Throughout Oregon, housing costs are soaring as demand continues to far outstrip supply. It is causing financial hardship for many, and that is not all. According to state economists, housing affordability problems are the root cause of homelessness, and they may also be threatening Oregon’s longstanding recipe for economic prosperity. For decades, Oregon has attracted a steady stream of people moving from other states, making it easier for local businesses to find customers, hire talented employees, and grow. Comparatively affordable housing has historically helped draw workers to Oregon, but more recently, the trend of people moving to Oregon has slowed. Experts say increasingly unaffordable housing is a significant risk to our state’s long-term prosperity.

“Ultimately, housing affordability is a longer-term economic and revenue risk. Our office’s forecast assumes that households will continue to move to Oregon in search of the high quality of life and plentiful job opportunities. However, to the extent fewer households can afford to live in and move to Oregon, or choose to live in a relatively more affordable state like those in the Intermountain West, then our office’s longer-run outlook will need to be revised lower. A slower growing population means there are relatively fewer workers earning less total income than in the baseline forecast. This translates directly into fewer customers and sales for local firms, and less taxes paid to state and local governments.” – Oregon Economic and Revenue Forecast, March 2022

State leaders have been working for several years toward a clearer understanding of the scale of Oregon’s housing shortage and developing strategies to address it. The Department of Land Conservation and Development (DLCD) is readying a sweeping proposal for the 2023 Legislative Session, focused on reforming the way local governments plan for growth.

Goal 10 of Oregon’s land use law asks cities to inventory their “buildable lands,” or land inside an Urban Growth Boundary (UGB) available for development. The law applies only to cities right now, but unincorporated urban areas (such as those in the Portland Metro Area, Marion County, and coastal counties) will almost certainly be included in upcoming reforms in some way. 

Cities are supposed to maintain a 20-year supply of land for growth. Periodic reviews of available land and land needed for growth were supposed to happen every 10 years, and historically these reviews were funded through state appropriations. State appropriations were discontinued and now the information many communities have available about their land supplies and needs is substantially out of date.

In 2019, the State Legislature passed HB 2003, requiring cities with populations over 10,000 to complete periodic Housing Needs Analyses (HSAs), and appropriated funding to support the work. 

Affected cities must then adopt a Housing Production Strategy, outlining tools, actions, and policies for addressing the needs they identify in their HSAs. DLCD has promulgated rules and provided example strategies to help cities comply. 

HB 2003 also directed the Oregon Housing and Community Services Department (OHCS) to calculate housing needs for the next 20 years in each region of the state, dubbed Regional Housing Needs Analyses (RHNAs), and directed DLCD to evaluate OHCS’s RHNAs. DLCD submitted their report last year. 

In 2021, DLCD and OHCS were tasked with developing plans for modernizing how cities and counties plan for housing, in order to promote better housing affordability and equity. DLCD convened a workgroup to engage with cities, counties, and other stakeholders around this work. AOC Legislative Director, Mallorie Roberts was appointed to the workgroup and has been representing county interests. 

A key sticking point is what enforcement mechanisms might be developed to encourage jurisdictions to comply with the new rules. DLCD knows jurisdictions will need technical assistance, and conversations are ongoing about how to find funding for that as well as funding to construct the housing that is needed. Stakeholder engagement will continue through the first half of 2022, after which, the agency will work to solidify details of its proposal so that it can be submitted to the Legislature in December.

Earlier this year, the Legislature directed DLCD to facilitate a discussion with local governments, community-based organizations, and other stakeholders about how land use law impacts the supply of land available for building housing, in order to develop recommendations for the 2023 Legislative Session. Specific issues to be considered include: 

  • How zoning regulations could help encourage development of more housing units and more diverse housing types on land within UGBs,
  • The possibility of converting commercial and employment uses to residential use,
  • How to streamline the process for establishing the need for UGB adjustments as well as the regulatory review of UGB adjustments while protecting resource lands, and
  • How to fund additional capacity to plan for and facilitate the development of housing in cities with populations smaller than 10,000.

In response, DLCD convened the Housing Capacity Work Group. AOC Legislative Affairs Manager for Community Development and Public Safety, Michael Burdick, has been appointed to the workgroup to represent the interests of counties. Seven meetings are planned over the next six months. Meetings will be open to the public, and meeting materials will be published at DLCD’s housing needs webpage under the heading “Housing Capacity Work Group.” Anyone interested in receiving updates around this work can sign up for updates there. 

Looking forward, DLCD is planning to ask the 2023 Legislature for a new appropriation of $1.6 million to provide technical assistance around preparing legislative recommendations for the adoption of a modernized housing planning system. In addition, the agency is planning to ask for an appropriation of $215,000 to partner with Business Oregon on developing a program to help communities update their employment land inventories and industrial development strategies. According to the DLCD Policy Option Package proposal for 2023, the program will “provide local governments with skills and resources to respond to industrial development opportunities, access capital, and provide infrastructure for industrial readiness.” As part of this request, DLCD hopes to hire someone who would “work closely with local governments and Business Oregon in support of short-term employment land supply requirements provided for by Goal 9, and to provide responsive technical assistance to capacity-constrained cities throughout Oregon.” 

The AOC Transportation and Community Development steering committee will continue to discuss and consider principles and priorities around the county role in housing production and land supply throughout the interim. 

Contributed by: Michael Burdick | Legislative Affairs Manager