Next week the Portland Bureau of Transportation will take an important step toward solving a vexing problem: their perennial lack of cash and revenue sources that rely on driving, which is an activity the city discourages.
At the July 7th meeting of the City Council Transportation and Infrastructure (T & I) Committee, councilors will likely pass a resolution that will urge PBOT administrators to come up with, “a comprehensive strategy to identify and evaluate viable alternative funding sources.”
PBOT has dreamt for decades about having of a stable revenue stream that would fund projects, programs, and general operations. Now the crisis is more acute than ever after the failure of the Oregon State Legislature to pass a transportation funding package last week.
As I’ve reported, PBOT’s current budget assumed $11 million from the State Highway Fund. If lawmakers would have passed HB 2025, that number would have grown to $28.4 million by 2028 and $56 million by 2031. But now, left with nothing, City of Portland leaders want to take action.
PBOT manages 4,800 miles of streets and 30% of the city’s total land area, yet they are asked to do it with dwindling resources that haven’t kept up with inflation or the demands of road users.
The resolution that will be discussed at Monday’s committee meeting will urge Public Works Service Area administrators to launch a public process to garner input from Portlanders and recommend, “the most feasible and equitable path forward.”
Here’s an excerpt from the resolution:
“The resolution initiates a process to address significant and ongoing funding shortfalls… By directing staff to identify and evaluate sustainable funding alternatives, this effort is intended to inform future budget decisions and support long-term financial stability for the Portland Bureau of Transportation.”
It’s unclear how this process might differ from the Pricing Options for Equitable Mobility plan PBOT adopted in 2021. That plan enlisted a stakeholder committee and came up with several recommendations for how to raise revenue — but so far none of them have been implemented. The lack of follow-through on POEM is likely going to erode enthusiasm about this attempt, but to me it feels like there’s much more urgency around the issue today than there was four years ago.
The combination of the crisis caused by the state legislature (which is already impacting PBOT in very real ways) and the fact that Portland has a new form of government with 12 sets of fresh eyes on the problem, should give folks hope that we finally make progress on this issue.
Mayor Keith Wilson has hinted for weeks that he is meeting with PBOT and T & I Committee leadership to discuss new funding mechanisms. And at the previous meeting of the T & I Committee on June 23rd, PBOT Deputy Director of Planning Art Pearce told members of the committee that it was urgent for his agency to “shift our funding streams… away from driving [related taxes and fees] in order to be a successful bureau.”
What type of funding mechanism is likely to emerge is anyone’s guess. But the way Pearce spoke at that last committee meeting gave us a clue. As he shared the funding challenges with city councilors, Pearce said they should be, “looking at [PBOT] as a utility that is funded by all households is one of the key philosophies that I think would be really important.”
The idea is that a new PBOT utility fee would frame transportation as a service that’s no different than sewer, water, or electricity.
If the resolution passes, the report will be completed before December of this year.
Thanks for reading.
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“utility fee”…hmm fine then make it apply to every home owner OR renter, whether you own a car or not. Everybody pays.
Yep, that’s what it would be – basically a tax on Portland residents. Doesn’t matter if the renter or the landlord pays it, since the landlord would pass it on to the renter anyway.
If Portland were really smart, they’d set up tolling stations at the city boundaries so that ClackCo, WashCo, and esp ClarkCo residents pay their fair share to use the roads.
I think this is the pertinent part – putting it all on Portland city residents somewhat incentivizes people driving in from elsewhere and wouldn’t help in reducing road wear and tear costs – it would be people in the city subsidizing people driving in from the suburbs. Whatever changes they choose to make it should aim to equitably capture dollars from drivers from outside the city or reduce driving in from outside the city altogether to reduce maintenance costs.
And then, do areas outside Portland capture dollars from Portland drivers in the areas? I’m having difficulty seeing how this would work. Portland provides an airport and water port for the region, is there something to learn and apply from those examples?
The vast majority of cars on Portland roads are going to or from places in Portland. While there are examples of cut-through traffic on some arterials (such as Sellwood Bridge to 99E to get from WA county to Clackamas County), most of them will be on regional roadways or highways owned by ODOT. Provided the assessments are fair and based on trip generation, this transportation utility fee could be a fairly straightfoward and comprehensive.
As a landlord I can tell you that the rent is based on comps–the rent in Portland hasn’t gone up significantly in years, but taxes have. If you raise the rent beyond the comps it will sit empty. DSA is right that their renter voters don’t pay this, their white haired busybody donors do.
