The URL can be used to link to this page

Home My WebLink AboutItem C: Multi Unit Property Tax Exemption Program ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Multi-Unit Property Tax Exemption Program Meeting Date: October 22, 2007 Agenda Item Number: C Department: Planning and Development Staff Contact: Richie Weinman www.eugene-or.gov Contact Telephone Number: 682-5533 ISSUE STATEMENT The Mayor and City Council requested a work session to discuss the provisions and benefits of the Multi- Unit Property Tax Exemption Program (MUPTE), Section 2.945 of the Eugene Code, 1971. BACKGROUND The MUPTE program was adopted in order to encourage new, higher-quality housing in the core area. To qualify, developments must be five units or more. The program enables a 10-year property tax exemption on housing improvements only; 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 possible under state law because Eugene and 4J together collect over 50 percent of property taxes. 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. Council Action History The City Council has a nearly 30-year history of approving tax exemptions under this program. Sixteen applications have been submitted and the council approved 15(Attachment B). Of those, the MUPTE has expired on 11 of the developments. Ten are now taxed and one, Lawrence Court, is operated as public- purpose, tax-exempt, low-income housing. The remaining four are still in their MUPTE exemption period. In 1971, the City of Eugene adopted the provisions of this program, which is enabled by state statute. The state statute originally was limited to a city’s core area but many years ago the legislation was expanded to also include transit-oriented districts. Portland and surrounding counties have used the program to encourage housing along the MAX light rail line. In Portland, MUPTE is commonly referred to as the New Multi-Unit Housing (NMUH) Tax Exemption. In 1996, the council placed a moratorium on accepting MUPTE applications in order to redesign the program and clarify the benefits to the community. Soon thereafter, Measure 47 (a property tax limitation and redesign) was adopted by Oregon voters. The council ultimately debated and adopted a redesigned program in October 1996. However, due to the uncertainty around the provisions of Measure 47 (and then Measure 50), the ordinance that placed a moratorium on new applications was kept in place. F:\CMO\2007 Council Agendas\M071022\S071022C.doc In January 2001, the council reinstated the MUPTE program with the new guidelines and adopted a boundary area that was limited to the heart of downtown, substantially smaller than what had previously existed. In February 2003, the council recognized that no multi-family development occurred in the core area after the moratorium took effect, and directed staff to return to City Council with proposed amendments to the program as part of a series of “downtown tools”. (Broadway Place and High Street Terrace were approved prior to the moratorium but constructed during the moratorium period.) In July 2003, the council approved a small expansion of the MUPTE boundary to include the City’s th development site at 14 and Olive (the future home of the Tate Condominiums) and directed staff to return at a later date with additional amendments to the program and boundary. In early 2004, during multiple meetings, the council debated the merits of setting more specific and stricter standards of quality for MUPTE recipients and settled on the current approach which provides a range of options to be evaluated by the council prior to approval. The council agreed to expand the boundary area for MUPTE-eligible housing and amended the rules to include quality standards and increase public notification requirements. The amendments also eliminated an annual fee that was paid into a low-income housing fund if at least 50 percent of the housing built was not low-income. Some members of the council argued that charging the fee reduced the incentive and ability to construct higher quality housing. MUPTE Guidelines The 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 respond to a list of public benefits including sustainability features, responsiveness to adjacent historic resources, quality of building materials, 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. Characteristics of MUPTE Applicants MUPTE applicants have typically been single-site property owners or small development companies. There are two exceptions. The history is unclear about the origin of the development team for Broadway Center at Broadway and Washington, the first approved MUPTE (1978). Broadway Place at Broadway and Charnelton (1996) is a City-assisted project that was constructed on urban renewal property following a request for proposals (RFP). The developer, Lorig and Associates, was based in Seattle but included significant private local investment and management for the project. MUPTE applicants are commonly individuals who own a property for an extended period of time and use the tool to significantly improve it. It appears from an examination of the tax rolls that all of the approved MUPTE projects are still owned by the original applicants. As an example, the three most recent MUPTE applications came from local interests: Bob Newland is a life-long Eugene resident. Patterson Place will be his first real estate development. ? Council approved this application on October 8, 2007. F:\CMO\2007 Council Agendas\M071022\S071022C.doc Dan Neal of Steelhead Townhouses is a single-site property developer who is employed as an attorney ? and professional musician. His law office has been at 1361 Pearl, in the West University th Neighborhood, for 27 years. His Coho Townhouse project on West 14 received a MUPTE and is under construction. Steelhead is scheduled for City Council consideration on November 13, 2007. Martin Henner is an attorney, mediator and long time Eugene resident. With the exception of one ? historic apartment rehabilitation experience in Cottage Grove seven years ago, Eugene Co-housing is his first real estate development and involves bringing a variety of potential homeowners together to live in the core area. This is scheduled for council consideration on November 13, 2007. Local Market Conditions and Activity The local rental housing market is tight. The low vacancy rate (under two percent in Eugene and near zero percent in the core area) has shown a tendency to increase rents at rates in excess of wage growth. Yet, because of increases in land and construction costs, local rental rates still appear to be insufficient to support new construction of quality infill rental housing. In an effort to understand this dynamic, staff solicited input from a local commercial appraiser, Corey Dingman of Duncan and Brown Inc. (Attachment F). MUPTE was highlighted in this discussion as a tool to bridge the feasibility gap particularly in regard to redevelopment projects at infill sites. Recently, staff mapped new, citywide, multi-family housing developments of five units or more (Attachment C). Based on available data, 1,332 units received permits during the last three years. MUPTE assistance represents seven percent of the total and three percent of the total of infill rentals. The 47 units at The Tate are infill condominiums. The remaining 86 percent are comprised of large-scale projects developed by out-of-area developers on vacant land (benefiting from economy of scale), senior assisted housing (Cascade Manor is connected to an assisted living development), condominiums, and heavily subsidized low-income housing. MUPTE rental assistance 45 units Infill rentals without MUPTE 153 units Condominiums 221 units (Includes The Tate (47 units), which received MUPTE assistance) Large scale projects 392 units Subsidized low-income housing 471 units Senior housing, undeveloped land 50 units Total 1,332 MUPTE Project Feasibility