Governors Push Faster Construction to Meet Housing Needs

This story was first published by Stateline, an initiative of The Pew Charitable Trusts. Read the original article here. 

PORTLAND, Ore. — Dick Anderson, a Republican state senator from coastal Oregon, has a chart and a readymade joke to illustrate the housing crisis facing his state. Up until 2006, his figures show, home building was on an upward trajectory in Oregon. But once he retired from a career in housing finance in 2006, the numbers plummeted.

"From there on, the production went down," Anderson said. "When I decided to hang up my spurs, that was the end of production in Oregon.”

Sure, his retirement coincided with a global financial meltdown and a home foreclosure crisis in the United States, but Anderson's point is taken. Since the Great Recession, Oregon and many other states have failed to keep up with the demand for new homes. In Oregon alone, the state needs more than a half million new housing units to meet demand over the next two decades, according to a state needs analysis released in December.  

More than 30% of the housing must be devoted to Oregon’s residents with the lowest incomes, the analysis found, and "will most likely require public funding or subsidy."

Nationwide, an estimated 3.8 million housing units are needed just to meet existing demand. Oregon ranks fourth in undersupply, the analysis found, just ahead of Washington state and behind three other Western states with equally compelling housing needs: California, Colorado and Utah.

The shortage is one of the many causes at the heart of the present-day crisis in Oregon and elsewhere, one with complex origins that manifests as limited inventory for would-be homebuyers, and in high rents and a homelessness emergency. "This is devastating for people experiencing homelessness and has negative social and economic impacts on communities," Oregon's housing analysis notes.

"This is not sustainable. We must build more housing," said Oregon Gov. Tina Kotek, a Democrat who took office in January with the goal of building 36,000 new homes each year, and who this month announced a Housing Production Advisory Council that's tasked with endorsing an action plan by April 1.  

Anderson, who sits on the council, has urged Kotek to declare the housing crisis an emergency, as she did with homelessness when taking office in January. "We've got a crisis now," Anderson said. "We've got to get some short-term stuff going now."

The problem extends far beyond the West. Last year, the Biden administration announced a Housing Supply Action Plan that gives a leg up in federal housing grants to states and other jurisdictions that adopt zoning and land-use policies that make affordable rents and attainable homeownership a priority.  

This year, governors from Oregon to New York are taking action by writing budgets that devote millions of dollars toward emergency housing and other short-term options. And in Oregon, the legislature is poised to pass a $200 million emergency package to help shelter people experiencing homelessness and those at greatest threat of losing their homes. 

States also are developing legislation that boosts new housing development as quickly as possible, sometimes by tweaking what have long been sacrosanct zoning and land use policies.

In Oregon, it's prompting a hard look at the effect of the state's urban growth boundaries, an environmental remedy from 1973 considered groundbreaking at the time and designed to prevent sprawl from encroaching on farmland and other natural resources.  

In places such as New York, lawmakers are confronting the legacy of single-family zoning, which has restricted what kind of homes can be built in many American suburbs and cities since World War II, limiting supply, contributing to sprawl and excluding many potential buyers from homeownership. New York Gov. Kathy Hochul, a Democrat, pitched zoning changes that first emerged on the West Coast, to mixed reception and success. (Oregon in 2019 and California in 2021 ended single-family zoning restrictions in most places, and many other cities and states, including Washington, are considering similar approaches.)

The plan in New York has met resistance from some suburban lawmakers, including one Long Island assemblymember who declared it a "hard pass!" on Twitter, claiming it would turn a town in his district, Brookhaven, into the Bronx.

But like Western states, New York has a housing shortage. A report released late last year from the nonprofit Regional Plan Association estimated that the state must build more than 800,000 housing units over the next 10 years to meet population demands, job growth and existing overcrowding. That's a 9.8% increase from the existing housing stock, the association said.

New laws that aim to quantify the shortage have made it easier for some states to understand how dire their housing needs are. For example, Washington state needs to build 1.1 million new homes over the next two decades, according to projections released this month by the state Department of Commerce. The estimates emerged from 2021 legislation that requires the state to compile the numbers for cities, which must "plan for and accommodate" housing for all income levels.

That's a change from previous state planning laws, which merely encouraged affordable housing. Washington state’s assessment found that more than half of the new homes, apartments and emergency shelters must be affordable for people with lower incomes.

Yet challenges remain everywhere. A poll published last week in The Oregonian in Portland suggests people are wary of new construction. Only 25% of those polled say they want additional home construction in their community. The poll of 500 people found that about 40% want to see even slower home construction. About 28% said they supported the status quo — the current pace of development.

"It’s a really big goal," Kotek admitted during an interview earlier in March on Oregon Public Broadcasting. "We can’t do business as usual. … We’re gonna have to be creative, and we’re going to have to be willing to change how we do business now."

People working on housing solutions, though, have seen how targeted money and help can make a difference in their communities. Karen Rockwell, the executive director of the Housing Authority of Lincoln County in coastal Oregon, also sits on the governor's Housing Production Advisory Council.

Their goal is "not just to have shelter," Rockwell said, "but to break the cycle of poverty, so that we're changing systems at the same time.”

She cites as an example her own housing authority, which in 2020 received an influx of federal and state disaster money to address housing needs after the wildfires that year destroyed homes and forced people to evacuate to beaches. The coastal county already was facing a housing crunch exacerbated by a pandemic-era boom in short-term rentals; that shift took many single-family homes off the rental market for working families. 

The coastal county may be a tourist draw, but it is also a rural place, with a small population and few housing experts in government. With the federal and state grant, though, the authority hired a real estate developer with expertise in identifying available land and willing sellers. The county now has more housing under construction than the agency thought was possible, Rockwell said.

The affordable housing building boom includes 12 townhouses under construction for people earning less than 60% of the prevailing wage in the area, with a preference given to people who lost their homes from wildfires. A 44-unit complex of one- and two-bedroom, low-income rental apartments is also under construction. One of the facilities officials are most hopeful for is a 27-unit housing complex for people undergoing mental health treatment.

It's a lot of construction for a small county, Rockwell said, and wouldn't be possible without the technical assistance or the disaster grant money. She hopes that the influx of cash approved by the state legislature will help them do even more, including hiring the expertise they need. 

"You've seen our plans say the things that are the responsible things to say," she said. "It's all in our plan. But I think now we're seeing, 'Oh, those were really aspirational and a whole bunch of things happened in the last five years that make this even more pressing.'

“So, we've just got to tweak some things. And they're big things. And we have to do it with a sense of urgency. But we also have to stay with the values of Oregon and ask for a lot of input."