The rent on my Lents house was $1300 in 2010 and is $1900 now, incomes and taxes have doubled since then.
Americans, love em to death, but we are very entitled people–just looking to blame someone. Landlords didn’t cause the DSA’s problems–life did.
Decolonization means that the middle classes of Europe and America are no longer profiting off of coercive resource extraction from the so called “third world”.
We now have to compete in a global labor market and the world, historically has been a very brutal place economically.
The whole world has it tough, worse than the USA–people dream of being admitted to the USA because they actually have a chance of decent take home.
In the UK you have the same rent and less than half of the income–there are no decent jobs there. Don’t even get me started on South America–those people are screwed. So the DSA is like a bunch of whiners who are to boot, provincial, preaching about Europe and ignoring the destitute darkies selling cocaine in the shadows and ignoring the 80 percent of the world that is outside of Europe and the USA.
Landlords extracting wealth just for owning something really is a part of the problem. You just dont like hearing it because you are a landlord and are benefitting off the systems of exploitation.
If you think landlords are extracting excess wealth from their rental properties, I have suggestions for you:
1) Buy a property and become a landlord. You can rent out your place for an appropriate low amount to help increase competition and make properties available for someone at a lower price.
2) Buy a property and rent it out just like any landlord, enjoy enormous profits and donate a portion to support affordable housing.
3) invest in home building or property management companies. (There are mutual funds and ETFs in these market segments.) You can even invest your IRA with as little as $100 to start. Then use your dividends and profits to support good causes as in 2, above.
You can be part of the solution!
When I suffered $8000 in pointless, malicious damage to my nice rental house, I raised rent by $100 a month but it takes 7 years to recover. No excess profit here. Did I think I had a good tenant? I thought so, she was a registered nurse. WTF
Generally, landlords extract excess wealth for their properties. If they don’t do that, they aren’t going to be landlords for very long. This wealth may be in the form of direct profits, or it may be in the form of owning the land itself, which generally can be used as collateral for loans (this is maybe less likely to be the case for smaller landlords).
2 of your 3 solutions are just not possible for renters in Portland (in general) who lack the capital to buy a home in the first place. And on the 3rd point, I’m skeptical that further financializing housing via small time ETFs is a sustainable solution to housing prices in the long term, but that’s just my idle speculation really.
Landlords may not have unlimited ability to make monopoly profits on the housing they own, but they still benefit strongly from legal and financial systems designed to benefit land owners. This isn’t strictly about profits – it’s also about ownership of a fundamentally scarce resource in a legal context which favors land owners.
You suffered $8,000 in damages and it will take you 7 years to recover your loss on a $100 monthly surcharge? I am 100% sure the value of your property will far outpace that $8,000 loss over a 7 year period, just like it has for every 7 year period in the history of Portland.
Theresa big difference between “might make money in the future if I sell” compared to “had to spend 8k now” and the associated opportunity costs of spending that 8k.
Sure, but spending $8k has a different meaning in the context of “maintain a valuable asset which can be used to finance other investments”, especially when that asset has increased rapidly in value over the term in question
This is always such a dumb line. No one is obligating you to own a rental property. If you feel it’s not worth the hassle, sell it.
Gonna be a little over-the-top, but it’s just so typical of landowners complaining about needing to work to make a living, as if it’s not exactly what they’ve been shouting at us is the only moral way to do so. Capitalists always looking to get something for nothing.
Whispers: “Developers” are also rent-seeking ******s.
Not unless they own the property; how could they be? Sure, complain about the waste and inefficiencies and double-dealings to do with American developers and construction industry, fair game.
But I’m so tired of this; bring back public housing! I’m all for it! Until then, let’s not pretend that being anti-development is anything but NIMBYism in a coat. You people have pushed development to the car-dependent, job-scarce fringes of Metro Portland, and almost literally everything is worse as a result.
Tell me how you know little about CRE without telling me you know little about CRE.
Oh boy…another screed about NIMBYs directed at a potential ally that wants to see as much rental housing built as is economically feasible. And, not that it will change your mind about the evil “left-nimby”, but one of the reasons I dislike the hyper-capitalist development model is that it prioritizes margin and anti-market behavior over building needed housing for communities/societies (as can be seen by the shortage of low/middle-income housing, the support of NIMBYism/anti-market-regulations by large developers, and the ongoing and worsening counter-cyclical bust in multifamily CRE). As a left-nimby, I believe society should FORCE developers to build the housing that communities need via incentives/regulation, mandates, and, even, outright socialization…but instead we have a system where FIRE only builds the highest margin and least-risky developments and repeatedly creates boom-bust cycles that have led to a permanent housing shortage (permanent scarcity = ↑margin).
