Lack of supply. High demand. Affordability. Low rental vacancy rates. Homelessness. Housing issues have taken on a new urgency in the mid-valley — and statewide.
The Oregon Legislature has passed major housing measures at its past two sessions. In the 2016 short session lawmakers passed bills allowing construction excise taxes and inclusionary zoning and limited voter-approved annexation.
In the just-concluded full session the Legislature added a major piece of legislation, SB 1051, that addresses affordability criteria, density, accessory dwelling units, the review period for development applications and the standards municipalities use when considering housing development.
And legislators came within a whisker of implementing new tenant-friendly rules on rent control and evictions. Those issues will be back, legislators and building industry experts say.
“We wanted to find something to deal with the affordable housing crisis that is happening right now,” said Andy Olson, Republican state representative for District 15. “We know that a total of 110,000 market rate units need to be built. That’s how dire our crisis is right now.”
Jon Chandler, CEO and chief lobbyist for the Oregon Home Builders Association, was asked about the level of legislative activity.
“My best guess,” Chandler said, “is that it was a confluence of the crisis being perceived as exactly that, and key legislative leaders coming to understand that there were things that the Legislature could do to address the situation that were both politically palatable and likely to be productive.
“All in all the Legislature seems to have generally understood that we need to build more housing in Oregon, of all types, to alleviate the price and rental pressure.”
Urgency at the state level, however, takes time to percolate down to action at local jurisdictions, and area planners still are sifting through SB 1051 and assessing its impact. In fact, area planners still are working on implementing the 2016 measures.
“Unfortunately there isn’t much to share at this point,” said Jeff Blaine, who handles public works, engineering and community development for the city of Albany. “We are in the process of evaluating the results of the legislative session to better understand its impacts.”
City of Corvallis officials agreed. “This is a big bill with a lot of connected pieces,” said Paul Bilotta, community development director, “so we are still evaluating what it will mean for Corvallis.”
Those in the building industry think SB 1051 will help move the needle forward, particularly its requirement that local governments approve applications for housing developments that meet their “clear and objective standards.”
“It will be much for difficult for a city to shirk its housing responsibilities,” said Dale Kern, a broker with Commercial Associates in Corvallis. “It provides further clarity on laws that are currently on the books but (that) have historically been artfully flouted by various cities attempting to evade state-legislated requirements to allow and facilitate housing.”
Kern added that the new rules should make it easier for the planned Ponderosa Ridge development in northwest Corvallis as well as projects he is working on with developers in the Timberhill region to be built.
The ADUs piece of SB 1051 is more likely to affect the Portland area than other parts of the state, officials said. Albany and Corvallis already have local regulations on ADUs, including restrictions that require owner-occupancy, and state Sen. Sara Gelser, Democrat from District 8, noted that “ADUs in every backyard won’t help.”
The bill, which went through a variety of changes as it moved through the pipeline, at one point included duplexes in the section on ADUs, but it was taken out, an act that broker Deborah Weaver of Willamette West Real Estate said was met with “considerable disappointment.”
Duplexes are not always popular in established neighborhoods, but they bring affordability and rental housing into the picture.
SB 1051 also reduces the clock that starts ticking on an affordable housing development application from 120 days to 100 days, meaning cities and counties must act more quickly when reviewing projects.
“The Corvallis land-use approval process places an emphasis on community notification and input beyond the minimums in state law,” Bilotta said, “so it is often a challenge to complete (an application) within 120 days. We will be continuing to explore opportunities to streamline that process to make the 100-day timeline.”
SB 1051 also changed the definition of affordable housing in certain circumstances, from affecting families with 80 percent of an area’s median income to 60 percent. Corvallis' Bilotta noted that the standard means “a smaller subset of the area’s households” will qualify, “but they will be those with greater needs.”
Beyond SB 1051 the legislature also boosted spending on emergency housing and state homeless assistance programs to $40 million. Local funding will be administered by the Albany-based Community Services Consortium, which serves Linn, Benton and Lincoln counties.
The homeless funding was a key goal for Rep. Dan Rayfield, Democrat for District 16.
