SB 611 Opponents Urge Legislators to ‘Clip Portland’s Wings’

Landlords’ group testified against rent control measure and in favor of expanding the urban growth boundary and making inclusionary zoning voluntary

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A panel convened by Multifamily NW is urging the Oregon Legislature to vote against a rent control bill and in favor of making Portland’s inclusionary zoning voluntary and addressing staffing shortages at permitting departments. Notably, the group — composed of residential property managers, owners, and vendors in the Portland area, Southwest Washington and down the I-5 corridor — testified against lowering the state’s rent control rent cap.

Senate Bill 611 was introduced in January by Sen. Wlnsvey Campos (D-Aloha). It would limit annual rent increases to 3% plus inflation, or 8%, whichever is lower. The bill has the support of a broad progressive coalition, including the Southern Oregon social justice nonprofit Rogue Action Center, Partners for a Hunger-Free Oregon, The United Way of the Columbia Willamette, The Pacific Green Party. Nearly 600 written testimonies have been submitted to the legislature in support of the bill.

“Changes in rent control undermine investors’ confidence because things that happen in the future are already factored into the price of a project,” said Jessica Greenlee, director of operations at Affinity Property Management, at a meeting of the Senate Committee on Finance and Revenue Wednesday.

“Capital has a choice. I have a lot of clients who are wary of Portland because they call it an unpredictable market,” Greenlee said.

Greenlee told the committee that while developers are still investing in Portland, increasing interest rates mean Oregon needs to act fast to deregulate and offer incentives if it doesn’t want to see a slowdown in apartment projects, which Greenlee said was crucial to meeting the governor’s housing goals.

“We haven’t been in an increasing interest rate for quite some time, and it’s making it harder for deals to move forward,” Greenlee. Greenlee’s company manages apartment buildings in multiple states, including Oregon; its homepage reads, “Affinity doesn’t just manage an asset. We cultivate an investment.”

Using data from the Portland real estate consultancy Johnson Economics, presenters told the committee that the average permitting time in Portland project was 413 days, 100 days longer than the longest wait time (Gresham) and twice as long as Vancouver. They said the city could solve this problem by hiring permitting staff using money from the city’s general fund, instead of funding staffing costs primarily through permits and application fees, which they said would lead to more stable staffing.

Greenlee pointed to 2019, when land use applications decreased, and the Bureau of Development Services had to cut 11 staff positions from its Land Use Services program.

The presenters’ data also said the average cost of an affordable housing project was $450,000 per unit compared to $275,000 for a standard project — due to a combination of difficulty finding financing, competition over tax credits and costs of compliance with Portland’s inclusionary housing standard, which requires that all residential buildings with 20 or more units rent some units at rents affordable to those making 80% or less than median family income. (The cost of non-compliance is also high, and some developers are happy to pay it: the developer of downtown Portland’s Ritz-Carlton tower will owe the City of Portland $7.7 million for going back on its promise to offer some affordable units in the building.)

Oregon isn’t the only state to see increased build costs for affordable units: California and Colorado have also seen their affordable housing projects hindered by increased construction costs.

“Inclusionary zoning is something the legislature allowed Portland to do and the mucked it up,” said Dr. Gerard Mildner, a former PSU economics professor also presenting with Multifamily NW. “My recommendation would be to clip the wings of the city of Portland.”

Milder also advised expanding the city’s urban growth boundary west, which they said would cause the least amount of friction for people in the affected area.

Multifamily NW’s panel also recommended the legislature temporarily remove system development changes (SDC fees) in Portland, make the city’s inclusionary zoning policy voluntary like they do in Vancouver, establish a 120-day expedited permitting process, use liens from the Property Assessment Clean Energy program (PACE) liens to improve cost and revenue projections for new units, and introduce property tax abatements to encourage more workforce housing projects to be built, for which they said the state currently lacks incentive.

SB 611 is currently scheduled for a work session Monday.

Editor’s Note: A previous version of this story said MFNW was in favor of abolishing the state’s rent control program, and expanding Portland’s Urban Growth Boundary. The expansion of the growth boundary was presented as an idea from Dr. Mildner, but is not the offical position of MFNW. 

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