Under construction on Nov. 19, a three-bedroom house on N.E. Water Avenue.
Does Albany need another local tax in order to promote “affordable housing”? It seems unlikely, but evidently that’s part of what a newly formed city task force is going to talk about.
The city council formed the Housing Affordability Task Force on Nov. 8, when it confirmed the appointment of its 14 members. Writing about it two days later, I speculated on just what the task force would be able to do.
I must have been asleep, because the main purpose of this group seemed to have escaped me. But now, a long staff report attached to last week’s council agenda has cleared that question up.
“A primary purpose of the task force,” it says, “will be to consider whether the city should assess a construction tax under ORS 320.192 and 320.195 and consider deferral or waivers of systems development charges.”
The two statutes referred to in that sentence apparently have been on the books since 2016.
The first says the city council may, by ordinance or resolution, impose a tax of up to 1 percent on the permit value of new residential, commercial or industrial construction, or on adding square footage to such buildings, including remodeling that adds living space.
The second law describes how revenue from a construction tax is to be used once the city has taken 4 percent for administrative costs. Fifteen percent goes to the state Housing and Community Services Department to help people make down payments on houses. Thirty-five percent goes to local affordable-housing programs, and the remaining 50 percent goes to city housing programs generally or (the law is not clear on this) to developer incentives.
The other day I took a photo of a new house being built on an in-fill lot on the 2100 block of Northeast Water Avenue, across from the old Oregon Electric Railway track. The building permit says it is a 1,298-square-foot house with three bedrooms and two bathrooms. The permit value is $200,000.
So that’s what the affordability task force will consider as part of its “primary purpose” when it meets starting in January 2022: Adding up to $2,000 to the cost, and likely the price, of a house like this. (hh)
Gotta love the logic of increasing taxes on housing construction to promote lower priced housing. Have liberals ever found a tax they didn’t like?
What makes this construction tax really attractive to city government is that they can pass it without any vote of the people. It’s political graft.
Inaction is the biggest concern for local governments. There is never a wrong reason or time to impose a new tax.
Next up: It’s time for GAPS to belly up to the trough and exploit this “opportunity.”
https://oregon.public.law/statutes/ors_320.170
GAPS already does $1 per square foot on housing
You are correct, but the purposes are different.
GAPS imposed a construction tax for the purpose of raising money for capital improvements. In 2009 the tax rates were indexed to inflation. The current limit is $1.41/square foot for new residential and $0.70/square foot for non-residential.
https://albany.k12.or.us/district/business/construction-excise-tax
The purpose of the city’s tax appears to be affordable housing programs.
the bigger question on the gaps excise tax is way did we not use it on a down payment on our current bloated budgets on school builds around town, it was supposed to be for doing just that
So another Tax headed to our utility bill I’m sure!
It’s just the beginning. More building means upgrading infrastructure (hopefully). More people mean more crime. All this will add up to each and every one of use paying more taxes and having a lower quality of life.
Not one of those uses for the proposed tax are necessary, NOT ONE. This is as if; working hard and making a commensurate wage makes us the fortunate ones therefore dictating we give to those who may not work as hard or better themselves to make a decent wage. One needs to be more disciplined and financially responsible with their money.
Govt should not be in this case, tax (forcing charity) those who work hard to give it away to people who won’t perform the due diligence I had to put in to save for a home.
“””… working hard and making a commensurate wage…”””
vs
“””… those who may not work as hard or better themselves to make a decent wage …”””
Good start at the moral argument for shifting the tax burden away from income tax and toward inheritance tax, capital gains tax, windfall profits tax, surtax on gambling winnings, etc, etc.
Somehow I have a hunch that you and the other tax haters on this page vehemently disagree.
Your attempt to differentiate my two notations into suggesting the latter is a representation of the wealthy, is mistaken and presumptuous at best. Those wealth taxes you note in relation to my comments for which you say would make a good argument for, are a crock and take from those who contributed innovation, jobs and vast tax dollars to the system. A system for which is one of the most inefficient, fiscally irresponsible and debt ridden entities for which hard working tax dollars pour into and disappear with little to show. In addition, suggesting other “tax haters” (who the hell likes more taxes?) would disagree is like saying water and grass don’t complement each other.
