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The Metro Council has referred its homeless services measure to the May ballot, narrowly making the February 27th deadline. Metro had initially planned to impose a 1% income tax on individuals making over $125,000 or households making $250,000, but when the revenue estimate for this plan was revised downward to $135 million, the regional government decided to add a business tax to reach its $250 million goal. The measure now includes both a 1% income tax and an additional 1% tax on businesses with Portland-area revenues over $5 million. This decision comes on the heels of reports that Oregon businesses are still grappling with how much they will have to pay under the state’s new business tax. But the Portland Business Alliance, which took part in negotiating changes to the measure, appears to support the burden on businesses. If voters approve the tax measure, it will go into effect in 2021 and sunset in 2030 unless voters choose to extend it. Metro estimates that 90,000 taxpayers will be subject to the income tax, while 6% of Portland companies will be subject to the business tax. The revenue will be distributed in proportion with population to each of the three counties overseen by Metro. Economist Joe Cortright takes issue with this aspect of the plan – he explains in his City Observatory blog that the homeless population, particularly those who are unsheltered, are overwhelmingly concentrated in Multnomah County. He breaks down the amount each county would be given per unsheltered resident based on Metro’s distribution estimates, finding that while Multnomah County would receive $54,263 per unsheltered homeless resident, Washington County would receive $355,653. Cortright charges that by distributing funding based on total county populations rather than homeless people, the measure contributes to inequity. Still, $250 million per year would be the most significant amount of funding ever directed to homeless services in the metro area.
Oregonian – Metro Sends Tax Measure to Ballot, Would Raise $250 Million a Year for Portland-area Homeless Services
Oregonian – 1% Tax on Large Businesses among Changes in Proposed Portland-area Homeless Services Ballot Measure
Seattle Mayor Jenny Durkan has decided against issuing a veto for the city’s new wintertime eviction ban, opting instead to let it move forward without her signature. The new law passed with a 7-0 vote, and just six votes are needed to override a mayoral veto. The mayor issued a statement saying she plans to spend an additional $200,000 on eviction prevention next winter, which she believes will be more beneficial to families facing eviction than the seasonal ban. The additional funds will be directed to the United Way’s Home Base Program, which estimates that it could be used to help 150 additional families. Durkan’s press release also included pointed statements indicating her frustration with the council – she urged city council members to, quote, “pass a bill to actually help people facing winter evictions.” Her statement also indicated that she is concerned about possible litigation, which could redirect funding from programs that support renters to city legal fees. The new winter eviction ban, which will run from December to March each year, will only apply to tenants earning below median income. Tenants who engage in criminal or nuisance activities could also still be evicted.
Seattle Times – Seattle Mayor Durkan Allows Winter Eviction Ban to Become Law, Proposes More Funding for Prevention
Willamette Week reports that State Senator Shemia Fagan, who defeated incumbent Rod Monroe to win her East Portland district in 2018, is giving up her seat to run for Secretary of State. Former House Majority Leader Jennifer Williamson had intended to run for the Secretary of State position but pulled out of the race after a Willamette Week article questioned some of her campaign spending. Since her race in 2018, Fagan has received strong support from public employee unions, who have been looking for a candidate to replace Williamson. Fagan is one of a handful of candidates looking to fill the statewide office – her opponents in the race include State Senator Mark Hass, former head of Oregon’s Department of Consumer and Business Affairs Cameron Smith, and former Congressional challenger to Greg Walden Jamie McLeod Skinner. District 24, which is currently represented by Fagan in the Senate, includes large portions of East Portland as well as parts of Milwaukie and Happy Valley. In her race against incumbent Rod Monroe in 2018, Fagan positioned herself as an affordable housing and tenants rights activist taking on a landlord. She currently serves on the Senate Committee on Housing and Development, as well as the Senate Committee on Health Care.
Willamette Week – State Sen Shemia Fagan Will Soon Enter the Democratic Primary for Secretary of State
The Portland Business Journal reports that the City of Portland is looking for an outside group to conduct a market study on its inclusionary zoning program, which went into effect February 2017. Internal reviews of the program have been conducted periodically throughout the first three years, but have failed to include holistic analyses of the program’s impacts on the market. The Portland Housing Bureau is working to define the scope of the market study before issuing a request for proposals. Local experts and economists have noticed a decrease in the number of applications for large projects since the law went into effect, as well as an increase in the number of projects under 20 units, which are not subject to the law. A permit report issued by the city in January 2020 found that over the past three years, applications have been submitted for 79 private projects with a total of 4,886 units – of these, approximately 520 units will be affordable. So far, just 55 affordable rental units have been completed under the program, including 24 studios, 20 1-bedrooms, nine 2-bedrooms, one 3-bedroom, and one 4-bedroom. Only 6 of the 91 projects subject to IZ, including both public and private development, are located in the Central City plan district.
