SB 1537, which Gov. Tina Kotek asked lawmakers to introduce, will make advances for more housing by allowing cities to expand their urban growth boundaries. An earlier version of this bill that failed last year would have given developers automatic exceptions for various zoning rules, including things like parking requirements for apartment complexes. Michael Andersen, the director of cities and towns at the Sightline Institute, wrote about this “missing piece” of the current bill. He joins us with more details.
The following transcript was created by a computer and edited by a volunteer.
Dave Miller: From the Gert Boyle Studio at OPB, this is Think Out Loud. I’m Dave Miller. Oregon lawmakers passed Governor Tina Kotek’s housing bill this session. It is intended to boost the production of homes and chip away at the immense shortfall of units statewide. But the bill did not go as far as the governor initially wanted in relaxing local zoning rules. And my next guest says that was a mistake. Michael Andersen is a director of cities and towns at Sightline Institute, a Northwest think tank focused on sustainability. He wrote recently about what he calls the missing piece of the new bill and he joins us now to talk about it. Welcome back.
Michael Andersen: Thanks. It’s an honor.
Miller: I want to start with the big picture here. Why are you focused on apartment buildings or big multi-family buildings in general?
Andersen: Yeah, I think the short answer is that we are not going to successfully solve the housing shortage without a lot more apartment buildings. The last time we built as many as the governor…and she’s drawing, by the way, on state economists, calculations with lots of science behind them, the state’s targets of something like a 50% to 100% increase in the home building rate across the state. The last time we built that fast was the 1970s.This was before we had an urban growth boundary. And still, half of the homes we built in the seventies were apartment buildings. They were in apartment buildings.
Miller: As opposed to single family homes with white picket fences?
Andersen: Or duplexes or townhomes. Larger multifamily housing is a huge, huge part of the necessary solution. We’ve never built apartments like that since. We didn’t come anywhere close in the 2010s, for example. And it just has to be part of the solution.
Miller: Your story really starts in 2023, in the last legislative session. Can you explain what the governor wants to do then to change local zoning rules? The words you used in your piece were sweeping, unprecedented, creative, wacky and sloppy. What was her idea?
Andersen: Yeah. And this is with great love and respect for where the governor is coming from. I think she and a lot of the state’s leadership have been talking about a housing emergency and then they took the unusual step of introducing a bill that was commensurate with the scale of the emergency, right? They said any of these zoning rules that are not related to life safety, but the rules about where a building can go, exactly how big it can be, how big the lot can be - all of those you can ask for an exception and you get the exception. That was where the bill started.
Miller: You’re a developer and you want to put an apartment building all the way to the edge of the property, for example.
Andersen: Right.
Miller: The bill initially at the beginning of 2023 says if you ask a city that has all of these rules that have been developed over decades, for this variance or this exception, they have to give it to you.
Andersen: Right
Miller: What would that have meant for local zoning rules as we knew them?
Andersen: It would have meant that they were largely gone for the duration of the bill.
Miller: Because there was an expiration date built into this?
Andersen: Not initially. And I don’t know if any bill has ever been introduced like it in the history of the United States. It’s possible there hasn’t been.
Miller: In terms of gutting local zoning rules?
Andersen: Yes, in terms of granting exceptions to them. But yes, essentially…
Miller: But cities didn’t see a distinction?
Andersen: Right. No, it was a really unusual idea and it was negotiated down [and] I think I would say it was reasonable, honestly. But it was negotiated down quite a bit and then on the last day of the legislative session, it was still in there. The bill failed by a single vote. And the governor brought the bill back in 2024, negotiated with various people, including the various local governments over the course of the next year and then it came back in a very different form.
Miller: What were the specific concerns that various folks had, whether it was specific cities or the League of Oregon Cities? I mean, what did they say about that initial plan?
