Item C: Multi Unit Property Tax Exemption Program

Home Browse Search

ATTACHMENT F Staff solicited an opinion from local real estate appraiser Corey Dingman of Duncan and Brown Inc. Duncan and Brown periodically publishes an Apartment Report that includes rental vacancy rates. In an email Mr. Dingman wrote the following: “Local rental vacancy rates remain very low. For the community they are no higher than 2% and in the downtown and West University are closer to 0%. The contributing factors include the credit crunch which is limiting new construction of housing, high enrollment at the University of Oregon, and a notable shortage of buildable, residential land inside Eugene’s urban growth boundary. Rent levels are not high enough in this community to justify most new construction. This is particularly true in the core where almost all new housing is a redevelopment project. A builder has to take into consideration the current rental income when determining feasibility of replacement. Construction costs are very high. One of the main reasons that new development is occurring in West University is MUPTE. Some of these projects may have been marginally feasible without it if built with lesser quality. But many would not have been built at all. If you look at where new multi-family construction is occurring, it is primarily campus. You need to look at MUPTE as a tool to encourage re-development. I think that the projects that would have worked on campus without MUPTE are primarily the ones with minimal existing improvements or were bare land. A property tax exemption on new construction essentially makes the underlying land more valuable and changes the highest and best use on properties that are under-improved or have run down improvements.”