BY JAMIE HOWSLEY & JOSEPH SCHAEFERThis article originally appeared in the February 15, 2017, edition of the Cascade Business News.
Housing doesn’t often rise to the top issues being faced in Oregon. But the 2017 legislature is cognizant of the shortage of affordable housing and is considering numerous bills to tackle the problem. Land is the most expensive component of new housing on a per unit basis, and some bills aim to reduce that cost by increasing the supply of land. Other bills propose regulatory solutions that attempt to drive down the cost of building on land that is already zoned for housing.
All of this occurs in the wake of the 2016 compromise where several passed bills allow cities to require rent control and inclusionary housing, allow expedited urban growth boundary expansions for affordable housing, and the elimination of voting requirements for annexation. That compromise is beginning to affect new projects, and generate new controversies, such as the City of Corvallis’s lawsuit that seeks to reinstate the voting requirement for annexation.
The 2017 bills approach the problem from several new angles. Senate Bill 608 would expedite needed housing by allowing local governments to expand their Urban Growth Boundary (“UGB”) when the number of new households exceeds the number of new housing units and the vacancy rate for rentals does not exceed six percent. As the City of Bend well knows, many years are typically required for the elaborate housing needs analysis that precedes expanding a UGB. This bill would provide an alternate, simple method for expansion based on market shortages.
Senate Bill 630 also takes the market based approach to expanding the urban UGB when four conditions are met: rental vacancy is less than one percent, annual rent increases exceed the overall Consumer Price Index, available land is inadequate to meet the demand, and a housing emergency exists. The expansion is not subject to review by the state, and so long as property owners consent, the land is annexed automatically when the expansion is approved.
Senate Bill 619 takes a different tack by including new language for needed housing to prohibit conditions that impose an unreasonable cost or delay or reduce density below what the zoning allows. And it would compel the Land Use Board of Appeals (“LUBA”) to award attorney fees to the prevailing party for needed housing appeals. LUBA has long supported the needed housing statute. In a typical LUBA case, a neighborhood opponent appeals a city decision to approve needed housing. If LUBA sides with the city and agrees with the decision, the neighborhood opponent would be facing a huge legal bill in the tens of thousands of dollars. Additionally, if a city denies an application for a developer, and the developer wins at LUBA, the taxpayers would be on the hook for the developer’s legal fees.
House Bill 2456 allows non-profit groups to develop affordable multifamily housing, defined as rents that do not exceed 30 percent of median family income, on rural residential land. The bill exempts these projects from the state land use planning goals and administrative rules, which currently prohibit multifamily housing in most rural residential zones.
These are just some of the bills poised that may affect housing in Central Oregon, and we encourage everyone interested in housing to make your voice heard in the capital as the legislature works on this issue.