Two new laws that passed in the Oregon Legislature are pushing the state toward what other countries have done to address housing: state-level zoning laws. As Sightline Institute reports, HB 2258 and HB 2138 seem to give the state much more authority and the power to override local zoning codes. Oregon has been making changes to zoning laws since 2017, and this new approach follows countries such as Japan and Australia. Michael Andersen is the director of Cities and Towns at Sightline Institute. He joins us to share more on what these new laws could mean for the future of home development in the state.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: From the Gert Boyle Studio at OPB, this is Think Out Loud. I’m Dave Miller. As Oregon’s housing crisis continues, the state is inching closer to state-level zoning. Governor Tina Kotek recently signed two bills into law intended to give the state more authority to override local zoning codes if it will lead to more housing production. Michael Andersen wrote about this recently. He is the director of Cities and Towns at Sightline Institute. He joins us now. Welcome back to the show.
Michael Andersen: Thanks a lot, Dave.
Miller: The central point of your new article is that, in recent years, Oregon has taken a lot of steps to streamline zoning statewide as a way to increase housing production. Can you give us a sense for just how complicated or piecemeal the system has been?
Andersen: One thing I saw … The group Strong Towns PDX did some work in the city of Portland, for example, to look at, if you look at all the zones, all the overlays, all the overlaps and all the different ways that we have figured out how to regulate what kind of housing you’re allowed to build on land – just in the city of Portland – it’s 779 distinct zoning categories scattered in this hodgepodge across the city.
And that is not the entire reason why we have a problem, but it captures the complexity of the different ways we’ve come up with to say, “You can’t do this, you can’t do that, you can’t do that.” And Oregon is leading the country, I would argue, in moving away from that patchwork and standardizing things more, not just across the city level, but from city to city to city.
Miller: What steps has the legislature already taken, before the two bills that were just signed a couple of weeks ago, to do what you’re talking about?
Andersen: I would say, starting in 2015 or so, the state has been on a sequence of gradually adding more and more standards to state zoning. We started with ADUs, backyard cottages, and then moved on to legalize fourplexes in 2019 and then streamlined parking requirements around the state in ‘22. So it’s been step-by-step. And I think that the most recent round of things coming this year is specifically about neighborhood-scale apartment buildings, how to standardize those.
Miller: So what does House Bill 2258 do?
Andersen: That is a great question that I think is still being determined by the state itself. But based on the conversations I’ve had, the concept of 2258 – and the plain facts, this fits within the text of the bill – is that the state will pre-approve like a catalog of homes, like a Sears Catalog. We used to order homes from a Sears Catalog. Now, we would potentially pre-legalize a catalog of housing types – single-unit, ADU or a couple of townhomes – and the state would preemptively give permission both for the zoning and the building permit. Then the city would process it. But you could do the same thing in Tualatin, in Oregon City and in Medford, etc.
Miller: So, if I’m a developer, I wouldn’t even need to go to the city of Medford or Tualatin, I would go, instead, directly to the state for quick approval …
Andersen: You would go to the city and you would say, “Look, I meet the requirements of the state.”
Miller: And the state would say they have no choice but to do this.
Andersen: That’s right.
Miller: But you said that it’s not totally clear what the state can do. If the state took the most maximalist approach allowed under the statute of the law that lawmakers passed and the governor signed, what could the state say?
Andersen: At least as I understand what the state is telling me the meaning of the law is, they could say you can build whatever kind of housing you want, that we have pre-approved for this land, as long as it increases the number of homes. Now, a city could do that today. My understanding is the state is not going to use that maximalist power.
But what’s interesting to me is the legislature has participated in this big shift, both parties and the governor all moving along in this direction, and almost unanimously passed this bill that gives great authority to the state to do a lot of changes, if it wants to. I don’t think it’s going to use that, but that’s representative of this big shift.
Miller: I’m still trying to figure out how this is different from the nationwide news – it was in 2019, I think it was – that then-Speaker Tina Kotek championed what was talked about as the end of single-family zonings; saying that in almost every city, except for the smallest ones in Oregon, you can no longer at the city level say that you can’t build duplexes, triplexes or cottage clusters. Everybody has to allow those. So how is what we’re talking about here, with state preemption, different?
Andersen: In 2019, what the state did was it said you have to get to “yes” on up to four units in these cities, up to two units in these other cities, etc. But there’s still a fair amount of leeway about how far from the property line you can build and how tall you can build, and so on.
And one of the bills that was just signed, [which] was also broadly approved, expands that standardization, strengthens that middle-housing law. And the other bill allows the state to predefine these specific building types that could in theory be part of a modular housing factory, that you would take up pieces, that you would be able to assemble this townhome and you would guarantee that you could put it in Oregon City as well as in Medford, and then get the scale to streamline your production.
Miller: So what has the Kotek administration been clear about, in terms of how they will implement this? If you said that it’s not likely that they’re going to be fully maximalist and say every single cottage cluster or every single duplex, no matter what style, we’re going to give automatic approval, everywhere in the state – if they’re not going to do that, what are they likely to do?
Andersen: Well, there are different agencies involved with the state government and those agencies will also need to be making decisions. My understanding is that what’s likely to happen in the short run is that things that use the residential building code – that is townhomes, detached homes and ADU’s – are likely to have some pre-permitted plans. And it won’t be used beyond that, in the immediate future, unless the governor asks for them to change a direction on that to include things like a garden apartment building or these small-scale apartments.
Miller: When you say pre-approved plans, you mentioned Sears before. I mean, those were basically the same house you could order. It would comes in parts and the builder would put [it] together. Here, are you talking about specific designs or more ideas of home types?