and Cost Reasonableness MUPTE is intended to influence feasibility, location and quality. Location and quality are addressed by the MUPTE boundaries and the quality standards in the application. In terms of feasibility, City staff review the pro-forma for each MUPTE application. The applicant must demonstrate in their financial presentation why the project could not be built “but for” the exemption. Staff is familiar with the construction costs of new multi-family housing because the City closely monitors the financial details of low-income housing development. At any given time, there are typically one or two low-income developments under construction and others in the pipeline. In a similar role, private lenders closely look at a project pro-forma, carefully examine the cash-flow, and determine cost reasonableness and feasibility before approving the project financing. In virtually every approved MUPTE project, the private lender required documentation of the MUPTE approval as a condition of their approval of project financing. F:\CMO\2007 Council Agendas\M071022\S071022C.doc The City of Portland follows a model similar to that used by Eugene. Staff reviewed two recent MUPTE applications and examined the rate of return over a 10-year period. In both cases the project, without the MUPTE incentive, did not have sufficient cash flow to qualify for commercial underwriting standards. This summary is provided in Attachment D. West University Neighborhood and student housing In 2004, when the current program guidelines were approved, the council debated including the West University Neighborhood. The majority of the neighborhood was included for three reasons: 1. The 2003 West University Task Force was formed to address safety and livability concerns. This Task Force included senior university administrators, senior City staff, a City councilor, residents, business owners, etc. Task force members were concerned about deteriorating housing. The recommendations included both adopting a housing code and supporting the MUPTE incentive for new, higher quality housing. 2. A primary purpose of the program is to create additional density in the core area. This area is a vibrant, mixed-use center adjacent to both downtown and the university, and is zoned for medium and high density. LTD’s Em-X runs through the neighborhood. MUPTE supports the zoning designation and the compact urban growth goals. 3. Much of the housing stock is aging or inexpensively constructed in West University, Eugene’s densest neighborhood. The MUPTE incentive is intended to encourage higher quality design and construction. The University of Oregon has a profound impact on the community in terms of education, economy, culture and jobs. It is the area’s largest employer. Traditionally, universities do provide some housing with the amount differing from school to school. The University of Oregon recently drafted a Strategic Housing Plan that is pending final adoption. Its draft goals are to provide on-campus housing for at least 25 percent of undergraduates (22 percent now), and at least 11 percent of graduates (eight percent now). Currently, 85 percent of freshmen live on campus. The U of O is developing a specific strategy to replace and expand much of its existing campus housing because it is old and obsolete for today’s needs. West University Neighborhood is home to many students of the University of Oregon, Northwest Christian College (500 students, of whom 100 live on campus) and Lane Community College. In recent years, many students have chosen to live further away from campus to choose more modern housing with included amenities. Many live across the river (Chase Gardens, Ducks Village, University Commons etc.). There are multiple public benefits to placing student housing near the schools they serve. Those benefits include encouraging the use of alternative modes of transportation, reducing the use of motor vehicles and vehicle miles-of-travel, reducing demand for surface and/or structured parking at the school, and stimulating support for the infrastructure required for walkable neighborhoods. In addition, providing housing that is proximate to the University of Oregon reduces competition for housing in other neighborhoods. This competition with students exacerbates the affordable housing crises for many lower income households. Timing Two MUPTE applications are submitted and pending the council’s approval. Both are scheduled on November 13, 2007. F:\CMO\2007 Council Agendas\M071022\S071022C.doc RELATED CITY POLICIES Policy Issues and Council Goals The key policy issues are whether the City wishes to provide a tax exemption as a tool that encourages construction of housing in the core area and, if so, whether the rules or guidelines should be revised. Encouraging housing and higher densities in the core area and in surrounding neighborhoods is consistent with numerous adopted planning and policy documents. Examples include: Growth Management Policies Policy 1 Support the existing Eugene Urban Growth Boundary by taking actions to increase density and use on existing vacant land and under-used land within the boundary more efficiently. Policy 2 Encourage infill, mixed-use, redevelopment, and higher density development. Policy 3 Encourage a mix of businesses and residential uses downtown using incentives and zoning. Downtown Plan: Living Downtown Policy 1 Stimulate multi-unit housing in the downtown core and on the edges of downtown for a variety of income levels and ownership opportunities. Policy 2 Reinforce residential use in neighborhoods abutting the downtown commercial core to help contain commercial activity in downtown and maintain the historic character and livability of adjacent neighborhoods. Implementation Strategies A. Expand the MUPTE program boundary to encourage housing on the edges of downtown. Periodically review boundaries and expand to include areas where additional housing is appropriate. F. Seek opportunities to equalize the costs of building housing in and near downtown compared with locations elsewhere in the city. West University Refinement Plan V.9 The City will encourage residential uses in all parts of the plan area. V.11 The City and the neighborhood shall study ways to encourage a variety or mix of structure types providing both owner and rental opportunities and appealing to a diverse population. COUNCIL OPTIONS This item is for information and discussion only, no options have been identified. CITY MANAGER’S RECOMMENDATION This item is for information and discussion only, no recommendation has been developed at this time. SUGGESTED MOTION This item is for information and discussion only, no options, recommendation or motion have been identified. F:\CMO\2007 Council Agendas\M071022\S071022C.doc ATTACHMENTS A. MUPTE Application Packet B. History of MUPTE approvals C. City wide Multi-Family Housing during last three years D. Sample cash flow with and without MUPTE E. University of Oregon Strategic Housing Plan Update F. Comments from Appraiser, Corey Dingman FOR MORE INFORMATION Staff Contact: Richie Weinman Telephone: 682-5533 Staff E-Mail: richie.d.weinman@ci.eugene.or.us F:\CMO\2007 Council Agendas\M071022\S071022C.doc ATTACHMENT A Multi-Unit Rental Housing Property Tax Exemption Program Revised August 2006 APPLICATION PACKET For more information, please contact Richie Weinman at 541.682.5533 City of Eugene Planning and Development Department th 99 W. 10 Avenue, Eugene OR 97401 Richie.D.Weinman@ci.eugene.or.us Property Tax Exemption for New Multi-Unit Housing Application Coversheet The Multi-Unit Property Tax Exemption (MUPTE) is an incentive program to encourage downtown housing. This ten-year exemption is enabled by state law, but each project must be approved by the Eugene City Council. Both rental housing and multi-unit housing for home th ownership are eligible. Projects must be within an area generally