HomeMy WebLinkAboutOrd. 20713COUNCIL ORDINANCE NO. 20713
AN ORDINANCE CONCERNING MULTIPLE -UNIT HOUSING PROPERTY TAX
EXEMPTION; AMENDING SECTIONS 2.945, 2.946 AND 2.947 OF THE
EUGENE CODE, 1971; AND PROVIDING A SUNSET DATE.
ADOPTED: October 23, 2024 `!
SIGNED: October 25, 2024
PASSED: 7:1
REJECTED:
OPPOSED: Zelenka
ABSENT:
EFFECTIVE: November 25, 2024
ORDINANCE NO. 20713
AN ORDINANCE CONCERNING MULTIPLE -UNIT HOUSING PROPERTY TAX
EXEMPTION; AMENDING SECTIONS 2.945, 2.946 AND 2.947 OF THE
EUGENE CODE, 1971; AND PROVIDING A SUNSET DATE.
THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS:
Section 1. Section 2.945 of the Eugene Code, 1971, is amended to provide as follows:
2.945 Multiple -Unit Housing — Property Tax Exemption.
(1) The provisions of ORS 307.600 to 307.637 enable cities to grant local property tax
exemptions for multiple -unit housing located in core and transit oriented areas designated by
the city. There is a need and demand for better housing at rental rates or sale prices accessible
to a broad range of the general public in the core and transit oriented areas which is not likely to
be produced without this incentive. This incentive is intended to:
(a) Stimulate the construction of transit supportive multiple -unit housing in the city's core
and transit oriented areas to improve the balance between the residential and commercial
nature of those areas, and to ensure full-time use of the areas as places where citizens of
the community have an opportunity to live as well as work;
(b) Encourage the development of vacant or under-utilized sites in core and transit
oriented areas, rather than sites where sound or rehabilitable multiple -unit housing exists;
(c) Encourage the development of multiple -unit housing, with or without parking, in
structures that may include ground level commercial space;
(d) Encourage the development of multiple -unit housing, with or without parking, on sites
with existing single -story commercial structures;
(e) Encourage the development of multiple -unit housing, with or without parking, on
existing surface parking lots; and
(f) Preserve existing publicly assisted housing that is affordable to low income persons by
providing the incentives authorized in ORS 307.600 to 307.637 to existing multiple -unit
housing that is subject to a low income housing assistance contract with an agency or
subdivision of this state or the United States.
(2) The provisions of ORS 307.600 to 307.637 are hereby adopted as the city's multiple -unit
housing property tax exemption program.
Ordinance - Page 1 of 13
(3) Application Requirements.
(a) Applications for property tax exemption hereunder shall be filed with the city manager
and shall be accompanied by an application fee. The application shall contain the
information required by, and be processed in accordance with, administrative rules adopted
by the city manager in the manner described in section 2.019 of this code. The application
shall clearly state whether the applicant elects to have the application evaluated under the
Standard MUPTE criteria in EC 2.946(2)(d) or the Accelerated MUPTE criteria in EC
2.946(2)(e).
(b) Whether the applicant elects to proceed under either the Standard MUPTE criteria in
EC 2.946(2)(d) or the Accelerated MUPTE criteria in EC 2.946(2)(e), prior to filing the
application, the applicant, including at least one of the applicant's principals, must have
arranged for and attended one public engagement opportunity with residents in the
neighborhood, including the board of any city -recognized affected neighborhood
association, and then included in the application copies of comments received from the
meeting or documentation of the applicant's attempt to solicit comments.
(4) Application Review and City Manager Recommendation.
(a) If the applicant elects to proceed under the Standard MUPTE criteria in EC
2.946(2)(d), following receipt of a completed application, the city manager shall retain an
independent outside professional consultant to review the project's financial pro -forma, with
the costs of that review to be paid for by the applicant. The city manager shall also convene
the review panel authorized by subsection (8) of this section to review the application and
the independent consultant's conclusions. The review panel shall make a recommendation
to the city manager about whether the application meets the criteria in section 2.946(2)(d)
and provide any other comments about the project's financial projections. After the city
manager receives the review panel's recommendation and comments, but in no event later
than 135 days following receipt of the application, the city manager shall provide the council
with the city manager's recommendation on the application and shall provide to the council
the independent consultant's conclusions as well as the review panel's conclusions.
