Eugene city council gives UO $400,000 a year

5/8/2012: The Eugene city council has just voted to give UO $400,000 a year. How’s that? The upscale downtown Capstone apartments will get a $800,000 annual tax exemption from the city. These are aimed at wealthy out-of-state students, for whom UO competes regionally, nationally and internationally. Parents shop around, looking at the cost of tuition plus living expenses across UO type universities. If we assume the elasticities of supply and demand are equal, half the $800,000 exemption will go towards higher profits for the developers, half to lower rents for the parents. UO can now raise total out-of-state tuition by $400,000. Sweet! Not that I’m an economist.