Who pays property taxes and who does not? Land speculation has been hurting Eliot for generations

The Eliot neighborhood in 1937. Flint and Russell streets are noted and the area marked in black includes where Harriet Tubman Middle School is today and some of Legacy Emanuel property. Photo courtesy Portland Archives

The Eliot Neighborhood is a geographically unique neighborhood in Portland. Bounded geographically from the Willamette River to NE 7th Avenue and the Fremont Bridge/Fremont Street to N/NE Broadway Avenue, Eliot is shaped like a rectangle plus a triangle. While most current residents in Eliot live between N Vancouver and NE 7th, that was not always the case.

Any discussion of land ownership in our neighborhood should begin by acknowledging that the land in the area rests on traditional village sites of the Multnomah, Wasco, Cowlitz, Kathlamet, Clackamas, Bands of Chinook, Tualatin, Kalapuya, Molalla, and many other tribes who made their homes along the Columbia River, creating communities and summer encampments to harvest and use the plentiful natural resources of the area (Credit to the University of Portland’s land acknowledgment).

Property taxes – paid by landowners – are the main way that the City of Portland is funded and a major source of funding for the local school system. Taxes like these are how we keep the lights on and the services working in any city, but they also have another effect on the way that cities are developed. Taxes can be a forcing function on the way that people use their land, forcing inefficient land uses to be moved to lower value land near the edges of cities and causing higher value land to yield higher value buildings. Unfortunately, in Oregon, there are several tax measures (namely Measure 5 and Measure 50) that change the way property taxes are assessed. In Eliot Neighborhood these aren’t even the biggest problems causing land to be inefficiently used.

Historically, through systemic disinvestment, Urban Renewal, redlining (a process that prevented loans from being issued), and other factors, much of the land in Eliot was rendered worth much less than similar properties around the City. As a result of property being under-valued in Eliot, a few landowners used various mechanisms to acquire fairly large property holdings in the Eliot Neighborhood. I will touch on a few of them.

Albina shipyards 1945 with Mississippi, Interstate and Russell streets visible. Photo courtesy Portland Archives

In the 1950s, N Williams Avenue was the center of the African American community in Portland. However, one thing that is less commonly known is that residential Eliot continued on the grid of streets that included a section from N Russell to N Fremont all the way downhill from N Vancouver Avenue to N Interstate Avenue. The area that we think of between N Vancouver and N Interstate Avenue has been replaced with a highway, the City of Portland’s “Albina Yards,” several empty blocks, and a large Emanuel Hospital campus.

So who owns all of this empty underproductive land? The City of Portland owns our parks and Matt Dishman Community Center, as well as the Albina Yards, which straddle the Eliot and Boise Neighborhoods. These parcels are around the area of the I-405 bridge (Fremont Bridge), and some of that land was originally going to be a part of a much larger cloverleaf interchange that was canceled when the NE Going Freeway project was canceled and I-405 was ended the way that we see it now. None of this City-owned land is paying any tax at all.

Just north of the Broadway Bridge, The City of Portland and Portland Public Schools both own large amounts of land along N Interstate Avenue. Portland Public Schools (PPS) owns a large site called the “Blanchard Building.” The amount of land at the Blanchard Building site is equivalent to 5 downtown city blocks. Meanwhile, the Portland Water Bureau, adjacent buildings, and parking lots are a similarly large area. I had not realized it until looking it up, but the City also owns a bunch of small disjointed parcels in the Lower Albina area. None of this land owned by PPS or City land is on the tax rolls.

The Oregon Department of Transportation owns many parcels underneath I-5 and I-405, and this land and adjacent unoccupied land is easily a block or more for the entire width of the “freeways.” It is interesting to think of these freeways from a property tax perspective. There are substantially fewer buildings adjacent to the freeway than other locations in the neighborhood, so the freeways are reducing property taxes collected on adjacent properties. In addition, these asphalt and concrete arteries through Eliot sit on previously taxed land that has been removed from the tax rolls completely.

I-5 with Boise Eliot School and Emanuel Hospital 1965. It is incredible to look at old photos and think about how much the shape of the neighborhood has changed. N Russell Avenue was a major connection down to the shipyards that helped us during World War 2, but the thing that really jumped out at me was how the residential neighborhoods actually went all the way down to N Interstate Avenue before Interstate 5 was put in. Photo courtesy Portland Archives

One of the most visible signs of under-developed land is on Legacy Emanuel Hospital’s campus. In the 1960s and 1970s, a lot of land was taken off of the tax rolls near residential Eliot. What was then a small Emanuel Hospital quadrupled in size with an expansion, and a much larger expansion was envisioned, as well. Land was acquired for quadrupling in size again the amount of land that the hospital owned. Much of this land was filled with houses like the ones that many of us live in now. Depending on how aggressively you want to count it, the land that is on the Legacy Emanuel campus is substantially covered in car parking and other non-health uses. I started writing this article thinking that this campus was one of the main culprits of under-investment in the Eliot Neighborhood, but I have moved away from this conclusion, realizing that they are actually doing a better job than the publicly owned entities at using their land. The hospital-owned lots along N Williams Avenue are simply much more visible than the publicly-owned lots elsewhere in Eliot. Through the Williams and Russell project with the city, one of these city blocks is expected to be developed.

The other large landowner that showed up on my radar was the company that owns the Broadway car dealerships. This company, OB Portland Properties II LLC, owns roughly 8 city blocks near their dealership. They had proposed to build a 5-story dealership/parking garage recently, and I wonder if they plan to sell some property and reduce their holdings in the process. At least, in this case, the property owner is paying taxes on their lots, they are unable to hold the land for free.  Parking lots are taxed at a much lower rate than buildings, so this may have encouraged them to demolish 3 houses that they purchased recently on N 1st Avenue.

As property values in Eliot increase, taxes on the property should go up commensurately; increased taxes should strongly encourage landowners to develop or sell their land. As mentioned earlier, much of Eliot’s land is owned by institutional landowners that do not feel these pressures. That most of this land is publicly owned makes it even worse. All of this under-developed land in Eliot reduces the vibrancy of the neighborhood. Despite thriving commercial and residential corridors in and around Eliot being built up, we are not seeing the snowball effect of development that a neighborhood with all private ownership would see. At roughly $10 million per empty city block in Eliot, all of this land that is not on the tax rolls is costing us a pretty penny in revenue, and even more in lost potential.

To remedy these problems, I would like to see the City and PPS account for their decisions to go so long with under-utilized or unused land in our neighborhood. They should do an internal accounting for the value of land to see if it would make sense to move their operations elsewhere. The county assessor could consider charging property taxes for the land under I-5 and other properties around the City. My dream would be to tax land that was undeveloped at rates similar to land that is developed (look up the idea of a Land Value Tax for more details) to encourage empty space in the neighborhood and reward those who are using their land effectively.

It is incredible to look at old photos and think about how much the shape of the neighborhood has changed. N Russell Avenue was a major connection down to the shipyards that helped us during World War 2, but the thing that really jumped out at me was how the residential neighborhoods actually went all the way down to N Interstate Avenue before Interstate 5 was put in.