(b) If the applicant elects to proceed under the Accelerated MUPTE criteria in EC
2.946(2)(e), no later than 135 days following receipt of a complete application, the city
manager shall provide the council with the city manager's recommendation on the
application.
Ordinance - Page 2 of 13
(5) Council Consideration.
(a) Upon receipt of the city manager's written recommendation on an application, the
council shall consider the application, the city manager's written recommendation, and any
written comments submitted on the application. If the council fails to act on an application
within 180 days from the date it was filed, the application shall be deemed approved and
processed thereafter in accordance with subsection (6)(b) of this section.
(b) At the meeting at which the city manager's recommendation on an application is
considered, or at a subsequent meeting, the council shall adopt a resolution approving the
application and granting the property tax exemption or adopt a resolution disapproving the
application and denying the property tax exemption.
(c) The council shall approve an application if the council determines that the applicable
criteria described in section 2.946(2) of this code have been met. The resolution approving
the exemption shall set forth any specific conditions of approval. The exemption may not
include the land or any improvements not a part of the multiple -unit housing. The
exemption may include parking constructed as part of the multiple -unit housing
construction, addition or conversion, and commercial property to the extent that the
commercial property is a required design or public benefit element of a multiple -unit
housing construction, addition or conversion approved by the city. In the case of a structure
to which stories or other improvements are added or a structure that is converted in whole
or in part from other use to dwelling units, only the increase in value attributable to the
addition or conversion may be exempt from taxation.
(d) If the council determines that one or more of the applicable criteria in section 2.946(2)
of this code are not met, the council shall deny the application. The resolution denying an
application shall set forth the specific reasons for denial.
(6) Resolution Filing.
(a) The city manager shall forward to the applicant a copy of the resolution adopted by the
council within 10 days following the date the council acts on the application. In addition, on
or before the April 1 st next following the approval, the city manager shall file with the county
assessor a copy of the resolution approving an application.
(b) With respect to an application deemed approved through inaction of the council under
subsection (5)(a) of this section, on or before the April 1st next following the expiration of
the 180-day period, the city manager shall file with the county assessor an administrative
order containing the same findings and information as required to be set forth in a
resolution approving an application and forward a copy thereof to the applicant.
Ordinance - Page 3 of 13
(7) Notwithstanding subsection (6) of section 2.947 of this code, if multiple -unit housing
granted an exemption pursuant to subsection (5) of this section is or becomes subject to a low
income rental assistance contract with an agency of this state or the United States, the city may
extend the exemption through June 30 of the tax year during which the expiration date of the
contract falls.
(8) Review Panel.
(a) The city manager shall create a review panel to provide third -party review of
applications subject to the Standard MUPTE criteria under EC 2.946(2)(d). The panel shall
be comprised of the following members:
1. Two at -large neighborhood representatives selected by neighborhood association
boards;
2. An additional two representatives selected by the board of the neighborhood
association from the neighborhood in which a proposed project is located; and
3. Six technical professionals from the following six groups: architects/green building
specialists; building trades union; developers; environmental professionals; public
health professionals; and human rights representatives.
In order to be eligible to serve on the review panel, members must sign a confidentiality
agreement in a form approved by the city manager.
(b) The review panel shall:
1. Review project applications subject to the Standard MUPTE criteria under EC
2.946(2)(d). The review shall include compliance with the criteria contained in section
2.946(2)(d) and the independent outside professional consultant's review of the
proforma as described in EC 2.945(4)(a);
2. For projects approved pursuant to the Standard MUPTE criteria in EC
2.946(2)(d), midway through construction, upon completion of construction, and during
the tax exemption period, assist the city manager in reviewing the project's compliance
with the requirements of section 2.946(2)(d) of this code, and the resolution approving
the tax exemption; and
3. Assist the city manager in preparing annual reports to the council on the progress
that will also include information about the program volume cap and review of the
documentation required under subsection (3)(c) of section 2.946 of this code.
