(The Center Square) — A bill on its way to Gov. Kate Brown could help Oregon close its housing gap by letting cities and counties build denser neighborhoods, housing advocates say.
Oregon's housing crisis has been a perennial problem for homebuyers. The Oregon League of Cities reports the state underproduced 155,000 housing units since 2015, which many blame for increasing home prices.
According to real estate site Zillow, average home prices in Oregon are $424,517, or 13.2% higher than 2020. In Portland, homes go for $526,626 on average. About 34% higher than the U.S. average of $281,370.
Senate Bill 458 would build on the state's efforts to help cities and counties to encourage more diverse housing construction beyond single-family homes with one kitchen, unshared walls, and unshared utilities. The process, also known as "upzoning," is promoted by housing advocates to expand competition by expanding the types of homeownership opportunities.
In 2019, state lawmakers banned single-family housing zones with the passage of House Bill 2001. The law was intended to encourage more land developers to pursue cheaper "middle housing" like duplexes, triplexes, and townhouses. Such homes were built nationwide until the mid-20th century, when they were banned from most land use codes amid widespread racial segregation laws.
SB 458 bans cities and counties from mandating driveways or parking spaces in land use applications. It allows local governments to split existing land divisions to accommodate denser housing and allow multiplex buildings to be sold to multiple owners. Current law allows for multiplex units to be sold only to one owner.
As amended, the bill gives local authorities 63 days to approve a proposed middle housing land division before the proposer is entitled to sue. Appeals must be filed within 14 days of denials. Legislative analysts note the legal costs to county staff statewide to implement the bill is pegged at $300,000. It takes effect July 1, 2022.
The bill is backed by a host of progressive urbanist groups like the Sightline Institute, the Oregon Housing Alliance, Proud Ground, and Habitat for Humanity of Oregon. Several construction companies praised the bill for opening the door to more business in their industry.
"If we were to build that exact same building but do a land division process to create three tax lots, this process can take one to two years and cost thousands of dollars," Justin Wood, Vice President of Fish Construction Northwest, told state lawmakers. "Due to this, many builders do not elect to go through the land process, thus resulting in the units not getting built unless they want to have rental inventory."
Some local officials testifying on the bill this session said they were concerned about the expedited timeline for land project approvals.
"The current limit of 120 days can be difficult if a decision is appealed," said Medford City Planning Director Matt Brinkley. "Cutting that period in half, at a time when many jurisdictions are working with reduced staffing, will not benefit the communities we serve."
Critics argue the bill does not come with any cost controls and does not stop land developers with deep pockets from building penthouses first-time homebuyers in lower-income areas cannot afford.
"One only has to look at Portland or Seattle or Minneapolis or Vancouver, BC to see that increasing density does not produce increased affordable housing unless effective provisions are explicitly written into legislation," concerned citizen Pamela Wooddell testified. "HB 458 does not have that."
The bipartisan bill, sponsored by Sen. Lew Frederick, D-Portland, and Sen. Tim Knopp, R-Bend, passed the Senate by a vote of 25-4 and the House by a vote of 54-2. It now goes to Gov. Kate Brown's desk.