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Predicting how land use policy may shift because of recent changes in Oregon’s leadership is complicated. Gov.-elect Tina Kotek will lead the executive branch and has indicated her intent to continue fighting the housing crisis as a top priority. The Legislature still has a Democratic majority, though not the supermajority it enjoyed in the 2021 and 2022 sessions. The losses of long-standing legislative leadership from outgoing House Speaker Kotek and Senate President Peter Courtney leave some big shoes to fill. This new leadership coupled with the substantial freshman element in the Legislature is certain to alter the body’s dynamic.

The trickle-down effect of federal COVID-focused financial subsidies has largely ended, reducing state revenues for the next biennium by at least $3 billion. Projected revenues for the biennium will still be $30.7 billion. With the loss of their supermajority, Democrats will need some Republican support to impose any new taxes to fund their initiatives. The new governor is a skilled negotiator and will be actively involved in the budget allocation process.

Full gubernatorial and legislative involvement will be necessary to address the housing shortage. As House speaker, Kotek pushed hard for a number of regulatory housing reforms, which included expanding middle housing opportunities in zones that had previously allowed only single-family detached housing in cities of over 10,000.

The follow-up legislative proposal is the Oregon Housing Needs Analysis (OHNA), which would transfer all housing supply and projection determinations to the state. Unlike housing projections currently made by local governments, state housing projections would include past underproduction, the need created by those experiencing houselessness, and housing lost to second and vacation home demand. OHNA also includes provisions intended to increase equity within and between communities, to be more responsive to the needs of minorities and lower-income families.

Accounting for available financial and regulatory incentives, the framework would evaluate how likely it is that affordable housing or other housing demands will be achieved in larger cities. Those with populations of 10,000 or more would be reviewed on a six-year or eight-year cycle for compliance with their housing production strategies. OHNA provides carrots and sticks to make the state housing projections credible and more likely to be realized on the ground.

Another political factor influencing the production of housing is that cash-strapped local governments must impose fairly high system development charges (SDCs) to provide infrastructure to serve new development, and those fees are then passed along to new homeowners. If housing for low- or moderate-income families is to be accommodated, the Legislature must identify some other way to close that gap.

It is also likely that some stakeholders may suggest that significant alteration of Oregon’s urban growth boundary (UGB) system is necessary to address the housing crisis. However, this approach would only substantially increase the cost of public facilities and, in turn, any resulting housing. Oregon’s new housing focus offers an ambitious program that will put the state in the forefront of those seeking to respond effectively to housing needs. It is in everyone’s interest that it work.

One more expensive endeavor that is worth the continued effort is the creation of a mapping system to deal with the levels of wildfire possibilities. Originating in 2021, draft maps produced by the Oregon Department of Forestry generated so much controversy over their accuracy and their impacts on insurance rates that they were withdrawn. This legislation required reports on additional measures to lessen wildfire dangers, which may include changes to building, land use, and other codes, some of which may involve revised wildfire risk maps to guide the state’s investments, technical assistance policies, and other state interventions for resilient communities.

Other potential changes in land use come from the adoption of the Biden administration’s CHIPS Act, which seeks to secure the national semiconductor supply chain, in part by designating large sites for research, development, and manufacture of semiconductors. The land use element involves meeting the need for large manufacturing parcels supported by necessary infrastructure tied to transportation, education, and other supportive elements. In its initial report, Seizing Opportunity, the Oregon Semiconductor Competitive Task Force emphasizes the need to designate such sites and provide for necessary infrastructure support through a streamlined permit process. The Legislature must provide that vehicle in 2023.

Time and circumstances present Kotek with the challenge of either a golden opportunity or a poisoned chalice. She is a skilled policymaker and can deal with most political challenges. If she does so successfully, the state will complete its transition into an effective government for both its urban and rural components. Nevertheless, while not insurmountable, the tasks before the 2023 Oregon Legislature are still daunting.

Edward Sullivan is a retired practitioner of land use and municipal law with more than 50 years of experience. Contact him at [email protected].

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or [email protected].

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither author nor the 91ÊÓƵ guarantees the accuracy or completeness of any information published herein.