The findings arrived as city property owners are receiving their new tax bills after a property revaluation that drastically changed costs for many homeowners.
A new study commissioned by a real estate group says Portland’s rent control policy has shifted millions of dollars in property tax burden onto homeowners and away from commercial property owners.
The findings, released Tuesday, arrive as Portland property owners are receiving their new tax bills in the mail after a property revaluation drastically changed what some will pay, and as the Portland City Council weighs whether to strengthen the rent control policy.
The study, commissioned by the Greater Portland Board of Realtors and conducted by Wallace Economic Advisers, concluded that rent control reduces Portland’s taxable property base by 3.2% to 5.4%, shifting $6.3 million to $10.6 million annually in tax burden onto residential homeowners…
But one economics expert questioned the validity of the study’s findings, which he said don’t conclusively prove a link between rent control and increasing property taxes.
“We have not seen any high-quality, peer-reviewed research that has shown the type of negative implications this study purports to find,” said Mark Paul, an associate professor of economics at Rutgers University’s school of public policy who reviewed the study.
Paul, the Rutgers expert, is interested in studies examining the connection between rent control policies and property tax hikes. But he said this one isn’t up to snuff.
“(This study) is not independent or rigorous,” he said. “It’s really looking at some basic correlations and then drawing really stark conclusions.”
Paul said the study only proves a correlation between rent control and higher property taxes. It doesn’t prove causation.
“In the summertime, we have more shark attacks, and also in the summertime we have more ice cream sales, but shark attacks don’t lead to ice cream sales,” Paul said. “We know these two things are unrelated, but they happen to move in tandem.”
Paul says rent control and property taxes may work the same way. He noted that property taxes are rising in communities across the U.S. for a variety of reasons, including inflation, rising pension obligations and reduced federal support for education.
“I don’t think it’s a bad question to ask, but we don’t have sufficient evidence to date to really show that rent control is having any impact on the tax base,” Paul said. “For that, I’d need to see a rigorous, peer-reviewed, independently funded study.”