Multnomah County tax measure would give people facing eviction legal help, critics say it could do more harm than good

By Alex Zielinski (OPB)
May 3, 2023 12 a.m.

Since pandemic-era eviction protections were lifted last September, the rate of evictions in Multnomah County has more than doubled from pre-pandemic levels. As tenants cycle through eviction court, they’re largely on their own.

Of the 842 households that faced eviction this March, only 3% had legal representation, according to data collected by Portland State University. Multnomah County landlords, meanwhile, were represented by lawyers 50% of the time during this same period. Tenants rights advocates say that leaves renters at risk of being evicted on illegal grounds, agreeing to unfair settlements with their landlord, and often having to cover their landlord’s legal fees, which tenant advocates say can reach $10,000.


A measure headed to Multnomah County voters later this month seeks to realign this skewed legal dynamic. Measure 26-238 would introduce a 0.75% capital gains tax to fund lawyers for tenants facing eviction. Proponents say the measure will tax the region’s wealthiest to raise between $12 million and $15 million a year and could start helping renters by May 2024.

On May 16, Multnomah County voters will decide whether to pass a new tax that will allow people facing eviction free legal representation. Yet politicians and community groups aren't convinced it's the right approach.

On May 16, Multnomah County voters will decide whether to pass a new tax that will allow people facing eviction free legal representation. Yet politicians and community groups aren't convinced it's the right approach.

Flickr photo/Rental Realities (CC BY 2.0)

But in a region plagued by an affordable housing crisis and growing tax fatigue, the proposal has attracted strong opposition from business, political and community leaders. Opponents say it could unintentionally harm low-income residents. At the same time, few doubt the necessity of the measure.

“We need eviction defense, but this tax mechanism isn’t the way to do it,” said Duncan Hwang, a Metro councilor and community development director at the Asian Pacific Association of Oregon (APANO). “It creates more challenges than it could potentially solve.”

Hwang is one of many political leaders who oppose the measure, including the entire Portland City Council, Multnomah County Chair Jessica Vega Pederson, Metro Council President Lynn Peterson and Oregon Congressman Earl Blumenauer. The opposition campaign has also attracted major investments from local and national real estate organizations. Critics contend that the tax the measure relies on is deeply flawed.

The measure proposed taxing capital gains, which is the profit made from the sale of a property, a business, stocks, bonds, and even works of art. This means the tax largely impacts the region’s wealthiest. A study by Oregon Center for Public Policy found that in 2020, Oregon’s wealthiest 5% made nearly 85% of all capital gains income in the state.

“We chose capital gains because they’re a way of making money that is disproportionately used by the extremely wealthy,” said Colleen Carroll, a spokesperson for Eviction Representation for All, the campaign behind the measure. “Capital gains are a driver of inequality and undertaxed.”

But critics say that could backfire because, unlike federal capital gains taxes, this measure does not include a slew of exemptions for low-income households, seniors, people selling their primary residence, or those withdrawing from retirement funds.

Hwang sees the measure hurting older lower-income households, especially those who may not receive clear guidance on the new tax because they speak limited English, like the population APANO serves.

Metro Councilor Duncan Hwang, attending a rally, July 14, 2022. Hwang is with the Asian Pacific American Network of Oregon.

Metro Councilor Duncan Hwang, attending a rally, July 14, 2022. Hwang is with the Asian Pacific American Network of Oregon.

Kristian Foden-Vencil / OPB

“We think the measure as written would negatively impact already marginalized people in Portland,” Hwang said. “It’s just hard to tell our elders that, ‘If this passes, your retirement’s gonna be worth less… If you sell your home, you will get less money.’”

Members of Eviction Representation for All say that wasn’t their intent.

“Our purpose was merely to increase the capital gains taxes that people who live in Multnomah County already pay,” Carroll said. “Not to create a new tax on vulnerable people.”

While these exemptions aren’t written into the measure, Carroll said Multnomah County commissioners would easily be able to include them after the ballot measure is passed. She pointed to how commissioners recently adjusted the tax code for the countywide Preschool For All income tax to reduce penalties for nonpayment.

“The purpose was to design a program that delivered on the promise of reducing displacement in our community,” Carroll said. “Copying over every detail of the tax code would’ve made this measure unreadable.”

