Item 2A: Approval of City Council Minutes

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low income tax exemption is available. However, the economics of subsidized and low-income housing is that it takes more than tax exemptions to achieve that goal. With the 10- year MUPTE tax exemption, some low-income housing may be built if rents are high enough, but it is difficult to achieve in most neighborhoods. There is currently a low vacancy rate in Eugene which makes it difficult for low-income people to compete for the limited commodity. Ms. Bettman distributed two maps provided by Mr. Weinman, illustrating the Proposed MUPTE Boundary Expansion/Downtown Plan Area (blue map) and Proposed MUPTE Boundary Expansion/Old MUPTE Boundary (yellow map) areas. She said the MUPTE program was predicated on the assumption that properties would not otherwise be developed. Market factors and variables in the West University Neighborhood (WUN) impact development. Ms. Bettman said there was development in that neighborhood, as reported by an article in that day’s Register Guard, noting there were 900 University of Oregon (UO) freshman who did not have campus housing, in addition to other undergraduate and graduate students. The pressure of those housing needs was placed on the community. The City should not forego tax revenue where the market supported housing construction, but the playing field should be leveled where code barriers made construction challenging. Everyone should pay their share of taxes. Ms. Taylor said there was a big demand for housing in the university neighborhood and it would be built with or without a tax break. Everyone should pay taxes. She preferred going back to the pre-2004 MUPTE boundary because there was a benefit to filling the empty space downtown, and she was not willing to expand the boundary. Mr. Clark was challenged with the pre-2004 boundary that came away from the Eugene Water and Electric Board (EWEB) property as illustrated on the map, and created a disincentive for anything that might occur regarding a dense core around what might one day be built on the EWEB property, taking an option off the property. He considered the 900 incoming UO freshmen to be new members of the community who needed to be served with the appropriate housing choice, whether on or off campus, and did not consider them to be a cost of the university. He asked what the functional impact of ending MUPTE around the university would be. Based on his conversations with real estate professionals, Mr. Weinman believed there would be less construction. He understood that some of the projects were built without MUPTE because of the but for requirement, because developers had owned the land for a long time or had paid a below market rate for the land. With the current value of land at $60 to $80 per square foot, housing construction was no longer viable without the economic incentive. Some people had purchased properties with the intention of building knowing the MUPTE incentive was available. This knowledge of construction costs is supported by staff analysis of proposals for low-income housing. Mr. Clark opined the City would be acting in bad faith if policies stated the intent to incentivize creation of density in the core and around the university, encouraging people to buy properties with the idea that they would be able to build housing, after which the City changed the rules making development no longer affordable. He was concerned that the boundaries could be changed at this point. He added he would not be opposed to the idea of extending the boundary into Ms. Ortiz’s ward, and welcomed more conversation on the issue. Mr. Pryor was intrigued by the nature of the discussion as it applied to the structural nature of the MUPTE rather than the reactionary nature. He noted a year from now, the Register Guard MINUTES—Eugene City Council May 27, 2008 Page 5 Work Session