A controversial bill before the state legislature would preempt cities’ rights to prevent new affordable housing.
People can’t afford to be poor in Portland, Oregon. Nearly half of the households that rent in the Portland metro area pay too much. Almost one-quarter (24.3 percent) of these households are severely cost burdened, meaning half of their household income goes to keeping a roof over their heads. The median income of Portland metro homeowners is nearly twice that of renters: $81,900 versus $41,600, per a new Harvard report on housing.
Oregon has decided to do something to boost affordable housing in the state. A new law before the legislature has opened unexpected fault lines in the already fractured political debate over housing costs. The bill represents something of a mixed blessing for affordability boosters: it’s designed to remove barriers to new construction, but at the cost of local authority.
House Bill 2007 would make it harder for local governments to restrict developments that include affordable housing. The bill would require city or county governments to complete a review of an application for a development with affordable housing within 100 days. Given the high costs associated with permitting, this bill could help pave the way for apartments and homes that Portlanders can afford.
Its benefits notwithstanding, H.B. 2007 is a preemption bill. Like other efforts by states to preempt cities, this bill would strip local governments of certain regulatory powers. Unlike other motions targeting cities—everything from bills banning sanctuary-city immigration policies to micromanagement efforts to keep local governments from tacking a nickel tax onto plastic bags—this one may work to certain Oregon cities’ favor.
Much of the resistance to the bill has come from preservation advocates, because the bill would make it harder for local governments from designating historic preservation districts in mostly residential neighborhoods. That’s a big change that would strip neighborhoods of one tool they use to curb development. It goes further. H.B. 2007 would preempt cities from downzoning applications for developments, meaning a city couldn’t require lower density for a development than maximum allowable zoning (except in certain circumstances).* It would also preempt cities or counties from banning accessory dwelling units or duplexes in neighborhoods zoned for single-family homes.
That’s a laundry list of obstacles that developers nationwide face in building new homes in supply-strapped cities. H.B. 2007 would take the question out of the hands of local government, where lawmakers are often shackled by the wishes of NIMBY homeowners who don’t want to see more housing (and more people) in their communities. Essentially, by stripping cities of authority, the state is protecting its cities from their own neighborhoods.
That’s not an argument that everyone buys. Oregon’s novel law, which couples zoning, preservation, and federalism into one decisive act, has divided some communities who share similar goals. At least, that’s the case in Portland; it’s far less clear whether a bill designed to address housing-affordability in a high-demand city that can’t create enough apartments to meet demand is at all suited to, say, Baker City in eastern Oregon.
Brian Libby, a Portland-based architecture critic and frequent CityLab contributor, calls H.B. 2007 a “reactionary Trojan horse.” In his column for the Portland Tribune, he takes issue with a bill to fast-track construction, citing the Oregon Home Builders Association’s support for the legislation as a cause for concern. “The bill as currently written has expanded into a stealthy attempt to usurp local control over land use policy and to largely eliminate historic preservation,” Libby writes. He describes the bill as “an attack on Oregon's most historic buildings and places and our ability to engage in the quality placemaking that has made Portland the most popular city in America”—referring here to the provision that would prevent cities from designating historic districts.
He’s right: Portland is one of (if not the most) popular cities in America. That’s also the crux of the crisis. People who don’t make very much money can’t afford to live there, and something has to give.
Under H.B. 2007, developers could earn a fast-track to “yes” by choosing to include affordable housing in their projects—defined for Oregon’s purposes as housing affordable to families making up to 60 percent of the county’s area median income. This would be a lure for developers who’d prefer to bypass as much permitting as reasonably possible. Paul Emrath, vice president of survey and housing policy research for the National Association of Home Builders, estimates that government regulations account for 25 percent of the final price for an average new single-family home, with most of that coming from permitting. At a recent forum for homeownership held at the U.S. Department of Housing and Urban Development, one economist said that permitting costs can amount to as much as 35 percent of the price of a home.
The prospect of McMansions and luxury townhouses emerging from the rubble of bulldozed historic homes is bound to bother any historically minded resident. But 1,000 Friends of Oregon, the state-level land-use nonprofit organization, has come out strongly in favor of H.B. 2007, arguing in a factsheet that the bill is not so bad as preservationists make it out to be. It would not affect existing residential districts on the National Register of Historic Places or prevent new neighborhoods from achieving that status. Instead, it would nix local standards for historic-district designation, which can be highly arbitrary—in Portland, across Oregon, and everywhere else. The fact-sheet also notes that the bill would not “promote large condos in single family zones” or eliminate design review.
Giving up any authority to the state might be anathema to residents of Portland and other cities where the pressure to build new construction could be transformative. That’s the whole point of H.B. 2007! Incumbent residents saying no to new residents, whether for aesthetic or historical reasons or simply to watch their housing investments appreciate with demand, are driving up the affordability crisis in parts of Oregon.
A May report from the Business Tribune noted that H.B. 2007 is the work of six lawmakers: three from Portland, three from downstate. A town hall convened in Portland to address the entire 2017 Oregon legislative agenda drew a crowd mostly there to oppose H.B. 2007. “After the legislators made brief opening statements, the first nine audience members who spoke criticized the bill,” the report reads. “No one supported it.”
So it is whenever the interests of incumbent residents of a desirable city are pitted against those of the people who might like to live there, and by living there change it. With H.B. 2007, lawmakers are stepping in on behalf of those future residents—and taking away some power from the city in the process.
*CORRECTION: An earlier version of this article overstated the degree to which H.B. 2007 would preempt downzoning.