Last week, Ashland and Newport’s Housing Production Strategy Plans were approved by the state. These plans come from a 2019 House bill requiring Oregon cities with populations over 10,000 to come up with eight-year plans to address housing. Linda Reid is the housing program specialist for the city of Ashland. Jan Kaplan is the mayor of Newport. They both join us to share what housing looks like right now in their cities and their plans for the future.
Note: This transcript was computer generated and edited by a volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Ashland and Newport’s housing production strategies were approved by the state earlier this month. All Oregon cities with more than 10,000 residents are now required to create these eight-year plans to address how they will increase housing production. That’s because of a 2019 law. Linda Reid is the housing program specialist for the city of Ashland. Jan Kaplan is the mayor of Newport. They join us to talk about what housing looks like now and their plans for the future. Linda Reid and Jan Kaplan, welcome to the show.
Linda Reid: Thank you. Happy to be here.
Miller: So Linda, first. What is the overall housing situation like right now in Ashland?
Reid: I would say that most people probably describe housing in Ashland as fairly challenging. Ashland is probably a lot like Newport in that it is a tourist attraction town. We have the Oregon Shakespeare Festival. We also have SOU (Southern Oregon University). And so we kind of have an interesting mix. Our population tends to be college students and retirees and our housing costs are the second most expensive in our valley. And I think the last time I looked at median housing cost, it was upwards of a half a million dollars to purchase a single family home in Ashland.
Consequently, we experience a lot of rent burden in our population. And because of the demands for travelers’ accommodations and student housing, as well as housing for workers in the tourist industry and workers in general - teachers and police officers and city workers - our rental costs and housing costs are pretty high.
Miller: Jan Kaplan, what about in Newport?
Kaplan: It is actually remarkably similar to Ashland. Perhaps we have very, very, very limited housing stock here because of the ability to build new housing, we have to find buildable land with utilities and infrastructure. And there’s just such a demand in this community for people with second homes, vacation rentals, which take up a significant portion of the housing stock which makes that unavailable. And we have a kind of a rich and poor county. We have a lot of retirees for people who move here with funding and then we have a lot of local workers who just cannot find places to live that they can afford. We have folks who work full time and camp. We have lost out on much talent that would have come into this community, people who were offered jobs who came and looked for housing and then came back and said, I can’t take the job. I can’t find a place that I can afford to live in.
Miller: Meanwhile, you also have people who have enough money to build what I imagine can be very expensive second homes.
Kaplan: Right. Or purchase them. So a lot of our focus moving forward is what can we do for the very, very significant portion of our citizens who can barely afford rent or can’t afford rent. And we need to increase our stock significantly in order to do that. We have had some increases, but the demand continues to exceed the supply.
Miller: You mentioned buildable land. How does geography in Newport specifically affect that?
Kaplan: OK, good question. Newport is a city that has a tremendous amount of gullies and streams that run through the city - you may have an acre of land, but if it falls off on one end, you can’t build on that acre or you can only build partially on that acre or you can’t get the cost to bring in to connect to things like water and electricity when we have land in this part of the country that’s always moving. So putting in infrastructure is very challenging and costly and we have the added burden of a city of a census population of about 11,000, but on a typical day, we have 30 to 40,000 people in the county. And that means that that’s the use of our water treatment, roads, all of the things that are necessary, that are used, but that are only paid, for the most part, by 11,000 people.
Miller: Linda Reid, just to take a step back here. How is what the two of you do now, and basically every city in Oregon over 10,000 people, different from what planners have had to do in Oregon cities for decades now? I’m thinking in particular about the 20-year buildable lands inventory. It seems like there’s some overlap here.
Reid: Yeah, I think that’s absolutely accurate. The state has been requiring cities of a certain size to do both a buildable lands inventory and what used to be called a housing needs analysis, often now called a housing capacity analysis. So, look at your population growth, look at your housing production, and then look at your land area and what it’s zoned for and try to make those things match.
I was actually at a planning conference pre-pandemic with someone from the city of Newport, and the city of Newport and the city of Ashland and other cities as well do often have housing programs or activities that they undertake to try to encourage the development of those needed housing types. And when I say needed, I mean housing types that have been identified through our housing needs analysis and buildable lands process as having a recognized need to develop a certain type of housing that we’ve also recognized that the private market will probably not provide, because there really isn’t a financial incentive for the private market to do so. So within the levers of city government, what sorts of things can we do to help incentivize or influence the development of housing types that are needed but that maybe the market won’t provide?
Miller: What’s an example of some of those strategies to fill in the holes where the market will simply not produce?
Reid: Well, I couldn’t speak for Newport, but I’m sure Jan can. The city of Ashland has a few different things that we have put into place to encourage that development. We’re at entitlement jurisdiction for Community Development Block Grant funds. So we have some grant funding. We also created our own Affordable Housing Trust Funds. So we have additional grant funding that we can use to incentivize development here. We also waive system development charges and we have since 1992 on deed-restricted affordable housing units, so that helps buy down the cost of those developments. We also have kind of an inclusionary zoning on our land use planning. So when a developer wants to annex a piece of land into the city, or if they want to change the zoning to increase density on a piece of land, then they would be required to provide a certain percentage of that newly-developed housing stock as affordable through the city’s program and it would get deed restricted. They would then also be allowed to apply for the system development charge deferral and they could also apply to receive Community Development Block grants or Affordable Housing Trust Fund grants.
