The Portland City Council plans to vote next week on a 1 percent tax on new residential and commercial construction to fund affordable housing.
Earlier this year, the Oregon lawmakers passed Senate Bill 1533, which ended a state ban on construction excise taxes and allowed inclusionary zoning.
All five members of the city council appeared to support the measure.
“We have unprecedented rent increases, more than 15 percent year-over-year,” said housing commissioner Dan Saltzman. “New development, both residential and commercial, is continuing to put more stressors on affordable housing.”
Most people who came to city hall to testify spoke in favor of the excise tax.
“We all have an obligation to help our community continue to be a good place for everybody to live,” said Dike Dame, a prominent developer who helped remake the Pearl District and the South Waterfront. “Do you want to be 75 years old, get kicked out of an apartment, and have no place to go? No.”
The Portland Housing Bureau estimates the commercial and residential construction taxes would bring in a combined $8 million a year on average.
However, not all of that funding would flow to the city.
The state Legislature requires 15 percent of any tax on residential construction go to a statewide program that encourages home ownership. Another 50 percent of the tax would be dedicated to tax breaks or other incentives for private developers who include affordable units in their projects.
The city has discretion over how to use the revenue from the 1 percent tax on new commercial construction. Council members indicated they wanted to dedicate all of it to the Portland Housing Bureau to preserve and build affordable housing units.
Saltzman said if the tax passes, the first project he would recommend the council fund is an effort to help the residents of a Portland mobile home park threatened with closure purchase their land and establish a housing co-op.
“One way or another, we’ll get it done,” Saltzman said to a group of Oak Leaf Park supporters who gathered at city hall Thursday.
They asked the city for $1.5 million to purchase their land before developers close the site and force mobile home owners to move.
The housing non-profit CASA has helped tenants at nine mobile home parks around the state purchase land and convert to co-ops. If the Oak Leaf deal moves forward, it would be the first resident-owned mobile home park in Portland.
City officials estimate Portland needs about 24,000 more units of housing available to people with low incomes.