CityLab reports that Democratic Presidential hopeful Joe Biden has become the latest candidate to release a housing plan. While the former Vice President claimed in the recent debate in South Carolina that he would, quote, “go after those people involved in gentrification,” his plan does not appear to address the issue of gentrification directly. Biden’s housing plan includes $640 billion in spending over a 10-year period, which would be directed to rental housing assistance, eviction protections, and support for municipalities that end exclusionary zoning practices. His primary challengers have all released housing plans that include a variety of strategies to deal with issues like displacement and affordability. Senators Elizabeth Warren and Bernie Sanders both plan to spend large amounts on building affordable housing units and increasing tenant protections. Senator Sanders’s plan also includes a national rent control program that would cap all rent increases at 3% per year. Likewise, Mayor Pete Buttigieg plans to direct funds toward building and restoring affordable housing, though his plan redirects money from existing programs rather than relying on new revenue sources. His plan also addresses vacancy issues in Rust Belt cities. Senator Amy Klobuchar’s strategy focuses on expanding existing programs, including LIHTC and rural rental assistance programs. Like his competitors, Biden plans to roll back the Trump administration’s changes to disparate impact laws and Affirmatively Furthering Fair Housing rules. But his plan does not indicate whom he believes the people involved in gentrification are, or how he would address gentrification and displacement directly.
The City of Tigard is planning to update its Washington Square Regional Center plan, which could entail turning the struggling retail center into a vibrant mixed-use community. The city has approved a contract with EcoNorthwest to evaluate changes to the policy, which could take up to 18 months to complete. The 827-acre area included in the study is home to the mall area as well as the RedTail Golf Center and additional parts of Beaverton, Tigard, and unincorporated Washington County. Several large stores in the retail area have closed recently, including Sears, Orchard Hardware, and Toys R Us. While the Tigard City Council plans to continue supporting the 940 businesses that operate in the area, Senior Planner Susan Shanks believes that plans should also include housing. The city intends to involve the community in any decisions about the area’s future by hosting outreach and community engagement events. Currently, approximately 14,278 people work within the boundaries of Washington Square, and the city hopes to continue supporting the businesses that contribute to the area’s high employment levels.
For the second legislative session in a row, Oregon Republicans have staged a walkout over a proposed cap and trade bill. This year, Republicans in both chambers are participating, and as the short legislative session comes to a close, $500 million in funding for crucial statewide programs hang in the balance. That funding was planned to go toward the state’s child welfare program, psychiatric hospital, and forestry department, all of which impact residents in both Republican and Democratic districts across Oregon. Additionally, House Speaker Tina Kotek had planned to use $120 million of that funding for homeless services and affordable housing. An additional $11.65 million had been intended to go toward emergency relief for victims of flooding in Pendleton. State Universities had hoped that lawmakers would direct $300 million for renovation and expansion programs. With Republicans gone, the chambers are unable to reach quorum, meaning these funds will go unallocated. Senate Republican Leader Herman Baertschiger argues that Governor Brown could still find a way to direct relief funding to Pendleton, but spokeswoman Kate Kondayen issued a statement saying that the Governor does not have $12 million in discretionary funding, and there is no rainy-day fund for emergency relief. If Republicans fail to return to Salem, these programs will go unfunded until the 2021 legislative session. Republican legislators are calling on their Democratic counterparts to send the cap and trade bill to a public vote, but Senate Majority Leader Peter Courtney says that his colleagues are unwilling to do so. Senator Courtney has also stated that he does not plan to send state troopers to retrieve Senate Republicans who have chosen to walk out.
Finally, the Economist published a special report on housing in January, which looked at the policy decisions and market forces that have led to housing unaffordability in many countries worldwide. Economist writer Callum Williams argues that where housing prices have skyrocketed past affordable levels, nations have made it too difficult to build new housing, created unwise incentives to encourage investment in the housing market, and failed to develop regulatory infrastructures to prevent housing bubbles. Callum cites figures from the Joint Center for Housing Studies, which show that between 1960 and 2016, median rents in the US increased by 61%, while median renter incomes grew by 5%. Before this period, housing bubbles were infrequent due to lower reliance on mortgage markets, transit improvements that allowed people to live farther from job centers, and a lack of land-use regulations. He traces the increasing importance of homeownership to housing programs established for veterans after World War II. Callum compares the US housing markets to those in other countries, finding that places like the US and UK, which instituted programs incentivizing homeownership at the expense of renter households, have seen unaffordability rise faster than countries like Germany that have a culture of renting. In countries where there has been a significant rise in homeownership, there has been a concurrent rise in NIMBYism, which makes it more challenging to build new homes. Callum concludes that keeping housing costs down requires better regulation of housing finance, improvements in transit systems to decrease travel times to job centers, and planning decisions that address the structural undersupply of housing.