Item 3C: Low-Income Tax Exemption for Prairie View

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 4985 Approving a Low-Income Rental Housing Property Tax Exemption for the Property Located at 560 - 588 South Danebo Street, Eugene, Oregon (Prairie View LLC, Applicant) Meeting Date: July 13, 2009 Agenda Item Number: 3C Department: Planning and Development Staff Contact: Richie Weinman www.eugene-or.gov Contact Telephone Number: 682-5533 ISSUE STATEMENT The City Council is asked to approve a resolution for a low-income housing tax exemption. The resolution grants a 20-year property tax exemption for Metropolitan Affordable Housing Corporation’s Prairie View development at 560 – 588 South Danebo Street. BACKGROUND The City of Eugene has an over 20-year history of taking actions and providing incentives to increase the supply of low-income housing. In order to address the shortage of housing affordable for households with low incomes, the council has adopted a variety of tools which include this 20-year, low- income tax exemption. The exemption is enabled by a state statute that was adopted after a bill was submitted at Eugene’s request nearly 20 years ago. The council reviews each request on a case by case basis. The full benefit of the tax exemption is reflected through reduced rents. The City and other local taxing districts forgo revenue when property is exempted from taxes. A property tax exemption plays a very significant role in reducing rents by approximately $100 per month per apartment. Prairie View has 64 apartments for very low-income households ranging from studios to three bedrooms. As a result, the development provides homes for a variety of households including many families with children. Some of the Prairie View tenants have been homeless or receive case management because of their disability. This project was developed on a 2.77-acre City of Eugene landbank site. Metro was selected as the developer by the Eugene City Council following a request for proposals and a recommendation from the Housing Policy Board. In addition to land, the City is providing subsidies through federal HOME funds ($316,121) and waivers of System Development Charges ($115,000). EWEB has also waived water SDC’s ($67,861) and Lane County contributed Road Funds ($213,700). When the council took past actions related to this project, this property tax exemption was projected to be part of the financing package that enables the HUD-required rents to serve households at or below 50% of median income. Z:\CMO\2009 Council Agendas\M090713\S0907133C.doc