your industry 2023 housing production priorities

BY PRESTON KORST, HBA DIRECTOR OF POLICY & GOVERNMENT AFFAIRS

On October 7th, 2015, the City of Portland declared a formal housing emergency. Since then the entire region’s housing supply has constricted, permitting timeframes have grown, affordability has diminished, and racial homeownership gaps have persisted. While there’ve been plenty of well-intentioned policies proposed and over $1 billion in voter-approved bonds passed, the situation has only gotten worse. The reason? We simply aren’t building enough homes.

It is sometimes said in local advocacy circles that, “you can’t build your way out of a housing crisis.” As The Atlantic’s Jerusalem Demsas noted, this attitude defies logic. In fact, the only wholesale way to improve housing affordability is to make sure there are enough homes being built for a growing population and an aging housing stock. Yet, as a region, we’re currently staring down a 60,000-unit housing shortage. And in just 18 years, we’ll need another 220,000 homes built just to keep up with population growth. Clearly affordability suffers when supply has been constrained for as long as it has—and right now, roughly 30% of Oregon households spend more than 1/3 of their income on housing.

In order to meet the current crisis and avoid one in the future, we need to immediately double the current rate of housing production across the region. In other words, we need to encourage a new era of residential construction not seen in nearly a century. Without bold initiatives (and a little local sacrifice), our economy will languish, homelessness will worsen, CO2 emissions from commuters will rise, and a new generation of households will be locked out of homeownership for good.

Of course, capital markets will always have an impact on housing production, especially when it comes to mortgage interest rates. But local government regulations often play an even bigger role in determining whether an empty patch of dirt turns into a new home for a working family. There is perhaps no industry that is as regulated by local government than housing. Whether looking at zoning, building codes, system development charges, permitting requirements and delays, land supply constraints, energy efficiency standards, or affordability subsidies—local policy makers and city staff are perhaps the single greatest driver or deterrent of new housing in any given community.

Fortunately, there appears to be some positive signals in the fight to increase our housing supply. More and more elected officials and government staff are heeding the call to simplify, streamline, and expand local production strategies. As an organization that has been around since the early 1940s, the Home Building Association of Greater Portland recognizes how vital government collaboration is in bolstering private construction activity. This is why we are excited to have such a diverse group of pro-housing advocates agreeing on a simple, yet powerful message on housing: we need more of it.

In 2023, HBA will work to bring together builders, elected officials, government staff, and local non-profits to deliver localized solutions that will bring our housing stock into the 21st century. The proposals below reflect our industry’s top housing priorities for 2023.

HBA’s 2023 Local Policy Recommendations

#1: Get housing built now. Eliminate land use and building permitting delays to move planned housing from concept to constructed. From submission to approval, no residential housing permit should take longer than 40 days to complete. We encourage every single permitting entity (cities and counties) to assess their permitting process in 2023 and remove unnecessary touchpoints in the approval process to meet this practical target. Tools that reduce construction timeframes, like concurrent reviews and early addressing, should be prioritized. Additionally, we support a Metro-led effort to conduct regional analysis of permitting timeframes and efficiencies across every jurisdiction.

#2: Expand affordability.

• SDC Reform. We recommend that every jurisdiction collect payments for System Development Charges at the point of impact (rather than at the beginning of construction). Doing so will allow builders of all sizes to save on carrying interest costs on financing of such expenses. Over time this small change would have a big impact on affordability and supply.

• Affordability Waivers. Adopt or expand local affordability waiver programs to support housing construction for purchase at or below 120% AMI. We support cities’ discretionary choice to waive building-related fees for projects incorporating affordability requirements.

• Tax Exemptions. Remove arbitrary unit caps and expand the success of Portland’s Home Ownership Limited Tax Exemption (HOLTE) program to encourage the construction and accessibility of new middle housing types. We implore every county in our region to lead the way in working with cities to establish or improve property tax exemption programs.

#3: Plan for the future. We support Metro’s proposed designation exchange for River Terrace 2.0 in Tigard and we applaud Sherwood’s well-planned expansion for SherwoodWest, both of which would develop new lands for housing and employment in the coming years. The next, most rational lands for close-in expansion is in and around the Stafford area. We urge involved parties to begin planning to bring this valuable and logical swath of buildable land into the UGB to ease the region’s housing shortage. To advance these goals, cities should explore innovative funding strategies to install infrastructure in newly expanded areas. HBA also recognizes the need for statedriven reforms to local Housing Needs Analysis and Buildable Lands Inventory methodologies—cities should all play by the same rules to get new housing built statewide. Combined, these policy proposals will result in more housing starts in the greater Portland area in the coming years, increasing affordability and access to homeownership. The shared effects will help begin to close the troubling racial homeownership gaps that have persisted for far too long. Our association strongly believes that 2023 will be a defining year for housing and a significant turning point for our industry’s collective efforts to deliver housing affordability to the region.