Item C: Multi Unit Property Tax Exemption Program

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The City of Portland follows a model similar to that used by Eugene. Staff reviewed two recent MUPTE applications and examined the rate of return over a 10-year period. In both cases the project, without the MUPTE incentive, did not have sufficient cash flow to qualify for commercial underwriting standards. This summary is provided in Attachment D. West University Neighborhood and student housing In 2004, when the current program guidelines were approved, the council debated including the West University Neighborhood. The majority of the neighborhood was included for three reasons: 1. The 2003 West University Task Force was formed to address safety and livability concerns. This Task Force included senior university administrators, senior City staff, a City councilor, residents, business owners, etc. Task force members were concerned about deteriorating housing. The recommendations included both adopting a housing code and supporting the MUPTE incentive for new, higher quality housing. 2. A primary purpose of the program is to create additional density in the core area. This area is a vibrant, mixed-use center adjacent to both downtown and the university, and is zoned for medium and high density. LTD’s Em-X runs through the neighborhood. MUPTE supports the zoning designation and the compact urban growth goals. 3. Much of the housing stock is aging or inexpensively constructed in West University, Eugene’s densest neighborhood. The MUPTE incentive is intended to encourage higher quality design and construction. The University of Oregon has a profound impact on the community in terms of education, economy, culture and jobs. It is the area’s largest employer. Traditionally, universities do provide some housing with the amount differing from school to school. The University of Oregon recently drafted a Strategic Housing Plan that is pending final adoption. Its draft goals are to provide on-campus housing for at least 25 percent of undergraduates (22 percent now), and at least 11 percent of graduates (eight percent now). Currently, 85 percent of freshmen live on campus. The U of O is developing a specific strategy to replace and expand much of its existing campus housing because it is old and obsolete for today’s needs. West University Neighborhood is home to many students of the University of Oregon, Northwest Christian College (500 students, of whom 100 live on campus) and Lane Community College. In recent years, many students have chosen to live further away from campus to choose more modern housing with included amenities. Many live across the river (Chase Gardens, Ducks Village, University Commons etc.). There are multiple public benefits to placing student housing near the schools they serve. Those benefits include encouraging the use of alternative modes of transportation, reducing the use of motor vehicles and vehicle miles-of-travel, reducing demand for surface and/or structured parking at the school, and stimulating support for the infrastructure required for walkable neighborhoods. In addition, providing housing that is proximate to the University of Oregon reduces competition for housing in other neighborhoods. This competition with students exacerbates the affordable housing crises for many lower income households. Timing Two MUPTE applications are submitted and pending the council’s approval. Both are scheduled on November 13, 2007. F:\CMO\2007 Council Agendas\M071022\S071022C.doc