Andersen: A very specific design, like the building permit would include the dimensions of the walls and all the specific details. And as the law is written, a private company could actually submit their own plans and say, “Hey, we would like permission to mass-produce this type of home. Does it meet the state’s building codes?” Oregon has a uniform building code at the state level, so it can put that into action.
Miller: Despite the changes that have been happening at the statewide level and Portland, which led this before the state copied some of what Portland was trying to do in terms of getting rid of single-family zoning … Despite all of that, apartment construction in Portland recently fell to its lowest level in more than a decade. Why?
Andersen: I think that in Portland proper, it’s largely because the population has been flat for the last few years. We’re still down a couple of percentage points from the pandemic and it’s still expensive to build things. So if we’re going to change that, and if we’re going to house the people that we know need to be housed, and if we’re gonna keep prices flat in the future if we have further growth in population, we need to figure out, how do we make it cheaper to build things? How do we make it less expensive to create a new home to compete with the existing ones? In order to do that, we’re gonna need to figure out how to build homes more efficiently. One way to do that is to build the same thing over and over again.
Miller: An article about this in Willamette Week, back in the spring, mentioned the national trend of higher interest rates as one of the things that, at a local level, we just have no control over, as one of the things that adds costs, especially, to financing new construction.
But it also talked about what their sources called “self-inflicted wounds,” including the inclusionary zoning mandate from 2017, which says, among other things, that for buildings with more than 20 units, 20% of them have to be affordable. And the gist of this was that developers are saying this was a reason that they’d rather, in some cases, build a 19-unit apartment building in a place that otherwise could have 40, 50 or 80 units. What impact do you think this law has had?
Andersen: The IZ [Inclusionary Zone] law? I think that for several years now, Portland’s program was pretty clearly malfunctioning and there were a lot of people bending over backwards to avoid the program and underbuilding. And that was part of why we’d had the big rent spike in the pre-pandemic years that we did, because the market was unable to keep up with that.
In 2024, happily, the city decided that it was going to readjust the program, and rebalance the incentives and costs, such that what I’ve heard now is the developers who were building those 18-unit buildings, 19-unit buildings, actually are saying, “Oh, it would be better for me to build a little bigger to qualify for the program because the tax incentives are lined up now.”
Miller: You wrote about another step that the state recently took. It released draft proposals for model codes that cities can adopt. What’s the big idea behind these codes?
Andersen: I think this is another form of that notion of, we should be setting standards for, you can be no more exclusive than such-and-such. So, in this state, where we’ve seen home prices are up 30% in the last five years, a big way to help people find the homes they need is that some people need to be able to live in apartment buildings. And over the course of the last 50 years, rule after rule after rule has chipped away at it. If I have time, I’ll give you an example.
Miller: Please.
Andersen: So in Tualattin, for example – I don’t mean to pick on Tualatin, but I do know this circumstance – they have a zone that’s described as a high-rise, high-density zone. It’s applied in their city on 18 acres, one 18-acre parcel, of which a little bit of that is undeveloped. And if you look at the specifics of it, it allows a six-story apartment building but only two homes on a 10,000 square foot lot. So if you imagine, a 10,000 square-foot lot, somebody wants to build there. You can build six stories but only two homes there. That’s not really an apartment building. So this zone was not actually written to be usable.
What these state model codes would do is they would define, this is what an apartment zone actually needs to look like if it’s going to count as an apartment zone. And through a set of rules that I think, I hope, are going to be applied at the state level, cities that are at least underperforming, but ideally any city, will have to compare their zoning to those model codes and say, “OK, we are going to meet these criteria.”
Miller: In other words, the idea in the future is it wouldn’t just be a suggestion that, “look, we have model codes, it’d be great if you use these,” but at a certain point there could be some kind of a mandate, either use this or use something that would that would provide even more housing …
Andersen: Right, and you can use your discretion and your local judgment to customize it, just as you’d have with fourplexes. But we’re saying at a state level, we’re going to set some standards to what multi-family zoning needs to look like if we actually want to get multi-family homes.
Miller: How is Oregon’s overall approach right now to zoning changes, with an aim at boosting housing production, compare to what our other neighbors in the West Coast, British Columbia down to California, are doing?
Andersen: All of the states on the West Coast, including British Columbia, have been part of a movement that’s going across the country where states are increasingly taking this decision off of localities’ backs, to some extent, re-asserting themselves over local zoning.
I would say that, for example, Washington just said within a certain distance of every train station, you need to allow a four-story building. California is likely to pass a law like that in the next few weeks. Massachusetts passed laws like this. Utah has passed similar laws. A lot of states are sort of piece-by-piece legislating these things. What Oregon is doing that’s unusual is it is systematically shifting this decision-making power to the state level rather than simply doing these one-off laws.
Miller: Finally, I want to get your response to an email we got. Tim McCormick wrote: “We made these reforms, but how sufficient are they? What else is possible and needed? Please, let’s talk outcomes such as overall affordability or rental burdens, not just outputs such as laws passed.”
“Also,” he says, “We have to consider barriers, factors and possibilities besides zoning and permitting. These are not necessarily limiting factors for housing projects. Our imagination often is.”
Andersen: Yeah, I couldn’t agree with that more. I think that there’s only so much the government can do to allow the imagination to solve the problems before us. And Tim is completely right that we have a huge problem of homelessness and of people who don’t get to live where they want, when they want. Zoning is not the only thing we need to do, but I think that we’ve seen from that 2019 law is that a bunch of these small-scale neighborhoods, small-scale townhomes, have come in at the price or lower than the average price in their neighborhoods and their newly-built homes. That is a sign that this can work, but it is not a complete solution.
Miller: Michael, thanks very much.
Andersen: Thanks.
Miller: That is Michael Andersen from the Sightline Institute.
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