Rising home prices, coupled with low inventories of “for sale” properties, microscopic rental vacancy rates and escalating rents have created what’s described as a housing crisis in Ashland.
It’s especially true for those at the lower end of the income scale, prompting cries that Ashland city government do something about the lack of low-income housing and housing for the homeless. Tiny houses have been suggested as one solution for the latter problem.
There are also demands that Ashland identify a reliable, ongoing revenue stream for its Affordable Housing Trust Fund (AHTF), which will presumably provide money to address these lacks.
Tiny houses may indeed provide a transition to permanent housing for those without shelter. But tiny houses need land upon which to sit, which raises the question: Where is the city-owned land in Ashland that could be used for a tiny house development? Certainly, no private developer in his or her right mind will pay a king’s ransom for land in Ashland and then build unprofitable housing on it.
Ashland does not have surplus public land. (A small lawn area next to the Council Chambers might accommodate a few tiny houses.) Instead, amend the city land-use code to allow individual homeowners to put a tiny house or two on their privately owned land. In this way, citizens could take direct, personal responsibility for solving the problem, rather than demanding that “someone else” (i.e., city government) solve it. This approach is already being considered and debated in Portland.
Similarly, where is the city-owned land in Ashland on which to build subsidized low-income housing? (Actually, there is one piece of city-owned property that could work, but it would require the removal of trees and, as we’ve seen with the property at Clay and Villard streets — property that was acquired specifically for affordable housing — Ashland prioritizes tree preservation over affordable housing.)
It’s arguably not the best use of the AHTF to buy land for affordable housing. Residential land in Ashland sells for $1 million an acre. Purchasing a single acre (enough for 17-20 apartments) would wipe out the AHTF and provide little return on investment. (Ashland already subsidizes affordable housing construction by waiving the development fees associated with it.) The AHTF is better used for its stated purposes of homebuyer assistance, rent subsidies, gap financing, etc. But all of these things still leave Ashland at the mercy of market forces that drive housing costs and that are largely beyond the control of city government.
Housing prices in Ashland are high — and getting higher — because of the flood of out-of-state equity money that, for the past 20-plus years, has been bidding up home prices in an apparently ceaseless inflationary cycle. How about taking advantage of the wealth that has moved to Ashland and is at least arguably driving the housing cost problem?
Here’s an out-of-the-box idea: A luxury housing tax. This is simply an excise tax on high-value, single-family residential property; say 0.1 percent of property value on any property in Ashland worth $900,000 or more. Such a tax could provide a reliable revenue stream for the AHTF and possibly dampen enthusiasm for the construction of new seven-figure estates in the city. This might also (although it’s a long shot) have a down-market ripple effect on housing prices. If value growth at the top of the market slows, perhaps value growth will slow in market strata below the top and maybe — just maybe — create a housing market that’s affordable for middle-class families.
A luxury housing tax might be considered an ad valorem property tax under Oregon law, which would bring with it a host of complications. The luxury housing tax ordinance would have to be written in such a way as to ensure that it is an excise tax, not a property tax.
This may not be the best answer — or even an answer — but unless we as a community start thinking outside the box, we’ll be stuck inside a very expensive box for a long time to come.
— Dave Kanner was Ashland city administrator from 2012 through 2016.