OP-ED: Oregon cities facing balancing act in implementing HB 2001

Keenan Ordon-Bakalian

At the Metro Technical Advisory Committee (MTAC) meeting on Jan. 15, the committee was briefed by staff from the Oregon Department of Land Conservation and Development (DLCD) regarding the ongoing implementation of recently adopted HB 2001, also known as the “Missing Middle Housing” bill.

Requirements for large and medium cities

The Oregon Legislature passed HB 2001 on the final day of the 2019 session in an attempt to allow for greater housing choice and increased supply in residentially zoned areas. In passing the bill, the Legislature identified what it believes to be a significant lack of supply of middle housing, which bridges the gap between single-family homes and mid- or high-rise apartment buildings. Affected cities are required to update their local regulations, which have previously limited what types of housing could be built. Supporters of the bill argue that those limitations led to increased housing costs across the state. However, many people believe the bill will negatively impact neighborhood character and accelerate housing displacement, especially within Portland city limits.

Implementation of HB 2001 is of primary concern to the Metro Council, because its impact will be felt most significantly by metro cities, which are largely defined as “large cities” under HB 2001. These include cities with a population greater than 25,000, unincorporated areas within the Portland-metro boundary that are served by sufficient urban services, and cities within the Portland-metro boundary with a population greater than 1,000.

The bill requires all large cities to allow construction of additional “middle housing” inventory beyond duplexes. These include fourplexes, multiplexes, accessory dwelling units (ADUs), and cottage clusters of homes centered around a common yard.

HB 2001 affects cities statewide, including sizable ones like Bend and Medford, but also smaller ones like Newport and Pendleton. These “medium cities,” as defined in HB 2001, are all those “outside the Portland-metro boundary with a population between 10,000 and 25,000.” HB 2001 requires medium cities to specifically provide for construction of duplexes in areas zoned for single-family dwellings.

In addition to specific changes to local development regulations, HB 2001 also imposes new limitations on, for example, zoning and development standards relating to ADUs, CC&R provisions relating to middle housing in residential neighborhoods, and building codes.

The bill does provide some flexibility for medium and large cities to regulate siting and design of middle housing, provided that the regulations do not, individually or cumulatively, discourage development of all middle housing types permitted in the area through unreasonable cost or delay. The bill also provided $3.5 million for technical assistance to cities, and DLCD has been tasked to work with local governments to update their codes and implement the specifics of the bill by mandated timelines.

Deadline for new regulations

Medium cities have until June 30, 2021 to adopt local code sections implementing HB 2001 requirements. Large cities have until June 30, 2022 to do the same. While affected cities may request an extension from DLCD due to infrastructure deficiencies, if the extension is not approved by DLCD and the city fails to develop regulations implementing middle housing by the applicable deadline, a model code promulgated by DLCD will apply directly.

DLCD has a deadline of Dec. 31, 2020 to adopt a model code for all affected cities. DLCD noted at the MTAC meeting that this is a significant undertaking, because the bill requires promulgation of a code that will be generally applicable to all affected cities, while at the same time accounting for the fact that cities across the state face diverse planning and infrastructure challenges.

Impacts of HB 2001

The cumulative effect of HB 2001 on metro-area cities – where the bill will have the most acute impact – remains to be seen. The city of Portland is in the process of undertaking its own Residential Infill Project, which will allow for additional middle housing in conjunction with the requirements of HB 2001. Additionally, the city is revising its rules around multifamily housing, called “Better Housing by Design.”

Another metro-area city, Beaverton, is in the process of developing its own Housing Options Project, which is designed to increase middle housing inventory within existing neighborhoods. However, because affected cities are still in the planning stages of implementing HB 2001, the implications of the bill will not be fully revealed until new housing development comes online.

Beyond the impact to Oregon cities, the bill will also require private developers to adjust market strategies and long-term planning objectives. Small-scale developers have historically been the most active builders of middle housing, while major developers have focused on large single-family homes in suburban areas or high-density multifamily projects. It is not clear whether HB 2001 will encourage major developers to become more active in the middle housing arena.

Further, national studies have provided conflicting answers as to whether denser zoning leads to additional construction. It is highly likely that Oregon cities will see dramatically different effects when the new middle housing regulations come online. Certain cities will see a dramatic increase in middle housing supply, while others may see a less tangible change, due to infrastructure constraints, market demand, and siting and design requirements – which will vary from city to city.

HB 2001 will require private developers to engage in a complex balancing act, simultaneously striving to achieve the bill’s goal of creating more housing, while at the same time navigating shifting market demand and new development regulations.

Keenan Ordon-Bakalian is an attorney in Jordan Ramis PC’s land use and development practice group. Contact him at 360-567-4843 or keenan.ordon-bakalian@jordanramis.com. This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.