How we dig out of our housing crisis: Lookout Editorial Board recommendations

Over the past few months, the Lookout Eugene-Springfield Editorial Board’s examination of Lane County’s homebuilding woes has taken us across the region. We’ve met with local homebuilders and developers, called politicians and leaders in local government, spoken with the heads of nonprofits and advocacy groups.

Toward the end of each conversation, we asked the same question: If you could snap your fingers and make one plausible change to get more housing built, what would it be?

Their answers helped inform the wide-ranging policy proposals we discussed in the first four parts of our series.

Now, we’re ready to give our recommendations.

More buildable land

We’ve heard the mantra over and over: Build up, not out. Focus on infill projects like apartments downtown, and middle housing like duplexes and townhomes in existing neighborhoods — not outward expansions with new subdivisions on undeveloped land.

How about yes to both?

We’re not arguing for Eugene and Springfield to open their arms to urban sprawl without reservations. But the depth of the supply crunch we’ve described will take an all-of-the-above approach to dig out of. Both cities are in the midst of multiyear, state-mandated analyses of their current land supply and future needs. Eventually, city planners will recommend to their respective city councils whether to add land and for what purposes.

We’ll do their work for them right now: Yes, add land. And make it for housing.

Development-friendly code changes in Eugene

For years, Eugene has missed out on easy chances to build more housing. The smallest lot size for single-family homes, 4,500 square feet, is bigger than in most of the cities Eugene compares itself to in terms of housing and business competitiveness.

That may not seem so significant in an age of “middle housing,” where anyone can build multiple units on a single lot. But the reality is, many homebuyers still prefer single-family houses.

Shrinking those lot minimums would allow any new subdivision to fit more single-family homes on a site. They would be smaller, closer together and likely cheaper as a result. The city is already weighing a reduction. It sounds like an easy win.

While we’re talking about Eugene’s development code, the city should acknowledge the depth of its housing crisis by loosening restrictions that limit construction in certain neighborhoods.

Eugene has roughly a dozen “Special Area Zones” covering parts of the city like downtown, the Whiteaker neighborhood, the Chambers Street corridor and others. They were created to guide development in ways that preserve the historic characteristics or natural features of a neighborhood.

Many were established in the early 2000s, in a far different housing market. We don’t mean to discount their goals, like reducing vehicle trips by encouraging walkable neighborhoods. But the city needs to prioritize its affordability crisis.

It can start by revising terms of the Royal Avenue special zone in west Eugene to encourage homebuilding — a step the city says could happen as soon as next year. Current restrictions meant to create mixed-use neighborhoods with housing, businesses and schools should instead prioritize as much housing as possible that’s affordable to a typical worker.

Lots could be smaller. Duplexes and cottages could be encouraged. Landscaping requirements could be waived.

Each year that housing isn’t built, it gets more expensive to build. So get the housing built now, and resolve any issues these loosened requirements might cause later. Yes, we are saying kick that can down the road.

Local and state financing flexibility

A friendlier development code could spur more housing. But financing is one of the biggest challenges small and mid-sized developers face.

A basic truth: Builders won’t build unless they see a chance to make a profit.

Cities know this, which is why Eugene, Springfield and other local governments use incentives like tax and fee waivers to help apartment developers close funding gaps. Cities lose revenue upfront, but get needed housing in return.

Those new tenants, in theory, make up for the revenue loss over time by getting jobs, paying taxes and spending their money locally. And eventually, the housing comes onto the city’s property tax rolls.

Eugene should expand one of its incentives: a utility and infrastructure fee waiver it currently offers apartment developers whose units are affordable to families earning 60% or less of Lane County’s median income. Raising the waiver threshold to 80% of the median, and offering payment flexibility for projects up to 100% of the median, could help developers overcome financing gaps they face before getting any income from rent-paying tenants.

The City Council already expanded another incentive, its downtown Multi-Unit Property Tax Exemption, to other parts of the city. It’s a smart move that can always be revisited, as the council has done in the past.

But councilors should also discuss whether to take advantage of rising property values in two of the more affluent corridors of the city — Coburg Road and Willamette Street south of 24th Avenue — by creating new urban renewal districts. These districts let cities use money from rising property taxes in an area to finance new development projects there. Eugene has committed more than $50 million in urban renewal funds to support the Downtown Riverfront project.

