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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: An Ordinance Concerning Multiple-Unit Housing Property Tax Exemption and Amending Sections 2.945 and 2.947 of the Eugene Code, 1971 Meeting Date: October 22, 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 conducted a public hearing on July 21, 2008, and scheduled 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. In 1975 the Oregon legislature adopted the enabling statutes for the MUPTE program as an incentive tool to complement the state land-use laws that were approved in 1973. The intent was to “stimulate the construction of rental housing in the core areas of Oregon’s urban centers…” The MUPTE statutes allow cities to dictate the minimum number of units that a project must contain in order to be MUPTE-eligible. Eugene has determined that eligible developments must consist of five or more units and provide a public benefit. 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 receive over 50% of property taxes in the City of Eugene. Each application for an exemption must be approved by the council on a case by case basis. The state enabling legislation sunsets in 2012 unless extended during a future legislative session. If that occurs the City must then also adopt the revised provisions in order to continue offering the program. Council Action History In July 1977, the City Council adopted the provisions of this state-authorized tax exemption program through a resolution that determined “. . . to complement the Eugene Community Goals and Polices adopted in 1974 which stated that ’High density dwellings should be encouraged close-in to accommodate those people who prefer to live near the center of activity‘…” Since that time both the state statutes and Eugene’s implementation of them have been amended. For instance, the statutes now allow multi-family ownership in addition to rental housing. The following is a summary of related council actions during the last twelve years: In 1996, council redesigned the selection criteria for the program and then placed a moratorium on accepting MUPTE applications after the passage of Measure 47 (a property tax limitation and redesign). Z:\CMO\2008 Council Agendas\M081022\S081022B.docm