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Giving Local Governments the Option to Include Affordable Housing

TownhousesOn April 14, the Oregon House voted to approve House Bill 2564, which would remove the preemption on local government adoption of inclusionary zoning as a tool to advance affordable housing.  Oregon and Texas are the only states that currently maintain such a prohibition and most other states allow this issue to be resolved at the local level.  If the ban were lifted, local governments could require that some percentage of units in a development be sold as affordable units to low income buyers as part of any new housing development.  No more than 30 percent of the housing units created by a new project could be offered at below-market rates, and local government must provide builders with one or more additional incentives such as additional density, waiver of permit fees or expedited permit review to do so.

There are some who argue that repealing of the ban on inclusionary zoning is somehow incompatible with our State planning system.  Nothing could be further from the truth.  Goal 10 (Housing) requires that:

Buildable lands for residential use shall be inventoried and plans shall encourage the availability of adequate numbers of needed housing units at price ranges and rent levels which are commensurate with the financial capabilities of Oregon households and allow for flexibility of housing location, type and density.

To assure that this objective is realized, the legislature has imposed an obligation on most local governments to plan and provide for “needed housing,” namely housing types:

* * * determined to meet the need shown for housing within an urban growth boundary at particular price ranges and rent levels…

Needed housing includes attached and detached single-family housing and multiple family housing for both owner and renter occupancy; government assisted housing; mobile home or manufactured dwelling parks; manufactured homes on individual lots planned and zoned for single-family residential use that are in addition to lots within designated manufactured dwelling subdivisions; and housing for farmworkers.

Further, through statutes, the legislature has set stringent review processes to track the amount of buildable land and requires larger jurisdictions to assess and address housing deficiencies where found.  These statutes place a heavy burden on more populous cities and counties and on Metro to confront affordable housing within their boundaries.  The deficiency in Oregon’s housing and land use statutes is the lack of an essential tool to meet the obligations created by statute. There is nothing incompatible with giving these local governments a complete toolbox, as well as holding them responsible to meet these legislative objectives.  Inclusionary zoning is only one such tool.

Planners face affordable housing issues every day.  Homebuilders and developers are quick (and correct) to claim the advantage of a planning system in which needed housing must be provided for and subject only to clear and objective conditions.  However, all involved in the housing field must do their part to meet the state’s housing expectations – the public and the private sectors, Metro and La Grande and Ashland and Bend.

We do not expect that all local governments will choose to meet their housing obligations through the use of inclusionary zoning; however, the manner of meeting housing obligations should be a matter of local choice.  For those governments that choose to enact inclusionary zoning policies the benefits will include greater economic diversity to communities that are gentrifying and forcing lower income residents to move elsewhere, improvements in social mobility with the creation of more equitable neighborhoods where all income levels have increased access to good schools, and a better shot at meeting the Federal Fair Housing Act’s duty to affirmatively further fair housing.  This is a community-wide problem that needs to be addressed by all local governments through a legislative process where the policy and related incentives are fully vetted by the citizens.

The vote was approved 34-25, almost exclusively on party lines.  The matter is now pending consideration by the Oregon Senate, which appears sympathetic to this proposal.   If the legislation is enacted, the Oregon housing picture will be very different indeed.

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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