Home Buyer CreditsBy Jason Boone

Affordable housing will be a central topic during Oregon’s 2016 legislative session. And inclusionary zoning will be at the forefront.

That much is already been made clear in the early weeks of the session.

The controversial practice of inclusionary zoning, which requires developers to build affordable housing as part of market-rate housing in new developments, has been banned in Oregon since 1999. But there is a movement afoot to bring it back to the state as a way to combat rising housing prices.

The sides are lining up, of course. Recently Knute Buehler, a Republican who represents Bend in the Oregon House of Representative, penned a thoughtful op-ed piece in the Oregonian arguing in part that inclusionary zoning will actually make the problem worse. Instead, he argued that Oregon should loosen its stringent land-use laws to allow for less expensive development.

Meanwhile, the Bend City Council voiced public support for the efforts in Salem to lift the inclusionary zoning ban.

Let’s be clear. This is indeed a complicated issue. And the concern over affordable housing is genuine. In Bend, the median price of homes has steadily risen, ringing in at $317,450 in January, since the depths of the Great Recession. And the rental market has tightened to historic levels.

But inclusionary zoning comes with risks. In fact, many economists argue that policies such as rent controls and inclusionary zoning actually make the affordable housing problem worse. Tom Means, an economist at San Jose State in California, and Edward Stringham, an economist from UNC-Fayetteville, concluded in this report:

  • Using panel data and a first difference model, we found that below-market housing mandates actually lead to decreased construction and increased prices. Between 1980 and 1990, cities that imposed a below-market housing mandate ended up with, on average, 8 percent fewer homes and 9 percent higher prices. Between 1990 and 2000, cities that imposed a below-market housing mandate ended up with, on average, 7 percent fewer homes and 20 percent higher prices.

And some studies suggest the urban growth boundary in Oregon’s major cities, including Bend and Portland, does seem to have at least contributed to the problem already.

  • While farmland loss has moderated, and densities have clearly increased, housing affordability has suffered. Housing appreciation is destabilizing the local political environment as growth-management goals conflict and new interest groups and coalitions emerge to challenge the system of regional planning.

Interestingly, the signs of compromise are beginning to show in Salem. And that could mean that we could see a combination of inclusionary zoning making a comeback and the loosening of urban growth boundaries. Although some argue that both inclusionary zoning and the lifting of the urban growth boundary would make the affordability problem worse.

Where this ends is anyone’s guess right now. But you know what they say about good intentions.

The issue bares watching over the next few months.

The more information a buyer or seller has about the neighborhood, the more prudence a decision they will make. I can help guide you through the process.

To learn more about the Bend market, get started with listing your Bend home, or to view area homes contact me call (541) 383-1426, or visit Bend Property Search to connect with me through my website.