Property dedicated for low-income rental housing

(a) For the purposes of this section, “low-income rental housing” means housing rented at or below the rental rate limits established by the United States Department of Housing and Urban Development for households earning 80 percent of the city’s area median income for the applicable household size, or less. (b) An owner of real property classified as Residential A used as low-income rental housing may make a five-year dedication of the property for low-income rental housing use and have the property classified as Residential provided that: (1) The property was purchased by the owner for less than $1,000,000; (2) The property is exclusively used during the dedication period as a rental home or apartment unit with a lease period of at least one year; and (3) The rental home or apartment unit is rented at a rate that meets the requirements of low-income rental housing as defined in subsection (a). (c) Any owner desiring to dedicate the owner’s property for low-income rental housing shall petition the director, describing the property to be dedicated, providing evidence that the property is currently used exclusively for affordable rental housing, and declaring that such use will continue in the dedicated tax years and the owner shall meet the applicable requirements of subsection (b) pertaining to the property. (d) The director shall prescribe the form of the petition. The petition for the following tax year must be filed with the director by September 1 of any calendar year. The notice of assessment will serve as notification of approval or disapproval of the petition for dedication. If the petition is approved, the assessment based upon the use requested in the dedication will be effective on October 1 of the same calendar year and apply to the following tax year. (e) The director shall make a finding whether the property is and will be maintained and used for the sole purpose of providing low-income rental housing. That finding will be based on the rental agreement or agreements and such other evidence required of and provided by the owner as the director may deem pertinent. (f) The approval of the petition by the director shall constitute a forfeiture on the part of the owner of any right to change the use of the owner’s real property for low-income rental housing for the dedication period. The dedication period may be renewed in the same manner as the initial petition. (g) The owner may appeal any disapproved petition as in the case of an appeal from an assessment. (h) (1) Failure of the owner to observe the restrictions on the use of such person’s real property will cancel the exemption retroactive to the date of the initial dedication, and all differences between the amount of taxes that were paid and the amount that would have been due from assessment without the dedication will be payable with a 10 percent per year penalty from the respective dates that these payments would have been due. Failure to observe the restrictions on the use means any failure of 45 consecutive days or more during the tax year of the exemption to use the real property in the manner certified in the petition or the overt act of changing the use for any period. Nothing in this subsection precludes the city from pursuing any other remedy to enforce the covenant on the use of the real property. (2) The additional taxes and penalties, due and owing as a result of failure to use or any other breach of the dedication will be a paramount lien upon the property as provided for by this chapter. (i) Before September 1 in each of the five years of the dedication, the owner shall submit to the director a copy of the rental agreement to be in force in the upcoming tax year. (j) The director shall make and adopt necessary rules to administer this section.