When I lived in Portland, which was only a year ago, it seemed as if all the locals were complaining that all the folks from California and elsewhere were invading the land and driving the prices up, sprawling the town, ect. Now people are leaving and thats no good either. Well, which is it?

It's both. All the Californians are staying, and the rest of us are getting ready to leave. 8c)

I would welcome a real discussion about our tax situation … not just quote a lobbyist from an extremely powerful group, the realtors - whose industry benefits already heavily from non-taxable real estate transactions.

As for the real estate transfer tax - I for one think it is something we should have a serious discussion about. Only 13 states do not have a real estate transfer tax of some sort, http://nmrealtor.com/transfertax/transfertaxes-by-state.pdf . We have a serious problem developing in the PDX area, as the article you quote indicates there is and will continue to be a dire shortage of low-income housing.

Okay, sure we can all complain about the Multnomah County Income Tax. I think it is pretty bad policy, but I voted for it, and will continue to support it for its remaining two years - our schools and services required an immediate solution.

Voters in Oregon capped property tax rates at 1995 values (Measure 5), which resulted in a poorly structured, inequitable property tax system. I purchased my home for $100K more than the county is allowed to assess taxes on my home. So, I am getting a tax break just because in 1995 my neighborhood was “undesirable”. And, commercial property owners got big breaks as well. Prior to Measure 5, commercial property owners were paying about 57% of total property taxes, now they pay around 40%. And, Portland got screwed due to Measure 5 - now we Portlanders get about 70 cents for every dollar we pay in taxes.

We are constitutionally prohibited from having a sales tax, which would allow local governments to raise revenue. So what are we left with? Don’t just tell me we have to cut waste. Yes, undoubtedly there is waste at all levels of government - just like there is waste that could be cut in virtually every household and private business.

We need to have a discussion about meeting our funding needs. We all have a variety of priorities we feel our government should fund and not fund. We are all never going to agree. You think a baseball stadium is important investment, and I could really care less about a stadium. I would rather funds go to things like the max and streetcar, even though I rarely ride either.

You indicated in an earlier post that you believe affordable single family housing should be a priority. So then, how exactly do you propose to fund that?

Call it "urban renewal" and take the tens of millions we're throwing at trolleys, aerial trams, light rail, etc.

I don't believe for a minute that people are avoiding living or buying in Portland, or Multnomah County, to any extent that really needs to be of much concern. The rising costs to living here, and the concern for planning and development, has as much to do with the desire to create a more livable City as anything. Running schools a full year, developing smartly, great libraries, all these things have a cost. People can find less expensive places to live, but there's a reason for that: over-development and lack of planning, closed libraries, and shortened school years -- all things that other communities are doing to save money.

If it applied to each exchange of mortgage backed securities and Real Estate Investment Trusts then it would be more equitable, from an economic perspective. The local government can have elevated priority in the property in those situations too, just as with tax liens. The only factor distinguishing those investment tools is the act of recording the trasaction with the county. The county could add a little feature to say that all exchanges of interests in mortgage backed securities and Real Estate Investment Trust interests must be recorded to be effective. Now wouldn't that throw a little curve ball into the analysis and the alignment of the political interests weighing in on the debate.

Roughly 45 percent of the ownership of residential real estate, nationwide, is by mortgage holders who are virtually guaranteed from the risk of loss upon the theory that some financial institutions are too big to fail.

Poor Joe Homebuyer, who is upside down already considering transaction costs and all, is just too wealthy to ignore as a tax target.

Taxing our glorified renters as wealthy is regressive taxation in the guise of progressivity. Idiots. I have to side with the Realtors on this one, but for different reasons than they see as relevant.

I'm not sure about "developing smartly." Having the local government heavily subsidize construction of large, ugly condo buildings is more like it.

Just to throw some fuel on the fire, I believe that Washington County has a tax like this. At least it did the last time I looked.

