Lobby group looks to repeal ban on inclusionary zoning
by Kennedy Smith
Daily Journal of Commerce
A two-year old lobby for the affordable housing industry is pressing the Legislature to scrap an inclusionary zoning ban that's been on the Oregon books since 1999.
The Housing Alliance this year hopes to get backing from lawmakers to strike Oregon Revised Statute 197.309, which prohibits municipalities in the state from forcing developers to build affordable housing units.
Janet Byrd, convener of the Housing Alliance, said the group hopes to have Rep. Peter Buckley (D-Ashland) introduce a bill in the House that would repeal the inclusionary zoning prohibition.
"Inclusionary zoning is a tool that doesn't cost the state or federal government money, but it does produce affordable housing," she said. "The notion is that developers doing large-scale or planned developments should set aside units for affordable housing, and in turn they might get a subsidy from local governments. The idea is that we create a balance of housing affordability through a variety of family needs and sizes."
Inclusionary zoning – also known as inclusionary housing – refers to city or state ordinances that require a share of new construction be made affordable to low- to moderate-income families.
Oregon is the only state to have a law that prohibits the practice, according to David Rusk, an urban policy consultant based in Washington, D.C.
But some say The Housing Alliance's goal is misguided.
"The best way to think about inclusionary zoning is that it is a tax on development," said Gerry Mildner, a professor at Portland State University's School of Urban Planning. "You're asking somebody to build something that they wouldn't otherwise do, and so presumably you're taking better options off the table."
Home builders have historically been the most vocal opponents of inclusionary zoning ordinances, which are law in more than 100 cities across the country, including several cities in the Bay Area, and in the entire state of New Jersey.
Any lack of affordable housing is a societal problem, not a developer's problem, Mildner said.
"From my perspective, it's a narrowly focused tax that tries to serve a broad social function," he said. "The real estate industry has become a target because people view the lack of affordable housing as a real estate problem. But if you look carefully, it's either a social incomes problem or maybe a regulatory problem."
Mildner likened the issue to new cars versus used cars. As higher-income individuals buy new automobiles, lower-income individuals have more options to buy used cars at lower prices. It's the same with housing, he said. The supply will always be there for lower-income families, he said, as higher-income families move up.
"Every city has a requirement to provide some high-density housing," he said. "It's a different issue to force developers to come up with subsidized housing as a condition of getting a building permit. That's not an appropriate strategy to low-income families."
The answer, Mildner said, is to set up assistance programs for low-income families in the form of home-buying vouchers through which potential home buyers would be given credits to buy a home anywhere in the city "instead of giving them a particular place where they must live," Mildner said.
"I don't see how putting some affordable housing in South Waterfront helps any low-income families," he said.
In Portland, incentives as an end-around
Although Oregon's inclusionary zoning legislation prohibits forced development of affordable housing, it allows city authorities – like the Portland Development Commission – to adopt incentives, contract commitments, density bonuses or any other voluntary regulations for low-income housing.
"In a sense, we can't do inclusionary zoning, per se, but it has been done," said Steve Rudman, executive director of the Housing Authority of Portland. "There are ways to incent developers in Portland (to build affordable housing). It's been done in the River District and New Columbia, where we have a mix of incomes."
But what Rudman sees as success in Portland can't necessarily be duplicated in the outlying cities that he said could benefit from an inclusionary zoning mandate.
"We don't have that much land," he said. "New Columbia was an anomaly. This kind of law really affects Clackamas and other surrounding counties that have opportunities for larger developments."
Back in 1999 and 2000, the regional authority Metro formed an advisory committee to discuss affordable housing strategies. One recommendation was to ask the Legislature to throw out the inclusionary zoning law, but nothing came of that effort, according to Gerry Uba, a Metro project manager.
"We asked for the bill to be lifted and also asked that what we could do was negotiate with state legislators to allow cities that want to implement (inclusionary zoning) to go ahead and ask for voter action," he said. "Nothing happened."
Uba said Metro currently has no plans to re-introduce the inclusionary zoning recommendation to legislators.
Lobby's effort ‘a long shot'
Even if The Housing Alliance is successful in its lobbying efforts, a House bill likely won't reach a floor vote. Getting legislators to vote on striking the state's inclusionary zoning ban is "a long shot," said Stephen Kafoury, a lawyer and land-use lobbyist. He said closing the door on the inclusionary zoning ban could open the door for inclusionary zoning requirements.
"I'm not saying it couldn't happen," he said. "Local control is a pretty big issue, always. I don't think home builders have the power they used to, but that hasn't been tested in the new Legislature yet. People may feel that eliminating (the law) would open the door to an inclusionary zoning mandate."
Bill would put M37 claims on indefinite hold
The Oregon Legislature on Monday introduced Senate Bill 505, which would place a hold on any Measure 37 claim not involving single-family homes.
The bill is co-sponsored by Sen. Floyd Prozanski (D-Eugene) and Rep. Greg Macpherson (D-Lake Oswego). It would freeze Measure 37 claims except those for which the claimant obtained both a waiver and building permit before Jan. 1. It also exempts claimants who had a judicial proceeding filed before the effective date of the bill or a person who agrees to build no more than one single-family residence outside of an urban growth boundary. A claimant seeking to expedite the process to build a single-family residence must sign a waiver on any other Measure 37 rights.