By Molly Harbarger

The Oregonian

Of the thousands of bills Oregon lawmakers introduced this year, most have already been left for dead. A small share of the remaining proposals will win approval before lawmakers must adjourn in two weeks.

That puts a Portland developer’s proposal for a unique new property tax break for an old idea — still alive in the waning days of the legislative session — in exclusive company.

The plan would reward up to 500 Oregon homeowners who rent rooms to low- to moderate-income people with property tax cuts as large as $8,000 a year, at a cost of up to $2.6 million a year in lost revenue for local governments.

If House lawmakers approve the plan, Oregon would be the first state in the nation to offer such a tax break.

With the backing of Sen. Mark Hass of Beaverton, a powerful Democratic senator known for his expertise in tax policy, Senate Bill 1045 cruised through the chamber without fanfare last month, with unanimous support from both parties. In the House, Speaker Tina Kotek, D-Portland, said last week she is “intrigued by the home share concept” and expects a committee to vote on the tax break soon.

It’s the brainchild of Portland developer Homer Williams, who has cast himself as a businessman with a heart of gold in recent years but achieved at best a mixed record of helping provide shelter. He formed Harbor of Hope, a controversial nonprofit focused on directing private-sector dollars toward homelessness. This spring, state records show, Harbor of Hope spent at least $10,000 to hire two experienced lobbyists, who flanked Williams during testimony at a recent House committee hearing.

He argues that the tax break would save money in the long run by reducing homelessness. And he is promoting online home-sharing platform Silvernest as a partner, rather than nonprofits and local housing authorities, which he said wouldn’t run a similar program as efficiently.

Providing a tax break to incentivize homeowners to rent out rooms at low cost would be “a hell of a lot cheaper than what the city would spend if the person went homeless,” Williams said in an interview.

Williams formed a relationship with Silvernest, whose platform targets baby boomer and older homeowners. It could leverage the new tax incentive to sign up customers in Oregon. As of Friday, Silvernest only had a couple home shares listed in the Portland area.

Williams and Denver-based Silvernest have a close relationship, though he said he is not involved financially with the business. CEO Wendi Burkhardt said she had become increasingly interested in expanding to the Portland market after early success in Colorado and Southern California showed that 70% of homeowners signed up not for companionship, which the company expected would be the primary motivator, but for additional income.

“We are seeing a challenge in affordable housing across the country right now and we know that is one large reason folks are looking to do this,” Burkhardt said.

Private-public collaboration

Williams reached out to bring Silvernest together with OneApp Oregon, a locally created app designed to help renters find and apply to open units quickly and cheaply.

Williams then suggested the property tax exemption idea. The Silvernest CEO wrote in testimony to lawmakers that based on her company’s demographic analysis of Oregon, “this homesharing collaboration promises to achieve the goal of providing greater financial security to Oregon residences by providing additional income to homeowners and reduced housing costs for renters.”

She said in an interview that she is already pointing other states to Oregon as an example. The effort to score a tax credit for home sharers wasn’t designed as a marketing tool, she said, but it likely would spur people who hadn’t considered home-sharing to consider the idea.

“I would very much love for Oregon to lead the charge and see this become the norm and see other states adopt it,” Burkhardt said.

The company stands to make $25 a month from each person who signs up for the tax exemption. It charges homeowners that ongoing fee to list rooms for rent, run background checks on potential tenants, recommend rental rates, match suitable housemates, offer rental agreement templates, collect rent and provide mediation services.

Under SB 1045, homeowners could reduce by up to $300,000 the assessed value of their home, which is used to calculate property taxes, if they rent out a room to someone earning up to 60% of the area median income. In Portland, that is currently $34,000 for a single person. Cities, counties and other local tax districts would decide whether to opt in to offer the tax break. In Portland, a $300,000 break on assessed value saves a homeowner up to $8,000.

Williams’ vision is that homeowners would sign up for Silvernest to list their property and use the platform’s compatibility tools to find roommates who fit their lifestyle and values. There is no charge to potential renters to use the platform to learn about available rooms, but a renter would have to pay $30 a month to go through the background and compatibility tests that a homeowner might want or require before agreeing to a lease.

The plan has run into questions from liberal tax policy advocates, who’ve asked why an incentive is necessary when renting an extra room is already common and how governments could ensure the incentive would not be abused.

Home-sharing is already commonplace in Portland and across the country. But at least 60 cities and counties have formalized programs that facilitate it, especially for seniors, according to federal estimates.

San Mateo, California, is the best-known example. There, a nonprofit focused on housing seniors began the program in 1979. Lobbyist Ryan Fisher referenced San Mateo in his testimony as the inspiration and called it extremely successful. But Williams’ pitch goes far beyond that, because he said in an interview that San Mateo’s program is too small to be a template for Oregon.

San Mateo’s runs through a nonprofit that uses public and private dollars to help match renters who apply through the housing bureau with homeowners. The city’s website promises participants only extra income, companionship and a sense of security.

Williams, though, told skeptical lawmakers that wouldn’t be enough incentive in Portland.

To sell the idea, he leveraged his private sector contacts to build support in Salem. He said he enlisted powerful Portland lawyer and political donor Bob Stoll to make calls to his Democratic friends because Williams said he doesn’t know much about the legislature.

