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MUPTE Tax Breaks Face Restrictions

Eugene’s Multiple-Unit Property Tax Exemption (MUPTE) has stirred up a lot of controversy for awarding tax breaks to downtown developers. Critics say the current ordinance and process don’t adequately ensure that the projects the 10-year tax exemptions incentivize are what the public needs. Now MUPTE could undergo a complete overhaul, if an April 22 City Council work session is any indication. Councilors discussed how they might change the city’s exemption program, including reworking its minimum requirements, making a new scoring rubric, creating some sort of limit to the total amount of exempted revenue and changing the zone of eligibility from downtown to areas with a greater need for development.

For an application to be eligible for Eugene’s MUPTE, it must score 100 points on the program’s scale. The total number of points awarded to an application just for being downtown, the only area eligible for MUPTE tax breaks right now? 100. Being in the eligible zone earns all the points neccessary. “That’s kooky,” downtown City Councilor George Brown said at the work session.

Brown tells EW that Eugene’s program has neither a sensible minimum threshold of requirements nor a clear and specific way of assessing community benefits, but Portland’s tax exemption program is better because it creates clear minimum requirements around the principles of affordable housing and community benefits. “Those are their priorities,” Brown says. “Ours are looser and need to be tightened up and brought into alignment with those two principles.”

Brown says he would like to see a minimum threshold that included a requirement that 20 percent of the new units be affordable for people making 60 percent of the area’s median income, some sort of green building standard and making the program competitive by requiring applications to be deliberated in a single time period. “You don’t want to make it so restrictive that no developer will touch it,” he cautions. “You want the development to occur.”

Councilor Alan Zelenka said that he’d like to have a better process for proving that a project needs a MUPTE to be built, which is required under the current ordinance. All the applications state that they need it, but, Zelenka says, “the problem is we can’t really tell whether that’s true or not.” MUPTE is intended to create both needed housing density and future tax revenue by allowing projects that developers can’t afford while paying tax revenue.

Other ideas included moving the MUPTE zone to the Trainsong and Hwy. 99 area, awarding points for development in transit nodes, having different lengths of MUPTE periods, raising the application fee, requiring returned revenue if a project makes much more than it projected and giving points to retail portions that would put fresh groceries in a food desert.

City Council suspended the acceptance of new MUPTE applications in February but the full program is scheduled to resume July 1.