Voters can weigh in on a watershed moment in the county’s housing crisis with county Measure 26-238. If passed, the measure would levy a capital gains tax to fund legal representation for tenants in all eviction cases and create a residential tenant resources program.
Right now, tenants aren’t provided with legal counsel, and the vast majority can’t afford to hire a lawyer.
In 2022, landlords filed 18,810 evictions, according to data compiled by Portland State University’s eviction tracking project. That year, peak representation for tenants was just 12%, and in some months, the rate dipped as low as 6%. Meanwhile, landlords had representation in 46-62% of these same cases.
Proponents say the measure will help slow the ongoing eviction crisis, while those opposed say the new tax will be a burden atop already high taxes and stunt housing production. The majority of Multnomah County residents are unlikely to pay the new tax, which is structured specifically to capture revenue from wealthy residents. According to the Oregon Center for Public Policy, roughly half of Oregon residents don’t report capital gains or losses on their taxes.
The measure uses the IRS definition of capital gains, which means taxes will be paid on assets, such as income properties, stocks and bonds held for more than a year.
Capital gains are concentrated among the wealthiest Oregonians. The Oregon Center for Public Policy found the wealthiest 5% of the population received 84.5% of all 2020 capital gains income in Oregon.
Meet the players
Proponents are a grassroots movement led by a coalition of tenants who say this measure will help level the playing field between renters and landlords. The Eviction Representation for All, or ERA, coalition includes the Community Alliance of Tenants, North Portland Tenants Collective and Don’t Evict PDX.
The measure is backed by a roster of unions — Local 8 Hospitality Union, the Portland IWW (Industrial Workers of the World) branch, Laborers Local 483, Teamsters Local 206 and Chapter 28 of IATSE (International Alliance of Theatrical Stage Employees), among others.
Multnomah County Democrats Rep. Khanh Pham, Rep. Travis Nelson and Rep. Farrah Chaichi all signed on to support the measure.
Many civil rights and social justice groups also endorsed the measure, including the Portland League of Women Voters, the Portland Gray Panthers and Portland Jobs with Justice. All told, the measure has more than 60 endorsements.
Opposition includes business lobbyists, real estate and housing industry groups and several Portland and Multnomah County elected officials.
Portland Mayor Ted Wheeler, Multnomah County Chair Jessica Vega Pederson and Metro Council President Lynn Peterson oppose the measure. The Oregonian reported in February that all three had come out against the bill at a retreat hosted by local lobbying giant the Portland Business Alliance, or PBA.
Wheeler personally donated $500 to “Building Our Future Together,” a PAC organized by a realtor to oppose the measure. Commissioner Mingus Mapps’ election PAC also donated $500, and Metro President Lynn Pederson’s election PAC donated $101. A slew of other elected officials oppose the measure, including the rest of Portland City Council — commissioners Rene Gonzalez, Carmen Rubio and Dan Ryan — according to the opposition PAC’s website.
The PBA is a core opponent of the measure and even filed an unsuccessful legal challenge in 2022. With modifications, the measure made it to the ballot.
Tax the rich, defend the poor (in court)
The funding mechanism is a tax targeting Multnomah County’s most wealthy in the form of an adjustable capital gains tax initially set at 0.75%. The tax is anticipated to raise $12 million to $15 million per year.
ERA — the coalition of tenants and community organizations — wrote and championed the bill. Colleen Carroll, a spokesperson for the group and lead architect of the measure, said surging evictions were the catalyst for the push.
Unlike criminal court proceedings where representation is guaranteed, in eviction court, neither side is provided with legal representation. In practice, higher income and access to more resources means landlords have representation in the majority of cases.
For tenants, the opposite is true. As Street Roots reported in December 2022, the eviction court system is fundamentally skewed in favor of landlords. The vast majority of renters can’t afford legal representation. In many instances, tenants face hurdles even getting to court because of logistical issues such as accessing childcare or getting time off work so they can attend court.
Many tenants also don’t know eviction law and may not realize they can challenge an eviction in the first place, or they may fear that if they challenge and lose, they’ll have an eviction on their record, making accessing housing down the line extremely difficult.
The measure comes at a time when evictions are surging — along with the cost of living and rents. Proponents point out prices continue to rise with no real end in sight. Landlords can raise the rent on qualifying properties by as much as 14.6% this year under the state’s rent control policy.
At the same time, income inequity continues to grow in the state — in part as a result of capital gains, which are a key mechanism for generating disproportionate wealth.
“One of the reasons this (the capital gains tax) was chosen is that this type of money earning is itself a driver of inequality in our communities,” Carroll said.
ERA also points to the Oregon Center for Public Policy analysis finding the top-5% of income-earning Oregonians received nearly 85% of all capital gains income in 2020.
So while opponents cite concerns about adding more taxes because a capital gains tax targets the uber-wealthy, the vast majority of county residents won’t even pay it. The Oregon Center for Public Policy found that less than 20% of Oregonians pay this tax at all.
Business-friendly opposition resists taxes
Chief among the opposition is the PBA, the city’s most influential lobby group, which operates as Portland’s chamber of commerce. In addition to mounting legal challenges to stop the measure from making it to the ballot, the PBA has spoken out against the measure. Andrew Hoan, president and CEO of the Portland Business Alliance, told The Oregonian the PBA was concerned about the effects of the tax burden.
"We got involved because here's a proposal that asks voters to raise taxes, in large part on housing, in the middle of a housing crisis,” Hoan said. “So, it's our responsibility to stand up to proposals like this that may be well-intended to help get tenants representation, but that impact the very thing that we know is driving our region to a place of unaffordability.”
On Feb. 19, The Oregonian editorial board ran an op-ed opposing the measure and calling for “a dose of common sense to counter the local tax frenzy.” John Maher, president of the Oregonian Media Group and a member of the editorial board that authored the endorsement, is also on the board at the Portland Business Alliance.
The Springboard Group, led by PBA board member Brett Baker, donated $10,000.
Wheeler also spoke out against the measure. As Street Roots reported in February, the Mayor’s office has close ties to the business community and even created the Central City Expeding Group to advise on city policy. As Street Roots reported at the time, the group is peopled with hand-picked business representatives, including the PBA, and is immune to lobbying disclosures.
“When we look at who's making money, year over year, and therefore who's funding the opposition, it’s people who buy and sell lots of different types of properties, stocks and bonds, or properties that they never live in,” Carroll said. “So we look at companies that buy and sell, buy and flip houses in our community, right?”
In April, Willamette Week published an article on Measure 26-238, noting the city’s Revenue Division estimates the administrative cost would absorb more than 50% of the revenue generated.
Carroll said the cost after the first year will drop significantly after start-up costs and also says this figure is based on implementing the tax as a separate form, which is the most expensive option.
“There is another way to implement local taxes, which is adding a line on the tax returns we already fill out,” Carroll said. “It absolutely does not have to be that expensive, either in the first year or on an ongoing basis.”
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