bounded by 4 Avenue, th Patterson, 17, and Lawrence Street. GENERAL INFORMATION Applicant(s) Business Name:______________________________________________________ Address:______________________________________________________________________ Phone #________________ Fax #_________________ E-mail:_____________________ Representative:________________________________________________________________ Address (if different):____________________________________________________________ Phone #_______________ Fax #_________________ E-mail:_____________________ Proposed Project Name:_________________________________________________________ Location:_____________________________________________________________________ ELIGIBILITY AND QUALIFICATION CRITERIA Eligible Property. To be eligible for the property tax exemption, a structure must be: 1. A multiple unit structure, having five or more dwelling units, not designed or used as transient accommodations and not including hotels and motels; 2. Housing completed on or before January 1, 2012 This includes new multiple-unit housing on vacant sites, the conversion of buildings into new units on under-utilized sites and housing which increases densities consistent with the applicable Comprehensive Plan and zoning designations, as well as relevant plan goals and policies; and 3. Located within the boundaries illustrated on the attached map of eligible areas. Term of Exemption. This program provides for a ten-year exemption for all residential improvements. The land and non-residential improvements continue to be taxed. PUBLIC BENEFITS The City Council places a great deal of importance on adding high quality housing to the core area. Therefore, applicants must respond in writing as to how each of the following nine quality standards relate to the proposed project. Council will consider the responses when determining whether to grant the application. 1. Incorporation of sustainability features such as conservation performance measures, solar heating, natural lighting, “green” building (techniques that use environmentally friendly materials and practices), and landscaping with native species that reduce the need for fertilizers, herbicides and pesticides 2. Responsiveness to adjacent historic structures that are on the National Register of Historic Places or listed as a City Landmark 3. Use of higher quality materials that contribute to longevity, durability, or enhanced building design 4. Prominent entry facing the public street 5. Number of units by which the minimum density is exceeded or the percent of housing units having three or more bedrooms (to encourage families) 6. Number of available ADA accessible units that exceed the required standard 7. Responsiveness to neighborhood character and safety in respect to height, mass, architectural detail, landscaping and open space 8. Number of units designed for home ownership 9. Solicitation of comments from the relevant neighborhood association REGARDING HISTORIC BUILDINGS Removal of Historic Structure or Potential Historic Structure. No exemption shall be granted for any property where an historic structure or potential historic structure has been demolished or removed from the property within the two years immediately proceeding the date of application for the exemption. This restriction shall be waived if the owner of the property gave notice of the intent to demolish or move the structure to the Historic Review Board at least 60 days before the owner’s application for demolition or moving permit from the City of Eugene. Historic Structure is defined as any building, structure, or object which has been identified as a primary or secondary historic resource (strong or possible eligibility for City landmark or National Register status) in a survey acknowledged by the Eugene Historic Review Board and the State Historic Preservation Office, or which is an “historic property” as that term is defined by Eugene Code, 1971, Section 2.403, or Any building or structure which is older than 50 years in age and located in an area of the city of Eugene which has not been canvassed as part of an historic resource survey acknowledged by the Eugene Historic Review Board and the State Historic Preservation Office. This provision may be waived by City Council in the event of unusual or particularly justifiable circumstances. APPLICATION PROCESS A copy of the Property Tax Exemption Standards and Guidelines is attached. Section R-2.945-H explains the application review process once it is received. PLEASE ATTACH THE FOLLOWING: 1. A schematic drawing, drawn to a minimum scale of one inch equals 16 feet, which shows the site plan and major features and dimensions of the proposed development and includes a side and front elevation of the proposed development. 2. A written statement which pinpoints the location of the proposed development and includes the number, size, and type of dwelling units; dimensions of structures; public and private access; parking and circulation plans; landscaping uses; and a description of public benefit(s) which the applicant proposes to include in this project. See the section Public Benefits. entitled 3. Application Fee: An application fee of $300 must be submitted at the time of application. “CITY OF EUGENE.” Checks may be made payable to 4. Electronic submissions: In addition to the required paper copy, an electronic copy of the application, including photos and drawings is encouraged. It can be submitted to Richie.d.weinman@ci.eugene.or.us Submit applications to: Richie Weinman City of Eugene, Planning & Development Department th 99 West 10, Eugene OR 97401 For more information: Call 682-5533 or e-mail: Richie.d.weinman@ci.eugene.or.us Property Tax Exemption for New Multi-Unit Housing Application Part One: GENERAL INFORMATION Project Name or Designation: _________________________________________________ Parcel Size:_______________________________________________________________ Estimated Dimensions of Project: Structure “Footprint”_________________________________ Sq. Ft. Building Square Footage _____________________________ Sq. Ft. Number of Stories_____________ Number of Housing Units__________ Proposed Lot Coverage____________________________________ (%) Amount of Open Space_____________________________________ Sq. Ft. (Parcel minus “footprint”) Part Two: UNIT INFORMATION Size/Type Number of Units Average Square Proposed Rental Ownership Feet per Unit Estimated Rental Rate or Sale Price Efficiency One Bedroom Two Bedroom Three Bedroom Four Bedroom Commercial/Retail Accessible “Ready” Number of Units/ Average Square Feet Proposed Estimated Units Bedrooms per Unit Rental Rate or Sale Price Type/description of construction and materials. Describe any additional public utility needs. Describe proposed landscaping. Please attach the following to your application: PRO-FORMA. 1. Detailed construction and operating cost analysis demonstrating project’s “need” for tax exemption, and that the project could not be built “but for” the tax exemption. This analysis or pro-forma should show the rental rates of each type of unit both with and without the tax exemption. FINANCIAL FEASIBILITY. 2. Information on the property costs and financing for the housing which demonstrates the financial feasibility of the project. SITE PLAN. 3. A site plan and supporting maps, drawn to a minimum scale of one inch equals 16 feet, which shows in detail the development plan of the entire project, including a side and front elevation, showing streets, driveways, sidewalks, pedestrian ways, off- street parking, and loading areas; location and dimension of structures; use of land and structure; major landscaping features; design of structures; existing and proposed utility systems including sanitary sewers; storm sewers, water, electric, gas, and telephone lines. PUBLIC/PRIVATE ACCESS. 