The City of Eugene has passed new tax exemptions for housing developers.
The city needs more than 26,000 new units in the next two decades, according to a recent Oregon Housing Needs Analysis produced by the state Office of Economic Analysis.
But Eugene’s Development Programs Manager, Amanda D’Souza, said there aren’t enough incentives for development that isn’t affordable housing or located downtown.
“Since 2013, we've averaged about 950 new units per year. The OHNA states we’ll need to be producing up to 1,600 units per year,” D’Souza said at a City Council meeting Wednesday. “Ongoing market challenges mean this is going to remain a steep hill to climb.”
On Wednesday, Eugene City Council voted unanimously to begin exempting 10 years of property taxes for some housing built by the start of 2032.
This means a developer won’t have to pay taxes on the improvements they make to the property. They will still have to pay for the existing value of the land.
One of the waivers is for middle-income housing located within a quarter mile of a frequent bus line. That includes a large portion of the city.
To qualify, these projects will need to be affordable for residents who make 20% more than the local median income.
Using the federal rent limit criteria, that would mean a maximum rent of less than $2,400 for a household of two.
The other waiver could include expensive market-rate housing in core commercial areas, such as downtown and near the Valley River Center and Oakway Center.
“The intent is for this tool to get those properties off the sidelines and into feasible territory,” said D’Souza.
There are other caveats and requirements for the developers. They’ll need to build at least four housing units with a density of 25 units or more per acre.
Buildings can’t be right next to industrial land, and housing built for students isn’t eligible for these types of exemptions.
At Wednesday’s meeting, Eugene Mayor Kaarin Knudson thanked city staff for their work on the ordinance.
“Our community cares deeply about housing affordability, about access to affordable housing, about the production of housing, and the stability that it provides for every person who is here,” said Knudson. “And this is an important piece of that work.”
In September, City Council will hold a public hearing on another potential incentive: whether to join a state program that offers loans to housing developers.
