A Portland, Ore. suburb is poised to vote on a law that taxes anyone who demolishes a home, the latest salvo in the fight over how to create more affordable housing in the state.

Legislators in Lake Oswego, an affluent city of about 38,000, have proposed a law that would place a $15,000 tax on most home demolitions. The funds raised would go toward maintenance of local parks, according to the ordinance.

But...