Dear Al
Question: I recently received a mailer from the City of Portland saying proposed land use changes could affect the value of my property. Will these changes increase my property taxes.
Answer: The short answer is, “probably not.” The key point is that the Comprehensive Plan says what you can do with your land, not what you have to do with your land. The plan is focused on the future.
Your property taxes, on the other hand, are based on what you have already done with your land, not on what you theoretically could do with your land. Taxes are focused on existing conditions.
For improved property (or property that has been developed or built upon), consider two neighbors living side-by-side on lots of equal size. One neighbor lives in the smallest house allowed by the plan and the other the largest. All other things being equal, the neighbor with the big house pays more taxes. The neighbor with the small house has remaining development potential, but what this owner “could do” is not taxable because it doesn’t count as an improvement. The upshot is that property taxes reward people who under-use their land. BTW, property tax rules are set in the state constitution.
Vacant land is already “under-used” as much as possible, so development potential can play more of a role in taxation. Let’s take the example of a vacant parcel that can be divided into two buildable lots. If the Comprehensive Plan Map changes and that same parcel can now be divided into three or four lots, property taxes will increase — but only when the land is subdivided.
Comprehensive Plan changes do not automatically trigger tax increases; it is the actual use of new development opportunities provided by the plan that raises taxes.
In summary, the new Comprehensive Plan will be nuetral on existing buildings. If an owner is content with the present level of improvements, the plan won’t change the tax bill. On the other hand, should an owner use new development allowances — that will increase taxes. Those new taxes result from the owner’s choice to develop; development that was allowed by the plan, but not required by the plan.
East Columbia Neighborhood Association 