Housing laws pass in Oregon but fail in California
Published 12:00 am Friday, July 26, 2019
PORTLAND — When state political leaders debated solutions to a housing crisis that was forcing renters from their homes and sending prices through the roof, they had a central goal in mind: avoid the fate of their neighbor to the south.
“In Portland, we’re just trying not to become San Francisco,” said Tina Kotek, the speaker of Oregon’s House of Representatives.
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This year, Kotek and her colleagues advanced the most ambitious response to housing affordability challenges in the country. Lawmakers passed a first-in-the-nation cap on rent increases and, in an effort to spur new homebuilding, became the only state to eliminate single-family-only zoning in many of its residential neighborhoods.
But in California, Gov. Gavin Newsom and lawmakers have struggled to pass strong renter protections and legislation that would significantly increase the state’s housing supply. A bid to cap rents in the state has been significantly narrowed — under the current version of the legislation, the policy would expire after just three years. And a high-profile measure, Senate Bill 50, to increase residential development near transit stops and in single-family neighborhoods was shelved in the spring.
Those failures followed a major defeat for California tenant advocates at the polls in 2018 and were brought about in part by division among interest groups and a lack of involvement from Newsom and other key elected officials.
In Oregon, the opposite happened: Voters pushed legislators to act on housing, a larger and diverse coalition of activists united behind the cause, and Gov. Kate Brown and legislative leaders came together to support a housing plan.
“Our crisis is so severe in this state, you have to do everything,” said Kotek, who drove the effort. “It’s that problematic out there for folks. We just came in and said, ‘We’re going to do it all.’”
Home to 4 million people, Oregon is one-tenth the size of California. The state’s median home value, according to real estate website Zillow, is $345,800, roughly equivalent to that of homes in Stockton. But parts of the state have seen a flood of job growth on par with that in California’s priciest metropolitan areas. And even though developers in Portland are building homes at a much faster rate than Los Angeles, San Francisco or San Diego, housing cost pressures have taken their toll.
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The issue came to a head during last year’s election after a measure to expand rent control in Oregon stalled in the prior legislative session.
Frustrated tenant activists and union leaders set their sights on Rod Monroe, a three-term Democratic state senator from eastern Portland and landlord who opposed the renter bill. They protested outside his home, hung banners advocating his ouster from highway overpasses and promoted former state Rep. Shemia Fagan to take his place.
Fagan, who on the campaign trail discussed visiting her homeless mother as a child, defeated him in the Democratic primary by more than 40 percentage points.
“This is a message election,” Fagan told the Willamette Week newspaper on election night. “And the message is that Oregonians are ready to deal with the housing crisis.”
The November elections swept Fagan and other Democrats into power, giving the party supermajorities in both houses of the state Legislature. Two days later, Kotek, a Portland Democrat who was also behind the earlier failed rent control effort, called the leader of the Oregon Rental Housing Assn., the state’s largest landlord organization, and told him it was time to negotiate.
The resulting legislation would cap rents statewide at 7% annually plus inflation and block landlords from evicting tenants without a reason.
“The tide had changed,” said Jim Straub, the association’s legislative director. “We knew we weren’t going to be able to stop it.”
Outside a small apartment complex in southwest Portland, Pamela Phan, the organizing director of Community Alliance of Tenants, pointed at ripped screens and cardboard on windows and doors and said residents there had told her about infestations of rats, mice and cockroaches.
Tenants “complain and complain, but nothing gets done,” Phan said. “And the rents keep going up and up.”
Residents, many of whom are Somali, Latino or other immigrants from low-income families, prize the location for its proximity to a mosque and elementary school, she said. Some have seen rent hikes as high as 25 % in recent years and a two-bedroom apartment that used to cost $750 a month about a decade ago now runs $1,300.
But Phan said capping rents alone won’t solve the state’s housing problems. Her organization, along with others representing tenants and communities of color, backed the legislation allowing up to four houses within neighborhoods zoned for single-family homes across much of the state. While her group wants to ensure that the policy rolls out with protections against displacing existing residents, she said single-family neighborhoods must open up to growth, citing the history of how those communities developed. Racist deed covenants often barred people from selling homes to nonwhites, government-sponsored lending practices provided low-cost mortgages only to whites and similar policies through the middle of the 20th century kept many nonwhites out of single-family neighborhoods.
Kotek’s legislation allows fourplexes in single-family home neighborhoods in the Portland metro area and other larger cities in the state. Smaller cities will have to allow duplexes, and rural communities face no changes.
Kotek secured some Republican support for the housing measure, which helped insulate it from the partisan rancor.
She also had the backing of Brown, a Democrat who in January urged lawmakers to act in her State of the State speech. The governor said she was able to dedicate more funding in the state budget to help build low-income housing and plan for development in smaller cities to help lessen concerns among lawmakers that there wasn’t enough money to implement the ideas.
“The extent of Oregon’s housing crisis was really felt across the political spectrum,” said Brown, who plans to sign the bill curtailing single-family zoning. “From left to right. Everyone was ready to take action.”
Unlike California, Oregon has a deep legacy of state involvement in housing issues through legislation passed in the 1970s that restricts growth to urban areas. That history, Brown said, also eased the path for the state to mandate changes to local zoning rules.
But there are other political differences between the states. In Oregon, last fall’s election brought in legislators who promised to add more protections for renters. The same thing happened in New York, whose Legislature recently passed its own set of rent stabilization measures. But in California, a ballot initiative to expand rent control failed in the November election by nearly 20 percentage points, giving landlord groups more leverage to oppose such efforts.
Oregon’s bill to increase density in single-family-home-only neighborhoods had the backing of organizations representing renters and low-income residents. California’s version of that legislation, SB 50, which would have also allowed midrise apartments to be built near transit, did not have many of those interest groups on board, with some fearing gentrification.
The deepest opposition in California to SB 50 came from owners of single-family homes. The same is true of the zoning bill in Oregon.
Rod Merrick, 70, has lived in his home at the end of a cul-de-sac in Portland’s Eastmoreland neighborhood for nearly four decades. Merrick, who is an architect, has been frustrated that developers are buying older homes in the community and replacing them with larger, new single-family homes and duplexes.
He worries that the new legislation will accelerate that process by leading to the development of fourplexes that he believes will be less affordable than existing homes and out of scale with the community.
Kotek regrets that she didn’t think of the bill to increase density sooner. She believes it could have helped alleviate the housing shortage in the state, something she believes leaders in California should consider.
“California needs to get it done,” Kotek said. “They’re behind.”