SALEM, Ore. — Oregon Gov. Tina Kotek has begun a full-court press for Senate Bill 1537, a $500 million housing package that she said would be her sole bill introduced in this year's legislative session. She testified in support of the bill at a public hearing before the Senate Committee on Housing and Development Thursday morning, and her office issued a press release touting a lengthy list of housing nonprofits, developers and advocacy groups that have endorsed the measure.
Speaking to the committee members, Kotek said the bill is based on seven months of work with input from a range of policymakers and stakeholders, and takes a multi-faceted approach to match the scale of Oregon's housing shortage. She also referenced her recent statewide listening tour, saying that people in every county brought up housing as a concern.
"Stories were a little different but a lot of similarities: I want to live in this community, I want to work in this community, (but) I don't have a place to live,'" she said. "This is affecting our economy; it's affecting the health of our communities, and we are seeing the ultimate result of not enough housing that is affordable, and that is our homelessness crisis."
What's in the bill?
Kotek's housing policy advisor Matthew Tschabold presented an overview of the bill's components at the hearing, as well as the scale of the problem.
Oregon currently has a deficit of 140,000 units and needs to produce 440,000 units over the next 20 years to both catch up and meet its future needs, he said, so the target is a sustained pace of roughly 36,000 new units permitted each year — almost double what the state is producing right now.
Funding for housing production
One of the biggest components of the bill is a series of programs to provide financial assistance to help local governments overcome various roadblocks that tend to crop up and derail low-income housing projects, Tschabold said, such as a lack of available land or difficulties building infrastructure like water and sewer service to support new housing.
Most of the programs would be geared toward low- or moderate-income housing, he said, offering grants for those projects and loans for other housing projects. The programs also generally include minimum density requirements and focus on smaller homes that are more affordable, he said.
The programs and pots of funding include:
- $5 million for local housing infrastructure planning
- $40 million for site acquisition
- $10 million for site mitigation and readiness
- $200 million for housing production
- $200 million for moderate income housing financing
- $20 million for housing climate incentives
Housing Accountability and Production Office
SB 1537 would create a new statewide office tasked with ensuring local land use codes comply with state law and coordinating between the various state agencies involved in housing production. The office would aid local governments and housing developers by providing build-ready plans, model codes and other technical assistance.
The office is also intended as a forum to resolve disputes around policies and developments without escalating into a formal hearing before the state Land Conservation and Development Commission or Land Use Board of Appeals.
"If folks think the state's laws are not being interpreted correctly, they could come to this office," Tschabold said.
The office would have some enforcement capability, he added, although the governor's office doesn't anticipate it being used often. A similar office in California has had a major impact on local development efforts while only having to pursue enforcement "in the worst situations," he said.
Urban Growth Boundary expansion
The bill includes a one-time-use option for cities to expand their urban growth boundaries to add 150 or 75 acres — depending on the size of the city — specifically for housing. The Portland area will have a cumulative cap of 600 acres that applies to all cities within the metro urban growth boundary.
Cities must be able to demonstrate a specific level of need for additional land and affordable housing in order to qualify to use the tool, Tschabold said, and 30% of the housing to be built on the added land must be legally restricted to be affordable.
Each expansion would also require the city to have a complete community concept plan in place that covers topics like minimum density, mixed-use residential areas, a transportation network, open space, natural hazard protections and urban services.
Design and development adjustments
SB 1537 aims to bring some flexibility to the state's housing production rules, allowing for temporary adjustments to some land use standards if necessary to make sure new housing gets built. The exceptions are specific to new housing units in new construction projects that meet minimum density requirements, Tschabold said.
"Something we've heard, particularly from affordable and public housing projects but also market rate housing projects, is if there was just some flexibility within the design box itself... that would be helpful in reducing cost or increasing production," he said.
The ability to bend the rules would not apply to any standards that relate to "critical public policy goals" such as natural resources, the environment, affordability or accessibility, he added, and there would be a limit of 10 adjustment requests per year.
Opting into new housing regulations
Under SB 1537, if local land use rules change while a developer is partway through developing a project, the developer would have a choice to stick with the old standards or opt into the new ones without having to submit a new application, as long as the decision is made before the public notice and review process begins for the project.
"Often times housing codes change and housing developers may have an application in process when those codes change. If it helps to increase the number of units or reduce the cost or increase the speed of production, this provision would allow developers to opt in," Tschabold said.
Discouraging frivolous LUBA appeals
In cases where a local government's approval of a housing project is challenged and appealed to the State Land Use Board of Appeals, SB 1537 would provide attorney fees to the builders and local government if the state board upholds the local government's approval.
"This will help with nuisance appeals that can add complexity or time or hedging to housing projects," Tschabold said.
The provision already exists in state law for affordable or publicly supported housing projects and has been successful, he added; SB 1537 would extend it to all housing projects.