The ‘Oregon Plan’ For Affordable Housing: Kicking the Working Class While They’re Down

By Dave Hunnicutt

The American Planning Association (APA), the national organization for state and local planners, recently published a brutally honest assessment of the impact of residential upzoning (i.e. increasing housing density) on low-income households and low-income neighborhoods.

While the APA’s conclusions shouldn’t surprise anyone, their honesty and willingness to acknowledge problems that are taboo subjects in Oregon planning and environmental circles is shockingly refreshing.

The primary subject of the article is “naturally occurring affordable housing” (NOAH), which the APA defines as housing affordable to low- and moderate-income households without requiring some form of subsidy.

NOAH is the primary source of housing for working-class renters and homeowners. Every city has NOAH neighborhoods. They serve as vital areas for families working jobs that don’t pay high wages. The houses aren’t fancy, but they serve their purpose, and keep families warm, dry and safe.

The problem is that Oregon has been chronically underbuilding housing for decades and now has a shortage of housing at all price levels, but especially low- and moderate-income levels. This disparity is exacerbated when you look at homeownership trends.

Common sense tells you that the worst solution would be to eliminate NOAH neighborhoods, right?

Not in Oregon.

Oregon planning policies increase risk of gentrification and displacement

In fact, in Oregon we’ve doubled down on eliminating NOAH neighborhoods (or in planner speak “reimagining” them). For years, Oregon’s most strident planning advocates and environmentalists have called for changing NOAH neighborhoods by eliminating single-family homes and replacing those homes with high-density developments. Think of shiny new apartments and quadplexes.

The apex of this line of thinking is DLCD’s new “climate friendly equitable communities” (CFEC) rules, which we’ve already blogged about extensively.

For Oregon’s planning “advocates,” the idea is that “revitalizing” NOAH neighborhoods by replacing traditional single-family homes with row after row of shiny new apartments will increase the number of housing units, reduce housing costs, and save the environment by forcing people out of their cars and onto bikes and buses. Right?

Well, according to the APA, the answer isn’t that simple.

In fact, the APA article cites studies demonstrating that while replacing NOAH neighborhoods with high-density housing results in “modest” gains in housing supply and “modest” reductions in overall housing costs, it is the low- and moderate-income households that suffer the impact of tearing down their neighborhood:

There is mounting evidence that residential upzoning can increase the supply and decrease the average cost of housing. The bad news is these aggregate gains are modest and – in some contexts – come with a net loss in naturally occurring affordable housing (NOAH), that is, housing affordable to low- and moderate-income households without requiring some form of subsidy.

As the article notes, “Absent subsidies or a well-calibrated inclusionary housing policy, tearing down a NOAH unit to build multiple new units will not increase the supply of housing affordable to lower-income households.”

In other words, Oregon’s land-use advocates and their friends in state and local planning departments want to force working-class families out of well-established neighborhoods where they’ve lived for years in order to produce “modest” reductions in housing costs and “modest” gains in housing supply.

Bad problems, worse solutions

But don’t worry, the advocates say, we’ll just solve our problems by forcing these families to seek public subsidies to help them pay the rent in their new apartments. Or we’ll tell a property owner that if you build your shiny new apartments, we’re going to force you to rent a percentage of your new apartments at rents affordable to the people you’re displacing.

The problem with those ideas is 1) the state of Oregon doesn’t have anything close to the level of funding needed to subsidize rents to make them affordable at the same level they were before they were “revitalized,” and 2) efforts at inclusionary zoning policies don’t work, because Oregon land-use laws have resulted in such a shortage of land available for building that the cost to construct apartments won’t allow for enough affordable units to be built while still allowing a builder to make a profit. In builder (and real world) terms, “the projects won’t pencil.”

And there is absolutely zero chance that the state or local governments can take over the construction projects from the private sector. Look at situations where Oregon’s local governments have attempted to build affordable housing. The per-unit costs are so high that very few projects are built because the state and local government simply doesn’t have the money to build them. In other words, they don’t pencil for government either, and they’re not even trying to eke out a small profit.

So, I’ve got an idea that seems to make the most sense – why don’t we just not displace families in the first place?

I don’t care what type of planner-speak is used to try and make it sound OK to displace working-class families from working-class neighborhoods. The correct and honest term for this planning strategy is “gentrification,” which Webster’s defines as:

“A process in which a poor area (as of a city) experiences an influx of middle-class or wealthy people who renovate and rebuild homes and businesses and which often results in an increase in property values and the displacement of earlier, usually poorer residents.”

There you have it – Oregon’s “plan” for improving housing is to force the poor and working class out of their neighborhoods so that the hipsters can move in. Wow.

So far, the author of the APA article is batting a thousand. He identifies the problem, is honest about the benefits and downsides of densifying NOAH neighborhoods and forces the reader to think about whether “planning” for more and more density is really a good idea.

But in true APA fashion, the “solutions” offered by the planner who authored the article are anything but. In fact, the author suggests that the “pro-NOAH” approach to retaining these neighborhoods is to use historic preservation regulations to prevent property owners from developing them beyond their existing development pattern.

In other words, let’s take a problem (underbuilding) caused by planners and land-use “advocates” and solve it by telling the owners of NOAH homes that their structures are now considered “historic” and that they can’t ever change. So the APA solution is to allow the state or local government to punish the property owner based on a lie (“guess what – your home is historic!”) to fix a problem that the same state or local government caused!

As we’ve written about before, the worst part about historic designations is that homes or businesses in historic districts are often regulated regardless of whether they have any historic value at all. The cities are already indiscriminate in forming their districts, including properties that have no historical value. These regulations can have significant implications for the use and value of someone’s property and can actually be weaponized to prevent a landowner from using their property in a way that advances their economic well-being.

I’m pretty sure it was Albert Einstein who said, “We cannot solve our problems with the same thinking we used when we created them.” He must not have been a land-use “advocate.”

OPOA proposes a different solution

Fortunately, there’s a much more realistic solution. Why don’t we build more houses in places that have never been developed for housing? That isn’t a particularly revolutionary idea – except in planner/environmental circles in Oregon.

Here’s how it works – we’d amend existing Oregon land-use law to reduce both the labyrinth of process that a property owner must navigate in order to build a home and we’d make more land available for housing, including land where houses have never been built. We’d get more housing units, which the APA says is good, we’d build them at a lower cost, which the APA says is good, and we wouldn’t gentrify NOAH neighborhoods, which the Oregon Property Owners Association, or OPOA (and anyone else who cares about helping low- and moderate-income households), can cheer about.

It’s a win-win-win.

For those who complain about sprawl, get real. As we’ve discussed multiple times, Oregon houses nearly its entire population on slightly over one-half of 1% of its land. We can afford to add a little bit more land and not be “sprawling,” even if that means our hipster friends need to ride their Schwinns a tad bit farther to get to the taphouse.

Thank you to the APA for publishing an honest article. Your solution is all wrong, but just having the planning community admit that plans like Oregon’s significantly hurt the segment of society that can least afford to be hurt is a win. Maybe someday Oregon leaders will address these problems – OPOA stands ready to help.

Dave Hunnicutt is President of the Oregon Property Owners Association. For nearly 25 years, he has represented Oregon property owners in the Capitol and in courts throughout Oregon.