The Legislature may not have enough days left for a bill that would give people a property tax break if they rent out rooms in their homes to low- to moderate-income people. And because the bill has at least one big problem, it’s just as well.
Senate Bill 1045 seems well-intentioned. It would provide homeowners with an incentive to provide more affordable housing through sharing their home.
The bill’s details are a mouthful. The bill would cut up to $8,000 a year off the property tax bill of up to 500 homes in Oregon if rooms are rented out to people who are not family members and who are making less than 60 percent of area median income. It might cost local governments some $2.6 million in lost revenue. The argument is, though, that cost would be cheaper than having to deal with the cost of people who are homeless or who are forced to spend so much of their income on rent.
Some cities across the country already have similar formalized programs, according to an article in The Bulletin. Many of them are focused on helping seniors find a place to live and companionship. And there is at least one Oregon business that provides services to people who want to home share, such as background checks, connecting renters and homeowners and collecting rent. That business and others like it would obviously benefit indirectly from the tax-cut subsidy.
When the bill came before Oregon lawmakers, some questioned a property tax break is the right mechanism for providing the incentive. Others wondered why homeowners need the incentive to begin with. They would already be making rent.
The bigger problem is that the program seems ripe for abuse. It would be easy enough for government to determine if a renter was a family member. But it would also be easy enough for a couple that is not married to be in full compliance with the law and also get a big, fat tax break when that is not all the intent of the bill.
SB 1045 comes with at least one severe flaw. The Legislature should not pass it this session.