Washington County and (I think) Lane County adopted transfer taxes before the state legislature prohibited local jurisdictions from adopting real estate transfer taxes. Washington and Lane Counties were grandfathered.

Washington County's tax is 1/10 of 1% of the sale price, or $300 on a $300,000 house. By local custom the buyer and seller each pay half.

Or Oregon could do away with all property tax and put a sales tax on everything (except food).

Of course, Portland would tax you at 10 times the rate they do elsewhere...

Very true. I also notice the PDX gas price is almost as high as LA. Everytime Jay Leno complains about it in his monlogue, Portland pays closer to LA than the rest of the country.

Perhaps Scott and Jack should move.

Oh wait! Scott's in Japan so he should learn to speak Japanese and stop harrassing us in PDX.

And this is Jack's blog, so he can do whatever he wants.

keith, people are definitely starting to stay away from looking at houses in Multnomah Cty because of the income tax. All else being equal, why would anyone choose to pay an extra 1.25% income tax? And this transfer fee will only make things worse. There is low-income housing being built all over the place, thanks to the federal tax credit. Why the hell should I pay for other people's housing? This city is going to tax hell.

Justin - Miss your morning coffee? Portland is my home and I'd like it to still be there when I move back. Maybe you should stop reading Jack's blog.

One big problem I have is the City Council harrassing me with their retarded taxes. The wasteful funding of the Tram is bad enough. And if silly ideas like that came along once every 20 years, instead of every 12-months, I wouldn't care as much.

But the retroactive tax I got to pay (thanks in part to Diane Linn) - pure brilliance! It wasn't even up to be voted on when I was last in town, but I got to pay it anyway. Fortunately friends in town gave me the heads-up, otherwise I wouldn't have known to pay the silly tax, and then I could have seen some real harrassment take place.

The harrassment of PDX, upon me, will be returned.

Scott, I am sure you checked your residency status before paying the tax but just in case you didn't the Multnomah County tax only applies to Multnomah County residents.

And, you should probably be thanking all the other taxpayers who voted for the tax in addition to Linn. Really its those public school kids who are really to blame for this whole tax mess. Geez, imagine those greedy little brats wanting a full-school year!

auggie - Oregon considers me a resident for all of last year. I won't bore you with the details (although it might make an interesting post for Jack to address...).

As for the school district wanting more money, how about giving the school district across-the-board pay cuts? Seriously. Give everyone a 5% (or so) pay-cut without cutting school days. It works in the real world, why not do it with labor unions and government?

Oregon and Multnomah County residency for income tax purposes depends on domicile, not physical presence. So even a person in Japan all year is treated as an Oregon/Mult. Co. resident if he or she thinks of Oregon/Mult. Co. as the center of his or her life -- the place he or she intends to return to whenever he or she leaves.

Maybe expatriate taxpayer X. should decide now, at a minimum, that when he returns to Oregon, he intends to live in Clackamas or Washington Counties. DISCLAIMER: That is just the late-night thought of a madman, not legal or tax advice. Your mileage may vary. Scott should consult his own tax professional!

Aren't property tax and property transfer tax about the most easy taxes to administer? People already have a strong interest to record their transfers and there's already an assessor who can look to a vibrant public market for valuation. The legislature could exempt the first $200K of residential value to take the load off poor people, and to encourage modest homes. Rich people will still live large, so they can pay most of the tax. Why not have a federal property tax, for that matter?

Keith,
Quick: which county is growing faster, Multnomah or Clark? Does that result reflect avoidance or just luck?

I will gladly pay 1.25% to live in Portland just to avoid living in Beaverton or Vancouver.

We purchased our home in Multnomah County about 2 years ago. We're about .25 miles from the county line -- which is just on the other side of Scholls Ferry Road.

