SWSAZ and Property Taxes

The South Willamette Special Area Zone won’t have an effect on current homeowners’ property tax bills. Under Oregon’s Measure 50, passed in 1997, the increase in assessed value of a property is limited to 3% per year, with a few exceptions. That means that no matter how much more valuable an existing South Willamette home becomes, the assessed value for property tax purposes will increase by no more than 3%, unless the home owner decides to make substantial changes to the structures on or use of their property. While rezoning is a change that could result in a reassessment, that only applies if the property is also being used consistently with the new zoning, and thus the rezoning to the Special Area Zone would not trigger this on its own.  

An example of the type of zoning change that would trigger a new tax assessment is the conversion of the zoning from R-1 to C-1, to allow for a retail establishment to be opened in the home, so long as then a retail establishment was actually opened in the home.  Eugene’s C-1 (or neighborhood commercial) is specifically designed to allow for small commercial establishments, such as corner markets, that serve the needs of the immediate neighborhood within otherwise primarily residential neighborhoods.  If I wanted to convert my home into, say, a small grocery store, I could apply to the city to change the zoning of my property from R-1 to C-1. Then, once I stocked the shelves and opened the doors, my assessed value would change, because I began using the property in a commercial as opposed to residential way.

The South Willamette Special Area Zone changes would not itself trigger a change in the assessed valuation of a home. From a tax value perspective, this is the same as when the Jefferson Westside Special Area Zone was passed in 2009. This changed the zoning for hundreds of properties to “S-JW” from “R-1” or “C-1” or whatever they were before, but did not trigger a new assessed value for the homes and businesses in that area.

New construction also would trigger an assessed value change—for example, building an accessory dwelling unit behind a home. However, while the South Willamette Special Area Zone provides some additional guidelines for accessory dwelling units, it creates no change for how creating them affects property tax assessed values. I can build a granny flat behind my home now, and that would cause my property taxes to go up more than 3%. After the South Willamette Special Area Zones passes, I’d continue to have the option to build an accessory dwelling unit on my property (which would cause it to be reassessed, just like now) or to make no major changes (and have my assessed value increase more slowly.)

Even if I sold my home, the new owner would get to take advantage of a lower assessed value—unless they decided to make major changes. So if they decided to remove a single family house and put up three cottages, the value of the property would be reassessed (as it should be).

The South Willamette Special Area Zone in and of itself would not have any effect on the assessed value of anyone’s property.