PORTLAND, Ore. (KATU) — A controversial proposal to charge owners of vacant commercial properties in Portland is off the table for now. The development comes as Portland continues to deal with record-high vacancy rates in downtown office buildings.
“There’s empty office space, and there’s empty residential units, and we need to come up with a solution,” Council President Jamie Dunphy told KATU in May.
Market data from Colliers, a real estate firm, found the city’s office buildings had a nearly 28% vacancy rate in the second quarter of this year. Downtown, it was even worse at just under 39%.
Last year, councilors approved a study of whether charging owners of long-vacant commercial properties could help bring life back to empty storefronts and office buildings.
Property owners panned the proposal.
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Now, the city has the results.
The study found vacancies are driven mostly by weak demand and costly build-out barriers. The study said a fee would be costly to impose, could disproportionately affect small or local owners, and would do little to reduce vacancy.
“That study was very clear, and [it] aligned with research from our office. It’s clear that in a narrow, defined circumstance, a vacancy fee is an effective tool. But it’s apparent to me that it is not the tool to solve Portland’s current vacancy problems. I am still deeply concerned about the way that vacant spaces are detracting from Portland’s recovery, and how commercial [lease prices] are not falling in spite of high vacancy rates, but am not pursuing a vacancy fee at this time,” Dunphy’s office told KATU this month.
A spokesperson for another councilor who proposed the study, Councilor Sameer Kanal, says Kanal has no plans to move forward with the fee.
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The report did make recommendations on what the city could do to address vacancies.
It said the city could make the permitting process cheaper and quicker. It also recommended changing rules to make it easier to convert empty spaces to a different use.
The report also said targeted enforcement for things like nuisance properties or elective vacancies would be more effecting than a citywide fee.