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New home construction incentives taking shape

Legislature plans to send governor a set of new policies and spending by mid-March

Oregon legislators are working on plans to provide more time before evictions, more money for factory-built homes, and new revolving loans to encourage building houses for middle-income families.

Lawmakers including state Rep. Maxine Dexter, a Portland Democrat who chairs the House Committee on Housing and Homelessness, are aiming to pass a set of new housing policies and well over $100 million in new state spending within the next month.

An omnibus bill the House committee discussed Tuesday is the first of several steps this session to address Oregon's housing and homelessness crises, as the state has about 111,000 fewer homes than needed to fit current and expected demand and an estimated 18,000 Oregonians are homeless.

"This is just a down payment on the housing work that we're going to do this session," Dexter said.

The amended omnibus bill is most of a housing package legislative leaders intend to pass and send to Gov. Tina Kotek for a signature by mid-March, House Speaker Dan Rayfield said. The House's housing committee will hear public testimony Thursday on a bill to create a new statewide housing needs analysis and plan to incorporate that bill into the final package.

Additionally, it will include tens of millions of dollars in new funding. Rayfield, D-Corvallis, told reporters during a press conference Tuesday that legislative budget writers are still working out details, but they expect to incorporate the $130 million Gov. Tina Kotek requested to build 600 shelter beds, keep 9,000 families housed and help 1,200 homeless people find shelter.

Eviction protections

Sen. Kayse Jama, D-Portland, and the chair of the Senate's housing committee brokered a compromise between landlords and tenant advocates on legislation aimed at preventing evictions. As it stands now, the bill will require landlords to give tenants 10 days' notice – not the currently required 72 hours' notice – when filing for eviction because of unpaid rent.

Those notices would have to include information on how and where tenants could find rent assistance and legal assistance for eviction proceedings. And it extends the timeline for eviction court filings: Initial court appearances now happen seven days after a complaint is filed and trials 15 days after the initial appearance. The bill would change the initial appearance to 15 days after a complaint is filed and the trial to between 15 and 30 days, giving tenants more time to come up with overdue rent and stay in their homes.

Gloria Ochoa-Sandoval, policy director at the social justice nonprofit Unite Oregon, told lawmakers that tenants living on the edge need time to pull together rent money and find resources. She has worked two jobs most of her life and still received an eviction notice for late rent at one point, she said.

"When housing takes up 60% to 80% of your income, it takes about one small incident to push you over the edge, things like a flat tire, increase in the cost of eggs, or for myself, an asthma attack way too close to the day the rent was due," Ochoa-Sandoval said. "In my situation, aside from needing funds, I struggled to find resources when I was close to eviction. What I needed was time."

The amended version of the bill eliminates a proposed safe harbor period that protected tenants from evictions for up to 60 days while state or local organizations processed their rent assistance applications. Removing that component meant Multifamily NW, a landlord advocacy group, now supports the bill.

But the change soured some tenant advocates on the bill. Alli Sayre, organizing coordinator for Portland Tenants United, said the tenants' union supported the bill with reservations, calling it "another half measure."

"Why can't we just get it right the first time for once?" Sayre asked. "Make no mistake, negotiating with Multifamily Northwest and others to try to get their support is like negotiating with terrorists. They will never be happy. There is no regulation they will support. At the end of the day, the problem is that tenants cannot afford their rent."

Modular building

The bill will direct $20 million toward grants or loans to build modular housing or homes that are partially built in factories and then pieced together on-site. They're a cheaper alternative to traditional homebuilding and more stable than manufactured homes because they're attached to a permanent foundation.

Rep. Pam Marsh, D-Ashland, sees them as a way to meet Kotek's goal of building 36,000 homes a year and help replace the nearly 4,000 homes lost in 2020 wildfires, many of which were in her southern Oregon district.

"Delay in housing replacement means that many families, including those in my own district, are still living in FEMA trailers, hotel rooms, or other temporary quarters while they hope for permanent housing," Marsh said. "To have any chance of achieving the governor's target of 36,000 housing units a year, we need to take bold, innovative action."

Modular homes can be mass-produced and stacked like LEGOs to form apartment complexes, and developers can use the same approved plans again and again in different communities without having to go through time-consuming approval processes, Marsh said.

Tom Cody, president, and CEO of the development firm project is working on modular home development in Bend, Medford, and east Portland. His company already invested $15 million, Cody said, and he said modular homes are less expensive and less risky than traditional homebuilding.

"When housing is built in a factory, it's scalable, and it invites many different kinds of people to work in the construction trades that might not otherwise work on a typical construction site, people of color and women included," Cody said. "It's a very inclusive, safe environment for people to work."

Housing grants

Another section of the bill, championed by Sen. Dick Anderson, R-Lincoln City, would provide $3 million in revolving loans developers could use for infrastructure and predevelopment costs for homes for people making between 80% and 120% of the median income.

In the Portland area, that's a single person making between $59,680 and $89,460, or a family of four earning between $85,200 and $127,800. For rent to be considered affordable, a family should spend 30% or less of its gross income on housing, economists say.

"​​We all know there is a need for more middle housing," Anderson said. "This range of housing is difficult to build because it often does not pencil out financially. It usually requires some incentive or light subsidy."

Anderson's goal is a pilot project, with loans of up to $500,000. Developers would pay low interest, of up to 3%, and they'd be required to make sure homes built through the program are rented as primary residences and kept affordable to moderate-income households for at least 25 years.

"We just need to get some projects built to see if this predevelopment aspect of funding helps and gets more people into the business," he said.


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