The Coos Bay City Council entertained a presentation on the Multi-Unit Property Tax Exemption (MUPTE) program (reference ORS 307.606) during Tuesday’s work session. The MUPTE program is a program that allows cities to exempt multi-unit properties from property taxes during the first years after they’re developed. The goal of the program is to enable more multi-unit dwellings to be built by making the projects more financially feasible. Since property taxes are a considerable cost, exempting properties from property taxes, even temporarily, can be the difference between more housing units being built, and plans to build going delayed or forgone entirely.
How it works
In order to qualify for the exemption, the project must check several boxes. For one, it must be a new construction with at least 3 housing units. Commercial properties like shopping centers and offices do not qualify. The project must be within one-quarter mile of a fixed-transit route, and the project must be infeasible without the MUPTE. That means if a project would be financially workable for the developer without the exemption, then the project wouldn’t qualify. The exemption applies for a maximum of ten years.
Political considerations
While most residents acknowledge that there is a housing shortage, the MUPTE program isn’t without it’s political obstacles. For one, it must gain the support of 51% of the taxing districts, which include the cities, the counties, and the school districts. Also, it’s not always a “good look” to exempt wealthy people from taxes at the (at least perceived) cost of city tax receipts. Councilor Stephens expressed her concerns about the idea.
I’m just not in the business of helping rich people get richer. Really, at the end of the day if this is about housing and supporting people that are low income and trying to access rentals, and we saw what happened on Wasson, and $1,900 a month is not affordable. I don’t think.. I think we’ve seen that the trickle down theory doesn’t work in practice….
Councilor Sara Stephens
What’s next?
Will any new area projects qualify for the exemption? It’s far too soon to tell. Tuesday’s meeting was only a work session, so no matters were voted on, though the majority of the council seemed to support the idea of offering the exemptions if it means more housing projects get built.