But, without this phrasing included in the ballot measure, opponents say the loophole could still be abused. The campaign opposing Measure 26-238, which calls itself Building Our Future Together, says the unrestricted tax could harm small business owners, seniors, and homeowners of color.

“The inability to own homes has had incredibly negative impacts in communities of color, by preventing generational wealth building that other families have long had access to,” reads a statement signed by several organizations representing real estate agents of color, submitted to the county voter’s pamphlet by Building Our Future Together. “Our communities are working hard to realize the American Dream of owning their own homes and building equity, Measure 26-238 directly restrains this goal.”

Jennifer Parrish Taylor, director of advocacy at the Urban League of Portland, said that characterizing this measure as a liability for communities of color is “somewhat misguided.”

“At the very least, [it] doesn’t consider the totality of Portland’s housing ecosystem and the disparate levels of access to homeownership or rental housing that residents of color face,” Parrish Taylor said

She noted that Black women in Oregon are twice as likely to face eviction; according to data compiled by Princeton University’s Eviction Lab, and that other national studies show that renters of color are at greater risk of homelessness after an eviction. Parrish Taylor added that discriminatory lending practices and lack of access to affordable mortgages are the key reasons keeping Portlanders of color from homeownership. A recent report by the city of Portland found that in 2022, Portlanders identifying as Black, Native American, and Latino and making the average income for their demographic would have been unable to afford the cost of a house anywhere within city limits.

Parrish Taylor said it’s even more challenging for someone to buy a home if they have a history of eviction.

“With the passage of this measure, there is at least a fighting chance that a tenant can contest an eviction and be successful so that outcome doesn’t follow them forever,” she said.

Building Our Future Together is primarily financed by the real estate industry. The political action committee’s largest donation — $250,000 — comes from the National Association of Realtors. The Oregon Association of Realtors, Portland Metro Association of Realtors, Home Builders Association of Metropolitan Portland, and other individual construction and development firms pitched in at least $135,000. Because of the way real estate firms are incorporated, most of them will be taxed as individuals under the capital gains tax meaning these companies will have to pay a 0.75% tax on each property sold.


Mayor Ted Wheeler and City Commissioner Mingus Mapps have each contributed $500 to the opposition campaign, and Metro President Lynn Peterson has given $101.

In total, Building Out Future Together has raised more than $630,000. Eviction Representation for All has raised just $29,232. Most of their funding comes from individual donations under $100. Another committee supporting Measure 26-238 called Tenants Organizing Against Displacement has raised $98,111 for the campaign since 2021. Proponents also received contributions from Oregon AFSCME and the Portland chapter of the Democratic Socialists of America.

Most local elected officials have condemned the measure, citing concerns that additional taxes could steer business investments away from the Portland metro region. According to a recent report by Oregon Business and Industry, Portland has the nation’s second-highest combined state and local individual income tax rate, trailing New York City.

“We’re reaching a point within the city and county of diminishing returns,” said John Calhoun, a spokesperson for Tax Fairness Oregon, a volunteer-led group that advocates for equitable taxes. “And the system to administer these taxes becomes increasingly inefficient.”

In late March, Portland revenue director Thomas Lannom shared a memo with Multnomah County’s financial director that estimated the annual administrative fees to oversee the Measure 26-238 tax would cost about $7 million. That’s about half the amount of money the campaign estimates collecting annually through the tax.

It’s unusually high. In contrast, the Portland Children’s Levy, a property tax that’s up for renewal this May, limits administrative costs to just 5% of revenue.

Lannom said this steep cost comes from the quick implementation period of the new tax, the cost of creating and using new tax paperwork, and the expected high number of taxpayers whose paperwork needs filing. Based on past tax data of residents with capital gains income, Lannom estimated that the new tax would create 61,000 annual tax returns in Multnomah County.

Calhoun calls the administrative costs associated with the tax “insane.” Local elected leaders have also expressed concern about the measure’s costs.

Susheela Jayapal on Oct. 23, 2019, in Portland, Ore. Jayapal won election to the Multnomah County Commission in 2018.

Susheela Jayapal on Oct. 23, 2019, in Portland, Ore. Jayapal won election to the Multnomah County Commission in 2018.

