New Eugene Mayor Kaarin Knudson says she want to build more houses and bring people back to city’s downtown

Kaarin Knudson became the mayor of Oregon’s second largest city, Eugene, on Monday. She delivered her first state of the city address shortly after being sworn in. Knudson says increasing housing capacity and revitalizing the city’s downtown are among her top priorities. But first, she faces a budget shortfall and will need to work with the city council to find a way to fill it. Last year, a proposed municipal fee to address the shortfall drew a lot of public opposition and the council decided not to vote on the issue. Knudson joins us to tell us more about her first official week on the job and her priorities for her term.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Kaarin Knudson became the mayor of Eugene on Monday. She delivered her first state of the city address shortly after being sworn in. She identified increasing housing capacity and revitalizing the city’s downtown among her top priorities for Oregon’s second largest city. First, city leaders are going to need to address a major budget shortfall. Kaarin Knudson joins us now. Welcome back to Think Out Loud.

Kaarin Knudson: Hi, Dave, it’s great to be here. Thanks for having me.

Miller: I want to start with housing. What’s the status quo right now, in terms of supply, demand and affordability of housing in Eugene?

Knudson: Oh, what a great place to start. That is also where I started in talking about our community’s work in the years ahead at the state of the city address on Monday night. In terms of where we are as a community, it’s really important to understand the role that housing plays as just a foundational component for opportunity and really for the quality of life that people are choosing Eugene for. This is such a burgeoning, creative and beautiful place to call home, but we need housing in order for people to be able to make that calculus work.

Over this last many years, like so many places across Oregon, all of Oregon cities but really all of the West Coast, we have really lost ground relative to affordability and just the appropriate attainable options that people have access to. So a big focus of my work as mayor will be on helping us to build the housing that we need to meet our community’s needs and helping people also understand why that is so important to how we grow, as a city that is really defined by having a lot of stability and a lot of opportunity that’s here.

Your question about the details of that and where we are in terms of our field position, it’s pretty tough. I mean, we have a circumstance where about 45% of our community is cost burdened by their housing and struggling to make ends meet as a result of that. And we also have the unfortunate distinction of still being at the top of the list of per capita rates of homelessness in the nation. We’re the center of a county that is right up with the other top four counties in terms of our overall rate of homelessness. That puts particular pressure on the city of Eugene, as our population center, to be creative and working really hard every day to make sure that people have the shelter and the long-term housing solutions that they need to build a life here.

Miller: Your ambitious pledge, as I understand it, is to double the city’s housing production over the next five years, meaning something like 1,000 new units with 200 of those being downtown. What are the specific policies you’d like the council to put forward to accomplish that?

Knudson: Yeah, well, thank you for asking. That was one of the flags that I planted. And I think it’s really important to have goals when you’re thinking about how to tackle a long-term challenge – you’ve got to put out some aggressive and attainable goals to keep everyone’s attention focused. So presently, the city of Eugene, on average, builds somewhere between 800 and 1,000 units of housing per year across our entire community. And we’re about 45 square miles as an area. Downtown needs to be a focus of our housing production efforts and that’s why I announced this downtown housing initiative. What I challenged us to do is to build 1,000 new units downtown in the next five years. So essentially building as many units in our city center as we would be building citywide per year within the next five years, and to focus 200 of those units at least in the traditional downtown core.

We’ve had some new housing development, and significant sort of scale and density of development along parts of Franklin Boulevard that is between our downtown core and the University of Oregon. We have wonderful new work happening along our downtown riverfront, and the rebuilding and revitalization of what was a utility operations yard into a neighborhood. But we haven’t seen new downtown housing investment right in the core of the city. And that’s where we have access to so many amazing cultural institutions like the Hult Center, like the McDonald Theatre, and fantastic transit access from our downtown station … and Lane Transit District’s work to make sure that people can get where they’re going right away and have a lot of opportunities to head in different directions through the city.

So that focus of units in the downtown core is because we really need that energy, and new investment of people and neighbors into the center of the city. And it’s also, I think, an attainable goal if the city comes forward with new proposals each year, multiple sites for housing redevelopment and development each year, and continues to do the work that we’re doing to reform our processes to save money and time, and make sure that also the community of downtown, the neighborhood of downtown, feels safe and welcoming to everyone.

Miller: Why hasn’t that development already happened in recent years? If you’re outlining transportation-wise and cultural-amenities-wise why this is a good place for people to live, why hasn’t the private sector said, “Yes, we agree we’re going to put tons of new units here”?

