Kotek’s Housing Production Advisory Council: What are they thinking?

By William MacKenzie,

Gov. Kotek has apparently decided not to immediately pursue multiple money-raising proposals put forward by her Housing Production Advisory Council to address the affordable housing crisis in Oregon. But you have to wonder, who are these people and what in God’s name were they thinking? How could they have been so oblivious, so tone-deaf to, the public mood?

The proposals in the Council’s ill-advised 20-page draft report, HPAC Policy Recommendations, all of which would have continued until sun-setting in 2032, include:

Increase all personal income tax brackets by ½ percentage point
Establish a special $1 per $1,000 real property tax assessment outside of Measure 5.
Implement a 0.5% retail sales tax
Implement a 0.5% payroll tax
Double the current state fuel tax
Targeted Measure 50 Reform:
Increase annual Maximum Assessed Value change from 3% to 5%.
Authorize voters to increase the permanent levy of their local
jurisdiction.
Exempt cities and counties from compression.
Adopt Land Value Tax
Eliminate Mortgage Interest Deduction for Second Homes (i.e., abolish income tax deduction for interest paid on second homes).
Enact temporary property tax exemption for new housing at 120% AMI or below.
Reduce or Eliminate Tax Expenditures (i.e., tax exemptions) not related to housing.

Total projected ANNUAL new revenue from just the first five proposals would be $2.4 billion. If enacted in 2024, and maintained until sunsetting in 2032, they would would fill state coffers by grabbing almost an astonishing additional $27 billion from taxpayers. Measure 50 reform surely would grab millions more.

Who came up with this stuff?

The report notes that four lawmakers sat as members on Kotek’s Council:

Senator Dick Anderson (R – Lincoln City)
Senator Kayse Jama (D – Portland)
Representative Vikki Breese-Iverson (R – Prineville)
Representative Maxine Dexter (D – Portland)

I can understand the two liberal Democrats, given their party’s predilection for government spending.

Jama represents Oregon’s 24^th Senate District, which includes parts of Multnomah and Clackamas Counties. He co-founded the Center for Intercultural Organizing, now Unite Oregon, and served as the director until 2021. He was appointed unanimously by the Clackamas and Multnomah County Boards of Commissioners to replace Shemia Fagan after she was elected Secretary of State. He won election by 58.7% in 2022.

Dexter represents Oregon’s 33^rd House District, which covers the Northwest District and Northwest Heights of Portland, plus Cedar Mill, Oak Hills and most of Bethany. She was appointed in June 2020 after the death of Democrat Mitch Greenlick. She won election by 84.8% in 2022.

It’s harder to understand why Republicans Dick Anderson of Lincoln City and Vikki Breese-Iverson of Prineville signed on to the Advisory Council’s massive tax proposals, unless you accept the proposition that the two parties are actually a duopoly focused on expanding government through mock competition..

Anderson squeaked into office after the incumbent Democrat decided not to run for re–election. He defeated Democrat Melissa Cribbins in the 2020 general election by just 49.4% to 46.5%.

Breese-Iverson, who formerly served as minority leader of the Oregon House, is an even more surprising advocate of higher taxes. Her Prineville home is in conservative Sen. Lynn Findley’s district. He’s one of one of six Republican senators who might be unable to run for reelection in 2024 because of his 2023 walkout. If he doesn’t run, Breese-Iverson may run in his place.

Then there are all the gubernatorial appointees to the Council.^[1] With broad experience in affordable housing, finance and architecture, and most with a long Oregon presence, you’d think they would be sensitive to the public mood. They weren’t.

The reality is that the optimism and liberal tolerance so long present in Oregon has been degrading for quite a while.

A January 2022 statewide survey conducted by the Oregon Values and Beliefs Center found Oregonians questioning government spending, with half of respondents saying more than 44 cents of every dollar in state spending is wasted.

“We spent way too much money on programs without any evidence that those programs are SOLVING the problems they are meant to address,” said one male respondent aged 45-54 in Multnomah County. “It seems that spending money is seen as a solution, but it isn’t. I want problems SOLVED and then the program must end. The programs go on forever and accomplish little, if anything.”

Young adults (18-29)—a group likely to exhibit strong support for tax increases to fund social programs—reported the highest perceived waste in the state budget of any demographic group. The median response among young adults was that a whopping 56 cents per dollar of state spending are wasted.

Liberal patience has degraded most noticeably in the Portland Metro area, where about half of Oregon’s population resides.

In a May 2023 poll carried out by GS Strategy Group for People for Portland, 75% of Multnomah County voters said homelessness in the area was “an out-of-control disaster”.

More than half (55%) said “Portland has lost what made it a special place to live”. And even worse, 65% agreed that elected officials in the Portland area were listening to “a small group of insider political activists” on important issues, rather than the public at large.

The erosion of once reliable liberal tolerance for the homeless and community crime was also evident in the overwhelming support (67%) for compelling drug addiction and mental health treatment for people in crisis.

Similar shifts in public mood were evident in a December 2023 survey of Portland voters by DMH Research for the Portland Police Association. About two-thirds of respondents said the city was on “the wrong track” and more than half said they would leave if they could afford to. Almost 70 percent of those surveyed said the city was “losing what made it special” and only about 20% said the city’s best days lie ahead.

Against this backdrop, the members of the Housing Production Advisory Council were way off track in their revenue-raising proposals. Simply put, they clearly failed to “read the room” .

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Gubernatorial appointees to the Housing Production Advisory Council

Ernesto Fonseca is the CEO of Hacienda Community Development Corp., which provides affordable housing, homeownership support, economic advancement and educational opportunities.

Elissa Gertler, former executive director of the Northwest Oregon Housing Authority, is Clatsop County Housing Manager, leading the county’s efforts in developing more affordable housing.

Riley Hill is a longtime local contractor in Eastern Oregon and former Ontario mayor from 2019 to 2022.

Natalie Janney is Vice President at Multi/Tech Engineering, which designs subdivision and multi-family projects throughout Oregon.

Robert Justus was co-founder of housing company Home First. With its development partners, the company has built 1,425 units of affordable housing with a development cost of more than $381 million. Justus stepped away from the company at the end of 2023.

Joel Madsen is Executive Director at Mid-Columbia Housing Authority and Columbia Cascade Housing Corporation. Both work towards promoting and administering affordable housing in the Columbia River Gorge.

Ivory Justice was selected as Executive Director of Home Forward, Oregon’s largest provider of low-income housing, in January 2023. She previously worked as Chief Executive Officer for Columbia Housing and Cayce Housing in South Carolina.

Erica Mills is Chief Executive Officer at NeighborWorks Umpqua in Roseburg. The private non-profit works with residents in Coos, Curry, Douglas, Jackson and Josephine Counties on affordable housing development, education, training, and homeowner assistance as well as lending, loan servicing and other financial services.

Eric Olsen is the owner of Monmouth-based Olsen Design and Development, Inc., a design-build land development company focusing on small to midsize projects with emphasis on residential.

Gauri Rajbaidya is a principal at Portland-based SERA Architects.

Karen Rockwell has been Executive Director with the Housing Authority of Lincoln County since late 2022. She served previously as Executive Director of Benton Habitat for Humanity in Corvallis, a commissioner on the Linn Benton Housing Authority and as vice chair of the Corvallis Housing and Community Development Advisory Board.

Margaret Van Vliet is a Portland-based consultant focusing on strategy development, organizational improvement and project management. Her specialties are housing homelessness and wildfire recovery.

Justin Wood is a Portland developer and vice president of Fish Construction NW Inc.

Oregon Catalyst