City council, planning commission discuss housing production strategies

By Sarah Brown
Lebanon Local

The planning commission and city council held work sessions Feb. 22 and March 8 to review strategies for housing production that could encourage development to support the growing city’s needs.

The February work session focused on strategies for multihousing units while the March work session was used to address single-family and home ownership strategies.

An analysis completed in 2019 identified housing needs in Lebanon. By recent state law, the city is required to consider ways to promote development of housing that would fulfill the needs of all demographics through a Housing Production Strategy, which should be implemented during the course of an eight-year cycle. The City of Lebanon hired Cascadia Partners to work with the council in the production of the document.

The 2019 analysis showed that Lebanon’s population of about 18,500 has an average household income of $45,200 with an average home value of $428,000. Fifty percent of the community’s households are renters, which was a much higher percentage than county and state numbers (which hover between 34% and 37%).

Senior Associate Rachel Cotton, Cascadia Partners project manager for the housing production strategy project, said 25% of Lebanon renters and 16% of homeowners are cost-burdened (meaning they’re spending more than one-third of their income on rent). She also noted that 30% of Lebanon renters are seniors (65+), another figure found higher than those in Linn County and in the state.

The analysis identified a need of about 2,500 additional housing units, of which about 1,200 should be renter-occupied, Cotton said. More than 550 rental units were constructed and around 150 units went up for sale since 2019, and another 133 sellable units are scheduled to be constructed. Yet with such a “healthy, robust” development of housing, about 1,350 single family homes, 230 multi-units and 115 manufactured homes are still needed.

While there has been a really healthy amount of rental housing development for middle and upper income households in recent years, rental housing targeted at low and extremely low households is still needed,” she said.

According to their data, the average homeowner in Lebanon makes about $63,300 and the average sale price of a home in the past year is $399,500.

To afford a home at that price, a household would need to make $93,000,” Cotton said. “So housing prices for homeowners are also becoming unaffordable and unattainable.”

The production strategy presents strategies directed at these obstacles, she said.

Urban Planner Jamin Kimmell of Cascadia Partners said Lebanon is looking at four key issues: the city needs to produce single-family dwellings at a faster rate to meet long-term needs, home prices are increasing rapidly and homeownership is out of reach for many local residents, there are code barriers to providing rental housing at prices that are affordable to the local market, and new rental housing serving lower income households needs some form of public subsidy or incentive to be built.

Kimmell provided some recommended strategies to target those needs, such as encouraging the development of smaller (more affordable) single-family houses for sale, promote cottage cluster housing, change multihousing (apartment) parking and open space standards, and allow tiny homes on wheels.

The challenge here is how can the city encourage rental housing development that would help meet the need for units that are affordable to those lower incomes,” he said. “There’s a range of things the city could do, and some of them involve providing financial incentives to a developer or helping to fund an affordable housing project that specifically targets those lower income households.”

But some of the city’s development codes are also presenting barriers, Kimmell said. He suggested reducing the minimum required site area per unit, required open space area and number of parking spaces per unit. Doing so would allow developers to place more apartments on a site.

Allowing more units is likely to lead to greater overall housing affordability in the market,” he said. “That’s based on research that shows that generally more housing supply is found to put a downward pressure on citywide average rents or prices over time. By allowing more units per site, you’re building up that supply to try to overcome the shortage in the market and what’s contributing to those rising prices.”

The only potential drawback Kimmell found in those recommended code changes was a chance for more cars to end up parking on-street, but he also found the current code requires more parking spaces than are generally needed.

Discussion by the councilors and commissioners at the Feb. 22 meeting centered around parking and open space requirements. Some at the table indicated a desire to maintain Lebanon’s standards for open space, while others agreed to make a small change in an effort to help provide housing.

Councilor Michelle Steinhebel and Commissioner Kristina Breshears noted that many in the community who fall under the cost-burdened category are either elderly or low income, in which case neither usually require more than one parking space.

Commissioner Marcellus Angellford said he believes reducing the parking standards would be a negative impact on the people who would live in those housing units. He also spoke to the statement about more apartments equating to cheaper rent.

The guiding assumption here appears to be, ‘If we build it, then there’s going to be more of it and then magically somehow it’s gonna be cheaper,’” Angellford said. “ I think that’s an incredibly flawed assumption. I think the market rates and everything else is going to bear out that people that own these properties are going to charge what they can get, and what they can get is what they’re gonna charge.

It’s not just about Lebanon. It’s about people that are in transient conditions in Albany and Salem and Sweet Home, and say, ‘Hey, there’s more housing cheaper in Lebanon,’ and swoop, here comes all these people descending on Lebanon and whatever benefits we might’ve thought we were gonna get, it canceled out by the increased demand of other people coming in.”

Angellford said he’d like evidence to prove certainty that the recommended code changes would result in the apparent promises being made.

Commissioner David McClain agreed with Angellford’s stance, adding that he has watched the city grow over the last 30 years and it’s up to them to take into consideration Lebanon’s liveability for the next 50 years.

