Albany city officials would like developers to build housing that more people can afford. To that end, the city council is talking about taking three steps, one of which is enacting an excise tax on new construction.
The tax would be 1 percent of the estimated value of new residential development, and 1½ percent on nonresidential development. The first $50,000 of value would be exempt.
Revenue from the “construction excise tax” or CET would be earmarked to provide subsidies to builders of “affordable housing” for households whose income is 80 percent or less of the local median income. The housing would have to be set aside for people in that income group for at least 60 years.
The incentives to build such housing would be handed out by the city’s Community Development Commission, whose members are appointed by the mayor and city council.
As an example, one 33-unit building of the Creekside Meadows apartment complex under construction alongside Periwinkle Creek at 1755 Geary St. S.E. is valued on the permit for a commercial building at just under $3.7 million. The excise tax on such a building would be around $55,000.
The construction tax is only one of three things the council is considering to boost housing development.
The council also is considering a 20-year exemption from city property taxes for low-income housing projects, and making surplus city-owned land available to housing developers.
All this and more may be talked about at a public forum the city has scheduled for 5:30 p.m. on Thursday, Nov. 14, in the council chambers at City Hall.
According to a survey cited in the announcement of the forum, 25 percent of Albany renters spend more than 50 percent of their income on rent.
To help people like them, the council has made it a goal to have more housing built. If you’re interested in how the city government hopes to work toward that goal, you’ll want to show up at the public forum Thursday night. (hh)
Why doesn’t the city offer help to the 25 percent with their rent and an exemption on taxes for people who cannot afford their taxes instead of taking their homes for back taxes (surplus land). The best way to help stop homeless is to keep them from becoming homeless in the first place. These proposals are just a way to “boost” the income of people who already have money. People need help now to reduce homelessness. Stop wasting people’s lives and help them before they lose everything. The construction tax could be directly used for low income families rather than benefiting builders.
Chris J, I could not agree with you more!
Too much building around here anyway!
Lets see! Raising taxes to award somebody to build low income housing seems self defeating. Why don’t you drop all city fees on low income housing as that my incourage people to build them but the Mickey Mouse tax you are proposing will achieve nothing other than being more money for the bureacracy.
Regarding “surplus city-owned land” I am curious if there is an Inventory map of exactly what properties the City of Albany owns? Linn county record shows 270 +/- and Benton county 40+/-….
Be interesting to see what “surplus” land they would be willing to give up?
That said, give the land to the developers to build the affordable housing, that cost savings in land alone would satisfy the need to provide other subsidy….PLUS the added tax base would be a major bonus since city properties pay 0 tax…This would more than pay for itself and generate more revenue than the need to tax the other construction projects
After reading your article I had to check my calendar to re-confirm it is Vets Day, not April Fools Day.
The city wants to raise house construction taxes in order to make housing more affordable? Only at city hall does this make sense.
Winston Churchill was right, “You cannot tax your way to prosperity.”
Hopefully city councilors will refer the issue to voters like Tillamook did. I have my doubts.
Wouldn’t adding another “cost” to new construction lead to an increase in the price of the building? The developer surely isn’t going to eat that cost, which means the purchaser is going to pay more. Seems like simple economics, costs more to build, sell more to make up for the total cost, hence “affordable” housing won’t happen.
Ridiculous. Can’t fix stupid, so why even waste my time writing out a logical response on why this is a terrible proposal.
What a great idea! Who will pay for the roads with expanded capacity that ALL Albany residents will need?
Just WHO are these “Albany city officials”.
I’m old school. Affordable housing to me in real terms means older less efficient houses. The cost of building new is NOT AFFORDABLE for many people. It is a set cost. Codes, land, and labor are huge costs. How can they go down? I fail to understand how a new tax oh new housing drives those costs down. Every time I see a new tax implemented….I pay more. I do know that capitalism is how business works. We invest and hope for a return. The owners of new apartment complexes earning less of a return is the only way housing costs less. I personally built a new 4 bedroom house with my own hands just before Covid. I was intending to in a small way help the need for less extravagant 4 bedroom homes. So far the tenants have not even needed 4 bedrooms. I set my price according to today’s standards which, to me, is more than even I could afford. I just happened to own a property I purchased in 1987, which allowed another house on it. I built a simple two bedroom house for myself 12 years ago. I’m retired now.
More taxes are not going to make housing more affordable.
Reduce the current permit and construction fees, for anyone building low income housing. They can then pass those savings on to the final customer.
If the city has properties that they feel would be better put to use as low income housing then offer those lots for sale at a reduced price.
All of this would of course require the builder to actually have a more affordable product to put on the market when all is said and done.
So let’s see If I have this straight, The City wants to raise the expenses on new construction to make housing more affordable> So just where do you think that “tax” will be paid from? They pay the tax and add it to the cost of the construction, thereby making the housing LESS affordable. Or once again, taking money from those who pay the tax and transferring it to the subsidized housing. Great Socialist program folks.
Hasso, I find it strangely interesting that on your home page has a discrepancy.
Comments counted. Tonight this story shows 3 comments. When you click in, much much higher.
What’s up? GOP wishful thinking? Just more misinformation from REPUBLICANS
One of the mysteries of our digital age. Or just some dumb computer glitch.
As I recall any new “ Tax” must be voted on by the Citizens. They have the ability to establish a “fee” without a vote I’m not absolutely certain that is still a requirement but needs to be clarified. If so, as a “Tax” I’m confident it would be rejected.
“The governing body of a city or county may impose a construction tax by adoption of an ordinance or resolution that conforms to the requirements of this section and ORS 320.195 (Deposit of revenues).”
https://oregon.public.law/statutes/ors_320.192
Like Tillamook, to maintain credibility this “tax” should be referred by the city council to voters. But I’m taking bets that city councilors will not ask for permission from lowly residents.