If we had it to do over again, we'd probably pick the other side of Scholls Ferry Road -- even if it meant paying a .1% transfer fee on the property purchase to Washington County. Things are bad in PDX/Multnomah County & they continue to get worse: our roads & infrastructure continue to deteriorate -- and our representatives continue to allocate funds to their pet projects (trams, streetcars et al), which are neat "features" but only nominally add to the overall livability of the city. It is frustrating to see what I perceive to be a misuse of my tax dollars.

Here's a thought for Vera & Co: take the tram money and spend it on putting sidewalks on the main thoroughfares of SW Portland. If you live on the West side (other than Portland Heights) and you want to walk to work, school, shopping, etc. -- or even to the local bus stop -- you take your life into your own hands: as there are no sidewalks, you have to walk on the shoulders of the busy (35 MPH) roads. If the mayor really wanted to leave Portland with a lasting legacy, it would be to make SW Portland more pedestrian friendly and safe for children to be able to walk to their neighborhood schools.

Actually the i-tax made up for about 10% of PPS's budget. In my experience, most businesses would do lay-off's instead of pay reductions - which makes sense from a business perspective as when the bottom-line isn't good it means your products aren't selling well. The problem with public entities is when there are financial problems it doesn't mean the demand for your services has gone down.

And, PPS teachers already gave 10 days of teaching for free one year ago - as agreed by their union. But, we could just fire 10% of the teachers & staff and watch class-sizes go up to about 35 to 1.

Look, I'll say it again, I think the i-tax is bad policy (but I voted for it)... but I think the whole tax structure in Oregon is bad. We need to have a real discussion about fixing the financial crisis in this state - we cannot continue to rely solely on an income tax.

Let's not forget one thing. PERS and FERS recipients are exempt from the Mult Co. Income Tax. How convenient. The ruling elite and the government class can talk the voters into a local income tax, and, after it is enacted those same voters find out the folks who talked them into it will not have to pay it when they retire. Common folk will.

And, I forgot. You are going to remind me that it is a temporary tax. I'll believe that when it actually expires.

"The legislature could exempt the first $200K of residential value to take the load off poor people, and to encourage modest homes. Rich people will still live large, so they can pay most of the tax. Why not have a federal property tax, for that matter? "

200K? You can't buy a crack house in St. John's for 200K anymore. Encourage modest homes? Since when is this the job of the government? Frankly, I'd rather see the government encourage modest portions at the local Izzy's. Who do you define as "rich" people, and how are they living large? By owning a decent home and sending their kids to private school? Why shouldn't they spend their money in the way they choose, seeing as how they earned it? And a federal property tax? Oh yeah, bring it on. Another tax to fund the war in Iraq and our Commander in Chief's abstinence programs in the schools.

Seeing as how over 50% of my income goes to the government, I think I'll ask someone to draw the line there please.

Just to clear something up--we're NOT losing residents to the City of Portland, if by that the lobbyist means "fewer people than before."

Checking out the numbers:
http://www.upa.pdx.edu/CPRC/publications/annualorpopulation/certified_estimates_03.pdf

2001: 529,121
2002: 538,180
2003: 545,140

Ah, torridjoe, you're either borrowing from the PDX City Counel/Multnomah Co Commissioners' playbooks or from that classic book entitled "How to Lie With Statistics" (great book, BTW). Let's see what happens when you express the census estimates you provided as percentages:

For Portland:

2003 (change from 2002): 1.29%
2002: 0.36%
2001: 0.87%

2000 - 2003 compounded growth rate: 2.54%

For Multnomah Co.

2003: 1.13%
2002: 0.6%
2001: 0.6%

2000 - 2003 compounded growth rate: 2.35%

As compared to, say, Washington Co:

2003: 2.06%
2002: 1.59%
2001: 1.46%

2000 - 2003 compounded growth rate: 5.20%

... from these figures, it looks like the growth rates for PDX/Multnomah co are rather anemic as compared to the growth rates for Washington Co.

One way of looking at these comparative rates is that we are indeed losing people/business -- at least relative to our neighbors.

