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Award Year:2015
Entry Title:Demolition Tax
Pillar: Government Affairs
Award Category: Best Government Affairs Effort - Locally
Association Name:Home Builders Association of Metropolitan Portland
Association Category Size: Local Association: 601+ Members
Number of Staff:19
Submitter's Name:Dave Nielsen
Submitter's Title:Executive Vice President
City:Lake Oswego
Description of the Entry:The HBA of Portland successfully defeated a proposed $25,000 demolition tax on all homes, regardless of condition. In an election year, the proposal was a gift to liberal Portland activists and neighborhood groups that had long complained about the tear-down of homes in the more affluent parts of the city.
Was the Entry Created in the Award Year:Yes
Purpose and Goal of the Project:Portland is perhaps the most liberal city in America, with arguably the most inefficient form of government. Portland’s City Council has long determined housing policy in an ad hoc, reactionary fashion that often panders to those wealthy neighborhoods that scream the loudest, at the expense of the less affluent and less vocal parts of the city. In the wake of a housing emergency and soaring rents and home prices, the $25,000 demolition tax embodied all that was wrong with Portland policy making. The goal was simple – work to defeat a hair-brained proposal that would negatively impact housing affordability and opportunity for the City of Portland and its residents.
How Purpose and Goal Was Achieved:In the hours before Christmas, after it looked like it would go through several times and after the Mayor repeatedly swore to bring it back until it passed, the Mayor’s Office sent out an email saying the proposal was dead and they would not pursue the demolition tax any further. In September of 2015, the Mayor’s Office released a policy proposal that would charge over $25,000 for every home demolished in the city in order to curb what had become known as the “demolition epidemic”. The policy was being billed as a way to protect neighborhood character and defend affordable housing in the city. Due to the extremely liberal environment we work in, initially it looked like a slam dunk for the Mayor’s Office. Portland is a city that loves to “protect” its livability, whether that accomplished by charging $300 per inch for tree removal or by charging approximately $8,000 per home for park system development charges. When the proposal was initially presented to the public, the Mayor already had the votes lined up. It was only through conversations with various councilors and collaboration with unlikely allies that we were able to instill enough doubt to slow down the vote. The initial proposal from the Mayor’s office was to charge $25,000 + $25 for every year since the home was built. The only allowance within the initial proposal was an exemption for homes considered “derelict” by the city. We quickly arranged for meetings with the Mayor’s Office to voice our concerns. The City of Portland is not only landlocked, but also built out. Vacant land is scarce and often comes with enough issues that mitigation is not feasible. Though there is very little land available, the City of Portland has told our regional government that it can handle a population increase of 200,000 people over the next 20 years. The only way we can reach these numbers is through aggressive redevelopment. A $25,000 demolition tax would make it impossible for the city to reach these aspirational numbers and would further hurt housing affordability in the region by shorting an already extremely constrained housing supply. The irony of a $25,000 “demolition tax” supposedly in the name of housing affordability was lost on some. After multiple conversations with the Mayor’s Office, the proposal was scaled back slightly. The policy was amended to a flat rate of $25,000 (no additional fee per year of the house’s age, although that was nominal to begin with) and added possible rebate of up to $25,000 for any redevelopment that increased the density of the property. This revision kept our metro government from intervening and ostensibly dealt with the increased infill goals of the City, but it had the unintended effect of turning the very neighborhood groups he was trying to appease against him. The most extreme of the neighborhood groups, United Neighbors for Reform, began a vocal campaign against the changes to the tax, which was quickly picked up by the liberal media outlets. They claimed that the amended demolition tax would cause more demolitions rather than slow the process. We began to employ a different approach before City Council by partnering with some of the very neighborhood coalitions the Mayor was seeking to appease. Namely, the HBA of Portland attacked the proposal from the left and framed the narrative as a proposal that would disproportionately impact housing affordability and equity, especially for the less affluent and disenfranchised residents of the city. We worked with a local permitting company to gather information on the houses that were being demolished. Though many of the homes being demolished were not considered derelict by the city’s standards, many of them had issues that would have made remodeling cost prohibitive. Images often speak louder than words, so we gathered pictures of some of the homes that had been recently demolished in order to show that though they are not technically derelict, they were often not fit for habitation either. (sample pictures attached). In addition, we were also able to show that without a tax in place our builders were not idly demolishing homes. In 2015, single family home builders had increased the density of the demolished properties by 32%. When multifamily is included, density increased by over 200%. Sample bar graph attached). In a city that needs to increase density in order maintain its quality of life this is a very important point. We were able to take this information to several city council members and bring up enough valid questions to make it impossible for the Mayor to get an easy win. By the time the proposal came before city council, we had not only put together a list of reasonable requests but also put together an agenda that embraced the liberal attitudes of our city. Since Portland prides itself on being progressive, the HBA engineered a testimonial lineup that featured a leading housing/economics professor from Portland State University – the training ground for most of the city planners, an expectant mother seeking to tear-down her existing home and rebuild but could not afford an additional $25,000, a gay gentlemen who had recently adopted a son with his husband hoping to move their new family back into Portland but realized that the tax would hinder the chances of finding an affordable home, and an African-American retiree living in a rapidly gentrifying area of the city who understood that any tax would hinder the value of his “nest egg” and was not fair to him and other long-time residents that had seen that neighborhood through from the “tail to the top”. Lastly, as powerful as the framing of the narrative and testimony was before Council, the power of progressive partnerships with more reasonable neighborhoods within the city was equally beneficial to the demise of the tax. Working with moderate neighborhood groups, industry associates and other progressive allies, an organic collaboration formed around housing affordability and the potential unintended consequences that would result from a $25,000 tax.
# of Staff/Volunteers Who Worked on the Project:1.5
Project Budget:$0
Project Funding Description:There was no funding earmarked for this endeavor. The purpose and goal were achieved by old-fashioned lobbying and the formation of a coalition that embodied the liberal character of the city.
% of Project Done by Staff:100%
% of Project Done by Members:0%
% of Project Outsourced (i.e. PR Firm, Contract Lobbyist):0%
Obstacles and How They Were Overcome:As with any political process, there are a number of items and moving pieces that present unique challenges. In this instance, the first obstacle was the Mayor was using the demolition tax as ploy to galvanize neighborhood support for his reelection campaign. By working with some of the more moderate neighborhood associations and non-profit allies, we were able to make clear to the City Council and Mayor that this proposal would actually unite the housing community against him rather than plump his reelection numbers. Second, there had been a years-long effort by the neighborhood groups to quell the “epidemic” of demolitions occurring throughout the city – this became the narrative with all Portland media outlets. Though there is only so much we can do to influence the media in our city, we were able to bring to light several points that were well received by the, such as the fact that the tax would make housing less affordable, would hurt the cities aspirational density goals, and would further promote gentrification in the city. Third, there were unique internal obstacles, in particular convincing membership to embrace the above-noted progressive strategies and tactics versus employing the traditional, big-stick approach before City Council. Our members were rightfully indignant about such a proposal but staff was unconvinced that pursuing legal action would work in our favor. By employing our state association as a legal backstop, we were able to try new strategies that we had not pursued in the past.
How Project was Innovative:The significance of the approach cannot be understated in a city like Portland. For too long, the HBA had not adequately framed an issue in a manner that reflects the liberal character and values of the city. The HBA seized the progressive message and partnerships and killed the demo tax.
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