A 17-year ban on inclusionary housing laws has been repealed as the Portland City Council approved a 1% construction excise tax which officials hope will help fund the city's affordable housing projects.
Starting August 1, the tax will be collected on both commercial and residential real estate projects. The tax proceeds are earmarked for the city's Inclusionary Housing Fund and the Oregon Department of Housing and Community Services. The tax revenue from residential construction will be split between the two while 100% of the tax proceeds from commercial projects will go into the Inclusionary Housing Fund.
Commissioner Dan Saltzman says the tax should raise an estiamted $8 million per year.
The tax shouldn't affect the current pace of housing construction in the city, but if current interest rates, out-of-state buyers or lack of inventory change Portland's new home construction market could slowdown.
