The “Eagle Pointe” apartments were under construction in east Albany in 2022. Future projects like this will be assessed a 1.5 percent city tax when they get a building permit.
Hoping to promote less expensive housing, one of the first things the new Albany City Council will do next month is to add a city tax on new construction valued at more than $50,000.
The council would have done this on Wednesday. But outgoing Councilwoman Matilda Novak delayed the action by voting against the second reading of the tax ordinance at the Dec. 11 meeting, which was Novak’s last.
This meant the ordinance automatically comes up for final action at the next regular meeting, on Jan. 8, 2025.
Five other council members, four of whom remain on the council next year, supported the construction tax even though everyone who testified at a public hearing spoke against it. At the hearing, the opponents’ main point was that the tax will raise, not lower, the cost of housing in Albany.
The tax will be imposed on the value above $50,000 as stated on building permits. It will be 1 percent if the project is residential and 1.5 percent on everything else. Schools and similar public buildings, including subsidized low-income housing projects, are exempt.
Depending on the pace of construction within Albany, the city estimates revenue from the tax to be $300,000 to $900,000 per year. After 4 percent is withheld for administration, most of the income is intended to be spent on subsidies for housing projects for households with income below 80 percent of the median in the city.
On a new house valued at $280,000, the tax will be $2,300. On an apartment building with 33 units the tax likely will amount to about $12,000. On a commercial building of about 6,000 square feet, the tax will add about $7,000 to the construction cost.
The council in January also plans to take final action on a 20-year property tax exemption for housing projects that “provide new regulated rental housing serving low-income households.”
This would be for people with income up to 60 percent of the median for the first year, up to 80 percent after that.
Finally, in its drive to promote housing that more people in Albany can afford, the council on Dec. 11 adopted a policy to consider any surplus city land for housing before disposing of it.
The surplus land policy was approved 5-1. Novak again voted no, as she did on the construction tax and the tax exemption. But on the surplus land issue, unanimity was not required, so that policy is now in effect.
The construction tax and the tax exemption ordinances have no emergency clauses, which means they take effect 30 days after the mayor signs them. It also means they are subject to a petition to refer them to the voters. (hh)
With their proven incompetence in real estate transactions, they now think they are experts in housing. What could possibly go wrong?
totally agree Bill
Someone has to pay for the revenue shortage the property tax exemption will cause.
It might as well be the middle class person who aspires to build a new home or new business.
And never, ever, ask for permission to impose a new tax on the citizens.
Comrades, welcome to the People’s Republic of Albany. Hand your wallet over to the dear leaders before entering.
they dont need to ask for permission to impose a new tax on the citizens
they were voted in to office to do a job that includes chosing what projects need doing the most AND raising funds for those projects
they are doing the job they were elected for
if you dont like the job they are doing you can run for office or whine
Low Income housing
Not one homeless person can afford to rent or buy a home.
My rent was raised $50.00
My wife and I both work, I always have to pay taxes at end of year.
We have no 401k, can’t afford it.
More construction on new ( affordable homes ) is not the answer to homeless families .
Residents in Albany are having problems buying groceries and paying medical bills, our rent is being raised each year.
Hard working Couples can barely
Make ends meet.
Strengthen what you have
Health Help and Happiness
Does not come from mass construction and raised taxes.
Peace
With their proven ignorance in comments on this blog, they now think they are experts in everything. Who could possibly be more wrong?
It sounds like Novak is what Spiro Agnew referred to as a “nabob of negativity.” Perhaps it is good she’s retiring from City mismanagement.
The obsurdity of thinking that new taxes on constuction will make housing more affordible is, at the least, ignorant. Just like every tax on anything, the cost is passed onto the consumer/buyer.
It amazes me that anyone can think that taxing something makes it less expensive.
A 20 year tax exemption? The City can’t fix badly deteriorated streets now so they are adding a “User Fee” to the water bill. Will occupants of these “affordable” houses be getting that added to the water bill? I will bet they will.
That 20 year exemption will effect street repair, schools, police, fire, parks, anything that is supported by property taxes.
What is going to happen at the end of that period and the taxes start being paid? The rent will go up to cover it.
Poor judgement on whoever came up with that idea!
I wonder if the fee was reviewed at the state level?
https://www.oregon.gov/bcd/jurisdictions/pages/proposed-fees.aspx#:~:text=Changing%20fees&text=Once%20the%20local%20jurisdiction%20drafts,different%20than%20the%20effective%20date.
The city mayor, manager and council are determined to make life harder to live here. The only ones benefiting from this is the city, realtors, contractors and so called nonprofits. Tax money will be divided up and wasted. No roads repaired, no help for people who need help to keep their homes. Homelessness will continue until all these “kind hearted people” stop getting paid to keep people homeless or benefit from their minimal efforts to supply housing. Paying upfront to get people to do the right thing never ends well and all their “compassion” disappears when there is no more money to fill their generously huge pockets. If things go wrong, who will be held accountable for all the failed projects and lost money? Taxpayers will, that’s who.
