An apartment complex goes up in Portland. The city voted to tax new residential and commercial construction to help fund affordable housing projects.

An apartment complex goes up in Portland. The city voted to tax new residential and commercial construction to help fund affordable housing projects.

Christina Belasco/OPB

The Portland City Council voted unanimously Wednesday to approve a 1 percent tax on new residential and commercial construction Wednesday.

All of the money raised from that tax will be used to fund housing projects.

Earlier this year, Oregon lawmakers ended a statewide ban on construction excise taxes.

Housing Commissioner Dan Saltzman said growth and new construction in Portland has driven the cost of housing up dramatically. 

“A minimum wage worker in Portland would need to pay 100 percent of her income to pay the rent on the average newly built apartment in Portland,” Saltzman said.

It’s estimated the tax on construction will bring in $8 million a year, on average. Some of the funding is earmarked for a state fund that encourages home ownership. The rest will go to city programs that fund private and public affordable housing construction.

On Thursday, the council will discuss referring another housing funding measure to the voters in November. It would authorize Portland to sell $258 million in bonds to fund affordable housing.

Portland housing officials estimate the city needs about 24,000 more units of housing available to people with low incomes.

Updated Lobbying Rules

City leaders also voted unanimously Wednesday to overhaul the regulations for people who lobby city hall.  

The new rules address the so-called “revolving door” between city government and lobbying jobs.   

Under the new rules, elected officials are banned from lobbying jobs for two years after they leave office. And city bureau directors cannot lobby their bureaus for two years. A one-year lobbying ban applies to most other city staff.  

The rules also raise the fine for violating the city’s lobbying rules to $3,000.

City auditor Mary Hull Caballero said the new rules put Portland on par with cities like San Francisco and Seattle.

The regulations only apply to paid lobbying, and do not prevent city staff from volunteering with local neighborhood associations or civic groups.