2021 Legislative Session Recap: Building & Maintaining Affordable Housing

The 2021 Legislative session included a number of proposals to build and maintain affordable housing, including changes to our land use laws to make it easier to build affordable housing. Read on for details on what was proposed and what passed this session.

Increasing our supply of safe, stable, and affordable housing across Oregon (SB 5505): Since 2015, developers have successfully utilized general obligation bonds to build affordable housing through the LIFT Housing program.  The Legislature allocated $410 million in Article XI-Q General Obligation bonds for both LIFT and Permanent Supportive Housing this biennium!

Preserve and Maintain existing affordable housing (HB 5006): Funds are needed to help to maintain all regulated, multifamily affordable housing, as well as public housing and manufactured home parks. The Legislature committed $100 million in general fund dollars to meet needs to maintain existing affordable housing across Oregon.  

Increase permanent supportive housing across Oregon (SB 5505HB 5006HB 5011): Permanent supportive housing is key to ending homelessness for people who experience health conditions or addictions disorders. The Legislature committed General Obligation Bonds to develop new supportive housing across Oregon (see above note for LIFT), and committed $12.2 million for rent assistance and services for projects funded during the 2019-21 biennium, and $1.6 million for rent assistance and services for projects funded during the 2021-23 biennium.  

Allow the development of regulated affordable housing (SB 8): SB 8 removes barriers to affordable housing development by: allowing affordable housing to be built in land currently zoned for commercial land, publicly owned land, and religiously owned land; creating a statewide density bonus for affordable housing; and broadening eligibility for SB 8 (2019) to allow more affordable housing developments to be eligible for attorneys fees when  projects are challenged to LUBA. This bill passed.  

Oregon Affordable Housing Tax Credit (HB 2433): The Oregon Affordable Housing Tax Credit helps to build and maintain affordable housing. The Legislature made several technical changes, and increased the cap for the credit to $35 million per year in HB 2433, which passed.

Property Tax Exemption Updates (HB 2456): Over the years, the Legislature has authorized several local option property tax exemptions for affordable housing. HB 2456 updates two local option property tax exemptions to align with federal income averaging flexibility, and allows a property tax exemption to remain in place even if the incomes of residents of the units rises to 80% AMI. This bill passed.

Property Tax Exemption, sunset extension (HB 2446): In 2015, the Legislature allowed projects that had previously qualified under ORS 307.130 to maintain their exemption in order to maintain affordable housing in communities across Oregon. The Legislature extended the sunset on this exemption to 2028. This bill passed.

Access to surplus lands (HB 2918): HB 2918 would require local jurisdictions to report surplus lands and to create a database operated by Department of Land Conservation and Development. In addition, the bill would require local jurisdictions to develop a process for using surplus lands for affordable housing. This bill passed.

Expand the Agricultural Workforce Housing Tax Credit (HB 2433): The Agricultural Workforce Housing Tax Credit builds affordable housing for agricultural workers and their families. An expansion to $16.75 million per biennium for this Tax Credit was included in the omnibus tax credit bill., HB 2433, which passed.

Incentivize preserving existing affordable housing (HB 3364): Across Oregon, we have homes built with federal dollars that are nearing the end of their use restrictions, and are at risk of conversion to market rate housing. HB 3364 would create a tax credit to incentivize the preservation of regulated affordable housing. This bill did not move forward.

Rent stabilization and affordable housing (HB 3113): HB 3113 removes the exemption for affordable housing from SB 608 (2019) and requires that affordable housing developers comply with maximum rent increase limits with two exceptions – when the rent is based on the tenant’s income, and the increase is as a result of an increase to the tenant’s income, or the rent can be increased without changing the tenant’s portion. This bill passed.
Other bills related to development, land use, and preservation which passed this session:

  • HB 5011 included $10 million for OHCS to develop a proposal with the Early Learning Division a grant proposal to support the colocation of affordable housing and early learning or child care centers. The budget note language on this proposal requires OHCS and ELD to develop the grant program before the release of funds.
  • HB 5011 included $5 million for gaps in affordable housing projects due to higher than expected construction costs.
  • HB 2095 would make technical changes to the publicly supported housing preservation work, and require tenants to be notified if a building is opting out of affordability requirements.
  • HB 3318 would expand Bend’s UGB, and require a certain number of acres be dedicated to income restricted affordable housing.
  • HB 2160 expands Pendleton’s UGB for affordable housing.
  • HB 2008 allows by right affordable housing on land owned by religious institutions, and provides  property tax exemptions for housing on land owned by religious institutions.
  • HB 5006 included $100 million for wildfire recovery including housing development, construction, infrastructure, rebuilding, down payment assistance, loans, and more. SB 5534 included $50 million for wildfire recovery housing including land acquisition and housing development.
  • HB 5006 included $30 million for land acquisition or naturally occurring affordable housing acquisition.
  • HB 5006 included $2 million for DLCD for planning and capacity building related to housing needs and $1.3 million for DLCD to incorporate RHNA findings into state and local planning processes.
  • HB 5006 included $4.8 million for fair housing.
  • HB 3040 funded a study of system development charges and their impacts on housing development.