Oregonians need homes, not tax shelters

Chuck Sheketoff

You may have heard the radio ads, seen the large newspaper ads, or pulled the shiny postcard from your mailbox touting a proposal to create a “First-Time Home Buyers Savings Account.”

The marketing materials are from an entity with the benign sounding name “Oregon First Home Coalition.” It’s nothing more than a front — a political action committee, actually — for the Oregon Association of Realtors. This political action committee has spent at least $750,000 campaigning for the proposal.

Ahead of upcoming House and Senate meetings on the proposal (HB 2996 and SB 849), the Oregon Center for Public Policy published a paper analyzing the flaws with this new tax shelter. Here’s what you should know:

1. The home buyer savings program is structured to mainly benefit well-off families and their kin. We know this because it is structured in the same way as another tax savings program that steers 87 percent of the tax benefits to the wealthiest fifth of Oregonians.

2. There is no evidence the proposal would increase home ownership. The association of realtors has offered no evidence this program would boost home ownership in any meaningful way and there is no reason to think that it would. Because it is tailored to benefit the most well-off, the program would simply be subsidizing home purchases that would already occur.

3. The proposed tax shelter will divert $35 million from schools, affordable housing, lowering student debt and other essential services. Following the release of our report, the Legislative Revenue Office estimated that the realtors’ tax shelter would cost about $35 million in the upcoming budget period, 10 times the realtors’ estimate. That would mean that the legislature would be digging the existing budget hole even deeper — just to create a tax shelter for the well off.

“Buying a first home should be more than just a dream,” the Oregon Association of Realtors’ marketing proclaims. That’s certainly true, but the lobby group’s proposal would keep it a dream for the middle-class — while creating a real-life tax shelter for the rich.

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Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.

By Chuck Sheketoff April 12, 2017