In a recent government meeting, officials discussed the City of Springfield's Housing Diversity Tax Exemption Program, aimed at addressing the city's pressing housing needs. The program, adopted by the Springfield City Council in May, seeks support from at least 51% of local taxing district partners to implement a property tax exemption for new multi-unit housing projects.

Jenna Cusimano, an economic development staff member, introduced the item, highlighting the necessity of the program in light of Springfield's housing challenges. Katie Carroll, a housing analyst for the city, provided further details, noting that Springfield's last housing needs analysis indicated a requirement for 296 new housing units annually to meet projected population growth. However, the city has struggled to keep pace, particularly with multi-unit developments, which have only constituted about 16% of housing units as of the 2022 census.

The tax exemption program is designed to incentivize the construction of new multi-unit housing in core areas and near transit, with the goal of increasing both the supply and diversity of housing options. The program is particularly relevant given Springfield's low rental vacancy rate of 1.6%, significantly below the healthy benchmark of 5%. Over 40% of renters in the city are considered cost-burdened, spending more than 30% of their income on housing.

Carroll emphasized that the program is not only about increasing housing stock but also about making development financially feasible amid high land and construction costs. The exemption would apply for ten years, allowing new residential improvements to be exempt from property taxes, thereby reducing operating costs for developers.

The city has engaged with local developers and other taxing districts to ensure the program meets community needs while providing certainty and efficiency for potential projects. So far, the Eugene and Springfield school districts have expressed support, and outreach continues to other taxing entities.

The meeting underscored the urgency of addressing housing shortages in Springfield, with officials optimistic that the tax exemption program will facilitate the development of much-needed multi-unit housing in the area.