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LEE PERLMAN
THE MID-COUNTY MEMO
In the words of Portland Planning and Sustainability Commission member Chris Smith, “We're chasing poverty eastward just as the central city gentrifies. It seems rational to send the programs that mitigate poverty east as well.” But, sometimes there are unintended consequences.
A case in point was the Portland Housing Bureau's proposal last month to “adjust” the territory of one of its programs: the Single Family New Construction Limited Home Tax Exemption or LTE. This program allows low-income homebuyers to gain a 10-year property tax exemption for “improvements” to property (the new homes) in certain “distressed areas.” As staffer Andrea Matthiessen told the commission, a given area is judged to be distressed based on a high percentage of vacant residential properties, concentrations of foreclosed properties, frequency of non-violent crime, 2010 median home sale prices, a large number of buildable but vacant residential lots and low home ownership rates.
The state requires participating jurisdictions such as Portland to adjust the boundaries of the program every three years to reflect current circumstances.
The Housing Bureau is proposing to remove all or part of seven census tracts, comprising a total of 1,119 acres, and add two with total of 1,383 acres. All areas being removed are west of the I-205 Freeway. The additions are east of it, in the Lents, Mill Park and Hazelwood neighborhoods.
The city is planning a more extensive review of housing programs, called the Big Look, in the near future. However, Matthiessen said, “Our staff would really like a review now to bring us into compliance with state requirements.”
Annette Mattson, vice-chair of the David Douglas School District, testified, “We're not asking for the end of this program, but the timing of the change couldn't be worse. We are at record enrollment, at 10,600 students. We are at capacity in all our schools. We've built like crazy, and now we need to do repairs.” An incentive for more new home building means “an increased burden” for the district, she said, and “Limits on tax increases make that difficult.” Already, she said, 28 percent of the district's properties are tax exempt. The enrollment increase has come “largely from immigrants and former Portland Public School students. We're not against increased home ownership, but increased burden.”
Commission chair Don Hanson expressed sympathy. “When your buildings are over capacity, an increase in enrollment isn't a creep in expenses, it means you need a new building,” he said.
Mattson had a process issue as well. David Douglas Superintendent Don Grotting received notice of the hearing the day before, she said. Matthiessen said there is always “extensive” outreach to school districts before a boundary shift, but apparently, most of this was done within the Portland School District.
This brought a response from Karen Fischer Gray, Parkrose School District superintendent and commission member. “When people are thinking of changing maps that affect a district, the discussion should be early and often,” she said. “This involves loss of revenue, and more families bring increased burden. I am kind of peeved that Portland Public Schools is represented on issues that have nothing to do with them.”
Commission member Jill Sherman, who works for the Gerding Edlen Development Co., pointed out that the districts and general fund would continue to receive taxes from the properties involved, and that it could be argued that neither the new houses nor the taxes they generate would exist without the program. However, she agreed, “We need to have all the school districts at the table, at least all who want to be. We need to figure out a way to not have this happen again.”
There was some unhappiness west of I-205 as well. Builder Jeff Schumacher claimed that he is putting together development deals in part of the Brentwood-Darlington neighborhood due to be withdrawn from the program, and he felt that at least some of this still qualifies for the program. The city provides a grandfather clause for developments in progress when an area is removed from the program, but Schumacher said the development process is so slow that the grandfather clause does not always answer builders' needs. “Without tax exemption I would have to shut down here,” he said.
The commission considered postponing the issue to their Jan. 25 hearing, but decided instead to accept the report without making the changes it recommended. “I don't think we'll be much smarter in two weeks than we are now,” Smith said.
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