City-Funded Study Concludes a Vacancy Tax Likely to Do More Harm Than Good

According to reporting by the Portland Business Journal, a study commissioned by the Portland City Council concludes that there would be little to no benefit from a vacancy tax proposal floated by Councilors Jamie Dunphy and Sameer Kanal in March, and could violate state law on limits to taxes imposed on real property.

The 150-page report conducted by economic consulting firm ECONorthwest found virtually no potential benefits from a tax on vacant retail or residential properties. The study suggested that tenant improvement grants and business incentives would be more effective in spurring improved occupancy of vacant spaces.

It's not yet clear whether there will be any further City Council action on the vacancy tax proposal after such a negative analysis, especially in the wake of an equally critical public opinion survey of real estate owners, developers, and brokers conducted by Portland State University in April.

The Revitalize Portland Coalition has identified the vacancy tax proposal as one of the highest priority issues being considered by the City and will continue to closely monitor it.