Knudson: Yeah, so we’ve been doing, I think, some really excellent necessary work to set the stage for that investment. And I love your question because it gives me a chance to share that, but also think about the continued work and what the city is going to be doing in the years ahead.

The city of Eugene, in our downtown, has needed energy and new investments for a couple of decades. The city center of Eugene has never had a high population density in terms of its residential density. Astoundingly, our downtown has a lower residential density than our traditional neighborhoods. Our traditional detached housing in our traditional neighborhoods has higher density than our downtown. When you’re thinking about neighbors, people and activity, that’s a really important metric to keep your eyes on.

The reason this work hasn’t happened is that we’ve just never managed to line up all of the forces at the same time. I think that we’ve done some great reform work to eliminate mandatory parking development requirements in the city center. The tools that have been on the table have been developing over a number of years. Our city council just put into place what is essentially an accelerated multi-unit property tax exemption program, and we’re piloting a new downtown fee assistance program. Those two actions alone should make this work more swift and bring the city to the table as a more engaged partner.

Then I just think, in terms of big picture timing, that the city can only do so much. There are development cycles and also interest rate cycles that either are a headwind or a tailwind for development. And ideally, you have your city and your public sector working on policies that are supportive on the right side of those two winds.

Miller: Even the most successful increase in housing in the coming years is not going to solve the immediate problem of unsheltered homelessness. Will there be any meaningful differences in the way the city responds to this ongoing crisis than Mayor Vinis’ administration? Can folks in Eugene expect a recognizable difference in homelessness policy?

Knudson: I think what folks in Eugene can expect is a difference in attention and a difference in the set of partners that are invested deeply in this work and in this success. I am very fortunate to be stepping into this responsibility with a history and really long-standing trusted relationships all across our community. It allows me this wonderful perspective that sees how much all of these different perspectives across our community actually are working towards the same outcome. And I don’t think that that is necessarily how we always see each other, right? So I’m very encouraged by just that.

In terms of how things are shifting, there is a lot in the rest of the landscape that is shifting. We are standing up in Lane County our local deflection program and shifts in how community safety, public safety will be engaging with drug use and the presence of drugs in public spaces. That will be a shift, in terms of how people feel like they’re experiencing public spaces. The city has stood up 700 shelter spaces in this last stretch of time. I will be advocating actively to our legislature to stabilize the funding for our shelter services. That capacity, that mid-step in this process is really important for communities being able to get their arms around the crisis of homelessness, and not feel like it’s just happening in the public realm without any support, and that people are suffering and that the ramifications are going along unaddressed.

I’m proud to stand on the shoulders of the work that our previous mayors have done. Mayor Vinis cared deeply about the crisis of homelessness – that was her work before becoming a mayor. And as an architect and urban designer stepping into this role, I’m going to certainly bring a strong focus on the housing component. But our lack of appropriate and affordable housing is the root cause of our homelessness crisis. So with all of these efforts lining up, I think we’re going to make some significant progress. And we’re going to do that in a way that helps people to feel welcomed in our community, but that also protects people’s fundamental basic rights and civil rights.

Miller: Let’s turn to budget questions. Can you just quickly give us a sense for the scale of the budget shortfall that the city is facing right now?

Knudson: Sure. The city of Eugene has shifted to a biennial budget. That biennial budget in total is about $1.7 billion – so a two-year budget that’s about $1.7 billion. Broken up per year, that’s just under $1 billion dollars per year. And the area of focus is really our general fund because those are the dollars that are distributed and prioritized to meet our community’s needs and our cities' needs. And that amount, our general fund, is about $390 million. So the questions that we’re trying to answer right now, in terms of our city’s budget deficit, are relative to that $390 million reference point.

The city council, on Wednesday, had a work session to look at a scenario where we close our current budget gap, which is just around either north or south of $10 million, by exploring the council’s priorities for budget reductions. That’s the number in terms of a deficit that we’re trying to solve for – about $8.5 million to $11.5 million, depending on what you load into that number and the direction that we want to give to our city manager going forward.

Miller: This has been described as a structural budget problem because costs have been rising about twice as quickly as revenue in recent years. What’s behind that imbalance?

Knudson: What’s behind that imbalance is the revenue generating structure that cities have. In the city of Eugene, we receive about 78% of our revenue from our property tax system, established in Oregon and certainly challenged in the way that that system brings revenue in commiserate with changes in property value over time. And then [we receive] a small amount of our budget, about 70%, from property taxes, and about 8% from an agreement with our local public utility, Eugene Water and Electric Board.