Andersen: Well, I think they said in various ways we had rules for a reason, right? Like every one of these little rules has come out of some discussion at some point and local government. For example, if you build up right up to the edge of a creek, you’re going to mess with the ecology of that creek. And if you build right up to the edge of the sidewalk, that’s going to significantly change the physical appearance of that property. And some people think that that’s very important and others don’t. But if you are sweeping all of these rules away all at once, it’s quite a big step. And a lot of people were saying we carefully negotiated these rules and you’re taking a meat ax to them.
Miller: To me, one of the more interesting questions that this debate brings up is what does it mean when we say this is an emergency? How do you answer that question, because all of it is long standing and there for a reason, hopefully, many of them are zoning rules that you’re talking about. They happen because, as you said, people said that there’s a problem with building in this particular way and so we’re going to restrict it, and we’re a locality and we can do so.
At the same time, almost everybody agrees that there is an enormous and really problematic shortfall in housing that leads to so many problems - people not being able to hire because there’s no place that somebody could afford to live, and on and on. So what do we do with the fact of the emergency?
Andersen: Yeah, I would certainly agree that there is an emergency and that the status quo will not change unless we change the status quo. And that’s really hard to do because I would say almost every single one of the many rules we’ve put on land use and development since the 1970s is there for a legitimate reason. So what we have to do is we need to find what are the least bad changes to make.
Miller: Because there are going to be negative consequences and you’re saying we have to somehow come together politically and agree to those for a greater good?
Andersen: For our own children and friends and economy and for the sake of not sprawling over the Willamette Valley, and so on. Yeah.
Miller: So let’s move on to this year. You said that the governor…well you write that before this session even started, the governor essentially capitulated and introduced an already very weakened version of her idea. So how did it start at the beginning of this session?
Andersen: And I would say it’s not as if the governor has dictatorial power, right?
Appropriately, she was negotiating and she was boxed in by politics, I think.
Miller: She suggests and then they vote.
Andersen: Exactly. But, as it was introduced in 2024, it said that basically cities can, through a fairly easy process, get out of almost every requirement on that local zoning exceptions thing, which itself had been narrowed substantially before that. But then there is this additional thing that is said, if you can get a couple of developers to say that your process is fair, then you’re good. And of course, almost any city can get a couple of developers to say that because they want to do business in the city.
Miller: What are examples of projects that are stalled right now that you think would actually be underway if some version of automatic adjustments were in place? If
local zoning rules were, if not gutted, then much easier to get around?
Andersen: Or if you could just say, if they were less restrictive, I would say.
Miller: [Laughter] But yeah, it depends on your perspective. But I take your point.
Andersen: Yes. In Astoria, there’s this amazing situation where there’s a four story apartment building that the Northwest Oregon Housing Authority wants to build next to another four-story apartment building owned by the Northwest Oregon Housing Authority - 50 homes for seniors and people with disabilities. It’s already got a federal grant lined up and it’s been under various challenges for the last year. There are a couple property owners who live just up the hill from it. And there are a lot of details,
but one of the facts of the matter is that it would block their view of the Columbia River and that of the three airbnb’s that one of them owns and rents out for $181 a night. If there was less discretionary decision-making required by the city to allow apartment buildings like this, if they were simply allowed to move forward, then they would not be subject to long challenges and the uncertainty that comes from them.
Miller: So we’ve been focusing so far on what you see as a kind of missed opportunity to ease the production of apartment buildings in the state, but I want to turn to what the bill that lawmakers passed did actually accomplish. The aspect of it that I think it’s probably gotten the most attention is a limited temporary expansion of the urban growth boundary (UGB). What do you think is going to have the biggest positive impact on housing production from this bill?
Andersen: That’s a good question. I think that one-time UGB expansion will probably have some effect, especially in cities that have struggled to go through the usual paperwork-heavy process for UGB expansion…
Miller: It’s worth just saying, as I interrupt you, that the example in Astoria was right in the middle of downtown. That does not require a UGB expansion.
Andersen: That’s right
Miller: And there are other places that could theoretically already be buildable land where there are other issues.
