Gubernatorial Candidates Tend to Focus on Housing for the Homeless
One of the most detailed and aggressive policy proposals to increase Oregon’s housing supply is from a gubernatorial candidate who isn’t on the November ballot. Tobias Read, Oregon’s Treasurer who lost the Democratic gubernatorial primary to Tina Kotek, posted an essay on Medium arguing for reworked incentives to build more housing, and especially workforce housing.
“While we need to build more housing across the entire spectrum – from market rate to workforce to affordable to permanent supportive housing to shelter capacity, I want to focus on workforce housing (80–120% of Area Median Income) because I believe it can offer the best ROI, including additional capacity to develop other types of housing,” Read wrote.
“I suggest that we can do more for the broader issue of housing affordability by focusing on workforce housing and what is often referred to as ‘missing middle’ housing,” according to Read. “When we increase the overall supply of housing, we can impact affordability, and help more people at all income levels find the appropriate level of housing they need.”
Failed housing policy will undermine faith in state government.
The stakes are high to make a meaningful dent in the state’s housing shortage, Read says. “If we can’t build confidence that housing security is attainable, we risk losing public support for a broader cross-section of government actions and interventions. We can no longer claim that we lack the financial resources to tackle our housing challenges. At both the state and local level, voters and elected officials alike have prioritized investments in housing.” He pointed to millions of dollars in unused housing credits under the control of Oregon Housing and Community Services.
The solution, Read believes, is “significant restructuring of existing incentives and policies.” He says a good place to begin is for Secretary of State Shemia Fagan to conduct an audit to determine the effectiveness of existing incentives and offer suggestions of how to realign or replace them.
Read singled out Oregon’s Affordable Housing Credit that requires a developer to team with a nonprofit organization. “Developers are too often unable to find viable partners and the margins they need,” he explains. “Oregon’s credit should be revamped so developers can monetize the credit as they do with the [comparable] federal credit” and use both in tandem. “Basing the credit on total project cost creates an obvious incentive to pad the cost,” Read adds. “Instead peg the credit to reduce per unit costs.” He also favors a new incentive to reduce the carbon footprint of new housing.
Read says sluggish permitting and the lack of enough minority contractors hamper efforts to build affordable housing. However, his most aggressive idea is for the state to “acquire, maintain and prepare land for different types of housing, including workforce housing.” “The Workforce Housing Land Bank can be a critical element that accelerates new construction,” Read believes, by assuming some of the risk for land’s prior uses and having the financial ability to hold land until the right housing project comes along.
“Increasing production of workforce housing fills an obvious need for Oregon, but it also presents a real economic opportunity,” Read says. “Putting people to work creates jobs, economic activity and tax revenue. And what’s more, it has the potential of allowing Oregon to develop a specialized expertise.”
He puts his recommendations in even larger perspective. “When and where it is appropriate, codes and incentives should be targeted at the emerging mass timber and mass plywood technologies. Further incentives can emphasize local sourcing of the feedstock and processing in local facilities. Oregon could provide loan guarantees for local manufacturers of modular homes and/or components therein. As the technology surrounding mass timber advances, Oregon could play a pivotal role in developing mobile mills that could make the economics of thinning operations connect with feedstock much more effectively. Similarly, the use of idle capacity in the forms of warehouses and the like could allow more widespread use of timber harvested to reduce wildfire risk.”
Read identifies other ways to finance workforce housing efforts, including a federal waiver on the use of Community Development Block Grant funds and modifications to the state’s mortgage interest deduction to incentivize renting to non-owners to boost rental unit inventories. He also suggests using Oregon’s bonding authority to finance housing construction and secured through mortgage payments. Property taxation, he adds, could be changed from structures to land in residentially zoned areas to encourage new housing development.
Read ends his essay with a nudge to the three leading gubernatorial candidates. “Success here requires courage, vision and the willingness to confront the trade-offs that manifest in NIMBYism. So let’s ask Representative Drazan, Senator Johnson and Speaker Kotek to react to these ideas, to build on them, improve them and to add their own. But let’s get going.”
During the primary, Oregon Capital Chronicle asked each gubernatorial candidate to describe their housing policy. Here is what Drazan, Kotek and Johnson each said earlier this year:
Drazan – “Our state government has repeatedly interfered with the private sector’s ability to meet the demand for housing. The result has been skyrocketing housing costs with little hope of ever building the number of units economists say are needed to address our housing crisis. To add to it, policies like inclusionary zoning and the regulatory complexities of our land-use system add thousands of dollars to the cost of building new homes. We must expedite the process to make buildable land available, speed up the development of new units and lower the cost associated with building new housing in Oregon. We must also protect existing programs – like the mortgage interest deduction and first-time home buyer program – while holding down property taxes that already make up a significant portion of Oregonians’ monthly mortgage bills.”
Kotek – “Oregon’s housing and homelessness crisis is the most pressing issue impacting our communities. As Governor, I will bring more urgency to help our unhoused neighbors get into permanent housing, and I will also focus on increasing the overall amount of housing in our state. Oregon has a shortage of at least 111,000 homes, with the greatest shortage being homes that are affordable to lower-income families. Statewide, we need to build about 36,000 new homes each year over the next decade to address the current shortage of housing and keep pace with future housing demand.
“As House Speaker, I led the way to invest more than $1.5 billion over the last five years to help build more affordable housing, provide more rental assistance to keep people housed, and maintain the current supply of affordable housing. But that’s not enough. As your Governor, I will lead a comprehensive approach to tackling our housing and homelessness crisis, focusing on these five priorities:
- End unsheltered homelessness for veterans, families with children, unaccompanied young adults, and people 65 years and older by 2025, and continue to strengthen pathways to permanent housing for all Oregonians experiencing homelessness.
- Build enough housing to meet the need for people currently experiencing homelessness, address the current shortage of housing, and keep pace with future affordable housing demand by 2033.
- Advance racial equity by reducing the racial homeownership gap by 20 percent by 2027.
- Keep people housed who are currently on the brink of homelessness.
- Encourage intergovernmental and private sector partnerships to have more effective and efficient responses to solving this crisis.
“If we’re going to solve Oregon’s housing crisis, we need both near-term and long-term strategies. As Governor, I will move Oregon forward on meeting both the immediate challenges and tackling the root causes of this crisis.”
Johnson – “Oregon has a housing affordability crisis because we have a housing supply crisis. As Governor, I will lead to increase the supply of housing to decrease the cost of housing – all types of housing choices. We cannot overcome our massive housing supply deficit simply through publicly funded or subsidized housing programs. And the legislature needs to stop telling homebuilders how to build homes. We need to unleash the power of the private marketplace to meet the growing demand for housing that exists across Oregon. We cannot make housing even more expensive with excessive rules, mandates, taxes, and fees. Unfortunately, this is something that has become all too common in Oregon.
“As Governor, I will convene conversations with local mayors, city councils, county commissions and tribal leaders, as well as the home building industry, about what is standing in the way of creating more housing – and lead to remove those barriers. We must face the reality of our situation and recognize we cannot continue doing the same thing and expect a different result.
“We are proud of our land-use system that has protected farms and wilderness, but if a lack of land for housing has made Oregon unaffordable for families, it is time to talk about targeted adjustments. Leading to make Oregon more affordable for people who work paycheck to paycheck – especially housing – will be one of my highest priorities.”