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Council increasing construction costs to fund affordable housing

PORTLAND TRIBUNE FILE PHOTO - The City Council is considering requring hand deconstructiuon of Portland's olderst homes, which is better for the environment but could add thousands of dollar to replacement homes.Although the City Council has declared a housing emergency because of rapidly rising rents and home prices, it is approving a series of measures that will increase the cost of new home construction — most in the name of building more affordable housing.

On Wednesday the council approved a 1 percent construction excise tax on all new construction, including residential construction, to help fund new affordable housing projects. The tax was authorized by the 2016 Oregon Legislature as part of a package of bills intended to create more affordable housing.

The vote took place while the council while the council was discussing a requirement that all homes built before 1916 to be torn down are deconstructed instead of demolished by large machines. Although considered to be better for the environment, deconstruction — with involves the hand removal of construction materials — is more expensive than demolition. The requirement could add thousands of dollars to replacement homes.

On Thursday, the council is expected to put a $258.4 million bond on the Nov. 8 general election ballot to fund an estimated 1,300 affordable housing preservation and construction projects. If approved by the voters, it will raise property taxes 42 cents for ever $1,000 of assessed value.

And on July 1, a new schedule for system development charged to fund future parks projects is scheduled to take effect. Most of the system development charges assessed against new construction projects that fund Portland Parks & Recreation projects are expected to increase.

Most of the votes have occurred — or are expected to occur — as the council has dedicated hundreds of millions of dollar to new affordable housing projects. Among other things, the council has increase the amount of urban renewal money dedicated to affordable housing from 30 to 45 percent.