Ordinance - Page 4 of 13
Section 2. Section 2.946 of the Eugene Code, 1971, is amended to provide as follows:
2.946 Multiple -Unit Housing — Threshold Criteria and Public Benefits.
(1) Boundaries.
(a) Except as provided in EC 2.946(1)(b), sections 2.945 through 2.947 of this code shall
apply only to the following areas:
1. Properties located in the area depicted on Map 2.946(2)(d)2.; and
2. Properties located in the area depicted on Map 2.946(2)(e)2.
(b) The council may expand the boundaries covered by sections 2.945 through 2,947 of
this code to include one or more of the areas listed in this subsection (b) upon city council's
approval of:
1. Amendments to sections 2.945 to 2.947 of this code that require that a percentage
of the units in an approved tax exemption project must be workforce housing as that
term is defined in subsection (2)(d)9. of this section 2.946, or that the developer must
make a commensurate "in -lieu of payment to the city that is based on workforce
housing rental rates, and that those payments shall be used to facilitate or develop
workforce housing; and
2. Refinement plan policies that specifically provide for multiple -family and mixed use
projects within that area, and that those policies are acknowledged pursuant to ORS
197.625.
The areas that the council may approve pursuant to this subsection are: the downtown area
west of Charnelton; Mid -town; South Willamette; West 11th; 6th/7th Trainsong Highway 99
Corridor; Valley River Center commercial area; North Franklin; South River Road; Mid -River
Road; North River Road; South Coburg Road; Mid -Coburg Road; and North Coburg Road.
Any Council approval of one or more of these areas shall include a map that identifies the
precise boundaries of the area being approved and shall include the density required for
approval of multiple unit tax exemptions in that area.
(2) Criteria for Approval. No exemption may be approved under subsection (5) of section 2.945
of this code unless the application complies with the approval criteria in EC 2.946(2)(a) through
(c) and either all of the Standard MUPTE approval criteria in EC 2.946(2)(d), or all of the
Accelerated MUPTE approval criteria in EC 2.946(2)(e).
Ordinance - Page 5 of 13
(a) Project Completion. In the case of the construction of, or the addition or conversion to,
multiple -unit housing, the construction, addition, or conversion will be completed on or
before January 1, 2032.
(b) Multiple Unit Housing Subject to a Low Income Assistance Contract. In the case of
multiple -unit housing subject to a low income housing assistance contract with an agency or
subdivision of this state or the United States,
1. The application for exemption was made on or before January 1, 2032;
2. It is important to the community to preserve the housing as low income housing and
it is probable that the housing would not be produced as or remain low income housing
without the exemption being granted.
(c) No Transient Accommodations. The multiple -unit housing is not designed for, and will
not be used as, transient accommodations.
(d) Standard MUPTE Approval Criteria.
1. Eligible Project Types. The project will provide multiple -unit housing of five or more
new units through new construction, an addition to an existing structure, or a conversion
of a structure from another use to dwelling units. Notwithstanding the preceding
sentence, no exemption may be granted for a project designed for the leasing of
individual rooms or beds, rather than entire apartment units, or a project otherwise
designed primarily for individuals attending college.
2. Location. The project must be located within the area depicted on Map 2.946(2)(d)2.
3. Project Need. The proposal could not financially be built "but for" the tax exemption.
The burden is on the applicant to demonstrate that absent the exemption, the project
would not be financially viable.
4. Compact Urban Development.:
a. Residential zones: 175% of the minimum density applicable to the zone.
b. Form -based zones with height limit of three or four stories: 30 units per acre.
5. Historic Resources. The project complies with any requirements in administrative
rules adopted by the city manager related to proximity to historic resources.
Ordinance - Page 6 of 13
6. Project Design and Compatibility.
a. The applicant has included a detailed description of the proposed project and
graphic information including site plans and elevations containing sufficient detail to
demonstrate that the project addresses a set of basic design principles in the
context of the project location. The city manager shall adopt as part of the
administrative rules to implement these sections a more detailed description of the
required design principles, including the scale, form, and quality of the building; the
mix of project elements; and the relationship to the street and surrounding uses.
b. Compliance with the project design elements that were reviewed at the time of
council approval is a condition of approval of the exemption, except that the city
manager may approve a deviation from those design elements if the city manager
determines in writing that the deviations provide the same or greater degree of
adherence to the design principles.
