Unintended Consequences

Missing Middle Housing infographic by Better Housing Together

As I mentioned in a previous post, Oregon governor Kate Brown signed HB 2001 into law this past August. The bill—which enjoyed support from both sides of the aisle—requires all cities with a population greater than 10,000 to open up single-family zoned neighborhoods to the construction of duplexes, while cities of 25,000 people or more must allow triplexes, fourplexes, townhomes, and cottage clusters in addition to duplexes. Backers of HB 2001 believe by encouraging a broader set of housing options, it will foster the development of more connected, climate-resilient neighborhoods of greater economic and demographic diversity.  

To conform with HB 2001, Eugene must amend its code for its R-1 single-family residential zone by June 30, 2022 to allow duplexes, triplexes, fourplexes, and cottage clusters on individual lots. HB 2001 does exempt areas with restrictive covenants, conditions, and restrictions (CC&Rs).

Adding to the mix of housing types within established residential neighborhoods is a central tenet of planners working today to increase housing choice while discouraging urban sprawl. Expanding the urban growth boundary to avoid density hasn’t been tenable since Senate Bill 100 took effect back in 1973. Relieving the pressures of population growth does require densification. Predictably though, there has been consistent opposition from longtime residents within established neighborhoods who fear the changes that are sure to come with increased density. The discussion between advocates for densification and defenders of the status quo has been contentious and uncompromising.

The fact is many households today simply do not fit the mold of those for which the single-family house paradigm evolved during the 20th century. The middle-class nuclear family comprised of married parents with 2.5 children no longer dominates the social landscape. Households comprised of solely of elderly retirees, couples without kids, and individuals are ubiquitous. As the cost of housing rises, the numbers of those seeking the most affordable housing options increases as well. Meeting their need is the challenge the authors of HB 2001 believe they are helping to address.

The problem with HB 2001 is that it doesn’t include any direct or indirect provisions requiring developers to create housing that is affordable to households that are “housing-cost burdened.” The bill merely mandates the possible inclusion of missing-middle types in neighborhoods presently zoned exclusively for single-family homes.

There is a large deficit in Eugene of affordable housing for very-low income households (those defined as having incomes below $25,000 per year). Market-rate projects will not meet the needs of VLI households. Such developments are simply beyond their reach. Faith in a “trickle-down” effect—that inserting a mix of missing middle types into R-1 neighborhoods will relieve the downward pressure on the most affordable properties—may not be rewarded because the upzoned land becomes most valuable and attractive to developers who are looking to maximize its profit potential.

The unintended consequence of HB 2001 may be the exact opposite of its envisioned purpose: increased rent for lower-range rentals and increased purchase price for lower-cost homes. If this occurs, the result will be displacement of lower-income households.

Portland is facing the same challenges as it comes to grips with the repercussions of HB 2001. The chair of that city’s Planning and Sustainability Commission (PSC), Andre Baugh, is concerned its proposed Residential Infill Project will displace certain populations (read: those most vulnerable at the lower end of the socioeconomic spectrum, which historically have been racial and ethnic minorities) faster than others in pursuit of the greater good. Even if more housing is created under Portland’s proposed program, it will most likely not be affordable. The displaced households will have no place in the city at all. The benefits associated with compact urban development will not be shared equally. I found Commissioner Baugh’s commentary during a February 12, 2019 PSC briefing very compelling.

The challenge of providing affordable housing options while also meeting goals for affordability and sustainability goals is vexing. I firmly believe increasing choice makes sense simply because our demographics are changing and our housing stock should evolve to address that change. Moreover, our community must do a better job of addressing the needs of the most vulnerable—those who require affordable housing or are at greatest risk of being displaced. This means providing a range of housing options but also providing it in a way that best addresses the affordability crisis.  

It’s possible the only viable solution for creating truly affordable housing is with the assistance of government subsidies, such as Eugene’s Multiple-Unit Property Tax Exemption (MUPTE), that help balance the equation. Without such subsidies, the marketplace alone is unlikely to step up and take on the housing affordability challenge. Additionally, the City needs to intelligently plan where best to encourage the creation of that housing while fulfilling the compact urban development and neighborhood livability pillars of Envision Eugene. Capitalizing upon the investments in the EmX bus rapid transit network by concentrating new housing along its corridors should be central to the Eugene and Springfield city governments’ broader strategy of managing future growth and fostering transit-oriented development.

Brentwood Town Centre in the Vancouver suburb of Burnaby, developed around two stations along the Millennium Line of the Skytrain regional rapid transit system. My parents live in the building with the arrow.

Vancouver, B.C. (the place where I was born and raised) is the poster child in North America for encouraging growth around and along transit centers and corridors. The results are the fulfillment of a vision for Vancouver that began in the 1970s. Its success is unquestioned and has served as a model for other cities to emulate. Vancouver has absorbed considerable population growth while reducing reliance upon the automobile and protecting iconic single-family neighborhoods. At the same time, the city’s desirability as a place to live pushed housing costs to stratospheric elevations (as of June 2019, the average sale price of a detached, single-family home was $1,486,620 CDN, which is actually down more than 11% from 2018). To help address the crisis-level need, governments at the federal, provincial, and municipal levels have all provided funding and incentives for below-market housing. Without these subsidies, the institutionalized social inequities would be entirely indefensible.

Eugene needs to comply with HB 2001. I’m enough of a realist to know the legislation by itself is not the panacea. Truly providing affordable housing options requires a holistic approach, one in which concerns associated with community livability, sustainability, economic health, containing pressures to expand the urban growth boundary, and housing choice are all factors. This is not the time for siloed thinking. The problem is broader than the implications of HB 2001 in isolation.