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. land write-down to housing developments which include some below-market-rate units. It is not intended that this memo be perceived as anti-development. A e developer who wants to build a market-rate condominium project downtown and can get the permits and meet the City's requirements should certainly be free to do so with no limitations by the City--in fact, with all the encouragement that the City can give to it. There would be no additional obli~ation to a developer who wants to receive City assistance in the form of technical assistance, tax exemptions, site preparation, or infrastructure improvements. Mr. Van Landingham pointed out that in the process of consideration, Gene Bixler, who makes his living as a condominium consultant, emphasized that education of developers and lenders about how to market condominiums and how to set them up was crucial to the success of those kinds of projects. Mr. Van Landingham also emphasized that one of the stated goal s of the "doughnut di strict" study has been to use infra- structure improvements to attract development downtown. If the City is going to provide a significant financial subsidy, in terms of writing down the interest rate or writing down the cost of the land, there should be some significant public benefit in return. In the case of the Hilton Hotel subsidy, there is a public benefit: there are jobs created and those jobs create income which in turn produces tax income. Housing does not create jobs. There will not be a tax increase. In addition, many on the Joint Housing Committee feel that this subsidy does not make good economic sense. The staff has spoken of helping downtown housing compete with other housing. Downtown housing costs more because land downtown costs more. That increase in costs reflects a greater value. When the housing market is ready and when there are financial factors which make downtown housing compete with other housing, for example in density, commuting time, and desirability, the developers will meet that demand with or without any subsidy. The recommendation is not saying that all housing downtown e should be low-income. This amendment would only affect those developments which want significant subsidies of land write-down and interest write-Qown. The amendment is deliberately vague so that the council, at the time that it gives the subsidy, could design it. In an 80-unit project, it could be one low-income unit. Whatever the subsidy is, whatever the requirement in exchange by the City, it should reflect the amount of the subsidy and the kind of project that it is. Finally, the amendment does not conflict with the City's dispersal policy. That policy has an exception for senior, low-income housing and also has an exception for experimental projects. One likely method to raise money to do this kind of subsidy is through the tax-exempt housing revenue bond. The Ullman bill limits those bonds to use for non-market-rate units already. The amendment is consistent with what Congress has moved to. In the Planning Commission consideration, staff pointed out that Federal subsidies to low-income housing may be at an end. That would make subsidized housing more difficult. Subsidized housing provision on a local level would become that much more important and necessary. Robert Bennett, 250 Palomino Drive, said he supports the things that Mr. Van Landingham supports. The downtown situation does not have the basic demand for the kind of housing the Leland-Hobson study might like to suggest as a sort of target development project. In order to make that kind of project go, it would have to be very heavily subsidized. There are a lot of questions. Leland-Hobson looked at that particular site, the one on the west side, as being a site which might be the most attractive, of the sites available, for the market rate develop- e MINUTES--Eugene City Council July 28, 1982 Page 10