So you save money without earning interest on it?
No, but I live cheaply, am certainly overpaid for my job by global standards, and don’t think about the .1% interest I have on my checking account (not an exaggeration; it’s literally .1% interest).
I do give away a couple hundred dollars a month to charity, and volunteer with an immigrant support org, and–to your point–don’t own my property; I rent. I’m an hourly wage worker; I don’t make any meaningful quantity of money without working for it.
Have we not learned of the uselessness of purity tests, yet?
The rental market in Portland is pretty good if you have manage to find a good job. It’s way less expensive than other major west coast cities, but this is predicated on finding a good job, and there are a lot of reasons why this is not something that is evenly distributed across different groups of people in Portland. And there are larger legal and structural reasons why land owners benefit relative to those who do not. Here’s one example: 14.9% of homeowners in Portland pay 35% or more of their gross income to mortgage costs, while 43.4% of renters pay 35% or more of their gross income to rent. This is essentially unchanged since 2010 (source). In general, people who pay housing costs with a fixed mortgage benefit immensely from the fixed cost over a long term, and from policy mechanisms like the mortgage interest tax deduction.
Best I can tell, for a house renting for $1,900 in Lents, $3,000/year would be a pretty normal property tax bill now, while $1,800 would have been normal in 2010 (not quite doubled, but close enough). At $1,300 a month in 2010, 11.5% of yearly gross income would go towards property taxes, while currently it would be 13.2%. That’s certainly an increase, but it’s fairly modest.
If you had one tenant over the course of the last 15 years, paying an average of $1,600 a month, they would have paid you $288,000 (I know this is not how it works in practice, but this is for back of the napkin math). At the end of the 15 year period, all they’ve done is pay your entire mortgage (15 yr, 5% fixed term in 2010 would have had a total loan cost of ~$170k on a $100k property) and maintenance costs for an asset that’s now tripled in price. Who benefits from this situation? You or the tenant?
Put another way, landlords themselves didn’t cause the problems that DSA members organize around, but the legal and financial systems set up to benefit landlords at the expense of renters did. And since we live in a nominally democratic society, we have the collective power to change the legal and financial systems previously set up to benefit landowners if we want to. You, as a current landowner, probably don’t really want to change that. Me, as a renter, does want to change that. You can say it’s naked economic self interest motivating me, but I can say the same to you. Is your motivation for preserving your legal and financial power more noble than me wishing to have some power over my own living situation?
This is a woefully incomplete representation of the world economic situation. The middle classes in the US and Europe absolutely still benefit from uneven resource extraction in the third world. When folks who work at Apple in the US earn enough to own a home, while folks who work for Apple in China can barely support themselves in a super oppressive factory system with few labor protections, and folks who supply Apple with raw materials in the DRC are mining cobalt by hand, it’s hard to conclude that Americans aren’t profiting from a deeply unequal global system.
I would prefer to not give up on South Americans as being “screwed”, especially when the level to which South Americans have been screwed is strongly influenced by US foreign policy dominated by US financial and industrial interests. Especially in Brazil, Chile, Argentina, and Uruguay where developmentalist socialist or semi-socialist regimes have been deliberately targeted for economic and political destruction by the US government and other US-based institutions.
Also, don’t say “darkies”. That’s a slur, and not a very subtle one.
I’m not sure you’re familiar with Donel’s self described biography mentioned during their various posts.
“Also, don’t say “darkies”. That’s a slur, and not a very subtle one.”
If you are, you would realize why the use of this slur is sardonic and that they have a very good idea of the practical rather than the scholastic effects of colonization.
What has the city done to attract businesses that employ high earners in the last 10 years? What has the local education system done to pursue academic achievement and rigor in the last 10 years? What is the compelling case for locating a business in Portland to pay regionally competitive wages?
This is a feature, not a bug. This means that Portland has stable homeownership, that people decided to stay when they bought, they raised families and contributed to the community. To compare a renter who transacts every year to someone who bought 20 years ago is meaningless, akin to suggesting life isn’t fair because a mosquito lives for a week but a dog lives for 15 years.
