Housing zoning reform in Oregon

After a dramatic false start, the Oregon Senate on Sunday gave final legislative approval to a bill that would effectively eliminate single-family zoning in large Oregon cities.

House Bill 2001 passed in a 17-9 vote. It now heads to Gov. Kate Brown desk to be signed into law.

It will allow duplexes, triplexes, fourplexes and “cottage clusters” on land previously reserved for single family houses in cities with more than 25,000 residents, as well as smaller cities in the Portland metro area. Cities with at least 10,000 residents would be required to allow duplexes in single-family zones.

Here is more by Elliott Njus, via Jan Fure and several other MR readers.  Next up perhaps is this

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Building slums

Ooh, I'll go get the concrete .............

Shouldn’t that be “battered face”? Now they can build dorms for the Antifa thugs and they can take over law enforcement in
Portland. Give the residents what they want, good and hard.

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> Building slums

This place has gone to pot. Now they're letting people buy in for only quarter million...

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Good. I'm not surprised it succeeded at the state level, either - it's no sure-fire success at the state level, but much easier than trying to reform single-home zoning at the city level.

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"Not in my backyard" is now literal.

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Legislation like this might do what was intended in areas with very high growth: Selling your house to get a duplex built might become economically attractive if you are making a mint as part of the process. There will be problems of stressed infrastructure, as duplexes and quads might be too dense if everyone drives but not dense enough for public transportations, but growth fixes a lot of ills.

But what does this legislation do to areas that aren't growing? All kinds of bad things, as rebuilding old housing stock can become mandatory due to age, but lead to an oversupply of housing.

It doesn’t require 2+ units. It only allows them. If market conditions merit o it building single family, that’s what will mostly get built.

Little satisfaction if it is your neighbor who builds a fourplex next door and your home's value drops by half.

On what planet does the building of a fourplex cause neighboring home prices to collapse?

Seriously overlooked: since you have the right to also build a fourplex (even if you don't) your property is worth *more*, not less.

Yup, the value of land should increase a bit as the potential ROI of buying and upgrading a given property should increase.

Yeah right! That would explain the rush to build nice single family homes next to fourplexes. I think you know nothing about real estate.

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I guess you've never lived next to a building with a bunch of rowdy (I am being kind) tenants after you've paid through the nose to raise your kids in a quiet safe environment.

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Seriously overlooked: since you have the right to also build a fourplex (even if you don't) your property is worth *more*, not less.

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One has to laugh. The same people who demand a free range environment for chickens are perfectly happy to prohibit it for humans.

Stack em and pack em. Of course the elites will have their getaways. Even the Soviet commies had their dachas.

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Single family homes are still allowed. It’s just that other types of homes are now also allowed.

Not quite true, if the Portland Marxist city commission gets it their way, you can only live in a large house if it is grandfathered in!

Look at page 26, table 110-4 of linked PDF file:

https://www.portlandoregon.gov/bps/article/711694

The infill proposal is implying a major reduction in maximum allowed single family square footage, depending on density zoning.

This is an example of extreme Atlas Strugged style Marxism. For example, an R7 lot, which previously could allow a 5850 square feet house, is limited to 1680sqft single house, 2100sqfr duplex, or 3000sqft distributed among 3-4 units.

These are proposed infill rules for Portland, not yet implemented. There is an enormous envy and animosity towards rich white dudes living in 3-4K sqft McMansions.

Further evidence of the madness, is that the proposal is several hundred pages long.

Where is your 5850 sq ft for an R7 lot come from? This source (admittedly not dated) indicates a maximum building size of 2,250 + 15% of the lot size over 5000 sq ft. So the max building size for an R7 lot would be 2250-3300 sq ft https://www.portlandoregon.gov/bds/article/72523

Good question, 5850 comes from the top right entry of table 110-4, page 26, in my source document above. I am wondering if Portland is trying to switch from limiting house footprint, to limiting maximum area?

I am reminded of the scene in Dr Zhivago where he returns to the family home to find its been converted into apartments by the Communists, with his family allocated one room.

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Pretty good example of someone equating allowing something to prohibiting its alternatives.

See my previous comment, prohibiting the alternatives is in the pipeline, at least for Portland, if not statewide.

Your comment had a link to the text of the portland zoning code. This post is about statewide legislation. Does the statewide legislation prohibit single family houses?

