How it Works

Property tax incentives can be used as a potential strategy to preserve affordable housing by providing owners with financial incentives to maintain a certain level of affordably priced housing units. Property tax incentives can come in the form of property tax exemptions, which lower taxes by reducing the property’s assessed value, or by abatements, which provide a credit against taxes owed.

Case Study

Enabled through state law, the City of Eugene, Oregon provides a 20-year low-income rental housing property tax exemption (LIRHPTE) for non-profit owned low-income rental properties or properties held for the purpose of developing low-income housing.  In addition, the city has a Multi-unit Property Tax Exemption Program (MUPTE) that offers a maximum 10-year property tax exemption for new construction, addition, or conversion of multi-unit housing located in a specified area downtown.

Similarly, the City of Seattle, Washington has a Multifamily Property Tax Exemption Program (MFTE) that offers a property tax exemption on new multifamily housing that provides 20-25% of the units as affordable. Like the MUPTE program in Eugene, the multifamily building must be located within a targeted residential area of the city. 

Key Considerations

  • Property tax incentives can be an effective tool for preserving affordable housing.
  • Incentives such as property tax exemptions can reduce the overall operating costs of providing affordable housing. Lower operating costs can make it financially feasible to provide more affordable units or slow rent increases.
  • Property tax incentive programs can be designed to encourage affordable multi-family housing in targeted areas.

Who’s Using It?

Low-Income Property
Tax Exemptions

       Multi-unit 
       Tax Exemptions 
Eugene, Oregon Eugene, Oregon

      Seattle, Washington 

 Sources

ChangeLab Solutions. “Preserving, Protecting, and Expanding Affordable Housing: A Policy Toolkit for Public Health.” 2015. PDF. 1 April 2016. <http://www.changelabsolutions.org/sites/default/files/Preserving_Affordable_Housing-POLICY-TOOLKIT_FINAL_20150401.pdf>.

Chicago Rehab Network. “Preserving Neighborhoods.” Web. <http://www.chicagorehab.org/valuing/preservingneighborhoods.htm>.

City of Eugene. “LITE and LIRPTE.” Web. <https://www.eugene-or.gov/1401/LITE-LIRPTE>.

City of Eugene. “Multi-unit Property Tax Exemption.” Web. <https://www.eugene-or.gov/829/Multi-Unit-Property-Tax-Exemption>.

City of Seattle. “Multifamily Tax Exemption,” Web. < https://www.seattle.gov/housing/housing-developers/multifamily-tax-exemption>.