Last Sunday, Oregon’s legislative session ended with historic wins for the housing industry, as well as a last-minute, nail-biting defeat on a key bill for the industry. All told, the sessions challenges were plenty, with a sizeable class of inexperienced freshman legislators, as well a historic Republican walk-out which lasted 42 days. Through it all, OHBA staff and lobbying teams led by CEO Jodi Hack fought hard until the very last minute. Session Starts with a Bang. Similar to previous legislative sessions, this year witnessed the introduction of an extensive number of bills – nearly 3,000. OHBA’s dedicated staff and Government Affairs Committee undertook the herculean challenge of carefully reviewing each bill, determining our association’s level of support, opposition, and decision to monitor or participate in the legislative process. In total, HBA was involved in several hundred pieces of legislation at various stages of development—from legislative concepts to bill signings. Of course, housing was not the sole focus of the session, as lawmakers dedicated a significant amount of time and energy to various other issues. Notably, debates and legislation regarding gun control, abortion, and gender-affirming care consumed substantial attention. This, of course, led to the longest-ever walkout in our state’s history and stalled about a quarter of the session’s allotted time to legislate. We want to thank those of you who stepped up and offered your time and expertise to support this immense work. Especially important to our successes this session were those who provided in-person and written testimony, made phone calls, emailed legislators, and engaged through our CALLS TO ACTION – it truly made a difference! Thanks to all of these efforts we were able to block attempts to set the housing industry back and move us forward in several meaningful ways. We didn’t get all that we wanted but we’ll keep working to prepare for our next opportunity! Looking Forward. Our team is working on a more comprehensive 2023 Legislative Report/Summary that will include a multitude of bills and will go into greater detail. But for now, OHBA and the team are going to catch their breath for a few days and then get back to it with a new game plan on how we move forward planning for the rest of 2023 and moving into 2024! Below is a partial list of bills the Oregon Home Builders Association engaged in this session that we believe will make a difference for our members. HB 2001 – Establishing the Oregon Housing Needs Analysis. Passed HB 2001 stood as a priority housing bill that received extensive attention and months of dedicated effort from the OHBA team. This legislation established the Oregon Housing Needs Analysis, serving to determine housing allocations and production targets for cities with populations of 10,000 or more across the state. It also introduced provisions allowing the use of housing acceleration agreements or enforcement orders for cities that underperform in this regard. Additionally, the bill mandated that cities calculate and plan for lands that are ready for development while requiring the Oregon Facilities Authority to finance infrastructure and predevelopment expenses for moderate-income housing projects. OHBA staff actively engaged in two work groups that contributed to the recommendations shaping this bill. OHBA lobbyists collaborated closely with the Governor's office and legislators to enhance the bill, emphasizing the inclusion of the requirement for cities to inventory "development-ready lands," expanding beyond the notion of solely "buildable lands." Our concerted efforts aimed to refine and strengthen the bill's provisions to address the diverse housing needs across the state. HB 2889 – Modifying the Oregon Housing Needs Analysis. Passed HB 2889, commonly referred to as the "technical fix" bill, entailed multiple revisions to the Oregon Housing Needs Analysis (OHNA HB 2001, noted above). Notably, it introduced a specific definition for the term "development-ready lands" within the context of OHNA and provides new approaches for cities to utilize when designating Urban Reserves. OHBA lobbyists collaborated with legislators and various stakeholders to establish a definition of "development-ready lands" that garnered consensus, resulting in its inclusion within the statute. Our efforts aimed to ensure clarity and effectiveness in the implementation of OHNA and its associated provisions. HB 3395 – Omnibus Housing Package. Passed This session’s omnibus housing package incorporated many elements related to land use, life and safety standards, and funding for affordable housing. Among other things, it allows affordable housing on lands zoned for commercial use within urban growth boundaries, addresses allowances for single exits in multifamily dwellings, provided some needed updates to the