4. Description and map or diagram of public and private access to property and parking, and circulation plans for project. Please provide above drawings on 8-1/2” X 11” size paper for reproduction purposes. An alternative is an electronic PDF version that can be easily printed. The applicant is encouraged to provide, in addition to the above, any additional materials, such as economic feasibility status or market analysis appropriate to the project. PROPOSED ELIMINATION OF EXISTING STRUCTURES. 5. Explanation and justification for any proposed elimination of existing, sound and rehabitable housing on the site. No exemption will be granted for any property within the two years immediately preceding the date of application for the exemption. This restriction will be waived if the proposed project increases the number of dwelling units by 50% from what previously existed or if it replaces the old dwelling units by larger dwelling units that will accommodate families. Part Three: SITE INFORMATION/LEGAL DESCRIPTION Legal Description: (please also attach a legal description) Addition Block Tax Lot Cross Streets: North Side South Side East Side West Side What is the current use on the site? Please provide digital photos of the site. Describe the current number and type of any structures, as well as their use, and the number of residential units, if any. Indicate the occupancy status and whether the structures will be demolished or relocated as part of the proposed development. Please attach a current photo of this site. Is the building over 50 years old or designated as a historic structure? ???? Signature of Applicant: Date: SUBSCRIBED AND SWORN to before me this day of Notary Public for Oregon My Commission Expires ADMINISTRATIVE ORDER NO. 53-04-03-F of the City Manager AMENDMENT OF MULTIPLE-UNIT HOUSING PROPERTY TAX EXEMPTION STANDARDS AND GUIDELINES RULE R-2.945 AND REPEAL OF ADMINISTRATIVE ORDER NO. 53-02-04-F. The City Manager finds that: A. Sections 2.019 and 2.945 of the Eugene Code, 1971 authorize the City Manager to adopt rules for administration of provisions of the Eugene Code, 1971, and specifically Standards and Guidelines for processing applications for multiple-unit housing property tax exemptions. B. Pursuant to that authority, and based on the findings contained in Administrative Order No. 53-04-03 issued on May 24, 2004, I proposed the amendment of the Multiple-Unit Housing Property Tax Exemption Standards and Guidelines Rule R-2.945 that were established by Administrative Order No. 53-02-04-F on October 2, 2002. C. Notice of the proposed rule adoption was published in the Register-Guard for five consecutive days on June 6, 7, 8, 9 and 10, 2004. Notice was also made available to persons who had requested such notice, and provided that written comments would be received for a period of 15 days from the first date of publication. No written comments were received within the time or in the manner provided in the Notice. Based upon the above findings which are hereby adopted, and pursuant to the authority contained in Sections 2.019 and 2.945 of the Eugene Code, 1971, I hereby repeal Administrative Order No. 53-02-04-F and adopt the Multiple-Unit Housing Property Tax Exemption Standards and Guidelines Rule R-2.945 to provide as follows: MULTIPLE-UNIT HOUSING PROPERTY TAX EXEMPTION STANDARDS AND GUIDELINES RULE R-2.945 R-2.945-A Definitions. For purposes of these rules, the following words and phrases mean: City Manager. The City Manager of the City of Eugene, or his or her designee. Core area . The area depicted on Attachment 1 hereto. Historic structure. Any building, structure or object which has been identified as a primary or secondary historic resource (strong or possible eligibility for city landmark or National Register status) in a survey acknowledged by the Eugene Historic Review Board and the State Historic Preservation Office, or which is an "historic property" as that term is defined by Eugene Code, 1971, section 9.202. Lender . Any person who makes a loan, secured by a recorded mortgage or trust deed, to finance the acquisition, construction, addition or conversion of multiple-unit housing. Low-income housing. Housing which is affordable to families or persons whose income is low, i.e., income which is no more than 80% of the median income of families or persons in Lane County, Oregon as determined by the U.S. Department of Housing and Urban Development or its successor. Low-income housing assistance contract . An agreement between a public agency and a property owner that results in the production, rehabilitation, or preservation of housing affordable to those with a defined level of household income. Multiple-unit housing. (1) Housing subject to a low-income housing assistance contract with an agency or subdivision of this state or the United States; or (2) Newly constructed structures, stories or other additions to existing structures and structures converted in whole or in part from other use to dwelling units that meet the following criteria: (a) The structure must have five or more dwelling units; (b) The structure must not be designed or used as transient accommodations, including but not limited to hotels and motels; and (c) The structure must have those design elements benefiting the general public pursuant to subsection (1) of Rule R-2.945-G. Potential historic structure. Any building or structure which is older than 50 years in age and located in an area of the City which has not been canvassed as part of an historic resource survey acknowledged by the Eugene Historic Review Board and the State Historic Preservation Office. R-2.945-B Program Purpose and Boundaries. 1. The purpose of the program is to: 1.1 Stimulate the construction of transit supportive multiple-unit housing in the City’s core area to improve the balance between the residential and commercial nature of the area, and to ensure full-time use of the area as places where citizens of the community have an opportunity to live as well as work; 1.2 Encourage the development of vacant or under utilized sites in core areas, rather than sites where sound or rehabilitable multiple-unit housing exists; 1.3 Encourage the development of multiple-unit housing, with or without parking, in structures that may include ground-level commercial space; 1.4 Encourage the development of multiple-unit housing, with or without parking, on sites with existing single-story commercial structures; 1.5 Encourage the development of multiple-unit housing, with or without parking, on existing surface parking lots; and 1.6 Preserve existing publicly-assisted housing that is affordable to low- income persons by providing the incentives authorized in ORS 307.690 to 307.691 to existing multiple-unit housing subject to a low-income housing assistance contract with an agency or subdivision of this state or the United States. 2. The program shall emphasize: 2.1 The development of multiple-unit housing, with or without parking, in structures that may include ground-level commercial space; 2.2 The development of multiple-unit housing, with or without parking, on sites with existing single-story commercial structures; and 2.3 The development of multiple-unit housing, with or without parking, on existing surface parking lots. 3. The program shall result in the preservation, construction, addition or conversion of units at rental rates or sale prices accessible to a broad range of the general public. R-2.945-C Eligible Structures. To be eligible for local property tax exemption hereunder, a structure must: 1. Be multiple-unit housing as defined above, which: 1.1 In the case of the construction, addition, or conversion of multiple-unit housing, the construction, addition, or conversion must be completed on or before January 1, 2006, 1.2 In the case of housing subject to a low-income housing assistance contract with an agency or subdivision of this state or the United States, the application for exemption was made on or before January 1, 2012; 2. Be located within the core area; and 3. Meet the approval criteria set forth in these Standards and Guidelines. R-2.945-D Application for Exemption for Housing Subject to a Low-Income Housing Assistance Contract . 