If you are not a tax hater, then you welcome more government control with one hand while the other Govt hand is on your wallet.
“””Your attempt to differentiate my two notations into suggesting the latter is a representation of the wealthy …”””
No, it seemed clear that you intended the latter to mean people with low education, low skills, low motivation, low wages, poor financial management, and practically no wealth.
Let’s disentangle the mess and consider four groups of people:
1 – Those I just described. Few people want to be in this group. Many of them grew up seeing no other way of life. Some of them had or have genuine disadvantages or disabilities which they can’t overcome. Some of them are just drunks and lazy slobs. One reason why we (the good people of group 2) might want to help some of them is that it might be cheaper in the long run than not helping them. Affordable housing is much cheaper than prison.
2 – Those “working hard and making a commensurate wage.” The shrinking middle class that may be justified in complaining about high taxes (and even higher prices).
3 – Those who may or may not work hard for a living, but whose wealth is mostly unearned, from many different sources: inheritance, lucky investments, lottery wins, legal judgments against entities with deep pockets, earnings from virally-attained celebrity, etc, etc. My idea of a decent society is where these sources of income are taxed at a higher rate (instead of the often-lower rate) than the wages of group 2.
4 – People at the top. People you claim “contributed innovation, jobs and vast tax dollars to the system.” Sometimes they worked very hard. Sometimes they were brilliant. Sometimes they were crooks or sociopathic liars and manipulators. Sometimes all three. You’re right, except for tax, they DID contribute, but it’s all a matter of degree. The magic underlying their success is ‘leverage,’ using other peoples’ money and labor (including management and brainwork) to accomplish their ends. There is no reason for their tax rate to be less (because of capital gains, off-shoring, and all sorts of “avoidance”) than the wages of group 2.
i’m on this task force and this tax isn’t going to happen, don’t even know where this has come from, stand by for news, and lets see if hasso prints the truth, he should
Michael,
Hasso is pretty clear on where this tax idea came from – the staff report.
“A primary purpose of the task force,” it says, “will be to consider whether the city should assess a construction tax…”
As a member of the task force are you claiming its primary purpose is something different? Is there a disconnect between the task force, city staff, and the city council?
Who ‘s on first?
gordon stand by for news, as peter the city manager told me hasso got ahead of himself, so we start to meet in jan 2022, keep in touch, i hope to be a strong voice for affordable housing
Keep us updated Mike.
The income caps on down payment assistance programs make them effectively useless given current housing prices. The HUD low-income guideline for a 2-person household in Albany is ~$43K. Assuming zero debt and $20K in down payment assistance, that means a max house price of $230K. There are few homes available in that price range, not to mention stiff competition from existing & aspiring landlords turning them into rentals.
So what would hep?
Realizing that not everyone will be able to buy a house and that’s not a bad thing? What gives a person with lower income the “right” to purchase a house at the expense of the developer/builder’s “right” to earn a profit and provide jobs?
Predictable maundering from the usual bunch
Just to clarify- Corvallis has such a tax. They used it to expand government by hiring a “affordable housing” planner. Such is the twisted thinking that more government will solve the problem- when the reality is that we need less government, lower fees, less regulation, etc. And even though most of Albany is pretty Red, those at City Hall tend to be Blue and thus regularly bring Corvallis programs to town- as well as former Corvallis employees. Said former Corvallis employees tend to be rigid supporters of big government and heavy on the dictatorship.
I am happy to see what the task force comes up with, I would like to see Hasso write about who the 14 members are and their background that makes them suitable for the task force. I’ve heard that former mayor Sharon is on the list, which seems quite odd considering she had all those years as mayor to do something, and yet did nothing but try and derail ADU’s from being built. That issue is what got her removed from office. If the task force is full of anti-growthers then nothing good will get done.