IN THE NEXT 20-plus years, developers in Washington County’s North Bethany area will cover about 785 acres with more than 4,200 single-family homes. Homes in one of the subdivisions already under construction—Arbor Oaks—are inviting: They’re close to shopping centers, parks, good schools, and they’re easily accessible to US Highway 26.
What they’re not easily accessible to, thanks to their $400,000-and-up price tags, are the bulk of Portlanders.
“Only the top 28 percent of wage earners can afford those houses,” says Washington County Commissioner Greg Malinowski. “Police, teachers, nurses, they can’t afford to live there. When I brought that up, I was told that for people who don’t make $100,000 a year, that’s what Aloha is for.”
In 2012, Malinowski tried to offer incentives to developers to get them to build housing which would include a mix of smaller, less expensive homes among the 2,700-square-foot behemoths, but says he was met with a we-don’t-have-to-and-we’re-not-going-to answer.
“I said, ‘I know you don’t have to, but wouldn’t it be neat if you did?'” Malinowski says. “I think if I’d walked in there with the option to enact a statute, I would’ve gotten a little more cooperation.”
If Oregon lawmakers pass House Bill 2564, Malinowski could get the bargaining chips he lacked.
The bill would end a 16-year-old ban on inclusionary zoning, a policy that requires developers to include a certain number of affordable housing units in a new development, with the goal of making homeownership accessible for low- and moderate-income families.
HB 2564 would partly end that prohibition, allowing municipalities statewide to set aside up to 30 percent of homes in a new development for sale at below-market rates in exchange for offering developers incentives like increased density, fee waivers, and speedier permit processing. Introduced by Representative Jennifer Williamson of Portland, the bill passed in the House last month on a 34-25 vote. It’s now had its first reading in the Democratic-controlled Senate.
The legislation’s a step toward cheaper housing, and advocates say it will open the door to homeownership. But the bill as written leaves out a huge chunk of Oregonians: renters.
HB 2564 only applies to for-sale new construction, a detail which Portland Commissioner Steve Novick recently called “very troubling.” Commissioner Dan Saltzman, who oversees the Portland Housing Bureau, is floating an amendment to HB 2564 that would add rental units into the mix.
“The bill won’t have as much currency for Portland without including multi-family rental developments, since that accounts for 74 percent of new developments in the city,” Saltzman says. “It’s still a good piece of legislation without it, but of all the new rental developments in Portland, almost none include affordable units.”
The local rental market is remarkably tight. Vacancy rates have dropped to less than one percent in some parts of Oregon, driving up rents. In Portland, the vacancy rate has hovered around three percent for several months, according to the Barry Apartment Report, a publication covering trends in Portland’s apartment market.
Diane Linn—former Multnomah County chair and current executive director of Proud Ground, a Portland nonprofit that connects low- and moderate-income potential buyers with suitable homeownership opportunities—says the bill would have a trickle-down effect of loosening the vacancy rate by freeing up rental units.
But some argue the bill would have a much better effect if it applied to rentals.
“This really seems like more of an opportunity for the rental market than the owned market,” says Nick Krautter, a principal broker with Keller Williams Realty. “It would be smart to include it, because a lot of people in that income bracket can’t, or don’t want to, buy a home.”
Linn says she would love to see rental units included in the bill, but argues passing the bill the way it is “doesn’t diminish” its effectiveness.
It’s true that workforce-price housing is increasingly hard to find. Linn says 60 percent of the new jobs created in the area in the last year pay salaries that are 60 to 70 percent of the median income. She says she works with families that have done everything right but can’t afford market-rate homes on their incomes.
“We can’t counsel people into homeownership,” she says. “We need every possible tool at our disposal.”
But developers are wary. Krautter says they fear the effects inclusionary zoning could have on profits.
“If there’s a net gain for them, then maybe some developers would support it,” he says. “But I think they also have concerns about the perception of buyers that they’d be buying into a low-income development.”
Such NIMBYism is “out of touch with reality,” Malinowski says.
“I guess as long as these people are willing to mow their own yards, dispense their own medication, and teach their own kids, then we don’t need affordable housing,” he says. “But that’s not a normal community, and we need working-class housing options for the other 72 percent.”
Jonathan Ostar, executive director of OPAL Environmental Justice Oregon, says people who consider inclusionary zoning a tool to take from the rich and give to the poor are mistaken.
“Inclusionary zoning typically isn’t really used as a direct anti-poverty tool, but it does free up public dollars to help meet the needs of the poorest among us,” he says. “It’s effective at building workforce housing for hard-working families who are priced out from buying a market-rate home.”
More importantly, Ostar says, it’s a policy that shouldn’t be in the state’s hands to begin with.
“The legislature shouldn’t even be arguing the merits of inclusionary zoning; that’s for individual jurisdictions to decide,” he says. “Oregon lawmakers need to lift the prohibition so that local jurisdictions have the option.”
It’s outrageous that the most useful tools that cities have to ensure that low- and moderate-income people can afford a home have all been taken away by the state. Local inclusionary zoning, rent control and land-transfer taxes are all prohibited by the State of Oregon –doing the bidding of developers who don’t give a damn about anything but their own profits.
