Oregon is responding to its housing affordability crisis by doing all the wrong things. The crisis is due to a shortage in supply which in turn is due to urban-growth boundaries.
So the legislature legalized inclusionary zoning ordinances and Portland passed one. Such ordinances require developers to provide a certain percent of the homes they build to low-income people at below-market rates. In response, developers are building fewer homes, exacerbating the supply problem. City officials “hope the slowdown is temporary,” but that hasn’t proven to be the case in other cities that passed inclusionary zoning ordinances.
Now the state legislature is considering a bill to provide $5 million to help first-time home buyers make down payments on homes. This will have the effect of increasing demand, which will only drive up prices even more. Continue reading →
The Washington Post is publishing a series of opinion pieces on what housing policies the next president should adopt. The first, by Urban Institute fellow Erika Poethig, argues that federal rental assistance should target the most vulnerable populations instead of, as is done today, simply anyone who makes a certain percentage below median incomes. The second, by University of Virginia economist Edgar Olsen, goes further and argues that all low-income housing subsidies should be in the form of rental assistance, not construction of low-income housing, which he says is not cost effective.
The most recent article is by the Antiplanner, and readers of this blog will not be surprised to learn that it focuses on land-use regulation. One point that I didn’t make in the article for lack of room (I was given a 500-word limit) was that land-use restrictions that make housing more expensive impose higher costs on taxpayers who are expected to provide low-income housing.
On the same day, Oregon’s Cascade Policy Institute published a paper arguing that Oregon land-use regulation violates the Fair Housing Act just as much as if Oregon put up a sign saying, “No blacks allowed.” This is similar to a paper previously published by Hawaii’s Grassroot Institute, but of course with more of a focus on Oregon law.
Oregon has a plan to reduce greenhouse gas emissions by forcing electric companies to stop burning coal and to get half their energy from renewable resources. It sounds like a great plan, but like so many government plans, it has a few flaws.
At least, that’s the conclusion of Oregon’s Public Utility Commission, the three-member board that is supposed to regulate electric utilities. The only problem is that the commission was never consulted about the energy plan, suggesting that the state is listening only to groups who are already true believers.
As noted here a couple of months ago, the Antiplanner volunteered to take part in Oregon’s mileage-based user fee experiment. I promised an update on the program, but so far all I can say is that it seems somewhat disorganized.
Since the state was only accepting 5,000 volunteers, I signed up almost as soon as the web site began accepting applicants on July 1. It turns out I needn’t have rushed: after more than a month, only 700 people had volunteered.
Yesterday, the Oregon Department of Transportation began accepting applications from volunteers willing to switch from paying gas taxes to mileage-based user fees. The experimental program is limited to 5,000 volunteers and apparently the applications are accepted on a first-come, first-served basis.
Oregon’s gasoline tax is 30 cents a gallon, so if your car gets 30 miles per gallon, you currently pay about a penny per mile. The initial mileage-based fee is 1.5 cents per mile, the same as if your car gets 20 miles per gallon. It will be interesting to see if most of the people who sign up drive gas guzzlers that get less than 20 miles per gallon.
The resignation of Oregon Governor John Kitzhaber after just a little more than a month of his fourth term in office could be seen as making a case for term limits. But really, it is a classic example of the pitfalls of using big government to solve social problems.
Oregon limits governors to two consecutive four-year terms. Kitzhaber was in the governor’s mansion from 1995 to 2003. Then, Putin-like, after letting someone else be governor for a couple of terms, he ran again and won in 2010. Despite warning signs from Pulitzer-Prize-winning Willamette Week reporter Nigel Jaquiss, Kitzhaber coasted to victory (endorsed by Jaquiss’ own paper, among others) over a Republican legislator who represented one of the least-populated, and therefore politically inconsequential, parts of the state.
What brought Kitzhaber down was clear evidence that his girlfriend, Cylvia Hayes, who called herself the First Lady of Oregon and bragged that she was his “policy advisor,” aggressively used her connections to the governor to get contracts worth hundreds of thousands of dollars to lobby the state on energy policy, among other things. Rather than attempt to show that Hayes was keeping her roles as First Lady and lobbyist separate, Kitzhaber stonewalled public access to emails and even reportedly ordered his staff to destroy thousands of such emails. It was this stonewalling, more than the corruption charges, that led major Democrats in the state to turn against the governor.
Kitzhaber is a charismatic man who has a reputation with working with people on both sides of the political aisle. Yet this is far from his first major political scandal that cost taxpayer millions and involved questionable actions on the part of his friends and associates.
Commemorating the 40th anniversary of the passage of Oregon’s “landmark” land-use law, known as Senate Bill 100, a columnist with the Salem Statesman-Journallooks back at the history of the passage and early implementation of that law. If he had looked a little closer at the long-term effects, rather than just the back-room dealing, he would have found an unhappier story.
First, the law made housing in Oregon unaffordable. Before the law was passed, median home prices were consistently about two times median family incomes. As Oregon cities began drawing urban-growth boundaries, prices quickly shot up to three time incomes and today stand at four times incomes. While developers in most other states were able to buy large parcels of land and design beautiful and affordable master-planned communities, such developments were rendered illegal in Oregon since no large parcels were available inside of urban-growth boundaries. Land-use regulation also made home prices more volatile, leading to a huge drop in prices in the 1980s and another big drop after 2008.
In a stunning move, the Oregon Land Use Board of Appeals, which reviews citizen challenges to zoning and other local land-use decisions, has ruled that a zoning code in the Portland suburb of Hillsboro is unconstitutional. The decision applies to an zone that required that all owners of land within 6,000 feet of the Hillsboro Airport give an avignation easement in order to get a permit to improve or change their land. Such an easement would prevent them from protesting any airport activities and would have to be given without compensation.
LUBA’s ruling concluded that this taking of property without compensation was unconstitutional under both the fifth amendment to the U.S. Constitution and a similar provision in Oregon’s constitution. Of course, the question this raises is: if forcing someone to give up an easement without compensation is unconstitutional, how could be constitutional to downzone someone’s property from, say, 10-acre lot sizes to 40-acre lot sizes? The first involves an easement while the second is simply taking away someone’s right to use their property, but both are takings.
Naturally, Hillsboro and the airport are appealing the ruling. If it stands, no doubt many other Oregon property owners will raise similar arguments in their own cases.