Property Tax Exemptions
The city made four lopsided MUPTE (Multiple-Unit Property Tax Exemption) deals, gifting $22.8M in tax revenue to private developers over ten years while receiving minimal public benefit in return.
What Is MUPTE?
The Multiple-Unit Property Tax Exemption (MUPTE) program allows cities to grant property tax exemptions on new multi-unit residential developments. In theory, it incentivizes affordable housing or public amenities in exchange for the tax break. In Bend, four deals were made — and all four were lopsided in favor of the developers.
Four Bad Deals
The city gifted a total of $22.8M to developers over a ten-year period ($2.3M per year). The “public benefits” the developers agreed to provide pale in comparison to the value of the tax exemptions received.
Across all four deals, the same pattern emerges:
- Developers received 10-year property tax exemptions worth millions of dollars
- In exchange, developers agreed to modest “public benefits” — typically minimal affordable units, minor streetscape improvements, or nominal community amenities
- The agreed benefits were worth a fraction of the exemption granted
Tax Exemptions Are Not Free
Every dollar exempted is a dollar that does not flow to the city, the county, or other taxing districts. This is real lost revenue — $2.3M per year that could have funded city services, street preservation, or the library. The exemptions are permanent gifts to private developers, funded by all other property tax payers.
Rent Increases Quickly Capture the Value
Tax exemptions represent significant savings in a development’s financial model. These savings reduce financing costs and are quickly captured through rent increases. Within a few years, renters effectively subsidize the developer’s tax break through higher rents — while the city permanently loses the tax revenue.
The Context: A City Claiming Revenue Problems
These four MUPTE deals were made while the city was simultaneously claiming a revenue problem and asking residents to approve levy increases. Gifting $22.8M to private developers while telling the public that basic services are underfunded represents a profound misalignment of priorities — and raises serious questions about whose interests the Council is actually serving.