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McMinnville council split on backing state 'inclusionary zoning' bill to lower unit threshold
Summary
A state bill to lower the unit threshold for inclusionary‑zoning ordinances from 20 to 12 units drew a cautious reception from McMinnville council. Staff said the city has previously sought the change so local governments can consider an ordinance; several councilors voiced concern about requiring developers to set aside units.
City staff asked the McMinnville City Council on Tuesday whether the council would support a proposed state bill to lower the qualifying project threshold for inclusionary zoning from structures of 20 units to structures of 12 units.
What the bill would do: Under the existing state law described by staff, a city may adopt a local ordinance requiring a portion of units in certain new developments be affordable. Current state statutory thresholds limit the rule to structures of 20 units or more; the proposed bill would make 12‑unit structures eligible so more cities could consider local rules.
Staff context and past work Heather Richards told the council that McMinnville has raised this change in earlier legislative sessions and that the city’s affordable housing task force recommended it; the city also enacted a construction excise tax that could be used to subsidize required affordable units if a local ordinance were adopted.
Council response Councilors expressed mixed views. Several councilors said they support giving cities the option to consider inclusionary zoning. Councilor Cunningham said the idea originated with McMinnville’s affordable housing task force and called it “rewarding” to see the legislature reconsider the change. But others said they were uncomfortable with a state‑enabled regulatory requirement that could compel private developers to include subsidized units.
Key fiscal and implementation questions Councilors and staff discussed how an inclusionary ordinance would be funded and whether the construction excise tax would be used to backfill developers for the subsidy. Staff noted the Portland experience — where developers sometimes built under the threshold or the city amended funding after rollout — and said successful programs often include some backfill funds.
Council direction No formal council endorsement was made. Several councilors asked for more detail and noted the “devil is in the details,” including who pays the subsidy, potential impacts on overall housing supply and whether the council prefers voluntary incentives over mandatory set‑asides. Staff said they would use the council’s feedback as the legislative group and the housing committee continue to evaluate the draft bill.
Ending note: Councilors asked staff to return with additional analysis of the city's construction excise tax balance and possible subsidy approaches before deciding whether to publicly support the state bill.
