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EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Adoption of Resolution 4852 Approving a Low-Income Rental Housing Property Tax Exemption for the Property Located at 265 West 8th Avenue, Eugene, Oregon (Assessor's Number 17-03-31-12 Tax Lots 13700, 14100, 14200). (Metropolitan Affordable Housing Corp.) Meeting Date: August 8, 2005 Agenda Item Number: 2D Department: Planning and Development Staff Contact: Richie Weinman www. eugene-or, gov Contact Telephone Number: 682-5533 ISSUE STATEMENT City Council is asked to consider a resolution related to a low-income housing tax exemption. The resolution grants a 20-year property tax exemption for WestTown on 8th, an eligible low-income housing project in downtown Eugene. BACKGROUND The council has a history of supporting low-income housing tax exemptions and has approved virtually every request to date from both non-profit or for-profit entities. Since 1987, one of the City Council's annual goals has related to homelessness or increasing the availability of low-income housing. For low-income households, this always requires subsidies. Support for low-income housing also is found in the City's Growth Management Goals and the adopted HUD Consolidated Plan. A key element in creating lower-cost affordable housing for low-income households is an exemption from property taxes for 20 years. A property tax exemption plays a very significant role in reducing rents. In this project the average per-unit monthly savings is estimated at $158.00. This makes a significant difference in the budget for a low-income household and is critical to the financing of the development, since the units are rent controlled due to restrictions placed on the project by subsidy partners. Metropolitan Affordable Housing Corporation is targeting groundbreaking for this project in January or February 2006. Therefore, the approval of the property tax exemption is critical if the project is to stay on its schedule. The City and other local taxing districts forgo revenue when property is exempted from taxes. This project involves new construction on a City-owned "landbank site." The property is on the north side of West 8th Avenue between Charnelton and Lincoln streets. It is mostly an undeveloped parking lot and a building that has been vacant for over 16 years. The property was purchased by the City of Eugene for this purpose and the City Council was notified several times during the subsequent process that a tax exemption would be part of the financing for the future development. The project is supported by both L:\CMO\2005 Council Agendas\M050808\S0508082D.doc