A New Hope for Affordable Housing Will Oregon Lift the Ban on Inclusionary Zoning in 2016?

EARLIER THIS YEAR, affordable housing advocates had high hopes for House Bill 2564, which would have squashed a 16-year-old law prohibiting local governments from requiring developers to include affordable units in large residential projects.

The bill made it through the Oregon House of Representatives, passing 34-25 in April. But just days before the 2015 legislative session ended in July, Senate leaders admitted defeat, saying they didn't have enough votes to legalize affordable housing mandates, known as inclusionary zoning (IZ).

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Now, as the City of Portland clamors for more tools to increase the city's cheap housing stock, it looks like we'll see another attempt.

In February, the Oregon Legislature reconvenes for a short session, and advocates say they expect Senator Michael Dembrow, D-Portland, to introduce another IZ bill—a better IZ bill. The legislation being talked up would allow cities to force affordable units in apartment buildings, not just for-sale housing like condos and homes.

"The lack of affordable housing is a statewide problem, and we need to make sure the bill is broad enough to include everyone, while still having provisions that address the problems we're having in Portland," says Vivian Satterfield, deputy director at the group OPAL Environmental Justice Oregon. "We didn't get the benefit of having a vote in the Senate last session. This is us picking up where we left off."

Satterfield and Diane Linn, executive director of the housing advocacy group Proud Ground, have been working on an updated version of the IZ bill they hope Dembrow will introduce. Though the senator hasn't fully committed, both Linn and Satterfield say they're "reasonably confident" he'll do so. Dembrow wasn't reachable for comment by the time this story went to press.

"We're missing an opportunity in Oregon over and over again with the statewide ban," Linn says. "If we don't get it passed this time, we won't have another chance until 2017, and our communities can't wait that long."

In the late '90s, when leaders in Portland began talking about requiring developers to include affordable units in new construction, homebuilders took action—fighting for and winning a preemptive ban on IZ. Since then, affordable housing advocates like Linn and Satterfield have tried, unsuccessfully, to lift the preemption. They were just a few votes shy in the Senate five months ago, though, and Linn thinks they can use the momentum from last session to push a new bill through during the 36-day sprint in 2016.

"Inclusionary zoning isn't a silver bullet and it won't solve the entire problem, but it's one tool and we need all the tools we can get," Satterfield says. "We need the ability for control at the local level."

That's precisely what city officials are saying.

On OPB's Think Out Loud last week, Mayor Charlie Hales talked up IZ, saying: "Give us the authority to do our job, and we'll make it."

Housing Commissioner Dan Saltzman told the Mercury that he's "very supportive" of lifting the IZ ban, and is hopeful Dembrow will introduce a bill. Saltzman says he's received strong indication that the senator's interested, and says he intends to speak with Dembrow directly to express his support.

"It's particularly good for Portland to include rentals in the bill, considering about 80 percent of the new housing over the next 20 years is expected to be multifamily," Saltzman says. "If we can get the preemption lifted then we will have the power to make rules that will work for us."

State Rep. Alissa Keny-Guyer, D-Portland, an IZ supporter who was one of HB 2564's co-sponsors, believes it's imperative that the state lift the ban, allowing Portland to start requiring developers to help solve the problem next year, while the construction market is still booming.

"It needs to be up to the cities to figure out what works for them, because every place is going to have different needs," she says. "But of course we're not going to prevent developers from making a profit, or they will go somewhere else to build."

Keny-Guyer says that there would likely be incentives that sweeten the deal for developers, such as fee waivers, permission for increased density, or other concessions that would help offset potential financial losses from including affordable units.

Not everyone is supportive of the concept. Justin Wood, who works for Portland's Fish Construction, says he worries that if the IZ ban is lifted, the homebuilding industry will be footing the bill for fixing Oregon's affordability problem.

"Everywhere up and down the I-5 corridor would immediately enact some form of mandatory inclusionary zoning if they lift the preemption," Wood says. "And the problem is that many jurisdictions will rely solely on that method to fix the problem."

Saltzman says he's heard Wood's argument, and disagrees.

"The homebuilding industry are the ones producing the housing," he says. "So they should be required to help fix the shortage of affordable housing."