1. On or before February 1 immediately preceding the first assessment year for which exemption is requested, the applicant shall submit to the City Manager, on a form provided by the City, an application for exemption, containing the following information: 1.1 The applicant's name, address, and telephone number; 1.2 A legal description of the property or the assessor's property account number for the site; 1.3 A description of the existing use of the property, including a justification for the elimination of, or a plan for the relocation of existing sound or rehabilitable housing located on the property; and 1.4 Any other information required by state or local law or requested by the City or which is otherwise reasonably necessary to effectuate the purposes of this program. 2. The applicant must also attach to the application the low-income housing assistance contract that has been executed with the agency or subdivision of this state or the United States. 3. The application shall be verified by oath or affirmation of the applicant and submitted with an application processing fee to be set by the City Manager pursuant to Section 2.020 of the Eugene Code, 1971. The application fee shall include the amount to be paid to the County Assessor as the County's agreed processing fee for those applications receiving Council approval. The amount of the basic fee shall be prominently displayed on the application, together with a statement that the applicant may be required to pay other reasonable costs, including publication costs and appraisal costs, if any are incurred by the City or the County in processing the application. Any additional costs shall be paid to the City by the applicant prior to the granting of any final approval. If the application is approved, the City shall pay the application fee to the County Assessor for deposit in the County General Fund, after first deducting that portion of the fee attributable to its own administrative costs in processing the application. In the event an application is denied, the City shall retain that portion of the application fee attributable to its own administrative costs and shall refund the balance to the applicant. R-2.945-E Application for Exemption for New Construction, Additions, or Conversions. On or before February 1 immediately preceding the first assessment year for which exemption is requested, the applicant shall submit to the City Manager, on a form provided by the City, an application for exemption, containing the information required in section (1) of Rule R-2.945-D, and the additional information as follows: 1. A schematic drawing, drawn to a minimum scale of one inch equals 16 feet (1" = 16'), which shows the site plan and major features and dimensions of the proposed development, and a schematic drawing, drawn to a minimum scale of one inch equals 16 feet (1" = 16'), that shows both a side and front elevation of the proposed development; 2. A written statement which: 2.1 Pinpoints the location of the proposed development; 2.2 Describes the number, size, and type of dwelling units, and dimensions of structures; 2.3 Identifies public and private access, parking and circulation plans, and landscaping uses; and 2.4 Describes the public benefit(s) in section (1) of Rule R-2.945-G which the applicant proposes to include in this project; and 3. Information on the costs and financing for the housing and other information required by the City on the financial feasibility of the project. 4. The application shall be verified by oath or affirmation of the applicant and submitted with an application processing fee to be set by the City Manager pursuant to Section 2.020 of the Eugene Code, 1971. The application fee shall include the amount to be paid to the County Assessor as the County's agreed processing fee for those applications receiving Council approval. The amount of the basic fee shall be prominently displayed on the application, together with a statement that the applicant may be required to pay other reasonable costs, including publication costs and appraisal costs, if any are incurred by the City or the County in processing the application. Any additional costs shall be paid to the City by the applicant prior to the granting of any final approval. If the application is approved, the City shall pay the application fee to the county assessor for deposit in the county general fund, after first deducting that portion of the fee attributable to its own administrative costs in processing the application. In the event an application is denied, the City shall retain that portion of the application fee attributable to its own administrative costs and shall refund the balance to the applicant. R-2.945-F Duration of Tax Exemption. The maximum term of a tax exemption for any multi-unit housing project is ten years. For a multi-unit housing project under an existing low-income housing assistance contract, that term may also not exceed June 30 in the calendar year in which the contract expires. If the City Manager recommends the approval of an application, the City Manager shall recommend a grant of the maximum permissible term. The final determination of the exemption term will be made by the City Council. R-2.945-G Approval Criteria for New Construction, Additions, or Conversions. 1.Public Benefit . The City Council places a great deal of importance on adding high quality housing to the core area. Therefore, applicants must respond in writing as to how each of the following nine quality standards relate to the proposed project. Council will consider the responses when determining whether to grant the application. 1.1 Incorporation of sustainability features such as conservation performance measures, solar heating, natural lighting, “green” building (techniques that use environmentally friendly materials and practices), and landscaping with native species that reduce the need for fertilizers, herbicides and pesticides; 1.2 Responsiveness to adjacent historic structures that are on the National Historic Register or listed as a city landmark; 1.3 Use of higher quality materials that contribute to longevity, durability, or enhanced building design; 1.4 Prominent entry facing the public street; 1.5 Number of units by which the minimum density is exceeded or the percent of housing units having three or more bedrooms (to encourage families); 1.6 Number of available ADA accessible units that exceed the required standard; 1.7 Responsiveness to neighborhood character and safety in respect to height, mass, architectural detail, landscaping and open space; 1.8 Number of units designed for home ownership; and 1.9 Solicitation of comments from the relevant neighborhood association. 2. Compliance with Local Law. The proposed project must be, at the time of completion of construction, in conformance with all local plans and planning regulations which are applicable at the time the application is approved. 3. Local Standards. The proposed project must comply with the following additional standards: of the Proposed Project Site. 3.1 Utilization of Historic Structure or Potential Historic Structure 3.1.1 Removal. No exemption shall be granted for any property where an historic structure or potential historic structure has been demolished or removed from the property within the two years immediately preceding the date of application for the exemption. This restriction shall be waived if the owner of the property gave notice of the intent to demolish or move the structure to the Eugene Historic Review Board at least 60 days before the owner's application for a demolition or moving permit from the City. Justification for Elimination of Existing Housing. 