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After dropping his plan to charge developers $25,000 for razing habitable single-family homes, Portland Mayor Charlie Hales is now looking for other ways to pay for affordable housing.

The week before Christmas, Hales’ office sent a letter to stakeholders informing them that he was abandoning a demolition tax proposal he had formed to achieve two goals: discourage adverse developments in residential neighborhoods, and pay for ambitious efforts to tackle rapidly rising rents and homelessness.

Hales introduced the one-of-a-kind idea in September. Public hearings were held Oct. 14 and Nov. 25, and the proposal went to a vote Dec. 2. Three commissioners expressed opposition 鈥� Steve Novick, Amanda Fritz and Nick Fish 鈥� but the mayor left the meeting committed to identifying revisions that could win over a majority of commissioners.

Ultimately, he couldn’t find any.

鈥淚n subsequent conversations with commissioners, Mayor Hales concluded there are no reasonable changes to the proposal that will satisfy a majority of the City Council,鈥� the mayor’s policy director, Jillian Detweiler, wrote in the letter. 鈥淎s a result, he will withdraw it.鈥�

The mayor’s office now plans to put forward two proposals addressing negative impacts of demolition 鈥� one revising infill development standards to make new houses compatible with existing neighborhoods, and the other promoting the use of deconstruction over demolition to lessen environmental damage.

After Hales announced his tax proposal, building groups and others responded with stark opposition. Oregon Home Builders Association CEO Jon Chandler called the idea a 鈥渟tunt鈥� that would violate a state law banning cities from establishing excise taxes on construction activities.

Some building industry professionals and neighborhood association members expressed concern that the proposal would misfire and actually increase construction costs and rents, according to Paul Grove of the Home Builders Association of Metropolitan Portland.

鈥淚 think the council was very thoughtful on the proposal and understanding about the impact to affordability it would have had,鈥� he said.

In recent months, Hales and Dan Saltzman, the commissioner in charge of the Portland Housing Bureau, have helped set aside $204 million to meet affordable housing goals. New, permanent funding sources are still being sought, the mayor’s spokeswoman, Sara Hottman, stated in an email.