Moreover, the ordinance does not seem to ban single family homes. It apparently prohibits a 5850 sq ft house in a certain area. From what I can tell, many single family homes are smaller, and they are not disallowed in this code.

What I linked to is a draft proposal for Portland. You ate correct the state legislation does not prevent large single family homes.

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It's been an interesting several months as the Oregon legislature passed statewide rent control a few months ago but also passed this anti-NIMBY bill that will probably soon become law; Portland's city council has also been seeking to bypass zoning and lift restrictions on medium-density housing.

YIMBY may be one of the few bi-partisan issues of the day, although it doesn't seem to have gained political traction in the Bay Area the way it has in Portland and the rest of Oregon.

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“ also provides Democrats a retort to critics of a rent control measure approved by the legislature in February”

Homeowners interested in retaining the value of their housing investments should consider development covenants with neighbors or forming a homeowners association. https://www.luederlaw.com/creating-a-mandatory-homeowners-association-in-your-existing-neighborhood/

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As a landlord in the 1%, I'll all for affordable housing, section 8 vouchers, higher density zoning, and the like, as long as Fee Simple Absolute is enshrined in law, as long as there's no rent control, and as long as rental and real estate prices stay high. Otherwise, it's communism through the back door, Fabian style.

"as long as rental and real estate prices stay high"

You may be pleased that you can boldly state you class interest, but it is a class interest to extract rents from poor people and maintain a privileged position .. pretty much on their backs.

(I am old enough to remember when markets and conservatism were good because they "raised all boats.")

I actually agree with you. I better go lie down.

If they aren’t doing something about zoning, they aren’t actually addressing housing affordability. They simply want guys like Ray to pay for other people’s housing.

The most recent conservative in the WH was Reagan. Twenty-eight years of Bushes, Clintons, and Obama raised the riches' boats; especially Obama's eight years QE's and zero rates which made Wall Street moguls' net worths skyrocket while Main Street sucked hind teat.

Millions of poor people (with millions more illegally jumping El Rio Bravo Del Norte each year) need to live some place.

Public housing doesn't cut it. See Federal take-over of NYC public housing, and its bureaucratic slum regime.

It's not "class interest" (Marxist ideology), it's "enlightened self-interest." That's a crime in earthly paradises like Venezuela, Cuba, and New York City.

If you think NYC is anything like Venezuela or Cuba, you haven't been to any of them.

I live close enough to spit into NYC.

You can get a guided tour through a NYC housing project and you'll see how they compare to conditions in Cuba and Venezuela. Thank God for climate change: NYC's projects' poor are sweating out NYC winters, no heat.

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Really, I was conservative? Was it raising taxes to save Social Security, my immigration amnesty, or being a lifelong Democrat and a union leader up until 1962?

You weren't perfect.

You let Teddy Chappaquiddick gull you on the 1986 Immigration/Amnesty Bill, which should be trotted out to fight the illegal invasion and progressives' attempts at amnesty on steroids.

Thank God you employed deficit/military spending to re-arm and modernize US military might so as to consign to the dustbin of history the USSR.

Compared to the Bushes, Paul Ryan, Mitt Romney, John McCain, John Boehner, et al, not to mention the Clintons and Obama, you were an arch-conservative.

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You were just fine, Ronnie. Whether you want to be considered a conservative or a moderate, we could use you back about now.

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Markets and conservatism still raises all yachts.

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Meanwhile the University of Oregon occupies 295 acres in Eugene. Rather than address that waste of real estate, it is just easier to strip local government of authority.

The vast park-like university campus that is obligatory in the USA is remarkably rare elsewhere in the world. London, for example, has only one such campus and it is on the far outskirts. Stanford University gets tens of millions in real estate tax breaks to maintain its 1,000+ acre campus. States really should look first to unoccupied university real estate and parking lots for locations to slap up some public housing.

295 acres is 0.5 square miles, hardly gigantic. As campuses go, the University of Oregon is quite compact.

If a square mile contains 640 acres, do you not agree that a half-square mile has one-quarter of the area of a square mile? Forgive me, I was a French major.

I'm happy to clarify. Half a square mile, or 0.5 square miles, does not mean 0.5 miles x 0.5 miles. It means one half the area of one square mile.

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"Square miles" when you mean area in any shape. Miles square is when you describe a square with specific length.

