Oregon housing bill backed by Kotek prompts debate about affordability, environment

A $500 million bill focused on increasing housing production has made its way to the Oregon legislature, offering what Gov. Tina Kotek is calling a wide-ranging set of solutions to tackle the state's housing crisis.

Senate Bill 1537 had already drawn testimony from more than 350 entities as it entered its first hearings last week, with advocates saying that more streamlined processes for permits, funding and infrastructure are necessary to encourage more housing development.

Opponents, while acknowledging the need for affordable housing, say they have serious concerns about the bill's one-time Urban Growth Boundary (UGB) expansion tool. Environmental groups, such as 1,000 Friends of Oregon and the Oregon League of Conservation Voters, oppose the expansion, citing threats to natural spaces and urging amendments.

What is SB 1537?

The new bill would be the latest in a decades-long effort to legislate housing and relieve market pressures, including the 2022 session's House Bill 2001, which encouraged the development of middle housing units.

SB 1537 focuses on providing clear processes and tools for cities and developers to utilize in support of meeting the Governor’s goal to produce 36,000 units of housing annually for the next decade by reducing systemic barriers to housing development.

The bill aims to address housing supply and affordability by:

• Providing $500 million to support existing state resources,

• Creating the Housing Accountability and Production Office to address complaints and concerns presented by developers,

• Requiring 30% of developed housing to be affordable,

• Distributing financial and tool support for housing infrastructure like wastewater and power,

• and Implementing a one-time tool that allows eligible cities to add land for housing within UGBs.

To inform the content of the bill, Kotek formed the Housing Advisory Production Council to identify production barriers and recommend policy solutions. The council of 25 industry experts partnered with state agencies such as Oregon Housing and Community Services, Oregon Department of Consumer and Business Services, Oregon Department of Land Conservation and Development and the Higher Education Coordinating Commission.

Different positions on SB 1537

Thursday’s public hearing garnered an array of testimonies from stakeholders across Oregon. Of the just over 350 testimonies submitted online, more than 200 were written in support. Opposing testimonies totaled about 120, while another 18 were neutral submissions.

Kotek calls housing top priority

Housing development is complex. To build, developers need to apply and be accepted for permits, locate land, make sure it’s serviced by infrastructure, find funding to cover increased interest rates, costs of materials and skilled labor and try not to hit any snags along the way.

Numerous testimonies submitted to the Senate Committee On Housing and Development about SB 1537 recognize the housing crisis as an issue without a one-size-fits-all solution.

Kotek spoke at the bill’s Feb. 8 public hearing about her belief that this legislation would empower municipalities to make the choices they need for their communities while being provided a clear pathway from the state about how those procedures should be followed.

"The size of this challenge requires a full menu of solutions, which is what you see in this bill. … I believe this bill is bold and balanced. It’s comprehensive. It will provide the spark to jump-start the building of new housing that we need to see across the state,” Kotek said.

“We as a state must be a partner in making sure that housing happens. I also know that the process means there might be amendments to this bill. That’s the process but what we can’t see happen is that this legislature leaves at the end of their sessions without this bill.”

Senator Mark Meek (D - Clackamas County) spoke on how the state must double its annual housing production rate in order to produce over half a million homes by 2040. He said SB 1537 would support this goal by helping developers access streamlined tools while protecting Oregon’s valued natural resources.

“There is no more urgent need this session than to pass this legislation,” Meek said.

“Senate Bill 1537 will allow cities and builders to collaboratively include new land within the Urban Growth Boundary aiming for diverse, affordable housing and public services. The bill safeguards farmlands, forest lands and environmental resources, applying only to areas not classified as such or those set for future expansion, that is, Urban Reserves.”

Jodi Hack, CEO of the Oregon Home Builders Association and lobbyist for Oregon REALTORS, provided testimony on behalf of those organizations supporting SB 1537.

“Many compromises and concessions have happened to get to where we are today but that’s how good policy happens. Is this legislation perfect? No. Is it everything that we wanted it to be? No, it’s not,” Hack said.

“Can it help us reach our housing goals and work toward getting us out of this crisis that we’re in? Yes, it’s definitely a step in the right direction.”

Housing bill debates about environment, bureaucracy

Opposing viewpoints often acknowledged the state’s need for more access to affordable housing but called for amendments to sections of the bill proposing the one-time UGB expansion tool.

Sam Diaz, executive director of 1,000 Friends of Oregon, testified in opposition to the bill, citing the UGB expansion tool as a no-go for environmental groups focused on upholding the state’s deliberate preservation of natural spaces.

“Our state needs Senate Bill 1537 to build on last year’s House Bill 2001 comprehensive approach that this committee and the housing committee stewarded alongside a broad and diverse number of partners. We applaud the continued intention to meaningfully address our housing affordability and availability crises,” Diaz said.

“The alternative Urban Growth Boundary expansion process raises concerns and questions.”

Concerned with the bill’s sections 49-60 relating to the UGB expansion tool, Julia DeGraw presented oppositional testimony on behalf of the Oregon League of Conservation Voters and the Oregon Conservation Network calling for amendments to those sections to make sure infrastructure funding is “laser-focused inside UGBs.” The Oregon Conservation Network has labeled this bill as a “Major Threat” due to the proposed UGB expansion tool.

“Until the acreage is significantly reduced, we cannot remove the Major Threat status,” Degraw said.