I don't have the Clark Co. estimates available to me at the moment, but I'm guessing their numbers are even higher than Washington Co's.

Here's another idea to increase the amount of low-income owner-occupied housing:

When some new land comes into the UGB, zone a little bit here and there to have a *maximum* house size of 1300 square feet, enough for three bedrooms and a bath and a half. Zone out the McMansions.

Random comments:

"Okay, sure we can all complain about the Multnomah County Income Tax. I think it is pretty bad policy, but I voted for it, and will continue to support it for its remaining two years - our schools and services required an immediate solution."

From people like me, who on a no-benefit income of 10K had to write a check for nearly $100? I'll never vote for a Democrat for anything in this town or county again, and probably not the state.

"Or Oregon could do away with all property tax and put a sales tax on everything (except food)."

You've got to be kidding. As if Oregon's taxes could get any more regressive. I'm a native. I used to love this state second only to my family. I barely like it anymore. Things like this make me hate. You so lost my vote.

""Why the hell should I pay for other people's housing? This city is going to tax hell.""

Why the hell should everyone subsidize your housing through one of the biggest tax scams on the books -- the mortgage interest deduction?!

Separately. OPB radio last week reported real estate sales in Portland this past year at record levels and rates. From what I have seen via observation of property taxes, a $150K house can be paying twice the tax of a house selling for double or triple that. There's little if any equity there.

Furthermore, rents have not decreased in this town, even though vacancies have. (Lots of new tricks in the rental biz, too, like various non-refundable fees.)

I think people need to visualize outer southeast county, or upper north, when they start talking about tax structure in this county and state. It's enormously regressive. The political view seems extremely inbred and blithely smug.

That a sales tax could even be considered as a trade off against an RE property tax is somewhere bordering insane -- or I am, thinking about it.

Talk about trading sales tax for income tax and I'd be happy to deal.

"Talk about trading sales tax for income tax and I'd be happy to deal."
Of course. I wasn't very clear because I didn't want to type it all out. Wipe out everything, then put in a sales-only tax. No car-registration tax, no gasoline tax(es), no liquor taxes (and get rid of the OLCC!),....

As to the renting business adding more fees - that is getting crazy. I used to think that Japn had cornered the market on extortion for moving in. But it seems PDX is eager to play that game.

Maybe we'll get lucky and folks will stop seeing PDX as the next San Francisco. And see it as a rainy rest-stop on the way to Canada...and keep moving.

What a panderer you are, Scott. Not just my vote you're after but fulltime campaign volunteering! Yer on, bud. Come on back.

Don't forget tobacco taxes. The singlemost regressive tax on the poor to subsize those who are blithely, smugly, vastly better off.

(And whose "diseases" are not more expensive nor are the extortionist taxes so applied.)

Sally - I totally spaced on the cigarette tax, which is beyond insane (even for Oregon). I don't smoke, but did I correctly see a sign today for over $3 a pack?

Everybody "forgets" that tax, though for quite a few years they were the only ones the citizenry chipperly passed. (With their -- in fact as well as opinion here -- lying rationale.)

The cheapest you can buy cigarettes for is about $33/carton. Per pack they're substantially more -- $4.50 I think. I don't recollect the tax/product breakdown.

The state claims it "has ways of finding" -- and fining the hell out of -- anyone who dares buy them through an internet wholesaler.

It just always seemed very cheezy, and very dishonorable and irresponsible, to me to fund general revenues off the backs of a subset.

Wow... too bad I just found out about this wonderfull blog!

This particular discussion is interesting in that it was the Portland Realtors that endorsed Charley Hales of me (Ted Piccolo) in 2000 even though I held the same "no real estate transfer tax" position as they do.

They instead chose to play the game with political insiders. In light of that a new tax would serve them right.

Although... Portland is already dumping a ton of public money into their high density experiment while at the same time robbing schools and the general fund of dollars through the use of TAX INCREMENT FINANCING!

Ok... so that is my first post.

Ted

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