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Leave our campuses alone. While we're struggling to adjust to all the cultures that now exist in our country, a little appreciation for the unique American culture is in order.

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We better build a few hundred million units quickly - the Dems gonna open the floodgates.

Press one for English!

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Home builders in Idaho are going to love this. They can't keep up with the demand from refugees from California, Oregon and Washington as it is. DC-style pricing has now come to Boise.

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Zoning is an improper use of state power over private property. Single-family zoning is zoning.

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I am actually confused by the overwhelming negativity here. Besides the potential issue of increased restrictions on size that Viking brought up - how could this be bad?

If you own a home affected by this cool, the only change to you is that your house might be worth more converted into a duplex.

If you rent, soon you will have more places to chose from as the supply of housing increases.

Who is losing?

Kids (most likely boys) who want to play in their backyard. Mom who wants to keep her vegetable garden. Pop who wants to keep his woodwork shop.

They can still buy larger properties. Depending on the substitution effects, such people may well be absolutely better off with liberalisation.

There's a large proportion of people in the market who don't highly value the backyard, veg garden, and woodwork shop at the margin. Currently they are forced to buy such things by bundling, and bid up the price of such houses. Divert such demand into duplexes etc and the price of large houses falls.

So long as ratio of small-unit to large-unit demand in the market is less than the single-to-multiplex ratio at the margin, then it's all win for people looking to buy larger properties. The only "losers" are large incumbents who lose capital (but not yardspace, which is now cheaper).

You know, this is an econ blog.

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From what I can tell, most urban nimbyism is about congestion and restricting supply to drive up housing prices. Suburban nimbyism seems to be about restricting access to schools by economic class (both for funding reasons as well as to control peer groups)

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I doubt that this has much impact, as tearing down an existing structure to build, say, a quadplex is going to be expensive, expensive enough that it is only going to pencil out in places with the highest land values and where you can build quadplexes with large, luxury units. Which is to say in the most expensive neighborhoods, where people have money to spare and won’t be all that tempted to sell to make a buck, as they already have way more money than they need.

Are you sure?

Here in the UK, (planning permission) land prices are now well above rebuild costs of the typical structure in and around most cities (e.g. land, not labour, is the scarce resource). Multiplex conversions of larger properties are ultra common.

I don’t doubt that is true in the UK, as I have read that the UK (as a nation) has the highest real estate prices of any sizable nation on earth, due to those restrictions from planning commissions. Portland’s land prices aren’t comparable, if the price for suburban, single family homes that I see on Zillow and Trulia are to be believed. Although I don’t have the numbers at hand, I would be surprised if Portland had more than 20% of land parcels for the entire metro area. Not that some of the neighboring and outlying municipalities might not have some small areas with land values high enough to justify redevelopment, but overall I doubt much of the land will pencil out, and of the land that does, only a small portion will be redeveloped because the wealthy folk that live there don’t want to give up living in a detached single family home in a walkable, transit rich area, and they have enough money already to have paid a million dollars for a property anyway, and so will be very difficult to persuade to sell.

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I suspect P.Burgos is correct- this won't do what the bill's proponents want. They see low cost units going up, but I see multi-family units that are likely to be luxury units for sale rather than low-cost units for rent, and this is assuming there are any changes from what is actually being built before the change. Combining this with rent control is really stupid.

Agree! The bill would benefit those that are not well connected and want to purchase and redevelop a property, as this bill can remove the risk of a zoning change request being denied, as an egalitarian upzoning has already occurred.

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Always amused to see these laws limited to cities larger than x; Texas does these same thing. A great way to buy votes from small town and rural legislators whose electorate would fire them otherwise.

All this will do is ensure that small, very high-income, communities (Highland Park, University Park, West Lake Hills, Sherwood, Happy Valley, Lake Oswego, River Oaks, West University) thrive as they become even more exclusive and expensive and, of course, any new development will be heavily deed-restricted.

This will be a great pairing with Portland’s already ubiquitous and massive tent cities; Enjoy your densified urban slums.

Why does everyone in the comments think that multi-family units automatically mean slums?

Walkable communities with mixed residential/commercial space and lots of 3-4 story condo buildings are often some of the most desirable real estate in modern cities. Is Park Slope a "slum"? LOL

Park Slope?!? LMFAO.

You get back to me when developers start building all of those $1-4M apartments, condos and row houses. The YIMBY’s and homeless folks should be thrilled.

