Gov. Tina Kotek is the final stop for two of the major bills she requested to jump-start housing production and to continue state aid to local and regional efforts against homelessness.
The House passed both bills by big margins on Monday, March 4, after the Senate acted last week. They propose only about half the $500 million that the Democratic chief executive proposed to move toward her annual production goal of 36,000 units — 80% greater than the previous five-year average when she took office last year.
She got the full $100 million she asked for other programs.
“Our consensus that housing has to be addressed in a meaningful way this session has allowed for the remarkable work that this bill proudly represents,” Rep. Maxine Dexter, a Democrat from Portland who leads the relevant House committee, said in opening debate on Senate Bill 1537. “The people of Oregon deserve a place to call home that is safe and affordable. This bill will help move us toward making that a reality.”
The centerpiece of the reworked housing package is a $75 million revolving loan fund that local governments can tap for housing projects for households earning less than 120% of the area’s household median income. For the Portland metro area, the household median income — half above and half below that figure — was $78,421 in 2021 dollars, averaged between 2017 and 2021.
Another $94 million will go to 44 specified public works projects by local governments that sponsors say could clear the way for 11,000 homes. A few projects will share $7 million pending in House Bill 4134.
Rep. David Gomberg, D-Otis, is House co-leader of the budget subcommittee that funded projects he says will help communities upgrade their water and sewer lines for current and future populations.
“We must ensure that clean water comes out of the tap and dirty water goes down the drain,” he said. “These projects will transform Oregon,” he added, though they represent only a quarter of the more than 200 submitted by the League of Oregon Cities.
The package also contains money for technical assistance and a new state office to help cities streamline permit processes, plus upgrades for some older homes.
Rep. Mark Gamba, a Democrat from Milwaukie and a former mayor, said some cities probably have imposed too many requirements, but he doubts that is true for most of Oregon’s 241 cities.
“I continue to believe that the cities of Oregon know their communities far better than the state does,” he said. “We ought to find ways to make it easier for them to play an active role in housing construction.”
Senate Bill 1537 passed 50-6; Senate Bill 1530, 52-5.
One-time exception
Senate Bill 1537 contains a much-debated provision allowing a one-time expansion of urban growth boundaries of cities without the extensive justification required by state land use laws. A similar bill (House Bill 3414) passed the House narrowly but fell one vote short in the Senate in the final days of the 2023 session — and most of the objections were from Democrats, Gamba among them.
Under the new version, property owners must consent, cities of fewer than 25,000 people can expand by 50 acres, and cities with more people can expand by 100 acres. In the area covered by Metro, the regional government that covers urban parts of the three Portland area counties, the cap is 300 acres. Metro oversees the Portland area growth boundary, which was expanded in 2019 for Beaverton, Hillsboro, King City and Wilsonville.
Cities must show that they have done comprehensive planning and permitting before expansion — and demonstrate the need for both housing and land. They also must commit 30% of the new acreage to development of "affordable housing."
Only two House Democrats voted no on SB 1537, Courtney Neron of Wilsonville and Jules Walters of West Linn.
“We are going to have to take bold and innovative actions,” Gamba said. “This is always uncomfortable.”
Kotek told EO Media Group reporters and editors last week she would not rule out another try to bypass urban growth boundaries. But she also said she is committed to Oregon's system of keeping most development confined within the boundaries.
The Southern Oregon district of Rep. Pam Marsh, D-Ashland, includes 2,500 of the 4,000 homes destroyed statewide in the 2020 Labor Day wildfires that swept western Oregon. Many of them housed low-income residents of Talent and Phoenix.
“I am confident we can absorb modest changes to our land use patterns. This bill contains all the right sideboards,” Marsh said. “Bringing in some new land into the system is a reasonable part of the package.”
“Our failure to provide an adequate supply of housing is seeding desperation and pushing people out of their community,” she added. “We are ready to act.”
Republicans comment
Rep. Anna Scharf, R-Amity, said the bills fail to deal with other barriers to housing construction, such as building code and energy-efficiency requirements, a shortage of labor and the rising cost of materials.
“While I know we need solutions for our housing crisis, I struggle with justifying circumventing our 50-year-old land use laws," said Scharf, a farmer. "It is a process that is arduous for a reason, a process that allows property owners to participate in the decisions affecting cities and the surrounding farm and forest lands.
"The bill also offers no protections for farm and forest practices as housing continues to encroach upon them.”
But Rep. Vikki Breese-Iverson of Prineville, the top Republican on the housing panel, said: “This bill pushes both sides of the land use debate into a place of uncomfortableness — and that is what is really needed to address the problem that Oregon faces.”
The package provides the full $100 million Kotek asked in state aid for local shelter beds and programs to avert homelessness, such as emergency rental assistance and eviction prevention. Some of the money will ensure that local and regional efforts can continue through the end of the state’s two-year budget cycle in mid-2025, despite a pending loss in federal funds by June 30.
The total now budgeted is $376 million from the tax-supported general fund, the most flexible account in the state budget.
pwong@pamplinmedia.com
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