That means that we don’t actually control the decisions about revenue generation for 78% of the revenue coming into the city. [This] creates a particular challenge when you are a city that is building things, buying material and employing people who are going to labor to deliver an outcome or administer a program in the community … staff, public spaces and public buildings, like our libraries. So the revenue side is very challenging and we have not made moves to increase that side of the equation yet.

Then on the cost side, the expenses [like] labor and materials have gotten a lot more expensive in the past several years. Anyone going anywhere knows that, in the last decade and several years. So that’s the equation that we are always struggling to solve in cities in Oregon.

Miller: Well, so let’s turn to one proposal that is on the table right now in Eugene – a revenue raising proposal that the previous city council and mayor talked about but did not vote on, the so-called fire fee. KLCC has reported that the average resident would pay about $10 a month under this new fee, some people a lot more than that, some people less, depending on the value of their home. And the average business owner would pay about $38. Just to keep it simple for now, do you support this idea?

Knudson: I think we’re going to have a very productive conversation in the next couple of months about both our expenses and the resources that we have to work with to meet those expenses. My understanding of the work that’s gone into building that recommendation … and this is over two years, almost two-and-a-half years of work that has happened through our budget committee process with our city council, with lots of input from community members, with revenue committees meeting to explore different scenarios. And what they’ve come to, is that the city of Eugene has not yet taken this step, when other cities of our size, and smaller, have had to do this many years before.

I mention that only because I don’t want it to be lost that our city has been working for a long time to stretch every dollar as far as possible, and we have sought extraordinary efficiencies along the way in doing that. We merged Eugene and Springfield Fire a number of years ago, to generate efficiencies and still deliver our fire and emergency services in fantastic capacity with the work that that staff is doing. We have moved, as I mentioned, to a biennial budget to create other administrative efficiencies. We’ve reduced the budget about $60 million in cuts over the last 15 years. So it’s not that there haven’t been very sharp pencils digging into this question.

The question now before council, and really before the community, is do we want to continue to prioritize access to certain services and programs in our community, some of the things that make this community such a fantastic place to call home? Or do we want to generate new revenue that allows us to meet this gap and puts some funding in essentially a lockbox for fire into the future? Or do we want to do something that’s a mix of both and try to balance this equation in a way that looks at some of both of those things?

So that’s the work that’s going to be in front of our city council in the next three or four weeks. And next week, we’ll have a conversation on the 22nd, at the council’s work session, about the timeline, priorities and the direction that our city manager needs in order to build a budget that meets the city council’s direction.

Miller: You mentioned earlier, being an architect and an urban designer. How do you think that background informs the way that you think about the problems that Eugene is facing or the solutions you’d like to see? To me, the context for this is that old line that “if the only tool you have is a hammer, then every problem looks like a nail.” I’m not saying that the only way you look at the world is through your decades-long careers, but it has to have an impact. We have about two minutes left. I’m curious how you think that has formed your vision as a mayor?

Knudson: I love this question. And I love the work that goes into designing really beautiful places that meet people’s needs and that people feel delighted and inspired by. There are so many examples of those kinds of spaces throughout the public space network that we have in Eugene. Being an architect, being trained as an architect and trained as a journalist before I was an architect, that, I’m sure, means that I am always looking for the story behind what presents in the final form. And when I think about the way that an architect might typically view the world, architects are always looking for ways in which we can meet everyone’s needs and ways in which the outcome can also accommodate futures that we couldn’t imagine. When we were first putting together a project, or thinking about a community and a space, and what its immediate needs might be, that certainly informs how I think about our city.

I look at our city all the time. I’m a lifelong runner. I run all around our community. I’m always looking at the decisions that we’re making about how we’re building. I think being an architect means that there might be specific details or questions that I have but that also I can usually decipher how it is that something got to be the way that it is. And I can imagine the levers that might allow us to do something different in the future. So I do think it’s a great advantage to be an architect mayor. I think I’m Eugene’s first architect mayor. I might be Oregon’s first architect mayor – not actually doing the historical research to verify those things. But I’ll bring a design perspective and the belief in an iterative process that’s going to generate great outcomes to all of the work that we’re doing.

Miller: Mayor Knudson, thanks very much for joining us. I look forward to talking again.

Knudson: Thank you so much. Have a great day.

Miller: You, too. That’s Kaarin Knudson, newly sworn in mayor of Eugene.

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