Item C: Ordinance on MUPTE - Laserfiche WebLink

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Is the requirement to construct five units or more to qualify for MUPTE above and beyond existing units that might be removed in the process, and does a rehabilitation count as adding a unit? Answer: The MUPTE statutes allow local jurisdictions to dictate the minimum number of units in a MUPTE-eligible project. Eugene has determined that eligible developments must consist of five or more units. However, the MUPTE Standards and Guidelines do not require a net gain of five units. Therefore, it is possible, for example, to qualify by removing one unit of housing and then replacing it with five. Staff is not able to identify an instance where this has actually occurred in Eugene. A MUPTE is also possible if an existing structure that is not in housing use (such as an office building or warehouse) was rehabilitated to create five or more housing units. Eugene has not received any th applications for this type of activity. Nozama Apartments on 19 Avenue received a MUPTE for a substantial rehabilitation when buildings that were a part of the former Amazon Student Housing were relocated to the site. How does staff monitor, after the fact, the need for each project’s “but for” requirement? Once a project is approved staff only monitors if the project is built and if it is substantially the same as what was approved. At the time a MUPTE application is submitted to the City the proposal is typically in an advanced conceptual state. The developer presents a concept, basic drawings, and a financial pro-forma, but has not submitted plans for building permits. The financial projections that are presented are reviewed by staff that is knowledgeable about housing finance. Under the new standards that are proposed, additional review would come from Eugene’s Loan Advisory Committee. Once approved by Council, the developer proceeds with investing in the more detailed design and permitting process with the knowledge that the tax exemption has made the project feasible. If the development has a substantial change in plans it would be a violation of the MUPTE approval and would need to come back to City Council for re-approval. Examples of a substantial change would be a deviation in the number of units by more or less than 10%, or adding additional floors. Less significant changes are often inevitable during the design, building permit and inspection process. MUPTE Guidelines The current MUPTE application packet is provided as Attachment A. This includes the adopted local standards. Public benefits are at the core of the program. Applicants must currently respond to a list of public benefits including sustainability features, responsiveness to adjacent historic resources, building material quality, design elements, Americans with Disabilities Act (ADA) accessible units, home ownership and solicitation of neighborhood association comments. The guidelines include specific rules for protection of historic or potentially historic buildings. Local Market Conditions and Activity The local rental housing market is complex. Eugene has very low rental vacancy rates (estimated at less than 2% in Eugene and near 0% in the core area) resulting in rent increases at rates in excess of wage growth. In some areas, such as West University, the tenants are willing to pay a premium for the convenience of location. However, in other neighborhoods rental rates still appear to be insufficient to support new construction of quality infill rental housing because of the increasing cost of construction and land. Very little in-fill multi-unit housing is being constructed without the MUPTE or some other incentive (e.g. low-income housing). Z:\CMO\2008 Council Agendas\M080813\S080813C.doc