In case you haven't noticed, the Portland metro area is enduring a bit of a housing crisis. Rents and home prices are way above the national average, wages are struggling to keep up and everyone is paying more of their income toward housing than ever.
Pressed by a frenzied public to do something, the go-to plan for local and regional government is to throw taxpayer money at the problem and hope it goes away.
Metro, the elected regional government, is asking voters to support a $652.8 million property tax increase to build rental apartment units for individuals and families qualifying for subsidized rents. Metro believes you will vote for this measure because "somebody needs to do something" about the housing crisis. Don't buy it. This measure will do very little to solve the housing crisis and even less to help improve affordability in the region.
Before you vote for this measure, consider the following:
• Metro expects to use a minimum of 5 percent of the bond just to administer the program. Metro doesn't currently have a housing department, so this would fund any new staff it needs and back fill some other staff it already has. According to Metro's numbers, it would need $32.6 million of the bond just to support bureaucracy. Keep in mind, Washington, Clackamas and Multnomah County, along with the city of Portland, already have these organizations up and running and would need a fraction of that to implement the same bond measure.
• For a $652.8 million increase in property taxes, Metro believes it can build between 2,400 and 3,900 units of low income housing. Metro's own data suggests the actual need for affordable units is closer to 50,000 units. So, for two-thirds of a billion dollars, Metro can solve between 5 and 8 percent of the total need in the region, over a 30-year period. That's not a solution to the problem; it's a drop of water in an enormous ocean.
• Why, you ask, does it cost so much for Metro to build so few new units? Because Metro has no idea how to build housing. Metro President Tom Hughes and the Metro Council are asking you to give them $652.8 million in new property taxes despite having no experience building any type of housing ever. Their numbers suggest each new unit will cost between $167,000 and $272,000 to construct what will primarily be two-bedroom apartment units. A quick survey of private industry finds the same units being built throughout the region at $125,000 or less. Metro cannot build these units efficiently.
• The city of Portland just passed a $258 million property tax increase citywide in 2016 for affordable housing. For some reason, Metro expects residents of the city of Portland to vote for another property tax increase on top of the one they just passed for affordable housing. How does that make sense for anyone living in Portland, especially when the city is struggling to spend the money it received from its bond over a year ago?
• Metro is trying to tell taxpayers the measure "will only cost an average of $60 per home." That's only true if your home has an assessed value of $250,000 or less. A majority of homes built in the past 10 years have an assessed value closer to $350,000 on average. The real cost per average home is more like $84 per home. It's not a one-time cost, either; it's for the next 30 years. So, the total cost to a homeowner is more likely $2,522 over the life of the bond. Metro uses a low number to get taxpayers to swallow the hook.
There are 2.3 million people in the region, hundreds of thousands of them seeking relief from high rents and ever-increasing home prices. Metro's answer is to tax existing homeowners who are already struggling to pay their mortgages, so they can help less than 10 percent of those in need. This was the best solution they could come up with?
A recent study by Affordable Oregon suggests that 15 to 20 percent of the total cost of each new home is spent paying government fees and charges for services. What if instead of asking for a $652.8 million property tax increase, Metro and local governments throughout the region agreed to allow a set number of new homes and apartments be built with 100 percent of all fees and charges waived so long as the owner/builder of the property agreed to provide the unit at a set rent for a minimum of 10 years? We could help thousands more and not ask taxpayers for another nickel.
Back to the drawing board, Metro.
Joe Keizur is director of Affordable Oregon, a nonprofit organization advocating to reduce housing costs by reducing government regulations and fees.
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