Yet progress has stalled there. And the reason has little to do with the city. Oregon law requires most housing projects receiving $750,000 or more in public funds to pay construction workers prevailing wages — essentially union wages.

Higher pay for trades workers of course seems like a good thing. But it puts cities in a catch-22: The financial support they provide to build housing can increase a project’s price tag by 10% to 20% when it triggers those higher wages.

A recent attempt by two Republican state lawmakers to reform the law fizzled amid strong pushback from unions, including the influential Oregon State Building and Construction Trades Council.

The unions are understandably protecting their members’ interests. But a housing affordability crisis is just that — a crisis. It’s time for the Democrats who control state government to grow a spine.

We urge them to work with Republicans and pass a law suspending the prevailing wage requirement for housing projects in any city or county that declares itself to be in a housing crisis. Lawmakers and housing policy experts should develop benchmarks that define that crisis point — perhaps when a city’s housing output falls a certain percentage below its projected need. We urge lawmakers to start that work in the upcoming legislative session.

Increase cooperation on housing and workforce development

Our recommendations so far have covered the nuts and bolts of building codes, financial incentives and government policy.

But big changes also take advocacy. Better communication between some of the region’s most powerful institutions wouldn’t single-handedly solve the challenges we’ve raised throughout this series. But it could help build support for some novel solutions.

The most obvious partnership is between the city of Eugene and the University of Oregon. The UO’s enrollment has stagnated, and at least two of its dorm buildings are underutilized. The city needs housing. Any effort to convert dorms into workforce housing would require extra funding that neither the city nor the university has right now. But if state government and private investors knew the city and university were willing to work together, perhaps some interesting solutions could be found.

That same logic applies to Eugene and Springfield’s relationship with Lane Community College, which trains many of the skilled tradespeople who build our housing. Lane County doesn’t have nearly enough of those workers. As a result, developers building apartments and subdivisions often rely on contractors from out of the area.

Shift the culture in Eugene

We’ve focused a lot of our attention in this series on Eugene. Nearly half of Lane County residents live within Eugene’s urban growth boundary. It’s where most of the jobs are, most of the construction is. And it’s generally where prices are highest.

Market forces have driven most of those price gains: Lots of people want to move here. Many come from California, escaping markets with even higher prices. Their “bargain” on a $750,000 house, or a $3,500 monthly rent, contributes to elevated prices across the housing affordability spectrum.

But for too long, the attitude of many longtime Eugene homeowners has been to fight new housing. We hear story after story of neighbors pressuring their city councilor or the mayor to step in and “save the character” of their neighborhoods.

Do homeowners own neighborhoods? No. They’re a public good, not a membership club. It’s past time for the Eugene residents who have benefited from decades of rising property values to welcome that opportunity for the next generation of homeowners.

The next time opponents of new housing take their concerns to the Eugene City Council, we would like to hear councilors respond: “Our housing situation is critical. Within reason, every kind of housing, everywhere, is needed.”

That would be a culture shift for Eugene. But what’s more progressive than helping people afford a place to live?

What’s next, and what we missed

It’s naive to think Lane County can climb out of such a deep housing deficit any time soon.

Nor can government policymakers eliminate the biggest private-market forces stalling new housing: inflation, which makes each unit more expensive to build; rising interest rates, which make it more expensive for governments and affordable-housing developers to get loans; a shortage of local building trades workers dating back to the Great Recession.

But could new ideas and different ways of thinking move the needle? We think so. At the very least, it’s worth trying something. Because what we’ve been doing clearly hasn’t been working.

We want to acknowledge the many Lane County housing issues our series didn’t address — like the affordability challenges young renters face, and the impact of rising prices outside the Eugene-Springfield urban core.

This series is only the start of our examination of Lane County’s housing issues, which we’ll continue to discuss throughout 2027.

Do you have an idea about how to build more homes, or a personal story you’d like to share about navigating the local housing market? Let the Lookout Eugene-Springfield Editorial Board know: lte@lookoutlocal.com