FILE - The front of the Hattie Redmond permanent supportive housing complex in North Portland on August 22, 2023. Metro recently decided to delay extension to a homeless services tax, which partially funds the Hattie Redmond complex, in response to calls from advocacy groups and business leaders.
Caden Perry / OPB
Metro, the Portland-area regional government, has decided to delay a controversial extension to a homeless services tax.
Responding to a unified call from advocacy groups and business leaders, the Metro council decided Thursday to hold off on referring the measure to a May ballot. The council will instead consider referring to a tax extension in November.
“I think folks universally want to see an extension as soon as possible,” said Councilor Duncan Hwang. “But we need to create a framework that works for everyone.”
The Metro supportive housing services tax, approved by voters in 2020, pays for programs that help move people experiencing homelessness into housing in Multnomah, Clackamas and Washington counties. That can include eviction defense, rent assistance, behavioral health programs, job training, or help retrieving legal documents that may be lost, among other services. It’s not meant to pay for housing development.
The fund is currently made up of two taxes. The first is on people making above $125,000 annually (or couples making more than $200,000). Those taxpayers must pay 1% on any income made above those income levels. The second is a 1% business income tax on income for businesses making more than $5 million annually.
While the fund has outperformed — bringing in $100 million more than anticipated annually — it’s also been criticized for not addressing the region’s sprawling homeless crisis more swiftly. A December poll commissioned by Metro (obtained by Willamette Week) found that just two in five voters support the measure.
The tax sunsets in 2030.
Metro has spent the past year drafting a ballot measure that would extend the tax’s sunset to 2050, while lowering the tax rate on individuals from 1% to 0.75% in 2031. It also would also allow the three countries to spend the tax money on building affordable housing, in anticipation of the end of funds collected through the 2018 Metro housing bond, which expires this year.
The proposal has divided homeless advocacy groups, business leaders, and service providers. Homeless advocates and nonprofits have lobbied against the proposed tax cut. The Portland Metro Chamber and others, meanwhile, argue that voters may not approve extending the tax for another 20 years without this cut — putting hundreds of millions of dollars for homeless services at risk. This disagreement made several councilors hesitant to advance the measure to a May ballot.
These various groups told Metro councilors Thursday that they will work together to find common ground on a tax extension measure.
“We’re asking you for just a bit longer timeline to complete the work that will result in, what we believe, a win if a measure is referred to in November,” said Jon Isaacs, Vice President of Public Affairs for the Portland Metro Chamber.
The 2020 supportive housing services measure was the rare tax proposal to be supported by business groups like the Metro Chamber, which often points out how rising taxes can deter businesses from wanting to invest in Portland. The groups’ political support — alongside endorsements by homeless advocacy groups and nonprofits — illustrated the universal concern of the region’s homelessness crisis.
Sahaan McKelvey is the director of advocacy and engagement at Self Enhancement Inc., a nonprofit that works with Black youth and their families.
“If we want to go fast, we can go alone. If we want to go far, we can go together,” said McKelvey, who is also a committee member with Welcome Home Coalition, an advocacy group that has asked to keep the tax rate as-is. “I think that we can take this measure very, very, very far by going together.”
Council President Lynn Peterson said she would be creating a work group next month to focus on the future measure and to ensure the supportive housing program runs smoothly if and when the tax changes. The goal, she said, is for Metro Council to vote on referring the measure by May, in order to get it on the November ballot.
Councilor Mary Nolan urged Metro to keep the programs that rely on the supportive housing tax afloat in the meantime, to make a case to the voters that it’s worth investing in.
“If we’re going to ask the voters to extend this for 20 years, we have to show them that we can in fact end our homelessness crisis,” Nolan said.
It’s not yet clear if this delay will convince county leaders, who have been skeptical of the measure, to support the proposal. Board chairs from three Metro counties have previously expressed concern with using the tax to cover housing as well as services, worried that it could take away funding already committed to service programs.
Earlier this month, the Multnomah County Board sent a letter to Peterson urging her to hold off on referring the tax extension measure to the May ballot.