Hey, Portland: You know how this city is currently short about 24,000 affordable units? And how the rent here is shooting up as fast, or faster, than anywhere in the country—15 percent in the last year—meaning that number is only going to rise?
Meet the latest effort to improve matters. City Council next week will almost certainly vote to refer a $258.4 million bond measure to the November ballot. If approved, it’d allow the city to borrow that much from the bond market, and pay it back over time via your higher property taxes.
Housing advocates at the Welcome Home Coalition have been cooking this thing up for a long time, and haven’t wanted to discuss all the specifics. But now it’s public record. Here’s the document city council will vote on next week.
AH-Tax-Bond (PDF)
AH-Tax-Bond (Text)
What you need to know:
•Money generated from the bonds would go into a special fund, and would have to be spent on “capital costs for affordable housing.” According to the language of the measure, that includes “acquisition, construction, reconstruction, rehabilitation, capital maintenance and capital repairs.”
•The bonds would be targeted at housing for people making 60 percent of the city’s median family income (MFI) or less. Right now in Portland, for a family of four, that’s a maximum of $44,100 a year.
•What’s it going to cost you? The city estimates the bonds will result in a tax hike of about 42 cents for every $1,000 of assessed value of your (or your unscrupulous landlord’s) property. So for a $200,000 home, that’s $84 bucks a year. Of course, $200,000 homes are rapidly disappearing. For the first time ever, the metro area’s average home price is now $402,500. Those “average” homeowners would pay about $169 a year for the housing bond. EDIT: An observant commenter correctly points out that’s market value, not assessed. The average assessed value in Portland is closer to $178,000.
•This city loves an oversight panel, and this is no different. If this passes, City Council would appoint a five-member body to look into spending of the bond money, and issue yearly reports.
•The money wouldn’t have to only pay for housing. Up to one-fifth of the space of any project funded by the bonds could pay for “child care facilities, groceries, pharmacies, community rooms, food service, neighborhood retail and leasing offices.”
•There’s also some wiggle room in that 60 percent MFI requirement. The measure would allow the city to “temporarily relax or waive” those income limits “to avoid undue hardship or to avoid displacement of persons residing in housing at the time it is acquired.”
As we noted earlier this week, this is one of a flurry of new tax measures being introduced in the city. Next week, council is also slated to approve a 1 percent tax on construction projects, which might generate $8 million a year for housing (some of it going to the state). And you’ll also be voting on a 3 percent local sales tax for recreational pot in November. Probably a statewide corporate tax hike, too.
The average price homes sell for has nothing to do with the assessed value that determines taxes. I own an “average” house that I think I could easily sell for $400,000, but I only pay taxes on a house valued at $120,000. So my tax burden for the bond would be $50 a year, not $169.
You’re right, and thanks for pointing out my oversight. I’ve made a note.
“So for a $200,000 home, that’s $84 bucks a year.”
This is an incorrect statement. The correct statement is “a person who owns a property with improvements assessed at $200,000 will owe an additional $84 a year in property taxes”.
There are lots and lots of homes with values of over $300,000 in Portland that have assessed values of much less than $200,000. Most of these homes are in gentrified areas where lower income people have been priced out, and costs for transportation are lower because you can walk or bike to jobs and services. Meanwhile, the lower income people that can scrape together enough to buy a home get to purchase a $200,000 home that has an assessed value of ~$190,000 – in a part of town where their transportation costs will also likely be much higher because they have to drive or travel much longer distances on transit to get to anything.
Doing more of the same is not going to “burst the bubble”. For supply-demand to actually drop prices once they’ve risen you have to have a surplus, but developers don’t build what their analysis say won’t be filled, and neither do government officials allocate funds to housing beyond simply meeting the point of equilibrium between supply/ demand. I’m no economist, but I know if it were so simple as everyone I talk to who read the WW’s front page article a few months ago seems to think, then it would have worked for other large towns – which it plainly did not.