Senate committee hears SB 49 housing‑production package; inclusionary zoning and local control draw debate

Senator Khan Pham, chair of the Senate Committee on Housing and Development, opened a March 5 public hearing on Senate Bill 49, a six‑part “Housing Production Accelerator” that sponsors said is intended to remove small regulatory barriers and increase housing production across Oregon.

“Making it easier to build housing has to be our North Star right now,” Senator Khan Pham said, introducing the bill and describing her perspective as both the committee chair and a small residential developer. Pham said the proposal is intended to reduce delays and uncertainty that add cost to housing projects. “Each of these six fixes in the Housing Production Accelerator Bill, SB 49, were brought to me by a developer or housing policy expert to address a specific challenge,” she said.

Michael Anderson, a researcher at the Sightline Institute, described the bill’s six components as relatively low‑cost, shovel‑ready policy changes: (1) legalizing incremental development by removing some mandatory minimum density rules for larger cities during a future planning cycle, (2) applying model zoning codes to provide a crosswalk between state model ordinances and local zones for larger cities, (3) streamlining up‑zone procedures and offering deferral options for certain planning analyses, (4) protecting council‑approved zoning by limiting design‑review processes from effectively reducing allowable density, (5) revising state guidance on mandatory inclusionary zoning (IZ) to add local flexibility and require periodic program “check‑ins” and funding commitments, and (6) adding residential expertise to the Building Code Structures Board.

Senator Pham emphasized the urgency: “I’m deeply alarmed to learn that last year, only 1,000 homes were permitted in Portland in 2024, while just 2 years earlier in 2022 4,100 homes were permitted,” she said, using those numbers to illustrate a perceived statewide production decline and the need for multiple approaches.

Supporters framed the bill as a practical way to clear administrative obstacles. Brian Hoop, executive director of Housing Oregon, testified in strong support, saying the bill “takes a practical approach to clearing red tape, making zoning work better, and giving local governments more flexibility to support housing development.” Developer and nonprofit witnesses — including Sarah Zahn of Security Properties and Oregon Smart Growth, Diane Lynn of Proud Ground, Sarah Radcliffe of Habitat for Humanity Portland Region, and Tim O’Brien of Urban Asset Advisors — urged the committee to preserve Section 5’s focus on inclusionary zoning flexibility while ensuring funding mechanisms to close affordability gaps.

Proponents said the inclusionary zoning reforms are intended to avoid the unintended consequence of unfunded mandatory IZ mandates that can discourage building. Anderson summarized that a balanced mandatory IZ program must fund the gap between market rents and the mandated below‑market units so the mandate does not render projects financially infeasible.

Opponents raised multiple concerns. The League of Oregon Cities, Metro, the City of Hillsboro, Central Point, and other municipal witnesses said the bill would strip local discretion, increase administrative burdens, and shift costs to underfunded cities. Alexandra Ring of the League of Oregon Cities said the bill “was developed without the input of practitioners on the ground or city planners” and said cities do not currently have the funding to operate the new IZ framework in the dash‑1 amendment. Metro’s Kyung Park warned that removing minimum density requirements could “result in expansion of the urban growth boundary, urban sprawl into our forests and farmlands,” and urged caution because minimum densities help encourage infill inside UGBs.

Preservation advocates said Section 4 — which would prevent a design‑review or other reviewing body from effectively reducing allowable density set by council zoning — risks eroding locally adopted historic protections. Carrie Richter of Restore Oregon asked the committee to “strike section 4,” saying the change could permit development that bypasses locally adopted landmark protections without adequate public notice.

Industry groups raised different objections. Multifamily Northwest questioned the dash‑1 inclusionary zoning thresholds and cost offsets and recommended a higher size threshold for mandatory IZ, shorter affordability periods, larger fee waivers, longer or larger tax abatements, and removal of a prevailing‑wage requirement that the group said would increase costs. Jerry Milner, a retired real‑estate professor, argued the IZ changes amount to a development tax or partial rent control that could reduce development activity and favored tenant‑portable voucher strategies instead.

Several witnesses urged compromise and further drafting. Advocates asked the legislature to require cities to fund any mandatory affordability requirements or to keep IZ optional where unfunded; cities urged more local consultation and capacity supports; and the senator acknowledged the bill is a work in progress and that many components could be narrowed, delayed, or removed in later amendments.

No formal vote was taken. The committee carried over public testimony given the length of the sign‑up list and signaled that sponsors will return with further amendments. Committee staff and the sponsor said they expect additional drafting — including potential scaling back or removal of the minimum‑density provision and refinement of IZ language — before the bill proceeds.

What to watch: whether the sponsor narrows or drops the minimum‑density changes, what funding mechanisms or tax abatements are proposed to support mandatory inclusionary zoning, and whether preservation and city groups secure carve‑outs to protect historic resource review.