Kotek housing goal will require creativity to meet

A major challenge involves securing enough vacant land, land for redevelopment and infill sites for ramped up housing construction

Gov. Tina Kotek wants 36,000 new housing units per year for a decade, an 80 percent increase in current production rates, to match supply with demand, lessen pressure on housing prices, encourage construction jobs and house the homeless.

Finding the money is essential but the largest roadblock to meeting Kotek’s goal is where to put all that housing. Challenges range from land availability, zoning restrictions, urban growth boundaries, height limits, and proximity to essential services, existing roads and transit routes.

Arguably one of the main reasons for the scarcity of affordable housing is the scarcity of affordable land.

Land availability
To put the land challenge in perspective, two of the largest planned community developments underway in the Portland area consume around 900 acres and, when fully built-out, will generate about 6,000 housing units.

Reed’s Crossing in Hillsboro sits on almost 400 acres of former farmland and will provide 3,896 single-family homes and apartments, with a park, elementary school and commercial center within walking distance. Two phases of River Terrace in Tigard will offer 2,107 apartments, row houses, triplexes and individual homes on the western slope of Bull Mountain near a new high school.

A new 1,450 square foot, three bedroom and 2.5 bath home in Reed’s Crossing goes for more than $500,000. New homes in River Terrace start at just under $500,000 and go up to more than $1 million. They are intended to meet the need for middle-class housing near employment centers on the metropolitan area’s west side. Existing houses in adjoining areas frequently sell within a week of being listed.

Both areas required urban growth boundary expansions and annexation to their adjoining cities to receive municipal services. Both have major investors backing the development.

A nearby housing project on redeveloped residential land includes 21 homes averaging 2,220 square feet each and priced at $800,000. All but two are already sold.

You can do the math. If it takes 900 acres for 6,000 new housing units, it could take more than 5,000 acres of developable land to create 36,000 housing units each year for 10 years. That’s a lot of pressure on farmland adjacent to urban areas.

The challenge in Eastern Oregon
Housing shortages exist statewide, not just in Portland. Remote professional workers relocating to Bend don’t have the same needs as tourist industry workers on the Oregon Coast. Rural communities in Eastern Oregon often have available land to develop, but lack demand, investors and scale.

John Day is enticing homebuilding on 170 acres of undeveloped land scattered throughout the city by offering to pay nearly $5,000 of system development fees and a 7 percent cash rebate on higher city property taxes for new homes. It has been called the most aggressive land-centered housing program in Oregon. It’s financially supported by the Oregon Department of Land Conservation and Development. The goal is 100 homes over 20 years.

Redevelopment
Portland has expanded housing supply by redeveloping the Pearl District with 5,161 housing units and the South Waterfront, a former brownfield industrial island and one of the largest urban redevelopment projects in America, has been turned into a high-rise community with 1,300 housing units. New housing, including affordable units, have been stimulated along MAX rail corridors.

Eugene is redeveloping its riverfront, with a first phase that will provide 228 housing units. Salem is demolishing a downtown block of buildings to clear the way for a mixed-use urban renewal development that includes an undetermined number of affordable housing units. Medford has broken ground in its downtown for 62 units of apartment-style workforce housing.

Redevelopment projects can add substantial housing units but it takes time, money and patience. The advantage is redevelopment occurs near existing services or with expanded services included as part of projects. The disadvantage of redeveloping existing buildings is the added cost of bringing them up to code.

Carving out urban areas for redevelopment can force many existing residents to move. Areas targeted are established neighborhoods with minority populations and nearby networks of businesses.

Increased density
New housing lots can be smaller, apartment buildings can be taller and neighborhoods can include multi-family housing. Housing units can have less square footage. Housing can be added atop commercial and light industrial buildings.

Oregon adopted legislation in 2019 to eliminate single-family zoning that prevented duplexes, triplexes and even larger units in existing neighborhoods. Increasing densities is established areas can take advantage of existing service providers and businesses, sometimes adding renewed vitality to an aging neighborhood. However, building these units often comes with a fight from existing homeowners or renters who believe their property values will suffer.

Homeowner Association restrictions also can thwart densification.

Building up is a way to boost density. After a decade of rapid apartment construction in Portland, permits for new multifamily projects nosedived in 2021. Housing developers blamed a new inclusionary zoning provision that requires low-rent units in large projects. The City of Portland issued permits for fewer than 1,500 apartments in 2021. In the proceeding five years, permits averaged 4,600 new units annually. Apartment permits lagged again in 2022, despite relatively high rents compared with other metropolitan areas.

Nonprofit contributions
Nonprofits such as Habitat for Humanity contribute to the supply of affordable housing. In 2022, the Oregon Community Foundation began accepting applications for Project Turnkey 2.0 making $50 million in state funds available to affordable housing projects for rent and ownership. New Spirit Village received $100,000 to jumpstart 84 new housing units for some of the Latinx families displaced by the Almeda Fire that destroyed 2,600 homes. Peace Village in Eugene also received funding to build 70 energy-efficient units ranging from 256-768 square feet. Residents can get a loan for the down payment and rents will be below market.

Outlook
Kotek’s housing goal is laudable and badly needed. To achieve the goal will require considerable creativity, collective support, accommodation and investment. Some incredible work is being done, but not nearly enough to catch up for a decade when too few housing units were created.

Gary Conkling has been a newsman, congressional aide and public affairs professional for more than 50 years.