Bend staff explains how tax‑increment financing would be used to spur housing and infrastructure

Jonathan Taylor, the City of Bend’s urban renewal manager, told the Planning Commission on Monday that the city is preparing site‑specific tax increment financing (TIF) plans to help finance housing and infrastructure projects.

“This is a financial mechanism that uses tomorrow’s dollars today to mitigate blight and improve property values, all while contributing to the health, safety, and welfare of the community,” Taylor said, describing how TIF captures growth above a frozen base to pay for redevelopment.

Taylor and Elizabeth Oshal, legal counsel for the Bend Urban Renewal Agency (BURRA), walked commissioners through the key mechanics and limits of TIF under Oregon law. In Oregon, TIF is authorized by Oregon Revised Statutes chapter 457 and relies on a “frozen base” of assessed value; taxes on growth above that base (the increment) are redirected to the urban renewal agency to repay debt or provide developer rebates tied to projects.

City staff said Bend currently has three active urban renewal districts and remains well under the state cap for large jurisdictions. Taylor noted Bend’s population is about 105,000 and that state law limits urban renewal to 15% of total acreage and 15% of assessed value for communities of 50,000 or more; Bend’s current share is about 7.67% of acreage and 3.28% of assessed value in urban renewal areas. He told the commission the city could establish additional small, site‑specific districts without exceeding statutory caps.

Taylor emphasized how the TIF division affects taxing districts: “Is this a tax on residents or is this a new tax? And the answer is absolutely not. The tax rate remains the same. This is not a bond,” he said, clarifying that TIF reallocates growth above the frozen base among overlapping permanent rate levies rather than raising rates or altering voter‑approved bonds and levies.

Staff reviewed common eligible projects—transportation, sewer and water, streetscapes, parks, land purchases and developer incentives—and explained that public facilities included in a plan require approval or input from three of the four major taxing districts. They also described typical plan features: a map and legal description, a maximum indebtedness figure, eligible projects, estimated costs and a financial analysis of taxing‑district impacts.

On process, staff said BURRA is scheduled to consider a resolution initiating consult‑and‑confer on March 19. If BURRA recommends a plan for public review, the city will send the recommended plan and resolution to taxing districts; each taxing district then has 45 days to submit official comments or request presentations. Staff noted a county presentation is planned for April 28 as part of the consult‑and‑confer process. Planning Commission will hold a public hearing on plan conformance to the comprehensive plan; staff said the planning review is a land‑use decision with a 90‑day period for a possible appeal to the Land Use Board of Appeals (LUBA).

Taylor said plans typically run decades (Bend’s existing districts are generally 30 years) and that the city sets maximum indebtedness and debt‑service schedules to ensure the agency can meet obligations well before plan expiration. He also described minor versus substantial plan amendments: minor amendments may change project allocations or small boundary tweaks; increases to maximum indebtedness above 20% of the original amount require a process akin to establishing a new district and broader notice and review.

City staff highlighted compliance and accountability measures: developers receiving TIF‑based rebates must annually certify compliance with affordability and other commitments; failure to certify can result in loss of the rebate and potential clawback provisions in development agreements.

Why it matters: city leaders are proposing TIF not as a general tax increase but as a targeted tool to make specific housing projects feasible in an environment of high construction costs and limited supply. City staff said TIF can be deployed selectively to catalyze development and public improvements that otherwise would not occur.

Next steps: BURRA’s March 19 meeting, public notices and an online open house starting March 20, a Planning Commission public hearing to determine comprehensive‑plan conformance on April 14, and ongoing consult‑and‑confer with taxing districts. If council adopts an ordinance establishing a district, the city cautioned there is a statutory appeal window and potential for litigation to pause activity until resolved.