So we try to package all those things together to sort of buy down the cost and encourage those needed housing types. But what we have found - I think our program has been successful but it just cannot keep pace with the amount of units that we need to produce at that lower income level. And as time has gone on, we have seen that the cost of labor has gone up, the cost of materials has gone up, so the subsidy needed to develop those housing units has become greater. And it really is something where the city was super thankful to the state that we got to work with a consultant to evaluate other actions that could help us get there, help us incentivize developers and the development of needed housing types.
Miller: Well that actually gets to a question that I had. Is this required report to the state going to lead you to do things you weren’t already doing? Or is it more a chance for you to write down the things you were already doing and present them to state bureaucrats?
Reid: Well, as part of the process, we identified all the things that we’re doing already and then we evaluated other tools that other communities have used successfully, mostly evaluating whether they were successful in those communities that were most like Ashland. And then we chose from a list of those things - and when I say we, I mean our community. We did a lot of community outreach in which community members and stakeholders identified the sorts of activities that they felt like we would have the best chance of either passing a political process and a public process, but also providing real incentives and tools to help us incentivize the development of those needed housing types.
So they may have been activities that we might have undertaken eventually, I think this process sort of helped us eliminate those ones that might not be appropriate for a city the size and composition of Ashland and also help us sort of narrow down that process, and then create a way for us to plan out how we will evaluate these over the next eight years.
Miler: Jan Kaplan, what do you see as the most promising strategies for increasing affordable housing in Newport?
Kaplan: I think in our case, and probably similar to Ashland and other cities, it’s really a combination of finding the ability for public subsidies, as Linda mentioned, to be able to close the gap between affordability and the ability of a builder to pencil out. So we’ve looked at various funding mechanisms such as tax breaks for first time homeowners, and so forth. One of the things that we’ve looked at also is our own code barriers and we’re looking at requirements that have historically been there in our codes for off-street parking, for example, and street widths. How close to the edges of a property can be developed? So that, in some cases, by eliminating or reducing some of those barriers, we may be able to bring down the cost if you have to. On the other hand, we’re challenged by if we reduce the off-street parking requirement which allows more land to be built on, it also creates potentially problems because we have more density and we’re losing parking spots. So those are things that are challenges.
I wanted to say that with an eight-year plan that a city has to do, much of which involves resources that the state or Feds control, we can hypothetically plan, we can plan with hope, but we don’t have assurances that the funding that’s necessary will be there. And that makes it challenging. One of the benefits of doing this type of planning is that it’s a thought exercise. It forces us as policymakers, it forces us all of the processes that Linda mentioned, we’ve engaged many, many, many people in our planning process. But it gets people to talk to each other, to think about ways to solve it, and to recognize the problem. The man in the street doesn’t necessarily see that there’s not enough housing, but by us being able to talk about that and engage people in problem solving, I think that long term that’s going to be one of the outcomes here.
Simply the state demanding a plan, that’s a piece of paper, unless we’re able to actualize it. And it’s certainly our goal and I’m sure other cities that do, we’ve at least mapped out what we’re hoping to do and have had some success in the beginning. One of the things that’s mentioned in our plan was the need for a winter shelter. We have not had a winter shelter in Newport and for the homeless. and we opened one a month ago. So whether that’s a result of that planning or supported by that planning, but that’s one of the things that’s in our plan and we can already check off. We’ve now established that.
Miller: Linda, we talked briefly about buildable urban land, land inside the urban growth boundary (UGB) in Newport. It’s interesting because in the last legislative session, Governor Kotek tried unsuccessfully to change land use rules to make it easier for cities to build housing outside of their existing urban growth boundaries. She made it pretty clear in an interview with us recently that she thinks that that’s a good idea. She wants lawmakers to pursue that in the next session. What do you think of that? Should Oregon’s land use rules in terms of building outside the UGB change?
Reid: Well, I think that’s probably a politically charged question in some circles…
Miller: That’s why I’m asking you.
Reid: I really hear what Jan is saying with regard to infrastructure. One of the tools that was identified through our housing production strategy process was funding mechanisms, and part of that was to support the development of needed infrastructure. Because for developers that is a cost they generally pay for the extension of those infrastructure pieces that cities require. And that is a cost. And for us, the development of properties within our urban growth boundary would require some pretty extensive infrastructure extensions and in some areas, the cost of that is prohibitive. Which is why we have seen some properties not come in to be annexed even though they are adjacent to our urban growth boundary and could readily be annexed, but because of the cost of the infrastructure, the development may not pencil at this time. So looking at ways that we could incentivize that to increase our buildable lands, I think that is an important strategy to consider. And I guess my concern about making lands developable within the urban growth boundary would be whether there would be funding from the state or the federal government to help us do that infrastructure expansion.
Miller: Jan Kaplan, last word before we go.
Kaplan: We use the term infrastructure and I don’t know that people really understand that, but what’s meant is things like streets, roads, the water being able to float to someplace and water being able to flow back into wastewater treatment. If you build a house in the middle that doesn’t have connection to city water or connection to electricity, it’s not going to sell. And those are quite expensive.
MIller: Linda Reid and Jan Kaplan, thanks very much.
Kaplan: Thank you.
Reid: Thank you.
Miller: Linda Reid is the housing program specialist for the city of Ashland. Jan Kaplan is the mayor of Newport.
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