“We all agree Oregon has a housing crisis. SB1537 has tremendous potential to urgently and effectively tackle this crisis with impactful policies that boost affordable, middle housing production and housing Oregonians need the most right now.”

Addressing how expanding UGBs places people farther from resources like support services and stores, Damon Motz-Storey, director of Sierra Club’s Oregon Chapter, said stakeholders need to

“Senate Bill 1537 has a lot of good in it. Especially, I’m excited about infrastructure dollars to prepare neighborhoods for housing. Unfortunately, the one-time expansion of Oregon’s Urban Growth Boundaries is unacceptable and runs counter to our shared goal of stopping the urgent crisis of housing and homelessness,” Motz-Storey said.

“Putting people at the very outer edge of metro areas means putting people in areas more likely to burn in wildfire, where people are forced to drive long distances by car and areas with trees and green space that currently sequester carbon and protect clean air and water.”

A housing crisis middle ground?

Fewer than 20 testimonies took a neutral stance on SB 1537. One of those submissions came on behalf of the City of Eugene. The city said it is in support of the Financial Assistance Supporting Housing Production portion of the bill but has concerns about other portions of the legislation.

“While Eugene still has concerns regarding the Housing Accountability and Production Office, the permit adjustments, and the Revolving Loan Fund provisions of the bill, we believe that Matt’s (Tschabold, the Governor’s Housing Advisor,) sustained engagement and outreach to cities like Eugene has greatly improved the bill and the relationship between state and local governments,” Ethan Nelson, the City of Eugene’s intergovernmental relations manager, said in a letter submitted for testimony.

What experts say about Oregon's housing crisis

Largely, the public testimony regarding SB 1537 acknowledged Oregon’s dire need for more housing despite some sections garnering opposition.

Rebecca Lewis, director of the Institute for Policy Research and Engagement (IPRE) at the University of Oregon, and Robert Parker, director of strategy and technical solutions for IPRE, study Oregon’s housing market and teach Planning, Public Policy and Management students at UO about the foundations of planning — “that everybody should be able to find safe, decent, affordable housing,” according to Parker.

The two experts agreed that ramping up Oregon’s housing production is necessary to meet the basic human right of safe shelter for all. Parker said the concerns of environmental impacts and bureaucratic entanglement shouldn’t halt the legislation where it stands.

“I think the concerns I see expressed are the traditional tensions between development and preservation and the concern is that if we develop all of this housing really fast, it’s going to impact our quality of life in ways that are going to negatively impact all Oregonians," Parker said. "At some level, that’s a legitimate concern but I don’t think addressing the crisis completely requires us to throw everything out the window. I think the concern that rampant development is going to turn Oregon into a suburban wasteland might be overblown.”

Not to disregard valid concerns, Parker said opposing views can be balanced. He said when he conducted his first housing study in Jackson County in 1992, housing affordability was a problem. He called the issue a “slow-moving crisis” that has only intensified since the Great Recession.

“From my perspective, I’m less concerned about the unintended consequences and more concerned about the consequences of not satisfactorily addressing the problem,” Parker said.

“The social impacts, the equity impacts of a lack of available housing for people outweigh, in my view, some of the environmental concerns. And I think those environmental concerns can be balanced.”

Lewis said the state’s efforts to alleviate pressure from these crises of housing accessibility and affordability have been ongoing for years, allowing different approaches to be considered and providing learning opportunities for what stakeholders need and what legislative support can assist in meeting those goals.

“I noticed that the Governor's bill reflects investment in priorities that we've heard are important to planners in our recent surveys. What I noticed this year about the Governor’s bill, which is a huge breath of fresh air, is a big focus on infrastructure. That has been completely absent from all other considerations of policy in the past,” Lewis said. “We’re not going to solve our housing challenges without dealing with the infrastructure issue."

Lewis said progress has been made to reduce regulatory barriers but that the state can only do so much to help developers when national systemic issues persist. She said federal policies will need to shift and invest more in housing availability and construction.

Even shifting the mindset of housing to being viewed as a necessity rather than as a commodity could be necessary to help reduce this crisis, according to Lewis. Kotek’s assertion during HPAC’s final meeting on Jan. 17 that “we can build our way out of this,” is an optimistic approach to a complex scenario that Parker and Lewis said will require federal support for infrastructure to realistically accomplish.

“The legislature has made significant efforts around policies around eviction, around rent control, around allowing inclusionary zoning at a local level and removing regulatory barriers related to zoning," Lewis said. "The state has done a lot on the aspect of dealing with the regulatory barriers to housing while protecting tenants. But where I think there’s a disconnect is this connection to the national, structural barriers."

Lewis said prior legislation that would have streamlined expansions for UGBs was shot down in the legislature despite academic research pointing to land supply and infrastructure serviceability issues as major barriers to housing production.

“We’re still in the same boat (as before HB 2254) and we’re still fighting the same battles in the legislature around Urban Growth Boundary expansions,” Lewis said. “It’s not raw land at large (that we hear is a barrier to housing production), it’s really the characteristics of that land, the ownership of that land and the infrastructure capacity that’s super important to keep in mind when we think about these issues."

Hannarose McGuinness is The Register-Guard’s growth and development reporter. Contact her at 541-844-9859 or hmcguinness@registerguard.com

This article originally appeared on Register-Guard: Senate Bill 1537 prompts debate about affordability, environment