If you itemize above the standard deduction, which means you have an expensive mortgage and is not someone competing with a renter for anything.
back of the napkin or not, it still should make sense, which this does not. You’re suggesting the rent is flat the whole term, but the home has doubled in value and no discussion about the capital investment up front or along the way? Why not make the rent $500 per month if the details don’t matter?
Sounds like a bunch of people who want to pull the ladder up behind them. What have you contributed to garner additional power in the transaction? Did you put capital at risk? Did you put a personal guaranty on the loan? Did you pay the transaction costs for the attorneys, accountants, title, lender, broker, etc.? Did you pay to replace the roof, the water heater, the furnace, paint the exterior, reside the home? Oh, you paid rent for something you don’t own, in a place with lopsided protections for you, and as long as you don’t destroy the place, you can give a little notice at the end of the term and walk away, and you’re wanting to say its still not fair?
And this is an unfair system. I think it’s bad that our housing and land system favors those who already own land over those who don’t. You obviously feel differently, and that’s fine.
I took the average of the two terms given in the comment I was replying to, which would imply a linear growth between the two over the intervening years. That’s a fine assumption I think.
Because that wasn’t what the comment I was replying to had. I was attempting to reference a “typical home” in the neighborhood they apparently have a home in. The doubling of value was along these lines as well, based on a series of example homes I looked at.
The point is that the renter pays $288k over the 15 years, enough to cover an entire 15 year mortgage on the property financed 15 years ago, with $110k left over for investment along the way. The owner ends this 15 year period with a fully paid off home, the renter has nothing. This may seem perfectly normal to you, that it’s a result of a fair agreement between two parties, but I think this is an exploitative arrangement that strongly benefits the owner.
I don’t have time to interrogate all the questions you have posed here, but I’ll say that I think the right to have a decent place to live of your own is more important than the legal and financial rights associated with landlords in the US. I would prefer a tenure system which strongly favors tenants, because I think people having places to live is more important than property rights. It’s a hot take, but there are a huge variety of tenure types in other countries, and we can and should weigh changing our own both for moral and economic reasons.
If the ClarkCo residents didn’t have to pay Oregon income tax I’m sure they would agree. As it is they leave that income tax here in Oregon and go home and use the Washington resources, I think with regards to the ClarkCo residents, Oregon and Portland is getting a pretty good deal.
The real question is what new revenue can be raised that Council can’t later legally take away from PBOT and use for police, parks, and pet projects?
Like the $8M we gave to descendents of people who at one time lived in Albina?
I was thinking of the ULF (utility license fee) which generated $88 million in 2022, only 3% of which went to PBOT. It was originally conceived in 1988 as a way for PBOT to pay for street maintenance as utility companies would repeatedly cut into the pavement, but Council quickly got all 40 of their sticky fingers and 10 thumbs into it and immediately siphoned off the funds for police, fire, parks, and so on, because they could legally get away with it.
I get the feeling you’ve seen this scenario before (perhaps more than once?) from your time in Portland?
It seems like the adage that if people don’t learn from history (in this case recent history) they are doomed to repeat it would be coming true again.
It’s all good though because the Dems are firmly in charge and will never do anything to the detriment of the people. Well, maybe if they’re tricked or fooled by the repubs or succumb to the local republican media onslaught they might do shady accounting, but only then.
Quite frankly I’m not worried that public funds will be siphoned off to pay unauthorized salaries and other common forms of corruption that all cities have to deal with, nor which corrupt party is in power, but rather how transportation infrastructure is being funded (and thus being prioritized over say housing or law enforcement.) As long as Portland (and Oregon) limits transportation funding to just gas taxes, vehicle registration fees, and parking revenue, it will simply never have enough money to engage in basic maintenance of what it has, let alone build everything it needs. Both the state and the city would be better off long-term, IMHO, by ending the pretense that dedicated funding will fix all its transportation ills, and that it would be far better to pool all of its GTR (general transportation revenue) in with its “general revenue” of property tax, PCEF, license fees, hotel taxes, and so on. Spend it all on police & Fire, fine. Spend it on housing, quite worthy too. But at some point the city will realize that it needs to maintain a basic network of navigable city streets and prioritize fixing those over policing and housing – and just go ahead and do it – without fuss and without waiting for the state legislature to fund them.