regulation of condominiums, and residential approval procedures, subdividing for the development of affordable housing, single room occupancies, and siting of duplexes. It also includes an affordable homeownership revolving loan fund and an affordable housing loan guarantee fund. HB 3414 – Increasing Land Supply and Housing Production; Supporting Local Governments & Developers. Failed This was OHBA’s top-priority housing bill and key legislation for Governor Kotek. HB 3414 would have established the Housing Production & Accountability Office (HAPO). The HAPO would have assisted developers and builders in reducing permitting and land use barriers to housing production. It also would have directed the state to investigate and respond to local government violations of certain housing laws and would have limited the reasons that a local government may deny an application for adjustment/variance from land use regulations if the project was within an Urban Growth Boundary (UGB). It also included a one-time provision that would have allowed certain cities to bring land from the Urban Reserve into the UGG. It would have allowed cities with populations greater than 25,000 to expand their UGB by no more than 150 net buildable acres, and cities with a population of less than 25,000 up to 75 net buildable acres. There was an affordability percentage decided by local jurisdictions, developers, and landowners (totaling 30% for a combination of middle-income, workforce, and affordable multi-family rental units). OHBA issued several Calls to Action on this bill, multiple members testified on several occasions and staff worked tirelessly alongside legislators, the Governor, and her team in support of this bill. In the very last hours of session, the bill hit the Senate floor after passing out of the House. Eight Republicans and seven Democrats stayed strong by voting yes. But in the end, 10 Democrats voted no, while another 4 Republicans and 1 Independent were absent from the floor, leaving the bill to fail by just one vote. There was an opportunity for the Senate to take the bill up for reconsideration, but the Senate President would not allow the motion for reconsideration, leaving us with the vote as it stands, effectively killing the bill. Through it all, Jodi Hack, our affiliated state association’s (OHBA) CEO, led the hard-fought effort of this bill from concept to its near-passage in a session fraught with historic difficulties. Here are some articles published about the bill and our efforts to get it passed despite obstruction: https://www.opb.org/article/2023/06/24/oregon-legislature-housing-urban-growth-boundary-standoff/?outputType=amp https://www.oregonlive.com/news/2023/06/oregon-bill-to-accelerate-housing-development-with-change-to-urban-growth-boundaries-fails-by-1-vote.html HB 2192 – Rebuilding in Forest Zones After a Disaster. Passed Since 1997, Oregon law has allowed for a dwelling in a forest zone to be replaced after a natural disaster if it “has” the features of a dwelling such as exterior walls, a roof, plumbing, wiring, and heating. In 2022, Lane County interpreted the word “has” literally, meaning that if the dwelling no longer has these features after being destroyed in a disaster such as a fire, it cannot be replaced. HB 2192 changed the law to allow destroyed dwellings to be replaced as long as the dwelling is lawfully established. SB 82 – Insurance & Wildfire Risk Map. Passed After the publication of the Statewide Map of Wildfire Risk as directed by SB 762 (2021), many insured homeowners began to see increases in their insurance premiums or experience policy cancellations or non-renewals. To reassure the public that the map was not being used to inform these decisions, SB 82 prohibits insurers from using a statewide map of wildfire risk or exposure as a basis for canceling, not renewing, or increasing premiums on an insurance policy. SB 82 also requires insurers to send a notice to insured homeowners if the insurer cancels, does not renew, or increases the premium of their insurance policy for reasons related to wildfire risk. Further, insurers must post on their website whether and how wildfire risk mitigation actions may impact underwriting and rates, and what actions may result in discounts, incentives, or premium adjustments. HB 2984 – Office to Residential Conversions. Passed Allows conversion of buildings from commercial use to residential housing within urban growth boundary under certain conditions. Prohibits, for such conversions, local governments from enforcing parking minimums and limits collection of system development charges. SB 644 – Easing Development of Rural Residential ADUs. Passed Since 2017, several laws have been passed that changed the requirements for the construction of an Accessory Dwelling Unit (ADU) in a rural residential area. In 2021, SB 391 required the