Gov. Tina Kotek has set a goal of building 36,000 new homes a year – nearly double the average number of homes built in Oregon in recent years. (Dan Reynolds Photography/Getty Images)
Saying Oregon needs bold action to fix a housing crisis decades in the making, Gov. Tina Kotek and housing advocates urged the Legislature to pass a sweeping bill eliminating regulations, making it legal to build duplexes and similar middle-density housing in more places and providing incentives for builders.
House Bill 2138, which received its first hearing on Tuesday, builds on Oregon’s first-in-the-nation 2019 law that effectively ended single-family zoning in large cities. Kotek championed that law as speaker of the House, and President Joe Biden’s administration highlighted it as a model for the nation, urging other states and localities to adopt their own version of that Oregon law.
The new proposal would bar cities and counties from blocking development of some types of middle-density housing, including duplexes or accessory dwelling units, on any land where a single-family home can be built. It also would prevent cities from requiring traffic studies or forcing developers to pay for expensive projects like a new stoplight when they’re building or redeveloping a lot. It would provide incentives for developers to build affordable homes and homes accessible for people with disabilities.
“This bill is about choice,” Kotek said during a press conference ahead of the bill’s hearing. “It’s about affordability. When we can build more kinds of homes, people have more options.”
Kotek herself benefited from the type of middle-density housing she now champions. When she moved to Portland after completing her master’s degree at the University of Washington, she lived in a fourplex apartment in an older neighborhood.
But by the time she introduced her 2019 law, more than three-quarters of the land zoned for homes in Portland didn’t allow duplexes or similar housing. Now, Portland and all other cities with populations higher than 10,000 have to allow duplexes wherever they allow single-family homes.
The new tweaks come as the state continues to grapple with a housing shortage that has kept Oregonians from finding affordable homes to rent or buy. The state’s chief economist recently estimated that the state needs to build at least 29,500 homes per year, mostly in the Portland region and Willamette Valley, just to keep up with demand and expected growth.
Kotek set a more ambitious goal of 36,000 new homes per year, but builders pulled only about 14,000 residential permits last year — slightly more than a third of the way to that goal — and most of those permits were for single-family homes. Builders attribute the lag in part to inflation and high mortgage interest rates that have kept people from wanting to buy homes or move to a new home, and in part to regulations that delay building.
Mike Riddle, board president of the Oregon Home Builders Association, said developers have to do a lot more work with infill development than they would building a single-family home.
“It’s not the low-hanging fruit for a lot of builders and developers, especially with just one or two or three units on one lot,” he said. “I think there are some boutique people who are willing to take the time, but I think overall, that’s not going to move the needle. We need many more people. We need to remove those barriers.”
Jesse Russell, founder and CEO of Hiatus Homes, has been working on this type of housing since he moved back to Bend, where he grew up. His mother was able to buy a home in Bend while working as a bartender decades ago, but the central Oregon city’s exploding population and rising costs — a median home reached $800,000 in October — made that impossible for Russell. He was interested in tiny homes and the possibility of putting four small homes on a single lot, but city regulations at the time wouldn’t allow that.
Russell worked with the city of Bend to create its cottage code, and in 2020 he finished Hiatus Benham, a community of 22 small homes — less than 600 square feet on average — clustered around shared garden boxes, ponds and fire pits. Now, Russell specializes in building small homes and accessory dwelling units.
“Governor Kotek’s bill builds on Bend’s success expanding support for cottage clusters, ADUs and small-scale developments across the state,” Russell said. “By streamlining the building process, it will help create beautiful, livable spaces for working families, retirees and young professionals faster and more efficiently.”
Ian Karasz, another Bend resident who drove over the Cascades to testify in person, said he was supporting the bill on behalf of friends who can’t afford to continue living in Bend despite working good jobs — one as a chemical engineer and one as a nurse.
“These are not isolated stories,” Karasz said. “I know several people who have grown up in Bend, wanting to establish their lives close to their families, but who have moved away due to being priced out. I know therapists and teachers who are living in their cars. Speak to anyone in our community, and they will tell you similar stories, or know of somebody with one.”
Hillary Gray, a retired nurse from Portland who joined Kotek at the press conference, found that the middle-density housing model worked for her. When Gray retired a few years ago, she and her son talked about how she liked living around other people, wanted to be a grandmother but has no grandchildren and needed an affordable home near her son.
They found the Cully Green community, a 23-home cluster of duplexes and triplexes in northeast Portland with shared community spaces, that allows Gray to live across from her son and spend time every day with other residents. She has built a grandparenting relationship with her neighbors’ kids, and she’s able to do neighborly favors like driving people to the airport or picking up their kids after school. Because of where she lives, Gray said she’s never bored or lonely.
“We know loneliness is a major factor in both physical and mental health,” Gray said. “My belief is multifamily housing combats loneliness by encouraging community interactions that would not happen if each person had a big house in a typical neighborhood.”
Alexandra Ring, the League of Oregon Cities’ lobbyist for land use and housing issues, said the league that represents Oregon’s 241 incorporated cities is neutral on the bill but urged lawmakers to consider the impact of frequent new housing-related laws that cities have to implement.
“Since 2019, we have seen sweeping near yearly changes to our housing and land use statutes,” Ring said. “Many of these changes are still being implemented on the ground by our city planners, and we have not had adequate time to measure the impact they’ve had on housing production in our communities.”
Lake Oswego Mayor Joe Buck, who opposed the bill, said it would pull cities away from implementing the middle-density housing encouraged by the 2019 law and back into planning and writing new city codes.
“The seemingly never-ending moving of the goalposts is slowing the work of actually allowing these good policies previously implemented to work,” Buck said.
Much of the other opposition to the 43-page bill came down to a single sentence on page 19. Part way through a list of regulations the state Land Conservation and Development Commission is expected to loosen was a direction to repeal requirements for demolition review for houses listed in the National Register of Historic Places.
Kotek told reporters that she supports changing the bill to remove that language. The intent was to make it easier to add homes in some historic districts, but she said that most of the housing they expect won’t be in historic districts.
Still, advocates for historic districts said the change wasn’t enough. Barbara Kerr, who owns a business selling salvaged building parts in northeast Portland, said maintaining older homes and communities helps create community stability.
“The NIMBYism, as people refer to it, is not people saying they don’t want it in their neighborhood,” Kerr said. “They don’t want destruction of any neighborhoods, and they see that there’s a better way by not taking out the older housing and finding places where they already have housing.”
David Welton, the volunteer chapter leader of Bend’s pro-housing Yes in My Backyard, or YIMBY, group, said building different types of homes and adapting is how a lot of now-historic homes were built.
“The people who built Bend back in the day were practical folks who built and changed their city to make it suit their needs,” Welton said. “Tear down the cottage, build a boarding house, no problem. I think they would scratch their heads and look at us kind of funny for having painted ourselves into a corner so badly with all the ways that we prevent housing from being built that have led to our crisis.”
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