7. Green Building.
a. Green building requirements apply only to the residential occupancy areas and
common areas such as hallways, stairwells, centralized HVAC or hot water
heating, and laundry facilities. The requirements do not apply to the commercial
areas or ancillary amenities such as parking garage, swimming pools, and
recreation centers.
b. The project will perform at least 10% more efficiently than the performance
established in the Oregon Energy Efficiency Specialty Code (OEESC).
(1) Green building requirements for one to three story multiple -family
buildings are as follows:
(A) Obtain LEED v4 Homes Design and Construction or LEED v4.1
Residential BD+C Multifamily Homes certification and modeled at least
10% above current OEESC; or
(B) Obtain Earth Advantage Silver certification and provide a
commissioning report.
(2) Green building requirements for four stories and above multiple -family
buildings are as follows:
(A) Obtain LEED v.4 for Homes Design and Construction or LEED v4.1
Residential BD+C Multifamily Homes certification and modeled at 10%
above current OEESC; or
Ordinance - Page 7 of 13
(B) Obtain Earth Advantage Silver certification; or
(C) City review of the project demonstrates that:
(i) Model building energy performance shows that the building
will perform 10% above current OEESC performance;
(ii) The building is constructed to modeled plans;
(iii) Commissioning report will be provided within 18 months
following issuance of certificate of occupancy; and
(iv) Applicant commits to working with city to report multiple -family
occupancy energy use data to city for the tax exempt period.
(D) Projects that will provide onsite parking are required to install
conduit for future electric vehicle charging stations.
8. Local Economic Impact Plan.
a. The applicant must provide a plan that provides for more than 50% of the dollar
volume of the combined professional services and construction contracts to include
local firms. "Local firm" means a business that is based in Lane County.
b. The applicant must ensure that qualified minority and women business
enterprises have an equitable opportunity to compete for contracts and
subcontracts.
c. The city manager shall include in the administrative rules adopted to implement
sections 2.945 through 2.947 of this code provisions that:
(1) Identify additional requirements for the local economic impact plan,
including definitions and exceptions such as when trades are not available
locally;
(2) Enable qualified minority and women business enterprises to have an
equitable opportunity to compete; and
(3) Ensure that the developer and its contractors and subcontractors comply
with wage, tax and licensing laws in the development of the project and posts
information about the city's rights assistance program.
Ordinance - Page 8 of 13
9. Workforce Housing.
a. Except as provided in EC 2.946(2)(d)9.b, following the city council's
compliance with the requirements of subsection (1)(b) of this section 2.946 related
to workforce housing and the council's activation of one or more areas listed in
subsection (1)(b) of this section 2.946, a developer shall include as workforce
housing units not less than the percentage of the units specified in those future
code amendments, or alternatively shall pay to the city an equivalent workforce
housing fee. "Workforce housing" is housing with rents equal to or less than 30% of
the area median income. "Equivalent workforce housing fee" is a fee equal to the
difference between the rent charged and workforce housing rents for the
percentage of the units specified by the future code amendments
(1) If the developer chooses to include the workforce housing units, the
application shall identify which units in the project will be the workforce
housing units, and shall maintain those units as such for the duration of the
tax exemption period. As part of the administrative rules adopted pursuant to
section 2.019 of this code, the city manager may further define "workforce
housing unit" and shall establish requirements to ensure that the units are
maintained as such during the tax exempt period. For purposes of this
subsection, "project" means all new development that occurs after approval of
the application on one or more contiguous lots all owned by a single entity or
covered by a city -approved master plan.
(2) If the developer chooses to pay the equivalent workforce housing fee,
the fee may be paid annually in years 3 through 10 of the exemption or may
be paid up front. Funds received by the city under this paragraph shall be
used for workforce housing.
b. The provisions of EC 2.946(2)(d)9.a. do not apply to tax exemption projects
that are located within the area depicted on Map 2.946(2)(d)2. or the area depicted
on Map 2.946(2)(e)2. However, the owner of the property shall pay to the city an
amount equal to 10% of the total property tax exemption and all such payments
shall be dedicated to the facilitation or creation of workforce housing. The fee may
be paid annually in years 3 through 10 of the exemption, or may be paid upfront.
