City of Eugene ends tax breaks for West University apartment projects

The City of Eugene announced earlier this month that apartment developers in the West University neighborhood will no longer receive tax breaks for new housing construction.

In a close vote held on Oct. 12, the Eugene City Council made the decision to cease providing tax breaks — after seven years of doing so — to apartment projects in the area just west of campus. According to the Eugene Planning Commission‘s Oct. 10 meeting agenda, the tax breaks were part of the Multiple Unit Property Tax Exemption program, which was “enabled by state legislation and designed to encourage higher-density housing and redevelopment in the core area and along transit corridors.”

At the Oct. 12 city council work session, council members were asked to provide direction on a strategy for determining priority areas for the MUPTE program in the context of Envision Eugene for property outside of the Downtown Plan [email protected]@see link below@@ Since 2004, developers had received 10 years of tax waivers on the value of new condos and apartments in designated areas; while the property continued to be taxed by the city, the buildings were [email protected]@

West University Neighbors Chairman Steve [email protected]@ described MUPTE as an incentive for better quality apartment development on underutilized sites around campus. The program was fueled by the University’s sky-rocketing student enrollment, which motivated construction of new apartment complexes throughout the past several years in the neighborhoods west and south of campus.

“West University Neighborhood’s requirements have centered around the provision of extensive safety and security features, on-site property management, adequate on-site parking and inclusion of ‘green’ building features,” Bennett said.

Bennett argues that without MUPTE to function with WUN, the opportunity to collaborate with developers to improve the neighborhood is now lost. He said that MUPTE worked with WUN to promote higher quality housing development that supported institutions vital to well-being, including the University, PeaceHealth Medical [email protected]@ and Northwest Christian University as examples.

But Eugene Mayor Kitty Piercy disagrees, stating that she, along with the city council members, believes growth will continue in the neighborhood despite the termination of the tax [email protected]@correct; see Oregonian story about a year and a half ago on this very issue@@

“MUPTE’s purpose is to help build multi-unit housing that could not otherwise be built,” she said. “Most (of city council) believes development would occur without it because of the demand for student housing.”

Piercy said the city remains interested in using the program in other locations in Eugene where such development is more difficult to stimulate, including areas such as West Sixth and Seventh avenues, Highway 99 to Barger Drive, the Trainsong neighborhood, Franklin Boulevard and Willamette Street. The future of the program in these areas, though, is something that will remain up for debate.

“I don’t disagree with ceasing the usage of MUPTE in this area, but it is a tool that should be used carefully,” Piercy said. “On one hand, the tax breaks mean no taxes coming in for a number of years for a MUPTE development. On the other hand, no taxes will come in at all if it’s not built. Both (sides) have a point.”

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