The governor wanted $700 million for affordable rentals. Oregon lawmakers slashed that

Legislators in Oregon are on track to spend hundreds of millions less on the construction of affordable housing than Governor Tina Kotek had requested.

There will probably be thousands fewer rental properties constructed and designated for low-income Oregonians as a result.

In order to finance new, reasonably priced rentals, Kotek requested that lawmakers authorize $700 million in bond funds for Oregon’s trademark Local Innovation and Fast Track rental program. It has been in operation for almost ten years, and according to the state housing finance agency, that sum would cover roughly 7,000 new apartments.

Legislators are now considering allocating just $468 million, or around 4,700 homes, to the LIFT rental program.

Kotek was not pleased with that. In a statement to The Oregonian/OregonLive on Wednesday, her spokesperson stated that although the $468 million will undoubtedly help more Oregonians live in affordable housing, fewer state funds allocated to affordable rental housing units will hinder Oregon’s efforts to reverse the state’s housing affordability and homelessness crises.

The Joint Committee on Ways and Means advanced Senate Bill 5505, which authorizes LIFT expenditure, on Tuesday.

The governor’s budget for the construction of affordable for-sale homes ($101 million) and so-called permanent supportive housing ($81 million), which is designed to incorporate assistance for those leaving homelessness, was approved by the committee.

However, the governor’s housing program, which blends two different cultures, is severely damaged by the significant alteration to Kotek’s LIFT rental proposal.

Deregulation of the free market is the first. Kotek has pushed for the suspension of levies that fund Portland’s parks and other infrastructure in an effort to encourage developers to come forward during a downturn in home construction. Additionally, she supported zoning changes that expanded the number of townhomes and other middle-class housing options in Oregon’s single-family areas.

However, like LIFT, the traditional left wing of the Democratic Party’s housing agenda is focused on large investments to support manufacturing.

Only two-thirds of Kotek’s LIFT rental proposal is included in the Legislature’s draft budget, which takes into account the state’s several objectives and the bleak revenue prediction the Legislature got in May.

House Minority Leader Christine Drazan of Canby cautioned at a separate committee meeting on Tuesday against relying too much on LIFT for new building because general fund funds are used to pay for bond debt service and potentially overshadow other state needs.

Drazan stated before the Joint Committee on Ways and Means Subcommittee on Capital Construction that the LIFT initiative had been accelerated in recent years. Later on, she added, we must decide whether to cease relying so heavily on the state taking on the role of residential developer and when to let these initiatives lie and rest.

Senate Bill 684, one of the other housing-funding legislation under consideration, would address funding gaps for new apartment complexes and establish a revolving loan fund in exchange for the inclusion of affordable units.

The law would create a fund enabling apartment developers to obtain low-interest gap loans to augment traditional construction loans, all in an effort to make the developments financially viable. This idea was inspired by a Maryland scheme.

Before SB 684 cleared the Senate on Tuesday with a nearly unanimous vote, Senator Dick Anderson, a Republican from Lincoln City, stated, “Hopefully, this bill gets us back into the production arena.”

Initially, backers wanted the loan fund to have between $25 million and $100 million. However, it’s unclear how much SB 684 would get in the budget if it passes both houses.

Before the quickly approaching end of the session, Kotek could advocate for additional rental construction subsidies in the meantime.

According to her spokesperson, Roxy Mayer, the Governor’s Office will be looking over the end-of-session budget to find ways to make the most impact and keep building on the success Oregon has made.

Stories by

Jonathan Bach

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