Trying to add a payment method? You can do this on the 
With a vote Monday, Eugene city councilors made a substantial investment in downtown’s future.
How substantial? About $8.6 million more substantial than they thought.
The councilors made the right call in coughing up more urban renewal funds to get the 1059 Willamette project over its financing hurdle. With the money now in hand, developers could start work in August turning the former Lane Community College downtown center into 133 units of market rate and low-income housing.
But the math behind 1059 Willamette’s tortured yearslong journey from concept to (near) groundbreaking should be setting off alarm bells in City Hall.
A quick summary: In 2021, as plans crystalized around a $30 million apartment project on the site, the city’s contribution was pegged at $1.1 million in urban renewal and other public funds, or a bit less than 4% of the total cost.
Fast-forward five years, and the council is now looking at a $38.7 million project with $10.5 million in public investment, more than 27% of the total cost.
It’s a hefty price tag for unlocking much-needed housing in the downtown core. Despite our support for the City Council’s approval of the extra funds, two things in particular trouble us:
- Ten years of waived property taxes through the city’s Multi-Unit Property Tax Exemption program, known as MUPTE, and nearly $2 million in downtown urban renewal funds, weren’t enough of a pot-sweetener to get the project to pencil out for the developers.
- The 1059 Willamette project is one of seven large apartments in preconstruction planning across the downtown area, but the only one slated to break ground any time soon.
If getting 133 apartments off the drawing board took nearly $9 million more than expected, what will it take to get the other six projects and their nearly 700 combined units built? It’s imperative that the city figures it out if it wants to meet its goal of 1,000 new units of downtown housing by 2030.
Subsidizing developers is a touchy subject in Eugene. Anyone who has followed local politics for a while remembers the furor over the City Council’s approval of tax waivers for an out-of-state student housing developer to build the downtown Capstone apartments in 2013.
But all seven of today’s downtown projects are backed by developers with Oregon ties. And housing affordability in Lane County has declined sharply since the Capstone debacle. The median-priced county home was 6.4 times the county’s median household income in 2024, up from 4.6 times the median income a decade ago.
Staff in Eugene’s Planning and Development Department need to work with city councilors to align the city’s housing incentives with today’s market conditions, and with its own budget realities. To salvage 1059 Willamette, the council reduced its $29 million downtown urban renewal fund — which diverts future tax revenue to finance redevelopment projects — by about 30%. Forking over urban renewal funds to each project isn’t sustainable.
Some of these discussions are already happening, such as the city’s consideration to expand property tax waivers to moderate-income developments instead of just low-income, and join a state program that makes no-interest loans to cities and counties to give to developers as grants if their projects meet certain affordability requirements.
But this is a time for bold steps. We have a few suggestions, based on the actions other governments across the Pacific Northwest have taken to jump-start housing construction.
The city of Portland has seen a modest uptick in permit activity since its City Council last summer passed an ordinance exempting most new housing from mandatory utility and infrastructure fees through September 2028.
In Washington state, the Legislature in 2021 expanded its multi-unit tax exemption policy to include eight-, 12- and 20-year property tax waivers, as long as developers meet certain affordable housing requirements. The city of Spokane has found some success with the 12-year waiver in particular, getting several large downtown apartment projects built in recent years with 30% of the units designated as income and rent-restricted.
It’s certainly not great that Eugene taxpayers will foot the bill for 27% of the 1059 Willamette project’s estimated cost, instead of the 4% the city envisioned a few years ago.
And we’re not saying public money should fund the other downtown projects to the same extent. Perhaps the sweet spot is somewhere between 4% and 27%. But with years of high interest rates and rising construction costs causing the region to fall further behind its housing goals, new ideas are clearly needed. The sooner the better.
..
