Portland waters down proposed $25000 demolition tax – OregonLive.com
Portland Mayor Charlie Hales is scaling back his proposed $25,000 demolition tax in a big way.
The tax would ultimately apply only to developers who knock down a single home and replace it with a single home.
Under revisions released Friday, it would not hit the wallets of builders who knock down one home and replace it with two or more units. Nor would it apply to demolitions that make way for affordable housing.
The tax would also be a flat $25,000. It would not increase based on the age of the home being torn down, as originally proposed.
Despite the changes, Hales’ office said the policy still meets the initial goal of discouraging tear-downs of habitable homes by making it financially “sting.”
“We hope it will discourage demolitions,” aide Jillian Detweiler said, “especially in the case when it doesn’t achieve any other goals,” such as added density.
Any demolition would still be subject to the $25,000 tax, under the proposed rules, which head to the City Council for consideration Wednesday.
But officials have now added a “rebate” section offering refunds of “up to $25,000.”
A rebate would be issued for demolition that makes way for new affordable housing, or one that “increases the number of dwelling units.”
“If you knock down a house, and you ultimately replace it with more than one, you would be eligible for a rebate,” Detweiler said, adding that the rebate would amount to nearly the entire tax, save some administrative costs.
Detweiler said the changes come after hearing from affordable-housing advocates and meeting with the Home Builders Association of Metropolitan Portland. But she said builders, who are opposed to the tax, didn’t offer any specific feedback.
“There hasn’t been any, ‘Oh, well, if you did this, we think you ought to tweak it this way or that way,'” she said.
Hales on Sept. 16 said he envisioned a tax that would apply to one-for-one knockdowns but also neighborhood infill projects, where several skinny-style homes often replace a demolished bungalow.
In the years ahead, Portland planners predict most residential growth will be from apartments and condos, not from replacing one single-family home with two or more.
“Two for one helps a little,” Hales said of added density through single-family home construction. “But when you’re talking about thousands (of apartment units), dozens (of single family homes) don’t make much of a difference.”
City officials say about 180 homes were demolished last year. Detweiler in September said the proposed tax would apply to the vast majority of homes slated for demolition.
In instances where three homes would replace an existing structure, she said, the $25,000 tax could be split among three lots, reducing the financial impact on builders and homebuyers.
Hales’ office rolled out the proposal two weeks before he announced a “housing emergency” focused on homelessness and affordability.
Targeting the tax to only one-for-one replacement is likely to leave some neighborhood groups – opposed to infill – frustrated, Detweiler acknowledged.
But the new version appears to have political support.
“We believe, based on comments from council staff, that a majority of the Council could be most supportive of this proposal if it really is narrowly targeted at when there’s no increase in density,” she said.
— Brad Schmidt