Andersen: That’s right. And my own perspective as an environmentalist is that if we can let people who want to live closer to each other, live closer to each other, we should absolutely do that because they cut their energy in half voluntarily when they do that, when people choose to do that. So Salem’s position is that we should do everything we can to get out of the way of that choice. And that’s much better than expanding the growth boundary when it can.
Miller: But what other aspects of this bill do you think will make a difference?
Andersen: I think that there’s a revolving loan fund and I was aware of it in policy development, and it sort of puts relatively small amounts of cash towards projects that are on the bubble between working and not working. And those will essentially have to be multi-family because those are the only ones that are going to be cheap enough to work under the parameters of the thing. But if you do the math, I think it’s 0.3% of the governor’s housing target that would tip into making it possible. So that’s $75 million for 0.3% goes to show that even in this circumstance, it’s pretty limited and pretty cost efficient. We’re not going to spend our way out of the problem.
There is a fair amount of spending associated with the package for infrastructure and I hear constantly from cities that it’s expensive to build roads and pipes and that’s true. The other things that it would do include a provision that says that if a project goes to the Land Use Board of Appeals, that’s the State Appeals Board, if somebody challenges a project and then loses, then they’re on the hook for both sides of the legal fees. So that would deter frivolous or sort of tactical lawsuits.
Miller: If you think there’s a chance you might lose, now you’re less likely to bring that challenge because you might not want to have to pay.
Andersen: That’s right.
Miller: In your article, you have a graph of the average rental increases over time in recent years in the country as a whole and in Austin, Texas. And as in the country as a whole, that’s relatively flat in recent years. Austin went way down and you note that they’ve actually been really good at building a lot of apartments in recent years. What can we learn from them?
Andersen: Yeah and I think that the time scale is a little bit shorter than recent years. With the story in both the United States and in Austin there has been a big run up in apartment prices/rents the last few years coming out of the pandemic. But then Austin has built more apartments than almost any city in the country. And the result of that has been that in the last year or so, the rents have gone down something like 8%, 9%. That is not a complete solution, but that is the function of a market where when there’s a huge amount of demand for something like living in a place, then the solution is to allow more people to live in the place.
Miller: I thought that lawmakers required that localities hit some kind of housing target number recently. Are there teeth to that? Is that a mechanism to actually say, all right, if you’re not going to change the way zoning works, you have to figure this out some other way because you have to create X many more homes every two years?
Andersen: I’m very excited about this law and I think it’s honestly a more nuanced way to get to a similar goal. So that’s my main pitch to the state right now, I guess, would be to take advantage of this law that was passed last year, 2023. Also, a Kotek bill that essentially said, here are the targets that each city over 10,000 people needs to hit for housing production. And you don’t have to hit those targets, but if you can make progress towards that rate of production, if you can accelerate your rate of production year after year after year at these different price points, then you’re good. If you can come up with the ways to do your own local zoning, your own local subsidies, your own local cool ideas that will accelerate the home building rate to the extent that you’re carrying your share of it, then you’re off the hook. Great. No problem. And then it says if you are not accelerating it, we’re not going to expect that you can, but you have to demonstrate that you are doing what you can. So a city needs to demonstrate that it’s getting out of the way to the extent that it can reasonably get out of the way of new housing.
Miller: Do you think there are teeth though in that last part?
Andersen: There aren’t. They need to be written in. The statute provides a variety of potential teeth and then rules being written this year by the Kotek administration dictate what those teeth do and when they bite and what even the goal is. So it is within the power of the government already to define, I would say, a very predictable and transparent and proportional set of rules like we did with fourplexes a few years ago to say, if you don’t allow apartment buildings on more of your land, you could. That’s a reasonable step you could take. And so if you’re not managing to accelerate your production, then either you should find maybe one-fifth of the land in your city where you can build an apartment building. And if not, then the state will do that for you.
Miller: Michael Andersen, thanks very much.
Andersen: Thank you.
Miller: Michael Andersen is director of cities and towns at Sightline Institute. It is a nonprofit think tank based in Seattle.
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