City adopts tax incentive for new housing amid affordability crisis

In a recent government meeting, the Salem City Council moved forward with the adoption of resolution number 2024-2502, which pertains to a multiple unit housing tax incentive program for a new development at 277 Northeast High Street. The resolution was presented for a vote after confirming that no modifications had been made since its first reading.

Chief Operating Officer Silva confirmed that the project is aligned with the city’s economic development goals, although it was noted that the tax incentive would not contribute additional revenue to the city. The property falls within an urban growth boundary, meaning any new taxes generated would be directed to the Urban Growth Boundary Board rather than the city or school district.

Council members expressed concerns regarding the housing crisis in Salem, highlighting the significant shortage of affordable housing and the rising rental costs that are impacting residents, including teachers and families. One council member pointed out that while 15% of the 105 units in the new development will be classified as affordable housing, the remainder will be market-rate, raising questions about who will ultimately benefit from the project.

Another council member emphasized the need for the city to reassess its housing tax structure to ensure that community needs are met, particularly in light of escalating living costs. The discussion underscored a broader concern about the potential for Salem to mirror housing challenges faced by larger cities, such as San Francisco, where affordability has become a critical issue.

The meeting concluded with a vote in favor of the resolution, despite the expressed reservations about the implications of the tax incentive on the community's housing landscape. The council acknowledged the pressing need for solutions to the ongoing housing affordability crisis in Salem.