Tag Archives: housing

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Abuse of Short-Term Rental Rules in Lake Oswego is Still Widespread

Lake Oswego encourages visitors.

“If you are visiting or thinking of visiting Lake Oswego, we welcome you,” says the city’s’ website. ” Whether you’re coming for business or pleasure, you’ll encounter an inviting community, friendly people and businesses, and plenty to see and do.”

At the same time, in response to citizen concerns about maintaining livability, Lake Oswego has tried to regulate short-term visitor rentals. But local property owners are widely ignoring the city’s short-term rental (STR) rules.

Lake Oswego tried to get a handle on controversial STRs in 2019 by enacting Ordinance 2815. The ordinance allows STRs (rentals of less than 31 days) of certain residential properties.

Since then, residents who want to operate a STR have been required to obtain a business license from the city and pay an $80 annual fee. They’re also required to pay Transient Lodging Taxes equal to 6% of taxable income from their STR. The tax revenue is used for the promotion and development of tourism and visitor programs for Lake Oswego.

It’s all pretty straightforward and simple. If you own a property being used for STRs, you need to get a business license and pay taxes on your revenue. But a review of city data on STR business licenses and on a national STR website reveals a lot of people are ignoring the ordinance, with the number of STRs and the number of scofflaws actually increasing over time.

At the end of 2022, according to AirDNA, a STR marketing firm, there were 90 active STRs in Lake Oswego, while information obtained from the city in response to a public records request revealed there were just 42 active STR business licenses. The discrepancy was brought to the attention of the City Council in hopes it would address the problem.

 AirDNA reports there are now 161 active STRs in Lake Oswego, but, according to publicly available Lake Oswego licensing data, there are just 81 active STR business licenses.

In other words, the number  of licensees has gone up, but so has the number of scofflaws. 

The STR occupancy rate over the past 12 months has been 66% and the average market charge per day has been $246.90.

The Lake Oswego STRs that have popped up include everything from a $61-a-night guest bedroom to a $288-a-night 3-bedroom home (“a serene sanctuary where the forest meets modern luxury.”) and a $1452-a-night massive luxurious estate with 7 bedrooms, plus a pool, sauna, hot tub and theater room.  

It’s not possible to identify the addresses of all the properties without trying to book them one by one. Website maps, reveal, however, that they are spread all over Lake Oswego. 

If a STR is found to be in violation of City Code, the city may suspend or revoke its business license, if it has one. The property owner may also be cited and have to pay a fine or appear in Municipal Court.

So come on malingerers. Step up. Do the right thing. 

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Affordable Housing Push Spawns Money-Raising Frenzy in Oregon 

Government just can’t seem to stop wanting more money.

In a strange twist, now there’s a move to make life less affordable for many Oregonians in order to promote affordable housing.

Oregon Governor Tina Kotek’s Housing Production Advisory Council has just submitted a 20-page draft report, HPAC Policy Recommendations, on ideas on how to address the affordable housing crisis. And, of course, the ideas include raising more money. The Taxpayer Association of Oregon revealed the report on Jan. 10, 2024.

Remember when voters passed Measure 50 in 1997? It introduced maximum assessed value (MAV), which acts as a “cap” on the growth of taxable (assessed) value for most property. MAV growth is limited to 3 percent per year. Combined with permanent tax rates, Measure 50 effectively limited tax increases, except under specific circumstances. Kotek’s Housing Production Advisory Council is proposing raising that to 5%.

Own a vacation property in Bend?  Kotek’s Housing Production Advisory Council is proposing eliminating the Mortgage Interest Deduction for Second Homes (i.e., abolishing the income tax deduction for interest paid on second homes).

Drive a gas car?   Kotek’s Housing Production Advisory Council is proposing doubling fuel taxes.

On section 7 (Page 16/17) it lists 5 suggestions to raise new revenue (as shown below):

  1. Generate new, state-level revenue to fund critical local infrastructure.
    a. New revenue generation to be limited to duration of HPAC Timeline (i.e., sunset in 2032)
    and in support of the related work plan topics described below. Potential sources
    include:

i. Revenue Source and Annual Revenue Generated (Legislative Revenue Office,
2023, p. B7, FY 23-24 dollars).

  1. Increase all personal income tax brackets by ½ percentage point.
    a. $699 Million
  2. Establish Special $1 per $1,000 real property tax assessment outside of
    Measure 5.
    a. $504 Million
  3. Implement 0.5% Retail Sales Tax.
    a. $501 Million
  4. Implement 0.5% Payroll Tax.
    a. $620 Million
  5. Double Fuel Tax.
    a. $686 Million

The report also proposes: 

Reform Oregon’s tax system to encourage development of needed housing and provide
adequate revenue for local governments to support housing production.
a. Taxes are both a tool to raise revenue for government and to shape taxpayer behavior.
Attaining the Governor’s desired housing production goals will require significant new
revenue; this recommendation highlights actions that can address revenue shortfalls and
encourage a shift in taxpayer behavior to support housing production.
b. Potential actions include (but are not limited to):
i. Targeted Measure 50 Reform:

  1. Increase annual Maximum Assessed Value change to 5%.
  2. Authorize voters to increase the permanent levy of their local
    jurisdiction.
  3. Exempt Cites and Counties from compression.
    ii. Adopt Land Value Tax
    iii. Eliminate Mortgage Interest Deduction for Second Homes (i.e., abolish income
    tax deduction for interest paid on second homes).
    iv. Enact temporary property tax exemption for new housing at 120% AMI or below.
    v. Reduce or Eliminate Tax Expenditures (i.e., tax exemptions) not related to
    housing.

The report notes that four lawmakers, from both parties, sit as members on Kotek’s Council.   They are:

  • Senator Dick Anderson (R – Lincoln City)
  • Senator Kayse Jama (D – Portland)
  • Representative Vikki Breese Iverson (R – Prineville)
  • Representative Maxine Dexter (D – Portland)

There are also a number of community members appointed to theCouncil by Governor Kotek.

They need to hear from taxpayers.

_______________________________________

Gubernatorial Appointments:
  • Co-chair J.D. Tovey – rural Oregon and an enrolled member of the Confederated Tribes of the Umatilla Indian Reservation – land use, building codes and housing development 
  • Co-chair Damien Hall – Metro- land use, and affordable and market housing development 
  • Daniel Bunn– Southern Oregon – land use and financing market housing 
  • Thomas Cody– Metro area – affordable and market housing development 
  • Deborah Flagan – Central Oregon – market housing development and construction
  • Ernesto Fonseca– Metro area – affordable and market housing development and financing affordable housing 
  • Elissa Gertler– Oregon Coast – land use and financing affordable housing 
  • Riley Hill– rural Oregon – land use and market housing development 
  • Natalie Janney– Willamette Valley area – land use, market housing development 
  • Robert Justus – Metro area – affordable and market housing development 
  • Joel Madsen– Columbia Gorge – affordable housing development and financing 
  • Ivory Mathews – Metro area – affordable housing development and financing
  • Erica Mills– Southern Oregon – financing affordable and market housing 
  • Eric Olsen– Willamette Valley area – construction, market housing development 
  • Gauri Rajbaidya– Metro area – affordable and market housing development 
  • Karen Rockwell – Oregon Coast – affordable and market housing development 
  • Margaret Van Vliet – Metro area – financing market and affordable housing, and affordable housing development 
  • Justin Wood – Metro – construction and market housing development