Taxpayers may not be paying much attention to the question of whether the city of Portland should continue to expand and extend its urban renewal districts. But they should.

Urban renewal, as it is being practiced in Portland, is an issue that touches the wallets of just about anyone who pays property taxes in Multnomah County - and arguably within the entire state.

The decision that the Portland City Council is slated to make June 18 and June 25 - to extend the life of the River District Urban Renewal Area until 2027 - raises a number of questions about the appropriate use of such districts.

But our main concern is simply this: Should hundreds of millions in tax dollars continue to be spent on a few selected projects within the urban renewal district, or would that money be better directed toward local school districts, Multnomah County and other citywide or countywide public services?

Our belief is that the city of Portland and the Portland Development Commission are allowing some urban renewal areas to stay in place too long. And in doing so, they risk future political support for the worthy concept of urban renewal.

Districts go on … and on

When urban renewal districts are formed, they almost always are sold to the public on the basis that there is an area of urban blight that needs a special boost from government before the private sector will be willing to invest in the neighborhood.

For an urban renewal agency to be able to make those public improvements, it freezes property taxes in the district and diverts any increase in valuations away from general-government services and toward urban renewal projects.

The rationale is that other taxing jurisdictions - school districts, county governments and the like - may make small, short-term sacrifices in their tax revenues, but they will recoup that money and more when the urban renewal area is terminated and all the new development comes back on the tax rolls.

This rationale only holds up, however, if the property is returned to the tax rolls. As noted in today's Portland Tribune, of the 14 urban renewal areas that have been formed in Portland since 1958, only three have ever been terminated.

Renewal funds are addictive

These facts are important to taxpayers because the money that is going toward urban renewal projects could be funding other things they would much rather see.

Wonder where the money might come from to open the vacant Wapato jail? Then consider that Multnomah County forgoes an estimated $18.5 million in tax revenue each year due to Portland's urban renewal districts.

Along the same lines, every school district that overlaps with a city urban renewal district loses some of its local-option or bond-measure money to urban renewal. And millions of dollars are diverted from the state's basic school support fund.

Most of the projects funded by urban renewal - including low-income housing - are worthy endeavors. But there has to be a point at which the city and the Portland Development Commission declare victory and close up shop in an area.

The River District, which includes the stunningly successful Pearl District, provides an example. Even if the original 2016 termination date for the district were left in place, the PDC would have $101 million remaining to spend on public projects.

The 10-year extension, along with a proposed expansion of boundaries, increases that amount by $344 million. It's easy to understand the addictive power of such money when a handful of people get to decide how it will be spent.

But those dollars would mean more services to more people if they were returned to their rightful jurisdictions.

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