County targets affordable housing with construction tax

Hood River County Board of Commissioners last week asked staff to write up an ordinance creating a new construction tax devoted to funding affordable housing programs.

The excise tax, created by Senate Bill 1533, allows local governments to impose taxes on residential and commercial development via building permits, with revenue destined for housing initiatives.

The board took action on Dec. 19, moving toward the ordinance, which they’ll have an option of adopting at an upcoming meeting in winter or spring of 2017.

“Our goal is to take them a draft ordinance in January or February for their review and feedback,” Hood River County Planning Director John Roberts said.

The policy tool came about when SB 1533 was signed into law this summer. So far, the City of Portland is the first government body to implement the tax program in Oregon.

Hood River County’s proposed excise tax, created by SB 1533, would collect a 1 percent tax on new construction, devoted to affordable housing initiatives. The Board of Commissioners will have an option of adopting the tax plan in early 2017.

Locally, an ad-hoc committee of government leaders and residents has worked at sessions throughout the year to develop a tax plan. Among the group are county, port and city representatives from Hood River and Cascade Locks, and Joel Madsen, executive director of Mid-Columbia Housing Authority.

County Building Department staff would collect the tax from developers and property owners when issuing permits. It could be applied to new construction and add-on construction for both residential and commercial properties.

The term “affordable housing,” according to a county staff memo, refers to a household’s ability to live within its means — generally paying no more than 30 percent of its income toward housing costs or rent. Such priced houses, the report notes, are “definitely scarce, and becoming much scarcer, in the county.”

The tax would resemble a system development charge, which the school district, parks district and county public works collect. The residential rate, as allowed by SB1533, has a 1 percent maximum. The commercial rate is flexible — allowing for a higher rate — decided by the county.

However, the committee has proposed a flat 1 percent rate on all residential and commercial buildings during the tax’s rollout, with the option of increasing it down the road.

“The committee recommended one percent across the board; start slow, maybe come back at a later date to discuss,” Roberts explained.

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