The Other Affordable Housing Trend in Oregon: Construction Excise Taxes

"Following mild skepticism from some builders and strong support from community advocates, Medford City Councilors approved a construction tax that will fund new incentives to build more low- and middle-income housing within the city," reports Nick Morgan.

"Faced with a shortage of new housing and increasing demand in the city pushing up home prices and rents, councilors described the tax as a business-friendly move in the right direction," according to Morgan. Support for the tax came even from anti-tax members of the Medford City Council—some councilmembers expressed surprise at their own support for the tax.

Morgan reports that Medford's new excise tax is modeled on a similar tax approved by the city of Bend. Jared Brey picks up on the larger trend of Oregon municipalities turning to the excise tax to fund affordable housing investments. According to Brey, the rise of excise taxes in the state has been enabled by a package of housing bill approved by the state legislature in 2016. At the time, the law was heavily scrutinized for lifting a ban on inclusionary zoning. That policy has been under renewed scrutiny in the state.