Portland wants home demolition tax to spur affordable housing

Mayor Charlie Hales considers tax on demolitions, fee on development.

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Mayor Charlie Hales is weighing a tax on demolitions, and a fee on new development to solve the dearth of affordable housing in Portland.

He is working with Commissioner Dan Saltzman, who heads the Housing Bureau.

Each funding idea could be a heavy lift politically and would only supply a piece of the funding solution. But affordable housing advocates say many funding strategies used elsewhere around the country are banned in Oregon, leaving a relatively narrow range of funding options.

“We’re looking toward (any) opportunity — whenever, wherever — as soon as it presents itself,” says Jes Larson, director of the Welcome Home coalition.

(SOURCE: Portland Tribune)

Hales is hoping this approach serves as a solution for two common complaints from voters.

“Keeping those old houses that are still in good condition has a strong public purpose,” says Hales, who says the tax won’t apply to homes in areas zoned for multi-family housing or derelict buildings.

In addition to the $25,000 tax, developers who want to demolish old homes would have to pay $25 for every year the house stood. A house built in 1940 would cost $26,875 to tear down, as a result. (Hales landed on the $25,000 figure after studying sales prices for home demolitions. On average, builders sold new homes for $250,000 more than the old homes. Hales says a 10 percent tax on that differential struck him as appropriate.)

(SOURCE: Willamette Week)

It’s unclear if this news will give Hales a boost in his upcoming race against Ted Wheeler, but the sitting mayor has enjoyed campaign contributions from developers. Will that support dry up in the wake of this proposal?

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