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Council briefed on proposed multi-unit property tax exemption pilot focused on downtown; public hearing set for Wednesday
Summary
Planning staff presented a draft multi-unit property tax exemption (MUPTI) program that would incentivize downtown housing near transit; the program would require minimum project sizes, tiered public-benefit requirements and independent financial review, and a public hearing was scheduled for Wednesday
City planning staff presented a draft Multi-Unit Property Tax Exemption (MUPTI) program to the council on Oct. 20, describing eligibility criteria, public-benefit tiers and the upcoming public hearing and potential adoption.
Jennifer Ware said the program is intended to encourage multi-dwelling housing close to employment and transit and to implement the city’s housing strategy. Per statute, the program requires that projects be within a designated area near fixed-route transit, have a minimum of five dwelling units and meet construction and timeline requirements: applications must be submitted by Feb. 1 and all work must be completed by Jan. 1, 2032, as dictated by the Oregon Revised Statutes (ORS), Ware said.
The program guide would let developers qualify the commercial portion of a development for exemption only if the project meets public-benefit tests. Projects that include affordable housing (units for households at or below 80% of area median income and with rents not exceeding 30% of household income) or provide an in-lieu payment to a dedicated affordable-housing account would meet the principal affordable-housing requirement, Ware said. The council requested clarification on definitions and on the suggested in-lieu payment level.
The program includes a tiered public-benefit structure: two additional public benefits would qualify a project for a seven-year tax abatement, while three additional public benefits would qualify for the maximum 10-year abatement allowed under state law. Ware said the city has received supportive resolutions from Benton County and Linn–Benton Community College and that the draft program will return for a public hearing Wednesday.
Councilors raised questions about the strictness of public-benefit requirements and whether the in-lieu payment might be chosen instead of on-site affordable units. One councilor suggested increasing public-benefit counts or the in-lieu payment percentage to ensure meaningful community benefits. Staff said the program is intended as a downtown pilot and that individual applications would be reviewed on a case-by-case basis.
