- Nicole Cmar
As we previewed last week, Portland City Council took up a resolution today that will scoop up a minimum $1.2 million in "short-term rental" lodging taxes collected by Airbnb, VRBO, and similar services, and plop them into a flexible fund for cheap housing.
That has the potential to create some progress—fast. Portland Housing Bureau Director Kurt Creager said this morning that the city could borrow against that steady income, leveraging between $12 million and $30 million relatively quickly.
It's no surprise, then, that the resolution's passage this morning on a 4-1 vote was cheered by advocates and housing officials, who noted Portland's one of the first cities to put short-term rental revenues toward housing. That's important, they say, since services like Airbnb can take would-be rental units off the market.
But the resolution also inspired dire predictions from commissioners Amanda Fritz and Steve Novick, who worry about what the $1.2 million yearly hit to the city's general fund will mean when it comes time to craft a budget next spring.
"This is a budget shell game," said Fritz, the resolution's lone dissenter. "I don't think the council knows where this money's going to come from. I'm really worried."
It's not everyday the Merc gets brought up in council chambers, but Fritz did us the courtesy of scoffing at my short post yesterday detailing the $11 million surplus the city expects it'll have next year. Fritz thought it was off base, it sounded like, making the budget picture sound overly cheery when in reality there are many, many demands for cash in city government. (She'd probably like my more considered take on the surplus forecast in this week's Hall Monitor column?)
"We're talking about closing community centers," Fritz said this morning. "This is irresponsible."
Novick, who actually voted for the resolution, voiced similar concerns—noting that 13 firefighter positions need to be funded, that the city needs to show a continued commitment to fixing roads (particularly if it asks voters to implement a local gas tax, as planned), and that his bureaus can't afford cuts.
"We do not have a good budget situation," he said.
Novick and Fritz are worried for a couple of reasons. First, Fritz just doesn't think it's good for the city to be allocating money like this. She said this morning it's more appropriate to make these kinds of decisions during the budget process. She even said she'd likely have supported an extra $1.2 million to the housing bureau if it had been brought up last month, as part of the city's budget adjustment process.
More pressing, though, is the fact Portland isn't forecasting any new ongoing money next year—largely because all the ongoing money that would have been forecast (around $5 million) was already dedicated to the housing bureau. As things stand today, the council just dedicated $1.2 million in ongoing money it doesn't have to play with, which means that money will have to come from somewhere else. (It's also possible—likely, even—that the forecast will grow sunnier next spring, so maybe that's not the case).
Meanwhile, there's other competition for ongoing funds—like parks workers who need to be paid more, or those firefighters, or freshly hired police background checkers that cops say are necessary if Portland is going to hire enough officers to fill looming holes at the bureau.
So that's the downside of today's vote—a side that a majority of council agreed with last year, when a similar proposal from Commissioner Dan Saltzman was shot down. The upside, as I said up top, is millions more in flexible funds for housing, in a city that needs a bunch of it.
"The money can be used anywhere in the city," said Creager, differentiating the new money from millions in urban renewal dollars that are restricted in where they can be spent. "This is jet fuel."
Among advocates on hand was Jes Larson, director of the Welcome Home Coalition, which is working to find more dedicated funding for housing in Portland. "It’s necessary in order to combat the affordable housing crisis," she said, noting her group wants to find $15 million a year in new housing money.
And, unsurprisingly, the move was praised by Mayor Charlie Hales and commissioners Saltzman and Nick Fish, who brought forward the resolution together, and touted it as a positive first step in easing the city's housing crisis.
"What one colleague might call a shell game another colleague might call making tough choices with limited resources," Fish said. "That’s our job."
That inspired a quick riposte from Novick, who noted: "None of us is actually making a tough choice today. None of us is actually saying what we’d cut in the upcoming budget in order to fund this."