adoption of the statewide map of wildfire risk before a rural residential ADU could be approved. Since this map has not been yet approved, these ADUs were not allowed to be developed. SB 644 changed the law so that rural ADUs may be developed before the map is published if they comply with the R327 Oregon Residential Specialty Code. After the map is published, an ADU must comply with this code if it is in an area identified as having high or extreme wildfire risk. SB 611 / HB 3503 – Limiting Maximum Residential Rent Increases. Passed In 2019, the Oregon Legislature passed SB 608, which limited residential rent increases to 7% + the annual change in the Consumer Price Index (CPI). With high inflation in 2022 due to the COVID-19 pandemic, the maximum allowable increase for 2023 was determined to be 14.6%. In 2019 OHBA lobbyists successfully negotiated the 15-year exemption provision for new construction and remodels – OHBA and our partners ensured that the provision was protected again this session and remains intact. SB 611, the version that passed, changed the maximum rent increase formula from 7% + CPI to the lesser of either 10% or 7% + CPI. SB 4 – Utilizing the Federal CHIPS & Science Act (Semi-Conductors). Passed In 2022, Congress passed the CHIPS and Science Act (CHIPS Act) to increase US-based semiconductor production and protect the country’s computer chips supply chain. The CHIPS Act included $52 billion to support these efforts. In response, the state initiated the Oregon Semiconductor Readiness Task Force (Task Force) to determine opportunities to secure federal funding for Oregon’s semiconductor industry and expand manufacturing. Of importance to the real estate industry was the Task Force’s recommendation to bring in new industrial lands to our UGBs to support the development of the semiconductor industry. SB 4 addressed this by allowing the Governor to designate eight new sites – two of 500+ acres and six of less than 500 acres – to be brought into UGBs for industrial uses related to the semiconductor industry. SB 4 also established the Industrial Lands Loan Fund to provide financial assistance for related development projects, in addition to allowing the state to leverage more than $200 million in state spending to bolster Oregon’s semiconductor competitiveness. HB 3409 – The Very Large Omnibus Climate Package. Passed This was a very large (112-page) last-minute giant omnibus climate bill containing provisions from 15 policy bills, posted with little notice. Items contained in the bill range from solar rebates, incentives for purchasing heavy-duty electric trucks, allowing local governments to regulate greenhouse gas, adopting building codes that exceed state requirements (formerly contained in SB 869 and 870), and the reopening of the state’s goals around greenhouse gas reduction (this provision was ultimately removed from the bill) and modifications to the Global Warming Commission now the Oregon Climate Action Commission. OHBA lobbyists were able to work with other stakeholders, legislators, and departments to amend HB 3409 at the very last days of the session to address our serious concerns. HB 2057 — Contractor Wage Liability Bill. Failed The bill would have imposed liability for wages on a general contractor whenever any subcontractor hired did not pay wages owed to the subcontractor’s employees. Thankfully due to the hard work and efforts of many stakeholders working with OHBA lobbyists, the bill remained on the Senate President’s desk when the legislature adjourned. This bill has been a priority for a certain legislator for many sessions and we expect it will return. HB 2426 – Self-Serve Gas. Passed The legislature finally passed the bill that will allow self-serve options in Oregon’s gas stations this session. The bill requires that gas stations still staff half of their pumps for those customers who still do not wish to pump their own gas. I-5 Bridge Funding Up-Date – $1B Secured to Move Project Forward. Passed Following this dedication, the state will be eligible to apply for large federal grants to replace the I-5 bridge. HB 5005, known as the bonding authorization bill, dedicated $250 million in general obligation bonds for the upcoming biennia with some additional authorizations for future GO bonds ($250 million in each of the next three biennia). This gets the state to the $1 billion commitment needed. The grant application process is the next step. SB 976 & HB 3010 – Eliminating 2nd Home Mortgage Interest Deduction & Adding Means Testing. Died The Mortgage Interest Deduction (MID) is an important tool for homeownership. These bills would have eliminated the MID for households with incomes greater than $250,000 and would have phased down the allowable amount that can be deducted through the MID for households with incomes greater than $200,000. These bills failed to pass.