Our community is changing. Existing families and families moving here after landing a new job with decent wages can’t find affordable housing. If we don’t adapt to change, then our County’s future looks grim. Since we passed Ordinance 83 imposing a 1% tax on new construction in Tillamook County, there have been a number of questions raised. It is my hope that this letter will serve to clarify some of the misinformation circulating in our community regarding this new tax. The 2016 legislature passed Senate Bill 1533 allowing cities and counties to impose a tax on new construction that adds square footage to a building. This bill also put some very stringent rules in place for the expenditure of these funds. The income from this new tax cannot go into the County’s General Fund nor can it be spent on anything the County desires. Senate Bill 1533 requires that the 1% tax on residential construction can only be spent in three ways as follows:

  1. 15% is required to go to the Oregon Department of Housing and Community Development to fund home ownership programs. We have assurance from the Oregon Department of Housing and Community Development that these funds will be given back to Tillamook County to be administered by one of our non–profit organizations to subsidize first-time homebuyer down payments.
  2. 50% is required to be paid for financial incentives to developers for building affordable housing in Tillamook County.
  3. 35% is required to be spent on affordable housing based on a Tillamook County Affordable Housing Plan.

Additionally, Senate Bill 1533 together with the new Tillamook County Ordinance 83 require that the 1% tax on commercial property be spent on increasing affordable housing for those making up to 200% of the county’s median household income, which is approximately $65,000 per year. These are the restrictions. I would like to reiterate that these funds, as mandated by State law and by Ordinance 83, are to be spent only on housing. Other facts include the following:

  • Ordinance 83 will sunset after 10 years.
  • There are exemptions in Ordinance 83 for housing units guaranteed to be affordable through deed restrictions, private school improvements, public improvements, public or private hospital improvements, religious facilities used for worship or education, agricultural building improvements, and facilities improvements that are owned and operated by an IRC 501(c)(3) nonprofit corporation.
  • Remodeling of a house that does not add square footage is exempt. If square footage is added, the first $100,000 of additional square footage is also exempt.

We are in the process of setting up a Tillamook County Housing Commission. We anticipate this commission will include representatives from the banking, realty, and construction and development industries. In addition, there will be representatives from non-profit groups who focus on housing, at least one city mayor, a Community Action Committee (CAC) member, and an at-large citizen. This commission will have broad authority to help set guidelines for the expenditure of incentives.

The recent housing study conducted by the Tillamook County Housing Task Force along with the recent public hearings we held regarding Ordinance 83 revealed the enormity of our housing shortage and the real struggle our citizens face in finding housing. Our local businesses are also struggling to find and retain employees due to the shortage of affordable housing. Our hospital needs housing to recruit those who take care of our health needs, and our schools are facing major difficulties in recruitment of teachers, again due to the lack of availability of affordable housing in our county. The situation we are facing is not only a housing crisis; it is an economic development crisis. The entity that conducted our housing study has national experience and expertise, and it has made several specific recommendations for a pathway out of our predicament. I urge you to read the report; it is sobering! You may access it on the Tillamook C.A.R.E. website at www.careinc.org.

Lastly, under most circumstances, I am not normally one who supports new taxes and spearheading the passage of Ordinance 83 has been an exceptionally heavy burden for me. I would not have pushed so hard for imposing a new tax if I did not see the crisis our community is now facing. Our current projected budget shortfall in the General Fund leaves no money available for housing and we are barely keeping up with the state-mandated services. This 1% tax is our only option for funding and addressing the recommendations made in the housing study and for resolving our shortage of affordable housing. Had we not taken this route, the housing study would just be another report sitting on a shelf and we would be like Nero, fiddling while Rome burned. Like Nero, if we continue to ignore this housing crisis, then we will be burying our heads in the sand and in essence turning our backs on a basic human need that our community deserves – affordable housing.


Bill Baertlein

Chair, Tillamook County Board of Commissioners