“I believe that by better addressing the causes of homeless and providing supports to get people back into permanent housing we can reduce the other negative health outcomes associated with homelessness,” Rayfield said. “I look forward to continuing the work that has been started this session until we provide adequate housing and services needed for all Oregonians.”
The Legislature also approved $80 million in general obligation bonds to be used for multi-family rentals and low-income first-time homebuyers. Because of the types of bonds being used the state has to be a partner in the project. This approach mirrors what Willamette Neighborhood Housing Services has done with “community land trust” homes at Seavey Meadows in Corvallis and elsewhere.
Jim Moorefield, executive director of Willamette Neighborhood Housing Services, also praised legislative action to boost a program that will increase the availability of low-cost mortgage loans for multi-family rentals.
“This program has been around a long time and is extremely helpful to our ability to finance the development of affordable housing,” Moorefield said.
Key additions out of the 2017 Legislature, Moorefield noted, raise the amount of the tax credits available by $8 million and extends to sunset date from 2020 to 2025.
The legislative craft
As noted above SB 1051 was a different brand of sausage by the time it reached Governor Kate Brown. Both Gelser and Weaver called it a “gut and stuff.”
“We wanted to move a bill,” Olson said, noting that “streamlining the process and ensuring the cities are synchronized with the state” led lawmakers to remove a few controversial issues.
“I’m usually not a top-down guy,” Olson said, “but we need to have people in homes.”
The speed at which 1051 moved proved too much for Gelser and she voted against it, along with three other Democrats and two Republicans. The bill passed the Senate 23-6 and was approved 59-0 by Rayfield, Olson and their House colleagues.
“It lacked a good process and it did not have adequate hearings,” said Gelser, who noted that some of the key work occurred during the 4th of July weekend. “There was no public testimony on 1051, they were working hard to put stuff in in the final minutes and there were a lot of questions that could not be addressed until it got to the Senate floor.
“We have a housing crisis in Oregon and I really appreciate the efforts to increase supply,” Gelser said while noting the continuing challenge of landlords renting to Oregon State University students by the bedroom and how expensive that makes housing in Corvallis for families.
Olson also noted the speed at which the Legislature moved, admitting in an interview that he still was digesting the bill and getting up to speed on some of its components.
The divisive issues of rent control and no-cause eviction rules did not pass in the 2017 session, with legislators, real estate professionals and other stakeholders only agreeing that the issue will return.
“I’m sure we’ll see this one next session,” broker Weaver said.
Weaver said that HB 2004 “had numerous unintended consequences which, had it passed, would have put a damper on increasing our housing supply and (the) development of rental units.”
Katrina Holland, executive director of the statewide Community Alliance of Tenants, called HB 2004 a “landmark bill” and added “let’s be honest; it is frustrating” that it didn’t pass, but she added “we came closer than ever before.”
Gelser is already on board.
“I’m disappointed that we weren’t able to move forward with (outlawing) no-cause evictions if they have been good tenants for a year,” Gelser said.
Albany and Corvallis took different approaches to the excise tax, inclusionary zoning and annexation measures passed in the 2016 short session.
Albany took no action on the excise tax and inclusionary zoning, said planner manager Bob Richardson. The city had required voter approval for annexations until the passage of SB 1573, Richardson said, but since Brown signed it in March 2016 “Albany will process future annexation requests according to SB 1573 and will not require voter approval.” The City Council makes the final decision.
Corvallis also did not tackle inclusionary zoning, which is a tool that mandates affordable units in new developments, but the city implemented the excise tax and has challenged the annexation limit in court.
The excise tax, which is assessed on residential and commercial construction, has raised more than $130,000 since implementation in November 2016, said Kent Weiss, housing and neighborhood services manager. About $15,000 of that total goes to state programs, with Corvallis set to hire an affordable housing planner later in the 2017-18 fiscal year. All funds raised by the excise tax must be used toward affordable housing programs.
Corvallis was the first city in Oregon to use voter-approved annexations, passing a measure in 1976. The city, with support from the League of Oregon Cities and Philomath, which implemented annexation votes in 1995, lost its first two court battles in Benton County Circuit Court.
The case in now in the “briefing stage” before the Oregon Court of Appeals, said Jim Brewer, who serves as city attorney for both Corvallis and Philomath.