Unaffordable Housing – Are Progressive Policies Undermining the Working Class?
Jessica Gomez, a candidate for governor, weighs in on housing affordability in the state.
EDITOR’S NOTE: This piece is a part of our #GovernorGoals series. Learn more about it here. Send your goals on one of the selected topics to theway@or360.org for potential publication.
Housing has many Oregonians frustrated, and rightly so. For years we have seen increases in homelessness, housing insecurity, and an ever-widening income disparity. Oregonians on the left and right agree there is a shortage of affordable housing, but disagree on how we got here and how to solve the problem. Did our current housing crisis happen by chance, or are misguided government policies to blame?
Progressives believe it is the government’s responsibility to build more affordable housing, funded by tax increases. Conservatives believe the lack of affordable housing is due to restrictive land-use policies, over-regulation, and excessive fees and taxes. Which solution will lead to more affordable housing? To help answer this question, I constructed a simple table that includes all fifty states’ voting preference, median home price, and median household income. I calculated the median home price to median household income ratio, a basic affordability indicator.
Based on the home price to income metric, Oregon ranks 48th out of 50 in housing affordability. In general, states with most Progressive voting patterns have the least affordable housing. From my analysis, in 2019 there were 22 Republican-led states with median home prices below $200,000, and only 2 Democratic-led states with median home prices below $200,000. It’s no surprise that rural Oregonians are frustrated with Progressive policies that increase inflation and undermine their ability to thrive.
What impact can this have on a state’s economy? To give just one example, Intel’s next major expansion will be in Ohio, which ranks 6th in housing affordability. For Intel, expanding in Ohio will have a positive impact on the company’s ability to attract and retain their new workforce, which will need affordable housing.
Although Oregon looks large, only about 32% of Oregon’s land area has potential for future development of any kind, and that includes the 17% of agricultural lands.
Oregon needs to close the gap between median household income and median home prices. Oregon needs a robust and diverse economy to provide working families with the opportunity for upward mobility. A vibrant economy requires support for education, innovation, business, and workforce development. We can start by identifying and addressing the cost drivers in the housing industry perpetuated by our state government’s policies.
What can Oregon’s next governor do to address house availability and affordability?
Set A Statewide Goal for Housing Price to Income Ratio.
Set a statewide median housing price to median income ratio goal of 3.5 or less. To achieve this, incomes must rise and housing prices must stabilize. Reasonable targets would be a median household income of $80,000 per year, and median home price of $280,000. A ratio of 3.5 would still put Oregon in 31st out of 50 in affordability, but it would be a significant step in the right direction.
Establish a Housing Affordability Team.
A policy team directly accountable to the Governor will perform a comprehensive review of our housing supply and make actionable policy recommendations, paving the way for a market-based strategy to make housing more plentiful and affordable and preventing those in economic distress from becoming unsheltered.
Empower Oregonians To Build a Better Future.
Social safety net programs are designed with good intentions. They keep families that are near or below the poverty line from falling through the cracks. Unfortunately, when individuals on public assistance enter to the workforce, their assistance dollars drop off faster than they can be replaced through earnings. This can discourage workforce participation. Implementing a Public Assistance Offset (PAO) Program will help supplement wages during career development, improving the chances for self-sufficiency and upward mobility for working families.
Reduce Administrative Burdens.
It takes at least 3-5 years to expand an urban growth boundary to accommodate more housing, and several more years to install public utilities that allow for that future development. A web of bureaucratic red tape stands between those projects and the finish line. We need a multi-agency strike-team tasked with reducing administrative burdens and cutting this cycle time in half.
Support Infrastructure Development and Financing.
We must support emergency housing infrastructure financing to facilitate sub-prime interest rate loans offered to developers for all work done from green field to completion. We must also collaborate with local municipalities to help reduce system development charges. The state should provide technical support and financial incentives for infrastructure development in newly expanded urban growth boundaries, and add special consideration in land-use decisions to address housing shortages.
Under my leadership as Governor, we will make significant progress in transitioning our unsheltered from the streets to recovery, improve livability in our communities, and create an environment where all Oregonians are empowered to build better lives for themselves and their families. It’s time for us to help Oregon’s families recapture the American Dream.
Jessica Gomez is Founder/CEO of Rogue Valley Microdevices and serves on the OIT Board of Trustees, Oregon Healthcare & Oregon Business Development committees.
Thank you for these ideas.
You make good points about the lack of affordable housing here as it relates to Intel's decision to locate in Ohio. Yes, this is a workforce and economic development issue as well.
Also, I do think that, given the crisis you describe, it is government's responsibility to incentivize the building of more affordable housing, but not necessarily via tax increases. The state has more unallocated funds now than ever before. More of those funds can be deployed for such incentives. Ditto for at least some of the kicker, at least for higher-income taxpayers. That last point may be characterized as a tax increase by some. But it's one time money generated from existing income taxes, not increases in tax rates. Both unallocated funds and excess kicker funds for higher income Oregonians are one time funds, best used for one time purposes. Surely getting more affordable housing built would be a beneficial one-time purpose -- an investment, as we progressives like to say (often for too many things that aren't one-time) that will have a long life span and long-term payoffs for our people and our economy.