“I call him the puppeteer,” Williams said.

Stoll did not respond to a call for comment.

Williams was able to get Hass, known as Senate Democrats’ heavy hitter on tax policy, to write the bill and sign on as a chief sponsor. Hass played a major role in crafting the new multibillion-dollar business tax increase to fund education this session, Democrats’ top legislative priority this year.

“When it comes to the housing crisis we have in Oregon, there are probably a thousand different things we need to do,” Hass said. “I think this creates an incentive to rent to someone who you might not otherwise rent to.”

Lane County, among others, has expressed support. Officials with Northwest Pilot Project and Mid-Willamette Community Action Program in Marion County previously testified in support of the idea.

Williams does not, however, have a broad base or many influential local elected officials backing him. He presented the idea to Portland Mayor Ted Wheeler’s office but did not receive support from Portland or the city’s lobbying arm.

Multnomah County Chairwoman Deborah Kafoury also did not deploy formal support, but she offered provisional encouragement without committing to adopting the exemption, if passed.

“The more tools we have to address the housing crisis, the better,” Kafoury said. “Cities and counties across the entire state are figuring out what works best for their community, and so for some jurisdictions this might make sense.”

Some question need for exemption

Williams’ testimony before lawmakers earlier this month was rambling and wide-ranging. “Really what we’re doing, we’re going back to the boarding house days,” he told state representatives. He called baby boomers “a lost generation,” saying “we’re consumers, we’re not savers. And then you layer on top of that artificial intelligence. Who is it hitting the hardest? Fifty and older. Verizon just laid off 44,000 people; you can imagine what the age was.”

Marcia Kelley, an advocate with the Oregon Women’s Rights Coalition, told lawmakers that home sharing is “not anything new. The property tax exemption is new.” Kelly said the plan would put the onus on local governments to audit whether the tax breaks were being appropriately used, which would be an additional cost to those governments.

At the same hearing before the House Committee on Revenue, Rep. Nancy Nathanson, D-Eugene, sounded skeptical.

“This sounds perfectly suited to a pilot project where a grant would be applied to a county,” Nathanson said. “I am not understanding how a property tax exemption is the right mechanism to encourage this program.”

But on Wednesday, Kotek sounded excited about the idea. “I’m intrigued by the home share concept and commend the proponents for bringing it forward,” Kotek said in a statement.

Williams pitches himself as the connection between the private and public sectors in Portland. He said that, as a developer, he has been housing Baby Boomers since the 1970s and he characterized his homeless advocacy as an extension of that work.

Williams has earned the buy-in of the city of Portland and Multnomah County on some of his schemes and extracted big-dollar donations from prominent business figures.

However, not all of his plans have worked out to spec. His project that has gained the most traction, a navigation center in Old Town Chinatown in Portland planned to open this summer, was launched with free land from the city and $1.5 million from Tim Boyle, head of local retail giant Columbia Sportswear.

He said that he would fully fund the center through his nonprofit with $3.5 million. The center is supposed to function as a giant tent where homeless people can find shelter and be connected to services — an alternative to the existing traditional homeless shelters. But Williams found the cost to clean up the land was higher than estimated. He burned through the money he raised, and the city and county’s Joint Office of Homeless Services pitched in the first year’s $1 million operational expenses to make sure it opens.

Plans to turn a marine terminal into a massive homeless shelter campus and to get the city to rezone and redistribute industrial land for workforce housing both went nowhere after initial nods of approval from city commissioners. He asked Multnomah County to continue to pay the upkeep costs of Wapato Jail instead of selling it immediately so that Harbor of Hope could evaluate whether the nonprofit could make an offer on the building, but never made that offer once new owner Jordan Schnitzer solicited do-gooder ideas for the site.

His nonprofit, Harbor of Hope, has independently raised the funds to get a mobile shower truck up and running without government assistance, he said, which is supposed to provide hygiene amenities to homeless camps.

Tax documents from Harbor of Hope show that his ability to fundraise might be limited. On Harbor of Hope’s 2017 tax forms, the organization was nearly $110,000 in the red, due to a more than $100,000 personal loan from Williams that covered expenses while Williams and others raised little more than $8,000. That year, the nonprofit’s largest expenses were project management, with little details about who those fees went to. The next largest line items were meals and entertainment and a website.

The year before Harbor of Hope reported nearly $130,000 raised — most of it gone by the end of the year due to travel, salary for the director and payments to contractors.

Still, Williams managed to attract Boyle’s investment in 2018 as well as others, including one from gas utility Northwest Natural. The nonprofit’s most recent tax documents are not yet publicly available.

Home sharing, tax exemption or not

Both Williams and Silvernest say they plan to roll out their idea whether they win a tax exemption or not.

Silvernest CEO Burkhardt said the company often works with nonprofits in a city it wants to concentrate on, such as San Francisco. She said she would continue that practice in Oregon.

“We think there is a huge need in Oregon based on what we see there and would love to be part of the solution,” Burkhardt said.

Williams indicated he would be open to a grant program or voucher system — or move forward on the private market — instead.

“We’re going to have the homeshare program going no matter what,” Williams said. “The only reason I asked the state to consider this is if we can drive (the cost of housing) down even further for those that need help.”

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