details of any plan to transfer, convey, or assign ownership to any third party after construction.
B. Criteria. An application may be approved by the Assembly if the following are met:
1. There is a demonstrated need for location, cost and type of construction that is proposed.
2. Construction is for entirely new residential units and not an extension or modification of existing structures on the property. If construction is for five or more residential units, they are contained within a single multiple-family dwelling.
3. The additional residential units will be constructed on the property within two years of approval.
6. The proposed term of the exemption is proportionate to the benefit of the development.
C. Final Approval.
1. Four or Fewer Residential Units. After the applicant has completed construction of the foundation of the structure in accordance with its approved application and submitted any documents the Assessor may require, the exemption will be approved for the property improvements attributable to the newly constructed residential units on the property (no previously constructed units, whether or not remodeled, nonresidential improvements, and/or land may be included). The exemption shall begin on January 1st of the calendar year after final approval.
2. Five or More Residential Units. After the applicant has completed construction in accordance with its approved application and submitted any documents the Assessor may require, including a certificate of occupancy or compliance with any requirements the authority with jurisdiction requires before a structure may be occupied, the exemption will be approved only for the property improvements attributable to the newly constructed residential units on the property (no previously constructed units, whether or not remodeled, nonresidential improvements, and/or land may be included). The exemption shall begin on January 1st of the calendar year after final approval.
D. Termination. An exemption under this section shall terminate immediately if the number of residential units on the property is less than the number existing at the time of final approval of the application, if the property is used for other than residential purposes, or for failure to comply with any other condition of approval.
E. Exclusions. A property that is receiving any other optional tax exemption, deferral, or credit is not eligible for a housing incentive and a property receiving a housing incentive is not eligible for any other optional tax exemption, deferral, or credit during the time for which the housing incentive is applied to the property.
1. A statement of occupancy and vacancy of the residential units for the prior calendar year.
2. A certification that the newly constructed residential units described in the application continue to exist and have not been converted to a nonresidential use.
3. A description of physical changes or other improvements constructed since the last report, or on first report, since the filing of the application.
4. Any additional information requested by the Borough Assessor.
G. Transfer of Ownership. An exemption that is granted for construction of five or more residential units will not be terminated due to a transfer or assignment in ownership of the property during the exemption period if such change is in accordance with the plan submitted at the time of approval and the new owner agrees to comply with all conditions of approval on a form approved by the Assessor. (Ord. 2022-23 § 2, 2022; Ord. 2022-11 § 6, 2022.)