Community Development Director Kelly Hart suggested the City consider cleaning up its “convoluted” code language pertaining to open space requirements, but McClain said they should give consideration to why Lebanon’s past decision-makers made the code requirements. Commissioner Shyla Malloy responded to McClain by pointing out the size and needs of the city are much different today.

We would like to keep Lebanon distinct,” Angellford said. “We would like to keep the values that we have in Lebanon.”

He didn’t want to see Lebanon get “gobbled up” by Portland-style complex housing, he said.

We have unique things about us that we should take pride in and we should retain, and not allow our city to be dictated to by the State of Oregon,” Angellford said. “We do need to evaluate the city for how it’s changed. At the same time, we need to be very careful because if we give certain things away, they will not be things we can reclaim later.”

Commissioner Lory Gerig-Knurowski and Councilor Jeremy Savage agreed it’s important to make at least a small change, suggesting they reduce the open space requirements by only five percent and clean up the code language. Mayor Ken Jackola said he’s opposed to reducing the parking, but agreed with the others about reducing the open space.

(We need to) respect peoples’ decisions in the past and hope they respect ours when they have to live the consequences of our decisions today,” McClain chimed in.

Hart clarified the group wasn’t required to settle on specific changes to the code.

The housing production strategy is identifying whether the city is willing to do additional research that may or may not result in a code change,” she said.

During the March 8 work session – a discussion held only by the city council prior to its regular meeting – Hart presented options for single-family and homeownership strategies. She gave an overview of current housing types in Lebanon as well as other options in city codes (created in 2008) for developers to utilize, most of which, Hart pointed out, are rarely used or require modification to be compliant with state law.

“Our latest codes from our code in 2008 has not been effective,” she said. “Through the housing production strategy, we have the ability to recalibrate some of these tools and create new tools to try to achieve that goal of different housing for the different level of income.”

Within the last few years, while working on the housing needs analysis and production strategies, the City held focus groups with different stakeholders, including developers. The developers, she said, indicated that a lot of the codes don’t work for them or fit with what the market actually does, which is why they’re not developing certain types of housing.

Two codes need to be modified to comply with state law: simply infill design standards and modify manufactured housing and park standards. Hart also suggested modifying and simplifying current codes that are not being used. Those are: density bonus provisions, cottage cluster housing and multifamily apartment standards, and provide more flexibility for housing commercial zones.

Two new concepts Hart suggested the City consider adding into their codes include allowing tiny homes on wheels and creating new small-lot detached single family homes.

“I get a number of calls a year requesting to either do a tiny home as an accessory dwelling unit on their existing single-family home property, or we’ve had a number of property owners that have had an interest in doing the concept of tiny home villages,” she said.

City Manager Nancy Brewer said there are tiny home dwellers who go from campground to campground and there are those who remain at one place for six months or so. But she also noted the pandemic created a surge in traveling nurses using tiny homes as they worked in a city for several months at a time.

Councilor KJ Ullfers said he’s been interested in the tiny home village concept, but with the home on a foundation rather than on wheels. Hart responded that falls more into the cottage cluster concept.

She also offered an option to allow for single-family homes on lots sizes of 2,500 to 3,000 square feet. Not only does that provide more affordable housing, but numbers indicate the developers can make more profit with that option.

Cottage clusters allow for smaller single-family detached housing on lots with a communal courtyard or open space. These are more affordable units useful for seniors and starter homes, Hart said. Cottage clusters are allowed in Lebanon, but developers don’t build them because the code allows for only four houses per lot.

Touching on the topic of density bonus (a code allowing developers a denser multifamily structure if at least some of the units are for low-income families), Hart suggested the current code regarding parking and open space be adjusted to encourage more use of the option.

“It’s a good tool,” she said. “It’s just a tool nobody uses, even those that have built low-income housing recently because it’s just not worth it.”

Hart also addressed code regarding housing in commercial zones, which currently is only allowed if the housing is above a commercial building. An economic opportunity analysis being completed by the City includes a buildable-land inventory.

“There are hundreds of acres of excess mixed-use and commercial land,” she said. “Allowing for additional residential opportunity in the commercial zones will not detract from the commercial availability of land for us to accommodate our growth within our community.”

To wrap up the work session, Hart informed the council she surveyed 11 apartment complexes in the city, some that are old and some of the newer developments. From that, she learned that they have an average 96% occupancy rate. In 2019, prior to the big increase in apartment development, the complexes were at an average 96% occupancy rate.

“So we have more people living in apartments, but they’re still full,” she said. “In the exchange, we have had a significant reduction in our severe rent-burdened status of 10.5%, which is the highest reduction rate in the entire state for those that are severely rent-burdened.”

As such, it might be possible to bypass code changes for multifamily units in this cycle because the city is already accomplishing its goals in that category, Hart said. Effectively that means the city wouldn’t have to change parking or open space standards in its code, as was discussed at the previous session.

The council generally agreed to keep the city’s multifamily codes as-is and look further into cottage cluster housing standards.

The next work session on March 22 will focus on financial incentive strategies to encourage needed construction. Hart said the City of Lebanon is required to decide on at least one or more of the strategies presented, after which time the codes will be written and a community input period will be held prior to adoption. This process will happen every eight years.