Garrett Andrews//October 1, 2015//
Homebuilders are worried about an idea being floated by Portland Mayor Charlie Hales to charge $25,000 for “one-to-one” demolitions on residential property.
As part of his “Neighborhoods Initiative,” Hales wants to heavily tax owners for razing “serviceable” single-family houses in . The move is intended to preserve both the diversity of housing stock in single-family zones and the availability of affordable housing.
Hales told the 91Ƶ that one thing that makes Portland unique is “neighborhood after neighborhood of nice, affordable single-family homes.”
“Home prices are ascending rapidly; people are barely hanging on,” he said. “The loss of affordable single-family homes one-by-one is a part of our crisis.”
The tax would not apply to structures being demolished because of fire or other forms of catastrophic loss, or those declared derelict. The money raised through the tax would go to affordable housing, Hales said.
The matter will go before Portland City Council on Oct. 16. Hales said the tax amount could be modified.
“A lot of people told me they love the demo tax idea,” he said. “Some people have told me they thought the amount was too low. I don’t know if we’ve perfected the Goldilocks test.”
The plan has local homebuilders worried, said Paul Grove of the Home Builders Association of Metropolitan Portland. He said taxing teardowns could have a result opposite of what the mayor intends. It could make it difficult for a developer to build two or more houses on an existing lot.
“In essence, this is a tax on density,” Grove said. “To maintain housing affordability, we have to have density, and the proposal would tax these alternatives that are the stated objectives of the city.”
One way that developers are building up infill is via “skinny” houses – razing a structure and replacing it with two narrow houses on the same lot. And if Hales is worried about preserving the history of a neighborhood, he shouldn’t go after skinny houses, Grove said.
“Skinnies go back to the early 20th century,” he said. “Portland has a long history of housing diversity.”
The “Neighborhoods Initiative” is a five-part plan to ensure that Portland’s neighborhoods remain “affordable, livable and equitable.”
Hales used the example of a $350,000 home being purchased, torn down and replaced with a $900,000 home that clashes with the surrounding Concordia neighborhood. Such an act can have a pernicious effect of pricing out a neighborhood’s current residents, he said. A map of home demolitions over the past five years shows heavy concentrations in the Cully and Concordia neighborhoods in Northeast Portland, and along Powell Boulevard and Division Street in Southeast.
Last year, 181 demolitions occurred in single-family zones, according to the Bureau of Development Services.
The proposed tax would be a unique policy. Other communities charge fees above and beyond basic permits, but do so to preserve a neighborhood’s character, according to Jillian Detweiler of Hales’ office.
But Grove said the mayor should go after buyer behavior, and not tax those supplying the demand. There is a greater problem with the city’s overall housing policy, he said, in that it prevents entry into homeownership by levying costs on first-time buyers.
“This will take us closer and closer to San Francisco,” he said in reference to its lack of affordable housing.