<br /> From: Peter and Lynne SpirMutrie <email@example.com>
<br /> Sent: Tuesday, September 17, 2019 11:47 AM
<br /> To: Council Distribution
<br /> Subject: Proposed demolition tax (letter of opposition)
<br /> To: Mayor Studebaker and City Councilors
<br /> From: Peter Spir, 449 C Avenue, Lake Oswego
<br /> Date: September 17, 2019
<br /> Subject: Proposed Home Demolition Tax
<br /> Is affordable housing needed in Lake Oswego'?
<br /> As a former City Planner, the answer is an emphatic "Yes".'
<br /> Is this proposed home demolition tax an effective, fair and equitable means to achieve affordable housing? The answer is an equally
<br /> emphatic "No".
<br /> Will the tax be effective?
<br /> The demolition of older homes will not be discouraged by the tax so long as a one bedroom/ one bathroom house sells for
<br /> $475,000. According to Clackamas County Assessor's data, the home at 553 Sixth Street sold on March 27, 2019 for $475,000. It is also
<br /> $95,341 over the "affordable home price" at 80% of median family income (MFI). Most older homes sell for much more.
<br /> A demolition fee will not amount to anything more than a temporary slowdown or speed bump in demolitions. As Councilor Wendland
<br /> stated at the April 16, 2019 Council work session, "...a lot of people want to keep old homes, but market forces prevail. It's part of
<br /> recycling of life. It's a reality."
<br /> It is, in part, why the City of Portland scrapped the idea of a demolition tax.2
<br /> The effectiveness of the tax is further diminished by the proposal to direct the collected tax not to affordable housing programs but to
<br /> parks and recreation. There is no nexus or proportionality here. (If you need money for parks and recreation then Council should propose
<br /> an increase in City wide taxes so the burden is fairly distributed.)
<br /> Will the tax be fair and equitable?
<br /> The narrative supporting the demolition tax will argue that some older homes, that might be demolished, are being used, or could be used,
<br /> as affordable rentals. According to the Census Bureau's 2017 American Community Survey for Lake Oswego only 20 percent of
<br /> occupied single-family detached homes are rentals. The majority, 80 percent, are owner occupied. A Zillow search of available rentals in
<br /> Lake Oswego showed only two homes are priced at "affordable" rents (80% of MFI).
<br /> Question: is it equitable or fair to impose a tax on a small group of homeowners whose homes were never in the rental pool to begin with
<br /> and have market values far in excess of the "affordable housing" definition?
<br /> Planning Director Scot Siegel did a great job speaking to this issue in his September 17, 2019 report:
<br /> "Potential impacts of the tax include increased construction costs, which would likely be passed on to sellers of land and/or buyers of
<br /> new homes. If the cost is borne by sellers, it could disproportionately impact older residents whose retirement savings is in the value of
<br /> their property. In addition, the tax would target neighborhoods that are redeveloping rather than the city as a whole, which could be
<br /> viewed as unfair if the tax is used solely for parks maintenance. "
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