But the complaints of our city leaders about these preemptions ring hollow too. That’s because our city still has one perfectly good tool that would accomplish all the same things. They could enact it tomorrow and there wouldn’t be any question of its legality.
It’s called a “linkage fee,” and it would require housing developers to put money into a dedicated affordable housing fund. Portland charges development fees to fund parks and sewers and streets, but nothing to fund affordable housing.
So when our “progressive” leaders boo-hoo about how powerless they are to address housing affordability, call bullshit on it.
Fuck your profits. The world doesn’t have to bend over just to ensure you get your profit. Don’t like it? I’m sure you can take your money to some other “hot” market where everybody gives a shit about your unfettered right to squeeze your community dry.
And know what? The landlords of Portland didn’t do a thing to earn the money they’re bleeding from this city. The flood of new renters and homebuyers didn’t actually come here because our landlords are so great –I know, I just blew your mind. They came here because of the community that we ALL helped create.
And now we’re all supposed to just go die so you assholes can make the profits that you think God ordained for you? Again, fuck your profits.
A linkage fee is related to the business. It is directly related to the livability of the community in which these developers seek to do businesses in. If these developers want to make money off the community they should have to make a positive difference. Amd give something in return that earns that profit.
Yeah, taxes = marxism. Stfu, imbecile.
Euphonious – Contrary to popular belief, these developers are not making money hand over fist. Land and construction costs are at all time highs, AND building right now at what is surely near a peak in the real estate cycle is not without real long-term risks. Portland needs more density and close-in mixed use / multi family housing to support its growth and all of the people moving here. To say it another way…there aren’t just shit loads of short-term profits from which these developers should be forced to pay additional “pay to play” type fees. Your little quip about “they can just move onto the next city” is poorly thought out…You think rents are high now, you don’t even want to know what they would be like if we had no new apartment stock coming online with an economy that continues to shift toward higher paying jobs in tech, etc. and of these people continuing to move here.
Property development is the single most profitable business that an investor can buy into. It can be very risky –that’s why developers come into a hot market like Portland, because the risk here is minimized.
Your notion that by taxing them, we’d be preventing the new housing supply the city needs, THAT’S what’s poorly thought out. Portland and Oregon are among the most developer-friendly, low-tax jurisdictions in the country. and the strategies I’m suggesting for keeping housing affordable are in use in many other places with no discernable effect on investors’ willingness to fund housing developments or developers’ willingness to build them.
The idea that the investors flooding in here from elsewhere will suddenly dry up if we impose similar fees or regulations to those in other cities is nonsense.
These people are taking the sweat equity that a generation of Portlanders have built up, putting it into their pockets and walking away. The idea that we’re not allowed to capture some of that value for the community’s benefit is wrong, logically and morally.
walls create inequality period. stupid politicians.
The comment about property development (and more specifically multi family development which is what we are talking about here) being “the single most profitable business that an investor can buy into” is absolutely false. Yes, it can be lucrative (just like any business), but it is also very risky and there are just as many people who have lost everything trying to play the development game as there are people who have become filthy rich. Finally, your insinuation that all of these developers are from out of town is also not true. Most of the developers of close in multi family buildings over the past 2-3 years and the money behind them are local. A few from Seattle, but most are from Portland.
We need a balance of proper incentives and intelligent affordable housing policy. I think everyone can agree on that. It doesn’t help to over sensationalize things though and make it seem like people are swooping in from NYC, etc. and robbing the city blind.
^ Jarhead- Socialism is not a bad word or a model for communist USSR, it’s part of the checks and balances of the sociopathic machine that is Capitalism. We should start referring to Capitalism as Sociopathism. If Sociopathism is going to treat people like objects or animals, then we need some Socialism. And to be honest, Sociopathism aka capitalism has gotten so out of control violating human rights, living in Russia in the 1980’s doesn’t sound so bad. They had more security against starvation, homelessness, or the prison you end up in for being broke. Yes, fuck your profits!
more walls more dumb shit. build a factory and pack it with bunk beds for the poor….$200 / month and rental prices get pulled down for the middle classes. Problem solved.
Non-sustainable government charity and smaller boxes for smaller prices are not fundamentally different from the walls we already have. The government or developer could even profit from that.
Walls create inequality. More walls are not solutions. Period.
PS- Charlie hales is a dumb ass. so too his minions (the cops) herding homeless like rats in public parks – get a real job.
“Fuck your profits. The world doesn’t have to bend over just to ensure you get your profit.”
The problem is that profit is the only reason that anyone builds any housing. Without profit (and an attractive one at that) little new supply will be built. If costs and requirements drive down profit margins, they’ll invest the money in something safer for a similar return.
It is the interesting nature of real estate development that we place so many extra social expectations on the business. No one reams out the vacuum cleaner store about what they’re doing to solve the City’s macro-level problems.
Instead of a society bent on using people and materialism-love of objects, perhaps we should think about using objects to love people….all you need is love…EXCEPT in a PROFIT DRIVEN ENVIRONMENT…because the love of money is killing us all.