Affordable rentals on the way.

Byline: Scott Maben The Register-Guard

Property tax exemptions approved by the city of Eugene will help bring more than 300 low-income rental units to town. That's almost quadruple the annual average in the years that the city has granted the waivers, designed to encourage affordable housing.

The City Council last week OK'd 20-year tax exemptions for two projects - one in southwest Eugene and one downtown - totaling 334 units.

A private developer in Kirkland, Wash., plans to renovate the 216-unit Redwood Park Apartments at the northwest corner of West 18th Avenue and Bertelsen Road and build 16 new housing units there over the next 12 months. The complex will have 180 one-bedroom and 46 two-bedroom apartments and six studios.

The Metropolitan Affordable Housing Corp. is moving ahead with plans to build 102 rental units on the north side of West Eighth Avenue between Charnelton and Lincoln streets. Called WestTown on 8th, the five-story development will be built on city-owned land next to the WOW Hall music venue. It will have 54 one-bedroom and 17 two-bedroom apartments and 31 studios.

The city granted tax exemptions for 15 affordable housing projects with a total of 555 units from 1992 through 2004; some years, there were no requests for the exemptions. The average has been about 62 units in each of the nine years in which exemptions were granted. The highest number in any previous year was 126 units in 2002.

Each of the two new projects is bigger than any previous one granted a tax waiver.

"This will be a good year," said Richie Weinman, urban services manager in the city's Community Development Division. "They come in waves. We're getting a lot this year. We may get hardly none next year."

The public benefit of getting more low wage earners into decent housing far outweighs the loss in tax revenue for the city, school districts and other local taxing districts, Weinman said.

"There's a huge price that we pay for not having affordable housing in the city," he said.

The city and other taxing districts received more than $44,000 in taxes from Redwood Park in 2004. In the next two decades, the tax savings for the developer is likely to exceed $1 million.

But because the apartments already exist, the subsidy is modest for how many new affordable units the project brings, Weinman said.

"This is relatively inexpensive compared to subsidies we have to put into new construction," he said.

Because WestTown will be new construction - it is expected to cost about $15 million - it has no tax record. The city bought the downtown property, which consists of a parking lot and vacant building, to add to its land bank for affordable housing.

WestTown would not get built if not for the property tax waiver, said Kent Jennings, a partner in Jennings Development, the development consultant for Metropolitan. The exemption could lower monthly rent by approximately $100 per unit, on average, Jennings said.

"Without this kind of incentive, these things simply wouldn't happen," he said.

Despite this year's spike in proposed low-income housing projects, the need for affordable housing is far greater than the community's ability to provide it, Weinman said.

"The numbers of people who qualify for low-income housing has been on a rapid acceleration for the last 20 years," he said.

He estimated that 10,000 households in Eugene qualify for, but lack, subsidized housing.

"We're talking about a significant number of people here," Weinman said. "We're nowhere near meeting the need."

Oregon has substantial rental housing problems compared with most other states, according to the National Low Income Housing Coalition in Washington, D.C.

"There's a severe lack of housing available to the lowest income groups in Oregon," said Linda Couch, the coalition's deputy director.

Nationally, 84 affordable housing units exist for every 100 renter households earning less than 30 percent of median income, the group's research shows. Oregon has 64 units for every 100 households - a lower ratio than all but California's and Nevada's.

"Your squeeze on your lowest income population is quite tight," Couch said.

Renters in Eugene on average earn $27,887 a year, or about half of what all residents earn, federal surveys show. Fair market rent for a two-bedroom unit averaged $687 a month in 2004. To pay that, a person would need to work 75 hours a week at minimum wage, or earn a wage of $13.21 in a 40-hour work week, Couch said.

Projects developed by the St. Vincent de Paul Society of Lane County have benefited most from the city's tax exemptions, with eight projects totaling 319 units.

"It's a very, very important tool in driving down the rents and making the housing affordable," said Terry McDonald, executive director of the nonprofit agency.

The latest St. Vincent de Paul housing project is Santa Clara Plaza, a 60-unit rental complex at Santa Clara Avenue and River Road. It filled up quickly, McDonald said.

Projects that receive the property tax waiver are open to households earning no more than 60 percent of the county's median income. For a family of four, that would be $32,580. Some developers set the cap even lower to make sure those most in need of affordable housing can get in.

Rents are set accordingly, and the city monitors them to make sure tenants aren't charged more than they can afford.

After 20 years, the waivers expire and, under current law, cannot be renewed.

WestTown also will benefit from a host of other public subsidies. In addition to the tax waiver, the city will give the nonprofit developer $1 million in federal housing funds; the property, appraised two years ago at $565,000; and $210,000 in development charge waivers.

The project also will benefit from Oregon Affordable Housing Tax Credits and bond financing through Washington Mutual. Lane County will contribute $275,000 to redesign part of West Eighth Avenue, and the Eugene Water & Electric Board will waive some water development charges.

The development also will have nine combination residential-commercial spaces on the ground floor that will not be subject to a tax exemption.