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Why does everyone in the comments think that multi-family units automatically mean slums?

1. we are stupid
2. we are too blind to see
3. because they do

"3. because they do"

Not sure if this is a troll but in case it's not: Boston's Back Bay, Portland's Pearl District, Midtown Manhattan, etc. are not exactly slums.

Likewise, not sure if you’re trolling, but just in case ...

“The bill, sponsored by House Speaker Tina Kotek, aims to address rising housing costs by increasing the supply of smaller homes, particularly in desirable neighborhoods.”

Addressing housing costs is not what any of these neighborhoods is about.
- Pearl is almost 2x more expensive per sq/ft than single-family homes north of the river.
- Back Bay is probably cheaper than Beacon Hill, but is certainly one of the most expensive areas in Boston.
- mid-town Manhattan? Seriously? Not only is it a terrible place to live (I have), it’s also possibly the most expensive location in the US. https://one57.com/

I'm not sure what you are trying to say here. Those neighborhoods are counterexamples to the claim that multi-family homes automatically mean slums.

They certainly are not low cost neighborhoods, but I never claimed that they are. Nor is Kotek claiming (nor would any economist or real estate developer) that multi-family homes in desirable neighborhoods will be low cost.

What she is claiming, and just about any economist will agree, is that reducing zoning restrictions will increase the supply of housing (albeit with smaller square footage) in neighborhoods that are currently zoned for single family houses.

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Welcome to the future.

https://www.bloomberg.com/news/features/2019-02-13/why-america-s-new-apartment-buildings-all-look-the-same

More like back to the future. The song "Little Boxes" was written in 1962 in reaction to the cheap, ticky-tacky identical single-family houses that were being built in suburbia - and are still being built today. The critics of monotonous apartment buildings forget that American suburbs are filled with equally monotonous single family houses.

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Oregon is not very dense, about half as dense as the USA on average (and that includes the box states). Even Portland is a small city (633k) with a density lower then nearly all major cities you can think of.

Oregon is only 2% black and 10% Latino. Crime is low. Poverty rate is low. It's not like getting rid of zoning is going to cause wild and undesirable demographic shifts.

Seems to me a reasonable experiment.

+1, I don't see anything much objectionable about this idea.

Says no one who actually owns a home there.

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Won't this wreak havoc on existing sewage infrastructure?

It's cheaper to provide public utilities to a large apartment building than a long string of SFHs spread out across multiple acres.

There are economies of scale in projects like sewer pipes, electricity, etc.

There are economies of scale when doing greenfield development, reconstructing urban infrastructure ... not so much. WTF are they going to do with 2-3x as many people who need transportation and schools? I suppose you can pass laws prohibiting commuting and children.

You build the infrastructure along with the redevelopment.

Cities didn't start off as hyper dense, well connected metropolises on day 1. They slow built up density over time. It's a long run process.

Let me try again. It is NOT cheaper to rip up existing infrastructure, plants, buildings, streets, water, gas, sewer, telecom, electric, etc. and replace it with larger updated systems. It IS cheaper to build it all from scratch in an empty field, esp. if you’re servicing multi-family.

In many older areas, e.g. Park Slope, the density was built-in from the beginning (mid-1800’s) because incomes/wealth were lower and people used mass transit, not cars.

Many of the neighborhoods in Portland weren’t developed until the late 1800’s and early 1900’s. Some (e.g. Irvington) were intended from the beginning to be primarily single-family residential. Ever since then anyone purchasing homes there did so understanding that. They didn’t move in hoping that just maybe, if they were lucky, someone would buy their neighbor’s house and build an apartment building.

YIMBY’s should just make peace with the fact that want what NIMBY’s have and they’re fine taking it. That’s okay, it happens all of the time.

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The bill only allows up to quadplexes, which is small apartment building, not a large one.

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From the comments in the newspaper article:

"Hey Oregonian how some real reporting on all neighborhoods EXEMPT from this devastation.
Here, Ill get you started: Irvington; Eastmoreland; Hessler Heights; Dunthorpe; that's just a few of the elite enclaves that protest as in NIMBY. All of these so-called "Historical" exemptions with all the government hacks making sure none of it touches them. Get to it. Or have you decided that you don't want to actually report both sides? "

The "more equal" constituents were consulted in this bill.

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