How does urban renewal work?

Point on a mapStep 1 - The District is created. The value of ALL the properties inside the district is calculated. This becomes the frozen base amount of property tax for the area.
Step 2 - Redevelopment and Improvements. Public and private investments generate improvements. As property values increase, all new tax revenue above the frozen base amount go to the urban renewal fund to reinvest in the area.
Dollar sign
Step 3 - District is retired. Once the City Council is finished investing in the area and the debt of the district has been repaid, the district is retired. Property taxes are distributed among the taxing districts.

While urban renewal itself does not increase property tax rates, it does function on the increases in property tax revenues from year-to-year. An individual property tax- payer’s property taxes may increase for two reasons, one, the assessor can increase property values at a rate of 3% per year and does so in most cases, and, two, if a substantial renovation is completed on a property resulting in increased assessed valuation.

When an urban renewal area is created, the property tax revenue from that area is diverted into two revenue streams. The first stream is what is called “the frozen base”. The frozen base is the property tax revenue from the total assessed value of the urban renewal area from the year the urban renewal area was formed.

The frozen base revenue stream continues to go to the regular taxing jurisdictions, such as the city, the county, and the school district. The second revenue stream is any increase over the frozen base which is called “the increment”. The increment represents the basis for tax increment financing and is any increase in property tax revenues above the frozen base. The second revenue stream goes to the urban renewal agency for use on projects, programs, and administration throughout the life of the urban renewal area. The funds that are allocated to the Agency from the division of tases or tax increment financing are used on projects that encourage public and private development. In the chart in Question 8, you can see that Urban Renewal has a “frozen base” meaning the assessed value in the District when it was originally formed. Taxes off that goes to taxing districts and will for the length of the Urban Renewal Plan. Any taxes off growth within the District (“increment”) go to the Agency for projects in the District. Once the District is terminated, all tax revenue will go to the taxing districts according to their tax rate.

Show All Answers

1. What is urban renewal?
2. Where is urban renewal used in Eugene?
3. What has been done in the Downtown District with urban renewal funds?
4. How does urban renewal work?
5. Does urban renewal raise property taxes?
6. How has urban renewal evolved?
7. Who benefits from urban renewal?
8. Where do urban renewal funds come from?
9. What effect does urban renewal have on the other governments in the area?
10. How will urban renewal impact the school district?
11. Who makes the decisions about urban renewal projects and spending?
12. Why did the City amend the Downtown Urban Renewal Plan?
13. Why is the City considering an amendment to the Riverfront Urban Renewal Area?
14. What is the City's next step related to Riverfront and urban renewal?
15. How will the money be spent if the Riverfront Urban Renewal Plan is amended?
16. How will the money be spent now that the Downtown Urban Renewal Plan is amended?
17. How much money is there to spend in the Downtown District?
18. What are the City's next steps related to Downtown and Urban Renewal?