Alternatively, the owner may comply with the requirement to include not less than
30% of the units as workforce housing pursuant to EC 2.946(2)(d)9.a.
Ordinance - Page 9 of 13
(e) Accelerated MUPTE Approval Criteria.
1. Required Number of Units.
a. Except as provided in subparagraph 1.b. of this subsection (2)(e), the project
will provide at least the following number of new dwelling units:
(1) Four, if the dwelling units will be newly constructed.
(2) Two, if the building or portion of the building where the new dwelling
units are located is converted from another use to housing.
b. If the project will cause existing dwelling units to become uninhabitable (for
example, because the existing units are demolished or converted to another use)
the project must result in a number of dwelling units that is at least 150% of the
original number of dwelling units that were located on the site. (For example, if a
building containing 10 housing units is demolished, in order for the new units to be
eligible for an Accelerated MUPTE, the project must include at least 15 dwelling
units.)
2. Property Location. The project must be located within the area depicted on Map
2.946(2)(e)2.
3. Compact Urban Development. Except in the case of the conversion of a building or
portion of a building from another use to housing, the project must result in a minimum
residential density of 25 units per acre.
4. Eligible Project Types. No exemption may be granted for a project designed for
the leasing of individual rooms or beds, rather than entire apartment units, or a project
otherwise designed primarily for individuals attending college.
5. Project Need.
a. Projects must demonstrate financial need by showing that, without the
multiple -unit property tax exemption, either:
(1) Total project cost exceeds project value at stabilization; or
(2) The yield on cost at stabilization (net operating income divided by the
total project cost) is less than 6.0%.
b. Total project cost may include imputed land cost and may include developer
fees totaling up to 5% of hard costs, including land.
Ordinance - Page 10 of 13
c. Project value is based on pro forma stabilized net operating income and
current capitalization rate for multi -unit property in the region.
d. Stabilization is the period that the project is projected to be fully leased.
6. Public Benefit Criteria. The project complies with the criteria in EC 2.946(2)(d)5-9.
(3) Additional and On -Going Obligations of Project Approved for Exemption.
(a) Following approval of an exemption under section 2.945(5) of this code, the city
manager shall monitor the development of the project to ensure that the project complies
with the requirements of sections 2.945 through 2.947 of this code, including the provision
related to workforce housing, the administrative rules adopted pursuant to this code, and
any other conditions of approval of the exemption.
(b) During the developer's design process and before the final design drawings are
completed, the developer shall hold at least one neighborhood engagement opportunity to
allow members of that neighborhood to provide comments on the proposal. At least one of
the applicant's principals must attend that meeting. In addition, once the final design is
completed and before it is submitted for permits, the developer shall allow the neighborhood
an opportunity to review and comment on that final design.
(c) During the exemption period, the project's owner must annually submit documentation
to evaluate compliance with workforce housing requirements, unless the project's owner is
paying the equivalent workforce housing fee or is exempt pursuant to EC 2.946(2)(d)9.b. of
this section. The regular reporting shall include the home city or zip code of the construction
labor workers, and any other information required by administrative rules adopted pursuant
to section 2.019 of this code.
Section 3. Section 2.947(8) of the Eugene Code, 1971, is amended to provide as follows:
2.947 Multiple -Unit Housing — Termination of Approval, Review.
(8) Notwithstanding subsections (1) through (7) of this section, if applicant, developer or other
owner of the project has failed to comply with the requirements of ORS 307.600 through
307.637, sections 2.945 through 2.947 of this code or the administrative rules adopted
thereunder, or a resolution adopted pursuant subsection (5)(c) of section 2.945 of this code, in
lieu of subsections (1) through (7) of this section, the city manager may impose penalties as set
forth in section 2.1995 of this code. Each day in which a violation is caused or permitted to exist
constitutes a separate violation. Failure to pay an administrative penalty authorized by this
Ordinance - Page 11 of 13
subsection shall be grounds for terminating the exemption under subsections (1) through (3) of
this section.
