Construction Excise Tax

CURRENT WORK

The City of Newberg is implementing the Construction Excise Tax (CET) Fund to use funds for affordable housing. The CET Notice of Funding Availability and CET Application Form are now available as attachments in the Supporting Documents section below. Application deadline is April 4, 2024.

Status: The Affordable Housing Commission met on April 23rd, 2024 to review applications received for the current fiscal year. Recommendations were made to bring forward two applications to City Council from the eligible proposals. One of the eligible applications put forward is from the Yamhill County Affordable Housing Corporation, under the category of Affordable Housing Programs, requesting an amount of $262, 500 for housing repairs for very low and low income households. The Affordable Housing Commission recommended that City Council grant their full request.

The other eligible application falls under the category of a Developer Incentive Project, for the joint proposal put forward by Catholic Charities of Oregon, Edlen & Company, Community Wellness Collective in partnership with Providence. Their request is in the amount of $397,050 with consideration for the Legacy portion of the CET Fund monies to build a comprehensive affordable housing project within Newberg. The Affordable Housing Commission recommended that City Council grant the remainder of the first allocation of CET Fund monies to their request.

The consideration of eligible applications is on the agenda for the July 15th, 2024 City Council meeting.

City Council adopted Ordinance No. 2023-2917 on May 1, 2023 and sunset the collection of the CET effective July 1, 2023. The Ordinance can be accessed in the Supporting Document section below.

What Can the CET Fund be used for?

Per the City ordinance adopted in December 2020, the CET funds must be used for affordable housing projects.

Construction excise taxes levied upon projects on residential improvements shall be used as follows:

• 50% to fund developer incentives 
• 15% to the Oregon Housing and Community Services Department to fund home ownership programs that provide down payment assistance
• 35% to fund developer incentives and affordable housing programs 

Construction excise taxes levied upon projects on commercial, industrial, and mixed-use property shall be used as follows:

• Developer incentives
• Fund affordable housing programs

Per ORS 197.309(5)(c) and (d) and 197.309(7), developer incentives allowed or offered include, but are not limited to:

• System development; and
• Land acquisition; and
• Local public improvements required by municipal governments.

Per Section 9, Chapter 59, Oregon Laws 2016, affordable housing programs include, but are not limited to:

• Rent buy-downs and subsidies; and
• Down-payment assistance; and
• Foreclosure-prevention assistance.

For more information contact:

Leanne Wagener | Assistant Planner
(503) 554-7768
leanne.wagener@newbergoregon.gov or planning@newbergoregon.gov 

BACKGROUND for the CET and CET Fund

The City of Newberg adopted a Construction Excise Tax in December 2020. Senate Bill 1533 from the 2016 Oregon Legislative session is the enabling legislation that allows local jurisdictions to implement a Construction Excise Tax. Revenues generated from a tax, is 1% on the project building permit value, would be used to address housing affordability issues for homeowners or renters within Newberg for families that earn 80% or less of the median family income. For 2023, the Median Family Income for the City of Newberg was $114,400. 80% of that amount for a family of four is $91,520.