3.1.2 No exemption shall be granted for any property on which any housing unit has been demolished or removed from the property within the two years immediately preceding the date of application for the exemption. This restriction shall be waived if the proposed project increases the number of dwelling units by 50% from what previously existed or if it replaces the old dwelling units by significantly larger dwelling units that will accommodate families. 4. Public Benefit Beyond the Period of Exemption. The owner must demonstrate that one or more of the public benefits described in the application will extend beyond the period of the tax exemption. 5. Project Would Not be Built Without Exemption. The owner must demonstrate that construction of the housing would not be financially feasible without the benefit of the tax exemption. R-2.945-H Recommendations on Applications. Within 90 days from the date an application is filed, the City Manager shall: 1. Review the application and all supportive material to verify that the applicant has provided the information required and notify the applicant of any omissions. 2. Publish a one column, 3" minimum display ad in the Register Guard soliciting recommendations or comments from the public. The ad will advise that written comments may be submitted to the City for a period of 30 days from the first publication date. Recommendations or comments shall also be solicited from the Planning Commission, other interested City departments, agencies, and neighborhood group(s) (if any). Failure of the agencies, departments or groups to submit written comments within 30 days shall be deemed approval of the proposal as submitted. 3. Recommend to the Council that the application be denied, approved, or approved subject to conditions. The recommendation shall set forth specific findings in support of his or her recommendation, based upon these Standards and Guidelines, Council resolutions and ordinances, applicable State statutes, and the written comments received. The written comments shall be forwarded to the City Council with the City Manager’s recommendation. R-2.945-I Compliance Review for New Construction, Additions or Conversions. Following approval of an application for tax exemption by the Council and immediately prior to the commencement of construction, the applicant shall review the working drawings and other documents with the City Manager. If construction commenced prior to Council approval of a tax exemption, the applicant shall review the construction documents and other documents with the City Manager prior to completion of construction to ensure that the project will comply with the approval conditions upon completion. R-2.945-J Reports. If requested by the Council, the City Manager shall submit reports to the Council for transmittal to the House and Senate Revenue Committee of the Oregon Legislature describing the effect of this program in the City of Eugene. The reports shall describe the number of housing developments and residential units to which the exemption applies, the value of the developments constructed, the value of the tax exemptions granted, and the general effectiveness of the property tax exemption as an incentive for construction of housing. The reports shall be submitted to the Council sufficiently in advance so as to permit the Council to file them at least 60 days prior to the convention of each regular legislative session. Dated this ________ day of June, 2004. ___________________________________ Dennis M. Taylor City Manager MULTI-UNIT HOUSING PROPERTY TAX EXEMPTION PROGRAM HISTORY NAMEADDRESSNUMBER OF UNITSYEAR APPROVED Broadway Center Washington and Broadway 107 units 1978 12 studio; 71 One-Bedroom; 24 Two- Bedroom; 12 Studio Lawrence Court 8th and Lawrence 50 One-Bedroom 1980 (currently all low-(approx) income) Washington Abbey 10th and Washington 48 units 1984 9 One-Bedroom/plus loft; Five Two- Bedroom; 34 One-Bedroom Olive Terrace 15th Ave. & Olive St. 28 units 1989 4 Studio; 12 One-Bedroom Units; 12 Two-Bedroom Units Joseph Shapitka 445 W. 10th Ave. 8 Two-Bedroom Units. 1990 Burnell Ambrose 17 & 35 Lawrence St. 7 One-Bedroom Units. 1995 Nozama Apartments 525 & 541 E. 19th Ave. 14 units 1995 12 Two-Bedroom Units; 2 Four-Bedroom Units. Hilyard House 701 & 725 E. 14th Ave. 1357 53 units 1995 & 1377 Hilyard 44 Two-Bedroom Units; 9 One-Bedroom Art Carmichael Units. Paradice Apts 640 E. 15th Avenue 30 units 1996 Phil Klingensmith/ 6 Studio; 8 One-Bedroom Units; Don McRae 16 Two-Bedroom Units. High Street Terrace 10th Ave. & High St. 58 units 1996 20 Studio; 26 One-Bedroom Units; 12 Two-Bedroom Units Broadway Place Broadway and Charnelton 170 units 1996 74 Studio, 72 One-Bedroom, 24 Two Bedroom The Tate 1375 Olive 47 units – condominiums 2004 14 one-bedroom, 27 two-bedroom, 6 three-bedroom Patterson House 979 Patterson 27 units 2004 3 studio, 12 0ne-bedroom, 12 two- bedroom th Parkside Place 633 E. 14 Alleyway 21 units 2006 1 one-bedroom, 2 two-bedroom, 5 three- bedroom, 7 four-bedroom, 6 five-bedroom 2007 th Coho Townhouses 631 E. 14 Ave. 9 four-bedroom units Under construction 14 units Patterson Place 1360,1372 Patterson 2 two-bedroom, 6 three-bedroom, 4 four-2007 bedroom, 2 five-bedroom PENDING REQUESTS NAME ADDRESS NUMBER OF STATUS COUNCIL UNITS ACTION Steelhead Townhouses 534,535 E. 9 rental Submitted Aug 28 TBD - Dan Neal 14th Comment period ends October 1 Eugene Downtown 990 Lincoln 24 ownership Submitted Aug 20 TBD Cohousing 7 rental (tentative) Comment period - Martin Henner ended October 1 ththth 16 and Hilyard 693 E. 16 10 rental Submitted Aug 7Application Apartments Advertised Sept 16 Withdrawn -David S. Corey Comment period pending redesign ended October 15 Additional Downtown Housing Tax Exemptions (not MUPTE) Lincoln School 58 units Historic Exemption (15 years) Tiffany Building 28 units Historic Exemption (15 years) Aurora Building 54 units Low-income Exemption (20 years) th WestTown on 8 (under construction) 102 units Low-Income Exemption (20 years) Updated: October 15, 2007 ÓËÐÌÛÍ·¬» ê ïðë î ï ïï ë ïí ïð í ïê ïî ïë è ïì ì ç Ç»¿® Ó¿°×¼Ò¿³»ß¼¼®»Ë²·¬ß°°®±ª»¼ Ý«®®»²¬ÓËÐÌÛÞ±«²¼¿®§ ïÞ®±¿¼©¿§Ý»²¬»®ìëïÉÞ®±¿¼©¿§ïðéïçéè îÔ¿©®»²½»Ý±«®¬íééÉè¬¸ßª»ëðïçèð ÓËÐÌÛÔ±½¿¬·±²úË²·¬ íÉ¿¸·²¹¬±²ß¾¾»§ìçìÉïð¬¸ßª»ìèïçèì é ìÑ´·ª»Ì»®®¿½»ïë¬¸ßª»òúÑ´·ª»Í¬òîèïçèç éóïð ëÖ±»°¸Í¸¿°·¬µ¿ììëÉòïð¬¸ßª»òèïççð êÞ«®²»´´ß³¾®±»ïéÔ¿©®»²½»Í¬òéïççë ïïóîð éÒ±¦¿³¿ß°¿®¬³»²¬ëîëÛòïç¬¸ßª»òïìïççë èØ·´§¿®¼Ø±«»éðïÛòïì¬¸ßª»òëíïççë Ó·´» çÐ¿®¿¼·½»ß°¬êìðÛòïë¬¸ßª»²«»íðïççê îïóëð ððòîë ïðØ·¹¸Í¬®»»¬Ì»®®¿½»ïðëëØ·¹¸Í¬ëèïççê ïïÞ®±¿¼©¿§Ð´¿½»îëëÉÞ®±¿¼©¿§ïéðïççê ëïóïðð ïîÌ¸»Ì¿¬»ïíéëÑ´·ª»ìéîððì ïíÐ¿¬¬»®±²Ø±«»çéçÐ¿¬¬»®±²îéîððì ïìÐ¿®µ·¼»Ð´¿½»êííÛòïì¬¸ß´§îïîððê Ý·¬§±ºÛ«¹»²» ïðïóïéð ïëÝ±¸±Ì±©²¸±«»êíïÛòïì¬¸ßª»òçîððé Ð´¿²²·²¹¿²¼Ü»ª»´±°³»²¬ ïêÐ¿¬¬»®±²Ð´¿½»ïíêðÐ¿¬¬»®±²ïìîððé Ý±³³«²·¬§Ü»ª»´±°³»²¬Ü·ª··±² Ñ½¬±¾»®ïîôîððé Ý¿«¬·±²æÌ¸·³¿°·¾¿»¼±²·³°®»½·»±«®½»¼¿¬¿©¸·½¸·«¾¶»½¬¬±½¸¿²¹»ò ×¬·º±®¹»²»®¿´¹®¿°¸·½¿´®»º»®»²½»¿²¼·²±¬·²¬»²¼»¼º±®´»¹¿´ô»²¹·²»»®·²¹±®«®ª»§·²¹°«®°±»ò ATTACHMENT D Example Cash Flows with and without MUPTE The theory behind the MUPTE is that multi-unit housing development is desired in the core area and that the development would not occur “but for” the granting of the exemption. The tax exemption is a tool used to offset real financial obstacles associated with developing multi-unit housing in the core. These obstacles could be related to higher land cost, higher construction cost resulting from multi-story construction and higher quality urban design, parking constraints, code requirements, and environmental conditions related to prior uses. Background: Real Estate Development Financing Generally, real estate development is accomplished through consistent and stringent financial underwriting. To obtain financing, a project must be able to demonstrate that the value after completion of construction is sufficient to justify the actual construction cost. The value of the project is based on