Tina Kotek

House Speaker Tina Kotek, D-Portland, tried to revive legislation to repeal a state ban on mandatory inclusionary zoning.

(Michael Lloyd/Staff)

Advocates of legislation meant to expand Oregon's supply of affordable housing conceded defeat Wednesday despite last-ditch efforts by House Speaker Tina Kotek to strike a compromise with Senate leadership.

With just days remaining in Oregon's legislative session, Senate leaders declined to advance a stalled bill that passed the House in April.

"The bill's not moving," said Molly Woon, spokeswoman for Senate Majority Leader Diane Rosenbaum, D-Portland. "We don't have the votes."

House Bill 2564 would have killed Oregon's 16-year-old law prohibiting local governments from requiring developers to provide affordable units in large construction projects.

While it would not have mandated affordable-housing construction across Oregon, it would have enabled local governments to set local policies requiring construction of cheaper homes.

Only Oregon and Texas have bans against the policy, known as mandatory inclusionary zoning. In Oregon, Republican lawmakers passed the prohibition in 1999 as leaders across the Portland area considered whether local governments should be required to provide a "fair share" of affordable housing regionally.

Proponents of the repeal say it's necessary to combat rising home prices and economic, racial and ethnic segregation. But homebuilders and real estate agents say government officials shouldn't burden the private sector with addressing a social challenge.

Once-optimistic advocates expressed frustration Wednesday after years of incremental progress.

In 2011 and 2013, legislation never reached a vote in the House. But with Democratic majorities in both chambers, proponents thought 2015 offered their best opportunity - particularly after the House signed off April 14.

Once in the Senate, however, the bill languished in the rules committee.

"We're just really disappointed with the Senate right now," said Diane Linn, executive director of Proud Ground, a nonprofit that works with low-income homebuyers. "We have every reason to believe it would have prevailed."

Jon Chandler, chief executive and lobbyist for the Oregon Home Builders Association, said senators made the right call. Chandler likened the years-long debate to an ideological "fist fight" that wouldn't make a dent in Oregon's affordable housing supply.

"I would like to have a conversation about affordable housing, I really would," he said. "The fact that we don't like this particular approach to it doesn't mean we don't understand the issue is something that needs to be addressed."

The bill appeared all but dead until Kotek, D-Portland, made rounds Wednesday, trying to win over swing Democratic senators. Although Democrats hold 18 of the Senate's 30 seats, Woon said the proposal couldn't draw 16 votes.

Kotek suggested last-minute amendments to appease moderate Democrats, to no avail.

The House-approved legislation capped the number of mandatory affordable units at 30 percent a given project. As part of that deal, local governments would have been required to provide financial incentives to developers who built affordable units.

In search of a compromise, Kotek proposed lowering the share of affordable units to 20 percent. She also drafted changes that would have allowed developers to pay a fee instead of building affordable units, and offered a hardship exemption for small developers.

Kotek, who formally requested a Senate hearing on the amendment, ended Wednesday disappointed.

"Oregonians are feeling real impacts of a statewide housing crisis every day, so the Speaker believed it was important to continue working until the end of the session to give local governments this tool," Lindsey O'Brien, Kotek's spokeswoman, said in an email.

Despite the outcome, proponents and opponents each say they don't expect 2015 will be their last battle.

"Dead," Linn said, "this session."

-- Brad Schmidt

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@cityhallwatch