Cheyenne Thorpe / OPB

Multnomah County Commissioner Susheela Jayapal is one of the few local politicians who hasn’t joined the opposition campaign. Jayapal said she finds some of the campaign’s arguments exaggerated. For example, she is confident that the federal capital gains tax exemptions would apply to this local tax — and she’s doubly sure that she and her fellow commissioners would enshrine those rules in the policy if passed.

Yet Jayapal doesn’t support Measure 26-238.

“I want to be clear: Of course, I believe in eviction representation. Eviction prevention is homelessness prevention, and that matters to me,” Jayapal said. “But we already have a revenue source for this.”

Jayapal pointed to the Metro Supportive Housing Services tax, an income tax that funds programs to keep people at risk of homelessness housed. Those funds are divided between the Portland metro area’s three counties. At the fund’s onset two years ago, the Multnomah County Board of Commissioners approved a plan for how those funds should be used. That included a goal to keep at least 1,000 households from being evicted annually. That goal is largely addressed by giving low-income tenants money to cover rent or pay late fees. Because of an unexpected influx in Supporting Housing Services dollars in 2022, the county recently directed $15 million in tax dollars to fund eviction prevention for more than 3,000 households.

“Funding rent assistance can prevent an eviction from ever being filed in the first place,” Jayapal said. “We certainly have a lot of work to do to let people know eviction support is there. But it’s there.”

It’s hard to tell by looking at the pace of evictions filed in Multnomah County courts. In October 2019, the county saw 448 eviction cases. By October 2022 — a month after Oregon lifted its pandemic-related eviction prevention policies — that number had nearly doubled to 820. In March 2023, the tally ballooned to 842 eviction cases.

According to tenant advocates, these numbers only represent a fraction of the number of renters impacted by eviction. After receiving an initial eviction warning, many tenants will immediately move out, perhaps believing that the document is an enforceable ruling — not just the first step in a legal process that can be challenged. There’s no way to track how many people go this route since those initial eviction warnings aren’t filed through the court.

Measure 26-238 will also pay outreach workers to visit people who may have received an eviction notice and inform them of their rights, along with connecting them to a lawyer. If passed, the entire program, composed of lawyers, paralegals, and outreach workers, will be housed in a new Tenant Resource Office at the county.

Jayapal said that the county is able to move more Supportive Housing Services dollars to pay for eviction representation and tenant outreach if necessary, and she isn’t opposed to making that shift. Unlike other voter-approved county tax programs, she doesn’t believe this program needs to be funded with a tax.

“Taxes like [Supportive Housing Services] and Preschool for All are programs that need sustained funding that doesn’t fluctuate,” Jayapal said. “I don’t think that’s the case here.”

She suggested that it instead be paid for through the county or city’s annual budget.

Calhoun, with Tax Fairness Oregon, agrees with Jayapal. Calhoun said that if the proponents wanted $15 million yearly to fund a new program, they should be looking at the county’s $3 billion budget.

“I think the cost for this effort is really minor in the county’s total housing budget,” Calhoun said. “The commissioners should have been heavily lobbied on this. And if the county refused [to fund it], then the campaign could consider a ballot measure.”

Bringing the proposal to the county to fund could have created more space to address technical issues, like the lack of exemptions baked into the measure, he said.

The campaign chose not to go this route for a reason. After spending two years researching different eviction defense programs across the nation, Carroll said that the Eviction Representation for All campaign decided against letting its funding be determined by the political whims of elected officials.

Since 2017, seven cities have established legal representation programs for tenants facing eviction, including Seattle, Philadelphia, and New York City. Many of these programs were established through a legislative process at the city level, and come from the city’s budget. While most have successfully reduced evictions, many face chronic underfunding.

“What we’re seeing in New York, what we’ve definitely seen in San Francisco, is that these conversations become political every year,” Carroll said. “And that’s just not how we should fund an important program. These programs need sustained funding.”

Measure 26-238 is one of two tax measures Portland voters will consider on May 16. Voters will also have the opportunity to renew the Portland Children’s Levy, a property tax that funds after-school classes, youth hunger prevention, and other youth programs. Voters will also elect a new Multnomah County Commissioner to represent Southeast Portland and fill several school board seats across the metro region.