Habitat, Proud Ground testify on expanding property tax exemptions in Portland

This week, the Portland City Council voted to significantly increase the number of privately developed homes eligible to receive the Homeownership Opportunity Limited Tax Exemption, or HOLTE, on homes sold to low- or moderate-income families. This expansion encourages private development of affordable housing, and creates opportunities to leverage even greater affordability in partnership with nonprofit developers. To better understand the potential of this expansion, read the testimony from Habitat for Humanity Portland Region CEO Steve Messinetti’s and Proud Ground Executive Director Diane Linn’s statement to Portland City Council.

Dear Mayor Wheeler and City Commissioners, 

Habitat for Humanity Portland Region and Proud Ground support the proposal to expand the number of privately developed homes eligible for the HOLTE program from 100 to 500.   

As the region’s largest affordable homeownership developer and the region’s largest Community Land Trust, we see the HOLTE program as a valuable tool to help bring homeownership within reach for households who are priced out of an increasingly inaccessible housing market. A reduction in property taxes translates into increased purchasing power.  For some families who partner with our programs to buy a home, this savings is the critical difference that allows the household to qualify for an affordable mortgage.   

Homeownership remains our country’s most proven strategy for long-term housing stability and generational wealth-building. The stability of a fixed affordable mortgage allows families to breathe a sigh of relief. That amelioration of stress – easing the looming fear of eviction, frequent moves to chase affordable rent, or financial hardship – is the prerequisite for better health, better educational outcomes, creating a sense of community with neighbors, and long-term financial stability.  Especially given the steep recent increases in interest rates, our region needs to embrace an array of proactive strategies to prevent homeownership from becoming an exclusive privilege for a select few. 

While we support private developers’ interest in expanding their affordable homeownership production, we also challenge these developers to dig deeper than apparent market-driven strategies.  In partnership with non-profit developers, we may be able to achieve deeper affordability and broader equity goals.  For example, a non-profit partner could bring a government subsidy or downpayment assistance to a project allowing some of the units to be sold to households at a much lower threshold than the 100% MFI required for HOLTE.   

Creative partnerships with non-profits and culturally specific organizations could help the benefit of HOLTE reach households of color, who have been most profoundly disadvantaged by our region’s historic and present racist housing practices.  At Habitat Portland Region, for example, over 80% of homebuyers are people of color and about 1/3 include a family member with a disability. Over the next few years, we encourage the City to track and evaluate whether privately developed HOLTE eligible homes are making a dent in the racial homeownership gap.  

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