It’s no secret that housing costs have soared throughout the Portland metro region in the past few
A billion dollar tax on housing.
An Ineffective, Costly Waste.
No on Measure 26-199
Housing costs have skyrocketed throughout the Portland metropolitan area over the last few years, making it unaffordable for single mothers, the elderly and our other most vulnerable residents.
One of the primary causes of this crisis is the unique set of laws that Oregon has that restrict the amount of land available for housing and other needs. Those laws set up processes to allow more land to use used for housing, if the governing body choses to do so.
In November 2015, the Metro council voted unanimously to refuse to allow more land to be used for housing. Councilors said at the time that available land “provides sufficient opportunity for near-term development."
Now, Metro is asking for a $652.8 million in bonds (that will cost over a billions dollars to repay) that would be “payable from taxes on property or property ownership.” In other words, a tax on housing in the name of making housing more affordable.
Under the measure, Metro would be able to spend over $32 million on “administrative costs,” purchase property and use any amount of the ‘billion dollar’ tax for “other commercial, office and retail uses” that “may include spaces for grocery.”… in their own words…
This is the most absurd attempt to solve a problem that metro helped create.
This will create a tax obligation of over 1 BILLION dollars.
This gives Metro a blank check to spend money in almost any way they desire, without limitation.
This is an insult to voters and should be defeated.
We strongly urge a “no” vote on this measure.
Why Metro’s Public Housing Bond Measure is A Bad Idea
Measure 26-199 creates a new function for Metro. Presiding officer Tom Hughes argues that Metro has the necessary expertise for this because it has long had a program to subsidize and build “Transit-Oriented Development.” That is true, but Metro’s own auditor has been harshly critical of the TOD program. In August 2008, the auditor released a report concluding that, “The Program had no system for regularly monitoring project results in terms of increased density, reduction in vehicle miles traveled or new private development stimulated by its efforts. Consequently, it is difficult for the Program to demonstrate its effectiveness.” In November 2010 the auditor released a follow-up report criticizing Metro staff for failing to implement key recommendations from the 2008 audit.
Measure 26-199 allows Metro and local governments to keep 5% of bond proceeds for “administrative costs.” That amounts to $32.64 million that would be siphoned for non-productive uses.
There is no cap on how much Metro may spend on each housing unit, therefore the public cannot know what it is buying. Many recent public housing projects have cost more than $250,000/unit. If that trend continues, the measure could only pay for about 2,480 new units over the life of the bond sales. Given that the market produces over 10,000 new units each year, adding roughly 99 more each year through this bond measure makes it irrelevant.
Under the terms of the measure, Metro and/or other units of government may buy existing housing units and subsidize rents, rather than add new units. While this may make a handful of lottery winners better off, it does nothing to increase the supply of housing. Since the lack of supply is the fundamental problem, simply re-apportioning certain units to low-income renters means that all other units will become more expensive.
Measure 26-199 does not actually require Metro or any unit of government to provide more housing. As described in the explanatory statement, “The improvements constructed or purchased with bond funds may be composed of a mix of unit sizes, and may include spaces for community and resident needs and services, such as, without limitation, spaces for childcare services, health care services, grocery, onsite utility and building facilities, and other commercial, office and retail uses.
Measure 26-199 will raise the price of all housing because property taxes will go up for at least the next 20 years to pay off the bond debt. Borrowing $652.8 million will result in principal and interest payments of roughly $1.06 billion. This makes all housing more expensive.
Metro’s “2040 Growth Plan” is actually designed to make housing more expensive by restricting land supply. As the agency’s own economists stated in 1994, “…the data suggest a public welfare tradeoff for increased density, more transit use, and reduced vehicle miles traveled. The downside of pursuing such objectives appears to be higher housing prices and reduced housing output” (emphasis added). Since 1970, regional population has grown by 78% while the regional supply of buildable land inside the UGB has only grown by 10%. This shows that in the world of Metro land-use regulation, expensive housing is a feature, not a bug.
The only solution to the housing crisis is to deregulate every phase of the homebuilding process – land availability, System Development Charges, density requirements, inclusionary zoning, and parking requirements. In addition, Metro has imposed a “construction excise tax” on most new construction since 2006. This tax should be repealed. We cannot make housing more affordable by taxing it.
Voters in Clackamas, Multnomah and Washington counties are being asked to approve Measure 26-199 on their ballots for the upcoming November 2018 general election. Here is some basic information about Measure 26-199 that voters can use to help make their decision.
Housing prices in the Portland metro area have skyrocketed in recent years, creating hardship for our most vulnerable residents.
Oregon has unique laws that requires processes for adding more land to housing and restricts where it can be built. The Metro council undertook such a process in November 2015, and voted unanimously to refuse to allow more land to be used for housing. Metro’s council reasoned that the available land “provides sufficient opportunity for near-term development."
It would authorize Metro to issue $652.8 million in general obligation bonds to fund “affordable housing."
The $652.8 million in bonds would be “payable from taxes on property or property ownership.”
Measure 26-199 would allow over $32 million of the $652.8 million to go towards “administrative costs.” It would also allow the property purchased by Metro to go towards “other commercial, office and retail uses” that “may include spaces for grocery.”
Is there a limit to how much money Metro would be able to spend per housing unit under Measure 26-199?
Under Measure 26-199, Metro and other government agencies would be able to buy existing housing units and subsidize rents. But Measure 26-199 does not require Metro to increase the overall supply of housing.