Item B: MUPTE Boundary and Selection Criteria

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Multi-Unit Property Tax Exemption Program, Boundary and Selection Criteria Meeting Date: May 27, 2008 Agenda Item Number: B Department: Planning and Development Staff Contact: Richie Weinman www.eugene-or.gov Contact Telephone Number: 682-5533 ISSUE STATEMENT The Mayor and City Council requested a work session to discuss the boundary and selection criteria associated with the Multi-Unit Property Tax Exemption Program (MUPTE), section 2.945 of the Eugene Code, 1971. BACKGROUND The MUPTE program is enabled by state statute. It was adopted in order to encourage new, higher-quality housing in the core area. To be eligible, developments must be five units or more and should provide a public benefit, as determined by the local jurisdiction. The program enables a ten-year property tax exemption on housing improvements. The land and any non-housing improvements continue to be taxed. The exemption applies to taxes owed to all jurisdictions because School District 4J also formally accepted the provisions. This is permissible under State law because Eugene and 4J together collect over 50% of property taxes. Each application for an exemption must be approved by council on a case by case basis. The State enabling legislation sunsets in 2012 unless extended during a future legislative session. Council Action History The council has a 37-year history of offering tax exemptions through this program. Twenty applications have been submitted and council approved seventeen (Attachment B). Of those, the ten-year exemption period has expired on eleven of the developments, and a twelfth, High Street Terrace, expires this year. In 1971, the City of Eugene adopted the provisions of this program. The state statute originally was limited to the core area of a city but the legislation was eventually expanded to include transit-oriented districts. For instance, in the Portland area the program encouraged housing along the MAX light rail line. In Portland MUPTE is commonly referred to as the New Multi-Unit Housing (NMUH) Tax Exemption. In 1996, the council both redesigned the program and also placed a moratorium on accepting MUPTE applications after the passage of Measures 47 (a property tax limitation and redesign). In January 2001, the council reinstated MUPTE with the new guidelines and adopted a boundary area that was limited to the heart of downtown, substantially smaller than what had previously existed. In February 2003, the council recognized that no multi-family development occurred in the core area (including the pre-2001 boundary area) after the moratorium took effect. (Broadway Place and High Street Y:\CMO\2008 Council Agendas\M080527\S080527B.doc