Some Oregon housing production advisers say painful compromises are needed to meet governor’s housing goal

Oregon’s current housing supply is short 140,000 homes. This shortage has helped to drive up home prices, increase homelessness and widen inequities, according to state analysts.

Oregon Gov. Tina Kotek has made it clear that addressing the state’s housing crisis is among her top issues. Among her first actions in office was issuing Executive Order 23-04, which established a statewide goal of constructing 36,000 new housing units — with a focus on housing for people earning below the median income — for the next ten years. It’s an 80% increase over what the state is currently producing.

The executive order also created the Housing Production Advisory Council. Its main responsibility is to develop a feasible action plan to meet the governor’s housing goal. The council includes construction, engineering, land-use, affordable and market-rate housing developers and financing experts from every region of the state, as well as legislative appointees.

“This level of production is very ambitious,” said Gov. Kotek at the council’s inaugural meeting on March 10. “It will require all of us working hard, exhibiting bold action to accomplish this goal.”

Gov. Kotek has an early legislative win, with the bipartisan passage of a $200 million housing package last month, but the details of how she will realize her aggressive housing construction target are still murky. Housing experts on the council say big and difficult changes to the status quo, like temporarily overriding some permitting processes or expanding urban growth boundaries, will be required to meet it.

Both affordable and market-rate housing developers on the council say the permitting process in Oregon’s cities, especially the metro areas, is cumbersome, lengthy and can significantly drive up costs. Natalie Janney, a civil engineer with Salem-based Multi/Tech Engineering, said permitting has been a major hang-up for her firm.

“Currently it takes two to three years to get a project from beginning to construction permits,” said Janney, who notes that the COVID pandemic, supply chain problems, massively fluctuating interest rates and the war in Ukraine all occurred in the past three years. “Too much can happen in that time frame.”

Janney said one possible way to streamline the development process is to limit public involvement in the land use process. Oregon’s robust public process is something the state has prided itself on for several decades, but Janney said it also allows a single person to halt a building project.

“Nimbyism is pretty rampant,” said Janney of communities who resist new housing developments. “If you’re in a jurisdiction where the governing body isn’t necessarily pro-housing, it can be really unfriendly.”

Ernesto Fonseca, executive director of the Portland area community development nonprofit Hacienda CDC, agrees the construction development process needs to be sped up. Among the ideas he’s brought to the council is to construct housing with plans that have been approved previously by jurisdictions.

“They have already been vetted, we know how much they cost, we already understand the lessons learned and the mistakes that we can avoid,” Fonseca said. “And then we start plugging in these different housing development projects [into communities] right away.”

Fonseca also wants to see the state invest heavily in prefabricated, modular housing

“We can deploy this housing rapidly, within weeks. That’s opposed to what we do today, which is years,” said Fonseca, who believes modular housing is well-suited for Oregon’s rural areas.

Another issue rising to the top in the group’s initial discussions is the limited amount of land available to build on within Oregon’s urban growth boundary or UGB. Oregon put these boundaries in place for each of its cities 50 years ago as part of its land-use system. The goal was to reduce urban sprawl and protect the state’s farmland and open space by designating where new homes can be built.

Deborah Flagan, a vice president at Redmond-based Hayden Homes, said this system keeps Oregon beautiful but it also makes it one of the priciest states in the nation to build homes in.

“The land inside the urban growth boundary is the most expensive land that we have in the state,” Flagan said.

And much of the land that is available, like wetlands, is challenging to build on. Flagan said the regulatory process to build on this type of land should be eased. She said reducing these barriers and lowering costs will help make affordable housing construction more appealing to market-rate housing developers.

The issue of who will actually be on the ground building 36,000 new homes a year is another top concern. At the council’s March 10 meeting, state economist Josh Lehner noted that Oregon needs between 10,000 — 20,000 new residential construction workers to meet the governor’s yearly housing goal.

The council’s next order of business is to consider these issues — as well as restrictive building codes, home ownership and financing options — as it comes up with recommendations on how to spur housing production in the state. The council has also agreed to frame all of its suggestions in a way that upholds equity and racial justice. Gov. Kotek has given the council a Dec. 31 deadline to submit recommendations.

But nine months is a long time for a housing crisis that’s happening right now. J.D. Tovey, the planning director for the Confederated Tribes of the Umatilla Indian Reservation and the council’s co-chair has acknowledged the urgency of the situation.

“The hopeful intention is that we don’t have to wait until December to submit any recommendations,” Tovey said at the council’s March 31 meeting. “If we wait, that means we’ve lost a whole year for hitting our [annual 36,000 housing] goal.”

And to meet that target this year the council must consider solutions that could be very uncomfortable for Oregonians, like placing housing production objectives above environmental or sustainability goals.

“It’d be great if we could all have large backyards, neighbors that aren’t super close and save all the trees,” Janney said. “But you can’t have it all and at some point, you have to prioritize your wish list.”