I dislike taxes as much as the next person; especially now that I’m retired and on set income, but from an economic standpoint, the city/county/state needs a way to generate income that matches inflation/CPI to keep up with eroding systems (roads, pipes, etc.). I remember a phrase from leadership academy in the service: “If you’re not part of the solution, you’re part of the problem”. 1. Q: How does the city generate income required to more than match needs? Albany is a town in need to steady employment at a higher than median income…that way life gets better for everyone rather than having to commute. (Any extra funds might be used to supplement grants to assist low-cost housing projects to help mitigate the taxes?). Food for thought.
As a person who spoke against the CET, here is my message to the Mayor and certain Council members–If you want people to give you respect in the public comment segment of a public hearing; you must by your example, demonstrate respect for the public. The relative new policy/practice of limiting comments in a formal public hearing to 3 minutes is disrespectful. The practice of interrupting a speaker in the middle of a sentence when timing clock hits exactly 3 min.is disrespectful. The long held practice/policy of not allowing a conversation between a Council member and a commenter is disrespectful. To call for a point of order —stating the Council does not allow for a conversation with a commenter–is disrespectful. Please listen/watch how the Mayor operates in the A/V Council recording for 12/11/24
So in order to make housing more affordable they are going to make it more expensive. Yep, that makes sense.
Many of the previous commenters here have it exactly correct- there will be a severe shortage of tax revenue from the 20 year tax exemption. When I testified I provided examples that Portland estimates they are will be short $135 Million from their 10 year property tax exemption. We can argue over how much Albany will be short, but the City of Albany cannot answer the question as to how they will fund the shortage?
Most reasonable people will surmise that the shortfall will be paid for by new bonds, increased taxes, new fees, or cutting service levels. And it will occur long after the current bunch of folks leave office. So it will be our job to remind the tax paying citizen at that time who exactly supported this scheme.
The main issue is that this two part scheme to rob from the rich to provide for housing the poor will indeed create a social class of people that live in the community and consume its services but don’t actual pay for any of it. I know that sounds extreme but its the truth. Normal market rents include the taxes on the property. When taxes are exempted the requirement is to lower the rent, meaning those paying the rent are not paying taxes to support the community.
Suppose its a 200 unit apartment complex. That means those people are using the schools, library, parks, roads, police, fire, etc. etc. all for free. They can vote for a new bond to cover the cost and won’t pay one cent! It’s really messed up.
The cost of housing either to buy or rent is a problem. There are solutions which will not have the devastating effects of these two propositions. First the City has to realize that any increase to the cost to build housing has the opposite effect of making the housing cost less. Duh.
I have suggested that more ADU’s would be built if the SDC fees were eliminated. Other cities have done this with great success. Oregon has been a leader in ADU’s and now changes in zoning to allow ADU’s are going across the nation. The best solution is to build more housing- that is get the supply and demand in a more balanced state.
Unfortunately the democrat controlled state of Oregon does not understand economics. While the governor wants to increase the housing supply by 30,000 units, at the same time the state shuts down logging in the forests. The result is that no less than 7 lumber mills closed down in Oregon this year. As they say- common sense is not so common.
Those of us contractors and developers will continue to do our small part to increase the housing supply. But we are growing tired of constantly having to fight the government at every turn. Anybody can be part of the solution, just put your own money at risk and go build some housing. Why is it that the people with the “answers” and “solutions” always want to steal money from everyone else to solve the problem?
This is what’s happens when you keep voting in the same corrupt politicians
“Corrupt” means dishonest. No action is “dishonest” just because you disagree with it.
We’re going to miss Matilda Novak.
Clearly this council is hellbent on making life more expensive for us all.
Allow me to recount the ways:
– Road Repair Tax to the Util bill
– Bury power lines fee tacked on to Pacific Power bill
– Bump increase for the storm water Util fee
Did I forget something? Probably!
All with out a citizen vote.
Something is wrong with them!!!
The “them” is really City staff that the Council just follows like sheep. Staff says we spent a lot of time developing this budget so you should not delete any proposed spending.
Five council members say Oh–Ok– approved.
Corruption is generally understood as a specific type of unethical behavior that involves the misuse of power or authority for personal gain. Anyone with any sense would disagree with any actions the city takes that have negative effects on our lives.
One might look my response to Carol Gascoigne from this blog item.
https://hh-today.com/new-software-and-city-utility-billing-delays/
The new system doesn’t even send you a confirmation like the OLD SOFTWARE DID!