Proposed Multnomah County tax could help tenants avoid eviction

A proposal for a local capital gains tax that would support tenants facing eviction will be decided by Multnomah County voters in the May 16 election.

Why it matters: National research shows that eviction is a significant cause of homelessness, and that access to legal counsel can slow evictions and lower government spending on homeless services.

Details: Money raised by the ballot measure's proposed tax on all Multnomah County residents would pay for lawyers for any tenant in the county facing eviction.

• Court cases wouldn't go forward until tenants have lawyers, and the county would have discretionary funds to pay for court awards to landlords.
• Supporters include state Reps. Khanh Pham and Farrah Chaichi, the League of Women Voters, the Urban League of Portland and a range of labor unions.

How it works: If approved by voters, a tax of 0.75% would be imposed on all capital gains made in 2023, as defined by the IRS, which include profits from sales of homes and cars, as well as stocks and business investments.

• The ballot measure doesn't list exemptions, although backers say county officials could make federal limits on home sales apply.
• Supporters estimate the proposed tax would bring in $12-15 million a year.

The other side: Opponents note the rate could go up or down year to year, depending on annual program evaluations.

• This local tax would be in addition to Oregon's state income tax, which taxes capital gains at the same rate as total income.

Zoom in: Multnomah County court data collected by Portland State University researchers shows that the vast majority of eviction cases — 88% in the last six months of 2022 — happened because rent wasn't paid.

• Half the landlords had lawyers, while 9% of tenants did.
• Of the 3% that went to trial, landlords won twice as often as tenants.

Zoom out: New York City created the first "right-to-counsel" program for tenants facing eviction in 2017. 84% of tenants who got free lawyers through the program in its first two years avoided eviction, but it is struggling to be fully funded.

• New York did not levy a new tax, saying the program would pay for itself.
• At least three states and over a dozen cities now have "right-to-counsel" laws in eviction cases.

Flashback: In 2020, voters approved two different ballot measures dedicating new taxes to specific social services.

• Multnomah County voters approved an income tax on individuals earning more than $125,000 annually to pay for free preschool.
• Voters in the tri-county Metro area approved a similar personal income tax, plus a tax on businesses with gross receipts over $5 million, to pay for affordable housing with supportive services.

Opponents of the current proposal — including Portland Mayor Ted Wheeler, all Portland City Council members and U.S. Rep. Earl Blumenauer — say that Metro tax is already tackling the problem.

What's next: Voters pamphlets are out; ballots are late but should arrive this week. Vote, sign and get it postmarked no later than May 16 or put it in a drop box by 8pm.