I think the solution to that is a charter amendment. Specify a “road maintenance and safety fund” in the city charter that can be used *only* for infrastructure maintenance and safety improvements on existing streets, and then dedicate various revenue sources exclusively to that that fund.
I’d be strongly inclined to vote against any funding proposal that isn’t lockboxed, simply because of what happened with the ULF.
They should use PCEF money. The way this reads sounds insane in light of current taxation with reduced services and reduced function.
“ As I’ve reported, PBOT’s current budget assumed $11 million from the State Highway Fund”
Sentences later, the article says PBOT “would be left with nothing”. I can’t hardly believe that is true. While, yes, it’s disappointing that the Bill doesn’t help PBOT, does the allocation change?
Won’t governor Tina call a special session for the Oregon legislature to pass a new transportation bill this summer?
Which will probably generate the exact same results. Wash, rinse, repeat. Until there’s a significant change of party affiliation (the next election) or districts (2030) there’s likely to be little or no change.
They should implement congestion tolls
The City tried to implement a street utility fee across households and businesses 10 or more years back. The concept was solid and, if I recall, had supporters, but the data used to generate revenue estimates was extremely flawed. Large employment areas, such as Cascade Station, were not included. Single family homes where a person had registered a business license were rated the same as the Stuptown Coffee on Division (which was severely underscored). The burden would have been on the homeowner or business owner to protest their assessment. If the City wants to try it again, they need to make the assessments fair and accurate for residential units and include businesses (which would partially cover folks who commute into the city for work or tax-free shopping).
Seems like if its too complicated, we shouldn’t expect any bureaucracy to manage implementation. I don’t like paying almost $300 everytime I need tags, but honestly, Id pay double that for my Prius if it was proportional to what others were. Wouldn’t a tiered system based on vehicle curb weight would be easy to implement. The 3 ton SUV is causing measurably more maintenance issues for PBOT than the 1 ton Honda Fit anyway. If it’s an EV even more reason, since the gas tax isn’t accounted for.
Thanks for this Anne. I have to go back and research the old “street fee” by Mayor Adams. I recall one reason it died is that the local oil and gas lobby was really strongly opposed. And yes, also the assessment calculations were disputed by folks.
I remember talking with a certain city councilor back then, he said that the main reason it never went forward was because of polling, that city officials thought it would fail in a vote, and the city was very risk-averse, that even the mere threat of failure debilitated them. Has this fear changed? Is the city now a risk-taker? Or does it still prefer to wring its hands, whine, blame others, do token pilot projects, engage in various studies and create stakeholder advisory committees, and steadily let all its streets go to s**t?
It will be quite annoying and frustrating if this ends up being a proposal for Portlanders to subsidize out of city and out of state motorists.
I understand the sentiment, but wouldn’t it also hold true that, because Portlanders sometimes drive outside of Portland, aren’t people in *those* communities subsidizing people from outside their borders?
Toll the Washington people that drive into our state every day and clog i5. They hate Portland but want our jobs and our zero sales tax.
You have to ask who is hiring them and why.
Toll the Sellwood Bridge (a none City facility) and claw back some of the $millions Sam Adams gave to Multnomah County for its reconstruction. At least the Washington residents commuting on I-5 for work are paying Oregon taxes. The reality is most of us rely on a functioning and well maintained regional transportation network to meet our mobile needs and for our economic to thrive.
“economy to thrive”
If we had a predominantly mass transit/ micro transit transportation system, we wouldn’t be in such a desperate situation.
It could be that transportation funding deserves a separate, dedicated income stream. But it’s also definitely true that Portlanders are becoming weary of bespoke taxes. When voters can’t rely on the City Council to prioritize funding according to their wishes, maybe the problem is the Council?
Or, then again, given the situation at the Federal level (an election revolving around inflation, with a policy response that only will increase inflation), maybe it’s just a fundamental problem with representative democracy.
$5 fee for every delivery made by a private business — Amazon, DoorDash, Lyft, etc. Often when I am biking, I will encounter a delivery vehicle illegally stopped, endangering lives, every few blocks. What if the companies that are making money from increasing traffic, increasing distracted and aggressive driving, increasing illegal stopping, etc. were actually made to pay more for using the roads? Whoo hoo. And yes, if you are getting something delivered to your doorstep, you will end up paying that fee. We all used to go to the store/restaurant/etc to engage in consumer culture. We can either do that again or buy less stuff or pay for the cost to our infrastructure of the stuff being delivered to our doorstep.
COTW.
Tax parking!