the project’s ability to generate Net Operating Income (NOI), service debt, and provide a return on equity invested. The market strongly influences NOI. Rental income, vacancy rates, and operating expenses are market driven variables that typically cannot be manipulated to improve NOI. Rental Income - Vacancy Rate - Operating Expenses = Net Operating Income (NOI) NOI is important to appraisers, banks, and developers. NOI is used by appraisers to determine value. Developers use NOI to pay debt service on loans, with the remaining amount applied to investor return. Banks use the appraised value to determine loan amounts. Banks also use NOI to analyze the likelihood of loan repayment (through cash flow) and the level of risk (through return on investment). For Appraisers & Banks For Developers & Banks NOI NOI ÷ Capitalization Rate - Debt Service = Appraised Value = Cash Flow (ability to repay loan) x Bank Loan to Value requirement ÷ Equity Investment in Project = Bank Loan Amount = Cash on Cash Return (level of risk) Generally, financial institutions base loan decisions on projects with the ability to repay the loan and an acceptable level of risk. The loan amount, however, is based on a specified percentage of the appraised value, rather than the actual cost of the project. Based on core area market conditions, the NOI, cash flow, and return may not be adequate to enable multi-unit residential development. One way to measure risk is by analyzing the return on investment. The Cash on Cash measure of return is the simplest, most straightforward return on investment decision making tool used by banks and developers. (Cash Flow divided by equity invested by the developer.) Historically, Cash on Cash return for multi-unit, residential rental development should be a minimum of 10% to 15%, to represent an acceptable level of risk for the bank. Two Example Pro-Formas Based on two recent MUPTE applications, staff created example pro-formas that demonstrate 1) the lack of feasibility in free market multi-unit developments within the MUPTE boundary and 2) the ability of MUPTE to correct the market imperfection. The pro-formas use conservative assumptions about property value growth and market assumptions about vacancy and operating expenses. The model assumes that assessed property values increases by 2% per year. The vacancy rate is assumed at 5% of rental income and operating expenses are estimated at 20% of rental income, both standard assumptions in financial underwriting. Example A: The pro-forma below is based on a nine-unit development with four-bedrooms in each unit. The rent is $1.00 per square foot. Pro-Forma: Without MUPTE Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10 Rent Income$ 172,800$ 174,528$ 176,273$ 178,036$ 179,816$ 181,615$ 183,431$ 185,265$ 187,118$ 188,989 - Vacancy (5%)$ 8,640$ 8,726$ 8,814$ 8,902$ 8,991$ 9,081$ 9,172$ 9,263$ 9,356$ 9,449 = Effective Gross Rent$ 164,160$ 165,802$ 167,460$ 169,134$ 170,826$ 172,534$ 174,259$ 176,002$ 177,762$ 179,539 - Operating Exp (20%)$ 34,560$ 34,906$ 35,255$ 35,607$ 35,963$ 36,323$ 36,686$ 37,053$ 37,424$ 37,798 = NOI $ 129,600$ 130,896$ 132,205$ 133,527$ 134,862$ 136,211$ 137,573$ 138,949$ 140,338$ 141,742 - Debt Service$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740 = CF $ 1,860$ 3,156$ 4,465$ 5,787$ 7,122$ 8,471$ 9,833$ 11,209$ 12,598$ 14,002 Cash on Cash Return 0%1%1%1%1%2%2%2%3%3% Example A shows Cash flow in Year 1 at $1,800 and Cash on Cash return at 0%. By year 10 the cash flow increases to $14,000 with a Cash on Cash return at 3%. Example B: The pro-forma below is based on a 14-unit development with two, three, four, and five bedroom units. The rent per square foot is $1.11 for two-bedroom units, $1.23 for three- bedroom units, $1.37 for four bedroom units, and $1.31 for five-bedroom units. Pro-Forma: Without MUPTE Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10 Rent Income$ 288,000$ 290,880$ 293,789$ 296,727$ 299,694$ 302,691$ 305,718$ 308,775$ 311,863$ 314,981 - Vacancy (5%)$ 14,400$ 14,544$ 14,689$ 14,836$ 14,985$ 15,135$ 15,286$ 15,439$ 15,593$ 15,749 = Effective Gross Rent$ 273,600$ 276,336$ 279,099$ 281,890$ 284,709$ 287,556$ 290,432$ 293,336$ 296,270$ 299,232 - Operating Exp (20%)$ 57,600$ 58,176$ 58,758$ 59,345$ 59,939$ 60,538$ 61,144$ 61,755$ 62,373$ 62,996 = NOI $ 216,000$ 218,160$ 220,342$ 222,545$ 224,770$ 227,018$ 229,288$ 231,581$ 233,897$ 236,236 - Debt Service$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000 = CF $ (3,000) $ (840) $ 1,342$ 3,545$ 5,770$ 8,018$ 10,288$ 12,581$ 14,897$ 17,236 Cash on Cash Return -1%0%0%1%1%2%2%2%3%3% Example B shows Cash flow in Year 1 at - $3,000 and Cash on Cash return at -1%. By year 10 the cash flow increases to $17,200 with a Cash on Cash return at 3%. Example A and B would both have difficulty qualifying for necessary conventional financing. With cash flow at such low levels, banks would not be confident in the projects ability to repay the debt. The perceived risk is also high demonstrated by Cash on Cash return well below the needed 10% to 15% level. MUPTE Impact As property taxes are a major operating expense in a development project, the property tax exemption provided by the MUPTE program can play a significant role in improving NOI. The MUPTE can help create opportunities for financing and return on investment that are not otherwise achievable in core area multi-unit development. Example Pro-Forma A and B were recalculated to include MUPTE. The MUPTE is estimated to 1 have a total value of $267,000 for Example A and $445,000 for Example B. Example Pro-Forma A: With MUPTE Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10 Rent/Sale Income$ 172,800$ 174,528$ 176,273$ 178,036$ 179,816$ 181,615$ 183,431$ 185,265$ 187,118$ 188,989 - Vacancy$ 8,640$ 8,726$ 8,814$ 8,902$ 8,991$ 9,081$ 9,172$ 9,263$ 9,356$ 9,449 = Effective Gross Rent$ 164,160$ 165,802$ 167,460$ 169,134$ 170,826$ 172,534$ 174,259$ 176,002$ 177,762$ 179,539 - Operating Exp$ 34,560$ 34,906$ 35,255$ 35,607$ 35,963$ 36,323$ 36,686$ 37,053$ 37,424$ 37,798 - Property Tax $ (24,405)$ (24,893)$ (25,391) $ (25,898) $ (26,416)$ (26,945)$ (27,484)$ (28,033)$ (28,594) $ (29,166) (saved by MUPTE) = NOI $ 154,005$ 155,789$ 157,596$ 159,425$ 161,279$ 163,156$ 165,057$ 166,982$ 168,932$ 170,907 - Debt Service$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740$ 127,740 = CF $ 26,265$ 28,049$ 29,856$ 31,685$ 33,539$ 35,416$ 37,317$ 39,242$ 41,192$ 43,167 Cash on Cash Return 5%6%6%7%7%7%8%8%9%9% Example Pro-forma B: With MUPTE Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10 Rent/Sale Income$ 288,000$ 290,880$ 293,789$ 296,727$ 299,694$ 302,691$ 305,718$ 308,775$ 311,863$ 314,981 - Vacancy$ 14,400$ 14,544$ 14,689$ 14,836$ 14,985$ 15,135$ 15,286$ 15,439$ 15,593$ 15,749 = Effective Gross Rent$ 273,600$ 276,336$ 279,099$ 281,890$ 284,709$ 287,556$ 290,432$ 293,336$ 296,270$ 299,232 - Operating Exp$ 57,600$ 58,176$ 58,758$ 59,345$ 59,939$ 60,538$ 61,144$ 61,755$ 62,373$ 62,996 - Property Tax $ (40,674) $ (41,488) $ (42,318) $ (43,164) $ (44,027) $ (44,908) $ (45,806) $ (46,722) $ (47,657) $ (48,610) (saved by MUPTE) = NOI $ 256,674$ 259,648$ 262,659$ 265,709$ 268,798$ 271,926$ 275,094$ 278,303$ 281,554$ 284,846 - Debt Service$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000$ 219,000 = CF $ 37,674$ 40,648$ 43,659$ 46,709$ 49,798$ 52,926$ 56,094$ 59,303$ 62,554$ 65,846 Cash on Cash Return 7%8%8%9%10%10%11%11%12%13% Even with the MUPTE, Cash on Cash, in both Example A and B, never goes above 13%. Therefore, MUPTE is not contributing to exorbitant developer returns. 