In December 2020, the city council approved the formation of a construction excise tax to raise funds to promote construction of affordable housing in Newberg.
But a new council has rescinded the tax and the city is taking a new approach to the issue.
The tax, levied on developers at a rate of 1% of the value of building permits, was made possible by the passage of Senate Bill 1533 in the Legislature and was set to run from January 2021 through December 2026.
Revenues were to be used to address housing affordability issues for homeowners or renters within Newberg — families that earn 80% or less of median family income, which the city estimated to be $114,400 in 2023. Eighty percent of that figure means a family of four with an income of $91,520 or less would qualify for assistance.
Over the course of the next 31 months, the fund gathered more than $500,000, money that was meant to incentivize developers to construct affordable housing by aiding them in paying the city’s system development charges. Regardless, developers in the area howled in protest at the tax, which they claimed would add thousands to the cost of single-family homes and tens of thousands to construct commercial buildings.