Oregon Governor Signs Bipartisan Legislation Dedicating $200 Million to Homelessness Crisis

Oregon Governor Tina Kotek signed two bills, “House Bill 2001” and “House Bill 5019,” that collectively dedicate more than $200 million to support people experiencing homelessness, keep renters stably housed, and boost affordable housing production. The funding package fulfills Governor Kotek’s request, announced in her inaugural address, for the legislature to swiftly approve major investments that address unsheltered homelessness (see Memo, 1/30). HB 2001 also includes provisions to implement the Oregon Housing Needs Analysis (OHNA) system, which requires cities with at least 10,000 residents to regularly study their housing production needs across a range of affordability levels and housing types and take action to facilitate needed development via their zoning codes, permitting processes, and other levers controlled by local jurisdictions.

“This early session package of policy and funding is an essential first step by the 2023 legislature to address Oregon’s affordable housing and homelessness crisis,” said Cameron Herrington, director of policy and advocacy at the Oregon Housing Alliance. “The Oregon Housing Alliance and its member organizations strongly support the elements of this package, which address the needs of Oregonians who are currently unsheltered and unstably housed while also putting in place measures to address our long-term housing supply shortfall. As this legislative session rounds the corner into its second half, we are now focused on bills such as SB 611, which will protect tenants from massive rent hikes, and SB 976, which will reform the state mortgage interest deduction in order to stop subsidizing vacation homes and instead invest in first-time homeownership and programs to provide housing for those who are homeless.”

"While the recent funding package is a significant step forward in addressing Oregon’s housing crisis, there is no doubt that further action is needed,” said Kevin Cronin, director of member services and industry support at Housing Oregon. “Advocates are pushing for bills in the 2023 legislative session to increase affordable housing production and strengthen tenant protections. SB 611 is a prime example of this effort. Although the bill has been amended to limit its scope, tenant leaders and housing advocates remain committed to its passage as it moves to the full Senate and House. Additionally, the resources allocated in HB 5005 are critical to achieving Oregon’s statewide housing production goal of 36,000 new units per year and closing the deficit of 109,682 deeply affordable homes. There is much work to be done, and Housing Oregon is committed to collaborating with partners like the Oregon Housing Alliance to ensure that everyone has a safe, stable, and affordable place to call home."

The $200 million legislative package passed both houses of the state legislature with unanimous support from Democratic members and support from nearly half of Republican members. Governor Kotek signed the bills into law on March 29. The package includes $85.2 million to help people experiencing homelessness move into permanent homes and to expand shelter capacity. The package also contains:

  • $33.6 million for eviction prevention and diversion services to help nearly 9,000 households stay in their homes.
  • $1.6 million for the state Office of Emergency Management and Oregon Housing and Community Services to coordinate the response to Governor Kotek’s executive order declaring a homelessness state of emergency in counties with the steepest increases in unsheltered homelessness (see Memo, 1/30).
  • $27.4 million to address homelessness in rural areas that were excluded from the homelessness state of emergency.
  • $24.9 million to serve youth experiencing homelessness and to provide young people and families with rental assistance, shelter, and mental health or substance abuse treatment.
  • $20 million to encourage production of modular homes.
  • $5 million to support members of Oregon’s nine federally recognized tribes that are experiencing homelessness.
  • $5 million to improve health and safety conditions in farmworker housing.
  • $3 million in revolving loans to pay for predevelopment costs for homes affordable to people earning between 80% and 120% of Area Median Income (AMI).
  • $2.3 million to cities and counties for sanitation services.
  • $200,000 to develop a long-term statewide rental assistance program.

Although the package represents a significant step forward in addressing homelessness and housing instability in Oregon, Governor Kotek acknowledged that the crisis will not be solved immediately and that further action is needed. Housing advocates are pushing for additional bills in the 2023 legislative session to increase affordable housing production, redirect funding into affordable housing, and strengthen tenant protections.

The Senate Committee on Housing and Development held a hearing on Monday, April 3, on SB 611, which would decrease maximum allowable annual rent increases under the state’s rent stabilization law. As introduced, the bill would have decreased the cap from 14.6% to 8%, narrowed the exemption for new construction to cover homes constructed within the past three years (rather than the 15 years required under current law), and provided relocation assistance to tenants who experience no-fault evictions. The bill was amended before passing out of committee on a 3-2 vote. The amended bill would change the rent increase cap to 5% plus inflation, with a maximum cap of 10%, and would neither narrow the new construction provision nor provide relocation assistance. Despite these amendments limiting the scope of the bill, tenant leaders and housing advocates will continue to push for passage of SB 611 as it moves to the full Senate and House.

The Senate Finance and Revenue Committee will hold a hearing on Wednesday, April 19, on SB 976, which would reform the state mortgage interest deduction and reinvest tax revenues in affordable housing. SB 976 would eliminate the state mortgage interest deduction for second homes and phase out the deduction for households with incomes above $200,000. The deduction would phase out completely for households with $250,000 or more in adjusted gross income. Recaptured revenue that would otherwise go to claimed mortgage interest deductions will be invested in a new Oregon Housing Opportunity Account, which would fund homelessness prevention and affordable homeownership opportunities for communities of color and low-income families.

The Joint Ways and Means Subcommittee on Capital Construction held a hearing on Friday, March 31, on HB 5005, which would allocate $770 million to the Local Innovation and Fast Track (LIFT) Rental Housing and Homeownership programs, $130 million to Permanent Supportive Housing, and $450 million in federal Private Activity Bonds to Oregon Housing and Community Services to facilitate affordable housing development and preservation. These resources would enable the state to make progress towards its statewide housing production goal of 36,000 new units per year, as established in Governor Kotek’s executive order on housing production. According to NLIHC’s Gap data, there are only 23 affordable and available homes per 100 extremely low-income renter households in Oregon, which amounts to a deficit of 109,682 deeply affordable homes. Eighty percent of extremely low-income Oregon renters are severely cost-burdened.

For more information on housing and homelessness priorities in Oregon’s 2023 legislative session, contact Brian Hoop, executive director of Housing Oregon, at [email protected], or Cameron Herrington, director of policy and advocacy at the Oregon Housing Alliance, at [email protected].