The City Council will decide today the fate of an ordinance providing property tax exemptions for new housing projects in the downtown area.
The Multiple Unit Property Tax Exemption provides a 10-year tax exemption on housing construction within the city’s “core area,” bounded primarily on the north by the Union Pacific Railroad tracks, on the east by High Street, on the south by East 13th Avenue and on the west by Lincoln Street.
Land under MUPTE projects continues to be taxed, while housing improvements are placed on the tax rolls at the end of the exemption.
The council will decide whether to expand the exemption to include much of the West University Neighborhood and other areas located north and west of the current eligibility boundary. It also will act on proposed amendments that may add construction guidelines to the MUPTE application.
The current ordinance requires the council to approve all applications based on whether the “public benefit” of the project surpasses the loss of revenue incurred from the tax exemption period. Ward 3 City Councilor David Kelly said the “public benefit” requirement would be replaced by specific standards for potential projects.
Among seven potential guidelines are provisions that would require developers to address how they would incorporate “sustainability features,” such as solar heating and natural lighting, to use “higher quality materials” that “contribute to longevity, durability, or enhance building design,” and to create a prominent entry facing the public street.
Members of the West University Neighborhood Association also recommended two guidelines, which would require applicants to design buildings for home ownership and solicit comments from relevant neighborhood associations before construction.
If approved, the new guidelines will give potential applicants an idea of what the council will require, Kelly said.
Kelly added he supports the use of the exemption to add variety and improvements to the housing market.
“Overall, I think history has shown it’s tough to get good new housing in the central city without some public oversight,” Kelly said.
Kelly pointed to Broadway Place, a 170-unit project completed under the MUPTE in 1996, as an example of how the tax exemption can foster housing development.
“Ultimately, the project was a positive addition to downtown,” Kelly said. “It wouldn’t have happened without MUPTE.”
Kelly did express concerns about the lack of standards in the current application process, saying he will need to see specific guidelines approved before he affirms the MUPTE changes.
“It think the standards are pretty low hurdle to get over,” Kelly said.
He also said it was important to allow neighborhood associations to have a say in the MUPTE project approval process.
However, not everyone agrees the exemption is a good idea.
Former Eugene resident and University student Randal O’Toole, head of the Thoreau Institute, said he would tell the council to stop promoting smart growth measures, such as the MUPTE.
“I don’t think we should subsidize anybody,” he said.
O’Toole said advocates of the exemptions claim high-density housing will reduce congestion and air pollution and will increase mobility. However, O’Toole added density will not remedy these problems.
He said exemptions make housing unaffordable by raising property taxes and causing rents in normal units to be higher than rents in tax-exempt, high-density areas.
Responding to opponents’ concerns that the MUPTE would increase downtown density, Kelly said increasing density would be a long process.
“If the run rate is at best one project every year, it’s not going to transform the density of central city overnight by any means,” Kelly said.
Kay Olsen, president of the Downtown Neighborhood Association, said the group stands behind the exemption. She said the downtown area lacks housing.
“More housing downtown is something we’re trying to strongly promote,” she said.