Oregon bill expands tax breaks for rental properties amidst economic uncertainties

During a recent meeting of the Oregon Senate Committee on Finance and Revenue, discussions centered on proposed legislation that could significantly impact the housing market and local economies. One of the key topics was the potential for private equity firms to purchase single-family homes in historic districts, which could lead to increased rental prices and the proliferation of short-term rentals like Airbnbs.

Currently, there are over 250 single-family rental homes in Portland's Historic Districts. The proposed bill would allow these properties to benefit from a historic property special assessment program, enabling owners to apply for multiple consecutive ten-year tax exemptions. Critics argue that this could incentivize large firms to buy up homes, limiting availability for local residents and potentially driving up housing costs.

The legislation also aims to broaden the scope of what qualifies for tax exemptions, including expenses for solar panels, heating systems, and general maintenance. This change could further benefit rental property owners while placing additional financial burdens on owner-occupied residents who do not receive similar tax breaks.

The financial implications of the proposed bill are notable, with an estimated revenue impact of $400,000 for the 2025-2027 biennium, increasing to $1 million annually thereafter. While this may seem modest, stakeholders expressed concern about the cumulative effect of such tax breaks amid ongoing economic uncertainties, including rising costs of living and the need for funding in essential services like education and public safety.

As the committee continues to evaluate the bill, the discussions highlight the delicate balance between supporting property owners and ensuring affordable housing remains accessible for all Oregonians. The outcomes of this legislation could have lasting effects on the community, shaping the future of housing in Portland and beyond.