Section 4. Map 2.946 of the Eugene Code, 1971, is deleted from Chapter 2 of the
Eugene Code, 1971.
Section 5. Map 2.946(2)(d)2. as referenced in this Ordinance and attached hereto as
Exhibit A shall be numerically incorporated in Chapter 2 of the Eugene Code, 1971.
Section 6. Map 2.946(2)(e)2. as referenced in this Ordinance and attached hereto as
Exhibit B shall be numerically incorporated in Chapter 2 of the Eugene Code, 1971.
Section 7. The City Council hereby designates the area shown on Map 2.946(2)(e)2.
attached as Exhibit B to this Ordinance (the Accelerated MUPTE Area) as the area of eligibility
for a multi -unit property tax exemption pursuant to the criteria in EC 2.946(2)(e)2. The City
Council finds that multiple -unit housing meeting the approval criteria in EC 2.946(2)(e)2. would
not be built or preserved in the Accelerated MUPTE area without the multi -unit property tax
exemption. The Council's designation of the Accelerated MUPTE Area is consistent with the
requirements of EC 2.946(1)(b), because:
1. The City Council has approved amendments to the Eugene Code, 1971, located in EC
2.946(2)(d)9.a. that require that a percentage of the units in an approved tax exemption
project must be workforce housing as that term is defined in EC 2.946(2)(d)9. or the
developer must make a commensurate "in -lieu of payment to the city that is based on
workforce housing rental rates (or, in the case of the areas shown on Map 2.946(2)(d)2.
and Map 2.946(2)(e)2., a commensurate "in -lieu of payment to the City that is 10% of
the exemption amount), and that those payments shall be used to facilitate or develop
workforce housing; and
Ordinance - Page 12 of 13
2. The City Council has approved refinement plan policies that specifically provide for
multiple -family and mixed use projects within the area shown on Map 2.946(2)(e)2. The
applicable refinement plan policies are included in the Downtown Plan, an
acknowledged refinement plan of the Eugene -Springfield Metropolitan Area General
Plan, that is adopted by the Eugene City Council.
Section 8. On or before January 1, 2027, the City Council shall be provided with data
related to performance metrics for the Accelerated MUPTE program for Council's review.
Section 9. This Ordinance shall sunset and be repealed on January 1, 2030, unless
extended or made permanent by future Council action.
Section 10. The City Recorder, at the request of, or with the consent of the City Attorney,
is authorized to administratively correct any reference errors contained herein, or in other
provisions of the Eugene Code, 1971, to the provisions added, amended or repealed herein.
Section 11. If any section, subsection, sentence, clause, phrase or portion of this
Ordinance is for any reason held invalid or unconstitutional by a court of competent jurisdiction,
such portion shall be deemed a separate, distinct and independent provision and such holding
shall not affect the validity of the remaining portions hereof.
Passed by the City Council this
23rd day of October, 2024
i
nFecorder
Approved by the Mayor this
95- day of October, 2024
Mayor
Ordinance - Page 13 of 13
Map 9.946(2)(d)2
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WCity Attorney's Office
Memorandum
Date: October 23, 2024
To: Katie LaSala, City Recorder
From: Lauren A. Sommers, Assistant City Attorney
Subject: Correction to Ordinance No. 20713
It has come to our attention that a reference error exists in certain maps that were added
to the Eugene Code by Ordinance No. 20713, which was approved by the City Council on October
23, 2024. Specifically, the maps -attached to Ordinance No. 20713 are mislabeled. Please effect
the following scrivener error corrections:
1. Map 9.946(2)(d)2, which is attached as Exhibit A to Ordinance No. 20713 should
be labeled as Map 2.946(2)(d)2.
2. Map 9.946(2)(e)2, which is attached as Exhibit B to Ordinance No. 20713 should
be labeled as Map 2.946(2)(e)2.
This correction is authorized by Section 10 of Ordinance No. 20713. Please attach a copy
of this memo to Ordinance No. 20713.
City of Eugene - 500 E 4th Ave. Ste. 301 • Eugene, OR 97401 • 541-682-8447 - 541-682-5414 Fax
www.eugene-or.gov