FOR IMMEDIATE RELEASE
Tuesday, May 24, 2016
Contact: Brendan Finn, Commissioner Saltzman’s office, 503-823-4151
Housing Commissioner Dan Saltzman announces tax on new development dedicated to building and preserving affordable housing
Commissioner Dan Saltzman announced today a proposal for a tax on new development, the proceeds of which would be dedicated to build and preserve affordable housing.
“The lack of affordable housing is the greatest crisis facing our City right now. This proposed tax on new development will provide us with a dedicated funding source for the preservation and construction of much needed affordable housing,” stated Commissioner Saltzman. “Portland’s rising rents coupled with extremely low vacancy rates, have made affordable housing options scarce for low- and middle-income Portlanders. This proposed tax on new development will provide more affordable housing and prevent more families from being priced out of Portland.”
During the 2016 legislative session, as part of a comprehensive bill authorizing local governments to enact inclusionary zoning, the State Legislature gave local governments the authority to enact a tax on new development, also known as a construction excise tax. In accordance with that authority, Commissioner Saltzman proposes to enact a tax on new residential and commercial development at 1% of the total permit valuation.
“As Housing Commissioner my primary goal has been to increase the supply of affordable housing. The key to achieving this has been to increase and diversify our funding mechanisms for affordable housing. This tax on new development would provide us with a new, much needed revenue stream,” Commissioner Saltzman stated.
State law specifies that the residential portion of a construction excise tax would be allocated as follows:
- 15% to the State for affordable homeownership
- 50% for inclusionary zoning program incentives
- 35% for affordable housing
The residential portion of the tax is estimated to raise approximately $5.4 million per year.
State law specifies that at least 50% of the commercial portion of a construction excise tax must be devoted to housing. Here in the City of Portland, Commissioner Saltzman is proposing that 100% of the commercial portion of the tax be devoted to affordable housing preservation and development. The commercial portion of the tax is estimated to raise approximately $2.6 million per year.
Today the Commissioner is releasing the details of the proposed tax on new development to solicit public comment in advance of a public hearing to be held in mid-June. The public is invited to submit comments regarding this proposal to email@example.com or by calling our office at 503-823-4151.
Details regarding the proposal and breakouts of funding can be found in the PDF attached here.