1 Values are estimates and depend on the assessed value for the housing in the project, the tax rates in effect during the exemption period, and the changes in the assessed value of this property over the exemption period Conclusion Core area market conditions are not conducive to the development of multi-unit housing. The provision of property tax exemptions (such as MUPTE), improves the financial performance of the development to a point where financial institutions will provide the necessary debt. In the two example pro-formas, the developments would not occur “but for” the granting of the exemption. éÈÊÛÈ×ÕÓÙôÍÇÉÓÎÕìÐÛÎyçÌØÛÈ× é×ÌÈ×ÏÚ×Ê íÆ×ÊÆÓ×Å èÔ×ùÔÛÎÙ×ÐÐÍÊÛÎØíçéúÍÛÊØÛÉÑ×ØÈÔ×çÎÓÆ×ÊÉÓÈÃÍÖíÊ×ÕÍÎÈÍØ×Æ×ÐÍÌÛÐÍÎÕÊÛÎÕ×ÔÍÇÉÓÎÕÌÐÛÎÓÎ ÙÍÎÒÇÎÙÈÓÍÎÅÓÈÔÈÔ×ÓÊÛÌÌÊÍÆÛÐÍÖÈÔ×ÉÛÐ×ÍÖå×ÉÈÏÍÊ×ÐÛÎØæÓÐÐÛÕ×ûÌÛÊÈÏ×ÎÈùÍÏÌÐ×Ä óÎÊ×ÉÌÍÎÉ×ÈÍÈÔÓÉÊ×ËÇ×ÉÈÈÔ×ÇÎÓÆ×ÊÉÓÈÃÓÎÓÈÓÛÈ×ØÛÈÅÍÌÔÛÉ×ØÔÍÇÉÓÎÕÉÈÊÛÈ×ÕÓÙÌÐÛÎÎÓÎÕÌÊÍÙ×ÉÉÈÍØ×Æ×ÐÍÌ ÛÌÐÛÎÈÔÛÈÅÓÐÐØÓÊ×ÙÈÈÔ×ÇÎÓÆ×ÊÉÓÈÃtÉÔÍÇÉÓÎÕÊ×ÐÛÈ×ØÛÙÈÓÆÓÈÓ×ÉÈÔÊÍÇÕÔÈÔ×Î×ÄÈØ×ÙÛØ×ÓÎÙÐÇØÓÎÕ Ê×ÙÍÏÏ×ÎØÛÈÓÍÎÉÊ×ÕÛÊØÓÎÕÈÔ×ÛÏÍÇÎÈÛÎØÈÃÌ×ÍÖÎ×ÅÔÍÇÉÓÎÕÉÈÍÙÑèÔ×ÕÍÛÐÉÍÖÈÔ×ÌÐÛÎÛÊ×ÈÍ éÇÌÌÍÊÈÛÎØ×ÎÔÛÎÙ×ÈÔ×ÇÎÓÆ×ÊÉÓÈÃtÉÙÔÛÊÛÙÈ×ÊÛÉÛÊ×ÉÓØ×ÎÈÓÛÐÇÎÓÆ×ÊÉÓÈÃ éÇÌÌÍÊÈÛÎØ×ÎÔÛÎÙ×ÈÔ×ÇÎÓÆ×ÊÉÓÈÃtÉ×ÎÊÍÐÐÏ×ÎÈÏÛÎÛÕ×Ï×ÎÈÕÍÛÐÉ ìÊÍÕÊ×ÉÉ ûÉÌÛÊÈÍÖìÔÛÉ×ÛÎÛÌÌÍÓÎÈ×ØôÍÇÉÓÎÕéÈÊÛÈ×ÕÓÙìÐÛÎÎÓÎÕõÊÍÇÌÓØ×ÎÈÓÖÓ×ØÚÊÍÛØÍÚÒ×ÙÈÓÆ×ÉÛÎØ Ï×ÛÉÇÊÛÚÐ×ÕÍÛÐÉÇÉÓÎÕûûçÓÎÉÈÓÈÇÈÓÍÎÉÏÍÊ×ÉÌ×ÙÓÖÓÙÛÐÐÃÈÔ×ÇÎÓÆ×ÊÉÓÈÃtÉ×ÓÕÔÈÌ××ÊÓÎÉÈÓÈÇÈÓÍÎÉÛÉØ×ÖÓÎ×Ø ÚÃíçéÛÉÌÊÓÏÛÊÃÚ×ÎÙÔÏÛÊÑÉèÔ×úÍÛÊØÅÛÉÕÓÆ×ÎÛÌÊÍÕÊ×ÉÉÇÌØÛÈ×ÓÎòÛÎÇÛÊÃ ÛÎØÚÊÍÛØ ÇÎÓÆ×ÊÉÓÈÃÓÎÌÇÈÅÛÉÕÛÈÔ×Ê×ØÚ×ÖÍÊ×ÓÎÓÈÓÛÈÓÎÕìÔÛÉ× øÇÊÓÎÕìÔÛÉ× ÛÎ×ÄÌÛÎØ×ØôÍÇÉÓÎÕéÈÊÛÈ×ÕÓÙìÐÛÎÎÓÎÕõÊÍÇÌÅÓÈÔÚÊÍÛØÊ×ÌÊ×É×ÎÈÛÈÓÍÎÖÊÍÏÉÈÇØ×ÎÈÉ ÖÛÙÇÐÈÃÉÈÛÖÖÛØÏÓÎÓÉÈÊÛÈÓÍÎÛÎØÈÔ×ÙÍÏÏÇÎÓÈÃÅÍÊÑ×ØÅÓÈÔÌÊÍÖ×ÉÉÓÍÎÛÐÙÍÎÉÇÐÈÛÎÈÉûÎØ×ÊÉÍÎéÈÊÓÙÑÐ×Ê ððùÈÍ ê×ÖÓÎ×ÈÔ× ÔÍÇÉÓÎÕÍÚÒ×ÙÈÓÆ×É ùÍÎØÇÙÈÛÙÍÏÌÊ×Ô×ÎÉÓÆ××ÄÓÉÈÓÎÕÙÍÎØÓÈÓÍÎÉÛÎØÏÛÊÑ×ÈÉÈÇØÃÛÎØ ÔÍÇÉÓÎÕÛÎÛÐÃÉÓÉ ø×Æ×ÐÍÌÛÎ ÓÏÌÐ×Ï×ÎÈÛÈÓÍÎÌÐÛÎ ÷ÄÈ×ÎÉÓÆ×ÓÎÌÇÈÅÛÉÕÛÈÔ×Ê×ØÆÓÛÑ×ÃÉÈÛÑ×ÔÍÐØ×ÊÓÎÈ×ÊÆÓ×ÅÉÛÎØÌÊ×É×ÎÈÛÈÓÍÎÉÈÔÓÊÈ××ÎÉÈÇØ×ÎÈÖÍÙÇÉÕÊÍÇÌÉ ÛÅ×ÚÚÛÉ×ØÉÇÊÆ×ÃÈÔÛÈÊ×Ù×ÓÆ×Ø Ê×ÉÌÍÎÉ×ÉÛÎØÛÎÛÎÛÐÃÉÓÉÍÖÈÅ×ÐÆ×Ì××ÊÓÎÉÈÓÈÇÈÓÍÎÉ ôÍÇÉÓÎÕíÚÒ×ÙÈÓÆ×É èÅ×ÎÈÃÉÓÄÔÍÇÉÓÎÕÍÚÒ×ÙÈÓÆ×ÉÅ×Ê××ÉÈÛÚÐÓÉÔ×ØÈÍÏ××ÈÈÔ×ÌÊÓÏÛÊÃÕÍÛÐÉÉÈÛÈ×ØÛÚÍÆ× èÔ×ÖÓÊÉÈÕÊÍÇÌÍÖÍÚÒ×ÙÈÓÆ×ÉÓÉØ×ÉÓÕÎ×ØÚÃ ÈÍÉÇÌÌÍÊÈÛÎØ×ÎÔÛÎÙ×ÍÇÊÙÔÛÊÛÙÈ×ÊÛÉÛÊ×ÉÓØ×ÎÈÓÛÐÇÎÓÆ×ÊÉÓÈÃ ×ÎÙÍÇÊÛÕÓÎÕÖÇÐÐÈÓÏ×ÉÈÇØ×ÎÈÉÈÍÐÓÆ×ÍÎÍÊÙÐÍÉ×ÈÍÙÛÏÌÇÉèÔ×É×ÙÍÎØÕÊÍÇÌÍÖÍÚÒ×ÙÈÓÆ×ÉÓÉØ×ÉÓÕÎ×Ø ÈÍ ÚÃÌÊÍÆÓØÓÎÕÛØ×ËÇÛÈ×ÛÎØÖÐ×ÄÓÚÐ×ÔÍÇÉÓÎÕÙÔÍÓÙ×É ÉÇÌÌÍÊÈÛÎØ×ÎÔÛÎÙ×ÍÇÊ×ÎÊÍÐÐÏ×ÎÈÏÛÎÛÕ×Ï×ÎÈÕÍÛÐÉ ÈÔÛÈÏ××ÈÈÔ×Î××ØÉÍÖÍÇÊÇÎÓËÇ×ÏÓÄÍÖÉÈÇØ×ÎÈÉÛÎØÈÔÛÈÛÊ×ÙÍÏÌ×ÈÓÈÓÆ×ÅÓÈÔÍÇÊÌ××ÊÉèÔ×ÖÓÎÛÐÕÊÍÇÌ ÛØØÊ×ÉÉ×ÉÍÈÔ×ÊÙÛÏÌÇÉÌÐÛÎÎÓÎÕÓÉÉÇ×ÉÈÍ ×ÎÉÇÊ×ÔÍÇÉÓÎÕØ×Æ×ÐÍÌÏ×ÎÈÓÉÐÓÎÑ×ØÈÍÚÊÍÛØ×ÊÙÛÏÌÇÉÕÍÛÐÉ éÍÏ×ÍÖÈÔ×Ñ×ÃÏ×ÛÉÇÊÛÚÐ×ÕÍÛÐÉØ×ÉÓÕÎ×ØÈÍÛØØÊ×ÉÉÈÔ×É×ÍÚÒ×ÙÈÓÆ×ÉÓÎÙÐÇØ× ôÍÇÉ×ÛÈÐ×ÛÉÈ ÍÎÙÛÏÌÇÉÈÍÏ××ÈÈÔ×wÌÊÓÏÛÊÓÐÃÊ×ÉÓØ×ÎÈÓÛÐvùÛÊÎ×ÕÓ× ÇÎØ×ÊÕÊÛØÇÛÈ×É ÙÐÛÉÉÓÖÓÙÛÈÓÍÎ ÓÎ ùÍÎÈÓÎÇ×ÈÍÔÍÇÉ×ÍÎÙÛÏÌÇÉÛÈÐ×ÛÉÈÍÖ ÖÊ×ÉÔÏ×Î ôÍÇÉ×ÍÎÙÛÏÌÇÉÛÈÐ×ÛÉÈÍÖÓÎ ÉÍÌÔÍÏÍÊ×ÉÒÇÎÓÍÊÉÛÎØÉ×ÎÓÍÊÉ ôÍÇÉ×ÓÎçíÍÅÎ×ØÔÍÇÉÓÎÕÍÖÉÈÇØ×ÎÈÉÓÎ ÛÎØ ÕÊÛØÇÛÈ× ìÊÍÆÓØ×ÛÏÓÄÍÖÔÍÇÉÓÎÕÈÃÌ×ÉÛÎØÊ×ÐÛÈ×ØÌÊÍÕÊÛÏÉÈÔÛÈÏ××ÈÈÔ×Î××ØÉÍÖÍÇÊÇÎÓËÇ×ÏÓÄÍÖÉÈÇØ×ÎÈÉ çîóæ÷êéóèãìðûîîóîõíööóù÷ çÎÓÆ×ÊÉÓÈÃÍÖíÊ×ÕÍÎ÷ÇÕ×Î×íê ôÍÇÉÓÎÕûÎÛÐÃÉÓÉ çíÙÇÊÊ×ÎÈÐÃÔÛÉ Ú×ØÉÓÎ×ÓÕÔÈÊ×ÉÓØ×ÎÙ×ÔÛÐÐÉÅÓÈÔÎ×ÛÊÐÃÛÏÓÐÐÓÍÎÉËÇÛÊ×Ö××È ÷ÄÓÉÈÓÎÕùÍÎØÓÈÓÍÎÉ ÛÎØÛÌÛÊÈÏ×ÎÈÇÎÓÈÉÖÍÇÊÛÌÛÊÈÏ×ÎÈÙÍÏÌÐ×Ä×ÉÛÎØÉ×Æ×ÎÈÃÉ×Æ×ÎÔÍÇÉ×ÉÅÓÈÔÛÐÏÍÉÈ ÉËÇÛÊ× Ö××ÈíÙÙÇÌÛÎÙÃÅÛÉÓÎÖÛÐÐ èÔ×ÖÛÙÓÐÓÈÃÛÎÛÐÃÉÓÉÖÍÇÎØÈÔÛÈÛÐÈÔÍÇÕÔçíÔÛÉÏÛÓÎÈÛÓÎ×ØÈÔ× Ê×ÉÓØ×ÎÙ×ÔÛÐÐÉÛÎØÛÌÛÊÈÏ×ÎÈÉ×ÄÙ×ÌÈÓÍÎÛÐÐÃÅ×ÐÐÈÔ×Ê×ÉÓØ×ÎÙ×ÔÛÐÐÉÅÍÇÐØÊ×ËÇÓÊ×ÛÐÛÊÕ×ÓÎÆ×ÉÈÏ×ÎÈÒÇÉÈÈÍ ÛØØÊ×ÉÉÙÇÊÊ×ÎÈÉÈÛÎØÛÊØÉ÷ÄÙ×ÌÈÖÍÊÈÔ×ðÓÆÓÎÕð×ÛÊÎÓÎÕù×ÎÈ×ÊÙÍÏÌÐ×È×ØÐÛÉÈÃ×ÛÊÛÐÐÍÖÈÔ×Ê×ÉÓØ×ÎÙ×ÔÛÐÐÉ Å×Ê×ÚÇÓÐÈÅÓÈÔÓÎÛÈ×ÎÃ×ÛÊÕÊÍÅÈÔÌ×ÊÓÍØÈÔÛÈ×ÎØ×ØÍÆ×ÊÖÍÊÈÃÃ×ÛÊÉÛÕÍ yûÎÛÎÛÐÃÉÓÉÍÖÇÎÓÆ×ÊÉÓÈÃÛÎØÎÍÎÇÎÓÆ×ÊÉÓÈÃÍÅÎ×ØÖÛÙÓÐÓÈÓ×ÉØ×ÏÍÎÉÈÊÛÈ×ØÈÔ×ÖÍÐÐÍÅÓÎÕ ïÛÊÑ×ÈéÈÇØÃ çíÔÛÉÛÐÛÊÕ×xÛÐÏÍÉÈ Ú×ØxÇÎÏ×ÈØ×ÏÛÎØÖÍÊÔÍÇÉÓÎÕûÈÌÊ×É×ÎÈÈÔ×É×ÉÈÇØ×ÎÈÉÛÊ×ÎÍÈ ÓÎÈ×Ê×ÉÈ×ØÓÎÐÓÆÓÎÕÓÎçíÔÍÇÉÓÎÕÚ×ÙÛÇÉ×ÈÔ××ÄÌ×ÙÈ×ØÇÎÓÈÈÃÌ×ÉÍÊÛÏ×ÎÓÈÓ×ÉÛÊ×ÎÍÈÛÆÛÓÐÛÚÐ× çíÔÍÇÉÓÎÕÏÇÉÈÙÔÛÎÕ×ÈÍÏ××ÈÈÔ×Î××ØÉÍÖÇÌÌ×ÊÙÐÛÉÉÉÈÇØ×ÎÈÉÅÔÍÓÎØÓÙÛÈ×ÉÓÕÎÓÖÓÙÛÎÈÓÎÈ×Ê×ÉÈÓÎ Ê×ÏÛÓÎÓÎÕÍÎÙÛÏÌÇÉÓÖÈÔ×ÃÙÛÎÔÛÆ×ÛÏÍÊ×ÓÎØ×Ì×ÎØ×ÎÈÊ×ÉÓØ×ÎÈÓÛÐÐÓÖ×ÉÈÃÐ× çíÔÍÇÉÓÎÕÉÔÍÇÐØÓÎÙÐÇØ×ÉÇÓÈ×ÉÅÔÓÙÔÉÈÇØ×ÎÈÉØ×ÉÓÊ×ÛÎØÌ××ÊÓÎÉÈÓÈÇÈÓÍÎÉÛÐÊ×ÛØÃÍÖÖ×ÊÛÎØÅÔÓÙÔ ÅÍÇÐØÖÓÐÐÈÔ×ÕÛÌÚ×ÈÅ××ÎÈÔ×ÉÇÖÖÓÙÓ×ÎÈÉÇÌÌÐÃÍÖçíÍÅÎ×ØÈÊÛØÓÈÓÍÎÛÐÔÍÇÉÓÎÕÛÎØÈÔ×ÛØ×ËÇÛÈ× ÉÇÌÌÐÃÍÖÍÖÖÙÛÏÌÇÉÏÛÊÑ×ÈÛÌÛÊÈÏ×ÎÈÉ éÈÇØ×ÎÈÉØ×ÉÓÊ×ÏÍÊ×ÐÓÆÓÎÕÉÌÛÙ×ÛÎØÛÏ×ÎÓÈÓ×É óÎÈ×ÊÎÛÈÓÍÎÛÐÉÈÇØ×ÎÈÉÎÍÎÊ×ÉÓØ×ÎÈÉÈÇØ×ÎÈÉÛÎØÉÈÇØ×ÎÈÉÖÊÍÏÇÎØ×ÊÊ×ÌÊ×É×ÎÈ×ØÕÊÍÇÌÉÉÔÛÊ×ÉÓÏÓÐÛÊ ÌÊ×Ö×Ê×ÎÙ×ÉÅÓÈÔÈÔ×ÕÊ×ÛÈ×ÊÉÈÇØ×ÎÈÌÍÌÇÐÛÈÓÍÎ çíÔÛÉØ×Æ×ÐÍÌ×ØÛÎ×ÄÙ×ÐÐ×ÎÈÛÊÊÛÃÍÖÊ×ÉÓØ×ÎÈÓÛÐÐ×ÛÊÎÓÎÕ éÈÇØ×ÎÈð×ÛÊÎÓÎÕÛÎØéÌÛÙ×ìÊÍÕÊÛÏûÎÛÐÃÉÓÉ ÙÍÏÏÇÎÓÈÓ×ÉÓÎÙÐÇØÓÎÕöÊ×ÉÔÏÛÎóÎÈ×Ê×ÉÈõÊÍÇÌÉöóõÉÛÎØÛÙÛØ×ÏÓÙÛÙÈÓÆÓÈÓ×ÉÉÇÙÔÛÉùÍÏÏÇÎÓÈÃ ùÍÎÆ×ÊÉÛÈÓÍÎÉÅÔÓÙÔÙÍÏÌÛÊ×ÖÛÆÍÊÛÚÐÃÈÍÈÔ×Ú×ÉÈÊ×ÉÓØ×ÎÈÓÛÐÐ×ÛÊÎÓÎÕÓÎÓÈÓÛÈÓÆ×ÉÛÈÍÈÔ×ÊÇÎÓÆ×ÊÉÓÈÓ×ÉóÎ ÛØØÓÈÓÍÎÈÔ×ðÓÆÓÎÕð×ÛÊÎÓÎÕù×ÎÈ×ÊtÉÓÎÈ×ÕÊÛÈÓÍÎÍÖÛÙÛØ×ÏÓÙÛÎØÉÍÙÓÛÐÉÌÛÙ×ÉÓÉÙÍÎÉÓÉÈ×ÎÈÅÓÈÔÍÈÔ×Ê ÓÎÉÈÓÈÇÈÓÍÎÉåÔÛÈÓÉÏÓÉÉÓÎÕÓÉÈÔ×Ê×ÉÓØ×ÎÈÓÛÐÐÃÐÍÙÛÈ×ØÐ×ÛÊÎÓÎÕÙ×ÎÈ×ÊÉÖÍÇÎØÛÈÍÈÔ×ÊÙÍÏÌÛÊÛÚÐ×ÓÎÉÈÓÈÇÈÓÍÎÉ çíÎ××ØÉÈÍÛØØÊ×ÉÉÉÌÛÙ×ÛÎØÊ×ÉÍÇÊÙ×ÓÉÉÇ×ÉÈÍÉÇÌÌÍÊÈÈÔ×Î×ÄÈÉÈ×ÌÉÓÎØ×Æ×ÐÍÌÓÎÕÓÎÈ×ÕÊÛÈ×ØÛÙÛØ×ÏÓÙ ÌÊÍÕÊÛÏÏÓÎÕÓÎÈÔ×çíÊ×ÉÓØ×ÎÈÓÛÐ×ÎÆÓÊÍÎÏ×ÎÈ óÏÌÐ×Ï×ÎÈÛÈÓÍÎìÐÛÎ yèÔ×ÌÐÛÎÎÓÎÕÈ×ÛÏ×ÉÈÛÚÐÓÉÔ×ØÛÎ óØ×ÛÐéÌÛÙ×ìÊÍÕÊÛÏ óØ×ÛÐéÌÛÙ×ìÊÍÕÊÛÏ ÓØ×ÛÐÉÌÛÙ×ÌÊÍÕÊÛÏÅÔÓÙÔÉÈÊÓÆ×ÉÈÍÛÙÔÓ×Æ×ÛÚÛÐÛÎÙ× ÷ÄÓÉÈÓÎÕóØ×ÛÐùÔÛÎÕ×óØ×ÛÐ èÃÌ× íÙÙÇÌÛÎÙÃ Ú×ÈÅ××ÎÏ××ÈÓÎÕÈÔ×ÔÍÇÉÓÎÕÍÚÒ×ÙÈÓÆ×ÉÛÎØÊ×ÉÌÍÎØÓÎÕÈÍ èÊÛØÓÈÓÍÎÛÐøÍÇÚÐ×É ÈÔ×ÏÛÊÑ×ÈÉÈÇØÃóÈÊ×ÉÍÐÆ×ÉÈÔ×çítÉÇÎÓËÇ×ÉÈÛÎØÓÎÕ èÊÛØÓÈÓÍÎÛÐéÓÎÕÐ×É ÛÏÍÎÕÓÈÉÌ××ÊÉÖÍÊÎÍÈÍÖÖ×ÊÓÎÕÉÇÓÈ×ÔÍÇÉÓÎÕÈÍ é×ÏÓéÇÓÈ×øÚÐÉ éÕÐÉ ÇÎØ×ÊÕÊÛØÇÛÈ×ÉÚÃÓÎÙÊ×ÛÉÓÎÕÈÔ×ÏÓÄÍÖÇÎÓÈÈÃÌ×ÉÈÍ éÇÓÈ×øÚÐÉ éÕÐÉ Ï××ÈÉÈÇØ×ÎÈØ×ÏÛÎØÓÎÕ×Î×ÊÛÐÛÎØÈÍ×ÎÙÍÇÊÛÕ×ÍÈÔ×Ê ûÌÛÊÈÏ×ÎÈÉ ÙÐÛÉÉ×ÉÓÎÌÛÊÈÓÙÇÐÛÊÉÍÌÔÍÏÍÊ×ÉÈÍÐÓÆ×ÍÎÙÛÏÌÇÉ èÍÈÛÐ é×Æ×ÊÛÐÉÙ×ÎÛÊÓÍÉÇÉÓÎÕÛÎ×ÉÈÛÚÐÓÉÔ×ØÖÓÎÛÎÙÓÛÐÏÍØ×ÐÅ×Ê××ÆÛÐÇÛÈ×ØÈÍØ×È×ÊÏÓÎ×ÔÍÅÈÍ öÓÎÛÎÙÓÛÐìÐÛÎ Ú×ÉÈÓÏÌÐ×Ï×ÎÈÈÔ×ÓØ×ÛÐÉÌÛÙ×ÌÊÍÕÊÛÏÛÎØÏ××ÈÍÈÔ×ÊÔÍÇÉÓÎÕÍÚÒ×ÙÈÓÆ×ÉÉÇÙÔÛÉÈÔ×ÓÎÈ×ÕÊÛÈÓÍÎÍÖÐÓÆÓÎÕ ÛÎØÐ×ÛÊÎÓÎÕÓÎÉÇÌÌÍÊÈÍÖÉÈÇØ×ÎÈÉÇÙÙ×ÉÉéÓÕÎÓÖÓÙÛÎÈÎ×ÅÙÍÎÉÈÊÇÙÈÓÍÎÅÓÐÐÚ×Ê×ËÇÓÊ×ØÈÍÊ×ÌÐÛÙ×ÈÔ× ×ÄÓÉÈÓÎÕÈÊÛØÓÈÓÍÎÛÐØÍÇÚÐ×Ú×ØÊÍÍÏÊ×ÉÓØ×ÎÙ×ÔÛÐÐÉÅÓÈÔÏÍÊ×ÌÊÓÆÛÈ×ÉÈÃÐ×ÇÎÓÈÉÛÎØÚ×ÈÈ×ÊÓÎÈ×ÕÊÛÈ×Ø ÉÈÇØ×ÎÈÐ×ÛÊÎÓÎÕÉÌÛÙ×É èÔ×ÌÊ×Ö×ÊÊ×ØÖÓÎÛÎÙÓÛÐÌÐÛÎØ×ÏÍÎÉÈÊÛÈ×ÉÈÔÛÈÓÈÓÉÌÍÉÉÓÚÐ×ÈÍÛÙÔÓ×Æ×ÈÔ×ÓØ×ÛÐÉÌÛÙ×ÌÊÍÕÊÛÏxÛÎÓÎÙÊ×ÛÉ×Ø ÙÛÌÛÙÓÈÃÖÊÍÏ Ú×ØÉÈÍÚ×ØÉxÅÓÈÔÓÎÈÔ×È×ÎÃ×ÛÊÈÓÏ×ÖÊÛÏ× ùÃÙÐ×ÙÍÉÈÍÖ ÏÓÐÐÓÍÎ öÇÎØ×ØÚÃÎ×ÅÇÎÓÈÊÛÈ×ÓÎÙÊ×ÛÉ×ÉÛÎØÛÎÛÎÎÇÛÐ ÓÎÙÊ×ÛÉ×ÓÎÔÍÇÉÓÎÕÊÛÈ×ÉÛÎØ ê×ÎÍÆÛÈÓÍÎÍÖÍÎ×ÈÔÓÊØÍÖÈÔ××ÄÓÉÈÓÎÕÚ×ØÉ Ê×ÌÐÛÙ×Ï×ÎÈÍÖÈÅÍÈÔÓÊØÉ ÙÍÎÉÈÊÇÙÈÓÍÎÍÖ Î×ÅÚ×ØÉÛÎØÙÊ×ÛÈÓÍÎÍÖÍÌÌÍÊÈÇÎÓÈÓ×ÉÖÍÊÉÈÇØ×ÎÈÐ×ÛÊÎÓÎÕ î×ÄÈéÈ×ÌÉ èÔ×ÌÊÍÆÍÉÈÅÓÐÐÉÍÐÓÙÓÈÚÊÍÛØ×ÊÇÎÓÆ×ÊÉÓÈÃÖ××ØÚÛÙÑÚ×ÖÍÊ×ÏÍÆÓÎÕÛÔ×ÛØÅÓÈÔÓÏÌÐ×Ï×ÎÈÛÈÓÍÎÛÎØÈÔ×ÖÓÊÉÈ ÌÔÛÉ×ÍÖÙÍÎÉÈÊÇÙÈÓÍÎåÓÈÔÈÔÓÉÙÍÏÌÐ×È×ØÌÐÛÎÈÔ×ÇÎÓÆ×ÊÉÓÈÃÙÛÎÏÛÑ×ÓÎÖÍÊÏ×ØØ×ÙÓÉÓÍÎÉÍÎÔÍÅÈÍÚ×ÉÈ ÉÌ×ÎØÔÍÇÉÓÎÕÖÇÎØÉÓÎÙÐÇØÓÎÕÈÔ×ÉÓÕÎÓÖÓÙÛÎÈÎ×ÅÌÊÍÙ××ØÉÖÊÍÏÈÔ×ÉÛÐ×ÍÖÈÔ×å×ÉÈÏÍÊ×ÐÛÎØæÓÐÐÛÕ× ûÌÛÊÈÏ×ÎÈùÍÏÌÐ×ÄûÉÓÏÌÐ×Ï×ÎÈÛÈÓÍÎÏÍÆ×ÉÖÍÊÅÛÊØÈÔ×ÖÍÐÐÍÅÓÎÕÓÉÉÇ×ÉÓØ×ÎÈÓÖÓ×ØØÇÊÓÎÕìÔÛÉ× ÅÓÐÐ Ú×ÙÍÎÉÓØ×Ê×ØÙÍÉÈØ×ÐÓÆ×ÊÃÉÈÊÛÈ×ÕÃÌÊÍÒ×ÙÈÌÔÛÉÓÎÕÉÈÇØ×ÎÈÐ×ÛÊÎÓÎÕÓÎÈ×ÕÊÛÈÓÍÎÛÎØÏÛÊÑ×ÈÙÛÌÛÙÓÈÃ ATTACHMENT F Staff solicited an opinion from local real estate appraiser Corey Dingman of Duncan and Brown Inc. Duncan and Brown periodically publishes an Apartment Report that includes rental vacancy rates. In an email Mr. Dingman wrote the following: “Local rental vacancy rates remain very low. For the community they are no higher than 2% and in the downtown and West University are closer to 0%. The contributing factors include the credit crunch which is limiting new construction of housing, high enrollment at the University of Oregon, and a notable shortage of buildable, residential land inside Eugene’s urban growth boundary. Rent levels are not high enough in this community to justify most new construction. This is particularly true in the core where almost all new housing is a redevelopment project. A builder has to take into consideration the current rental income when determining feasibility of replacement. Construction costs are very high. One of the main reasons that new development is occurring in West University is MUPTE. Some of these projects may have been marginally feasible without it if built with lesser quality. But many would not have been built at all. If you look at where new multi-family construction is occurring, it is primarily campus. You need to look at MUPTE as a tool to encourage re-development. I think that the projects that would have worked on campus without MUPTE are primarily the ones with minimal existing improvements or were bare land. A property tax exemption on new construction essentially makes the underlying land more valuable and changes the highest and best use on properties that are under-improved or have run down improvements.”