Why you should definitely vote YES on Measure 102 (and 26–199!)

When Oregonian’s get their ballot from their mailbox this week, voters across the state will be asked to vote on five statewide measures: Measures 102, 103, 104, 105, and 106.

Any decent and informed human being in Oregon knows exactly how to vote on Measures 103, 104, 105, and 106 (NO, NO, NO, and NO; no question about it, unless you are an awful person, in which case please throw your ballot away and re-evaluate your priorities in life). But Measure 102 — a constitutional amendment that essentially allows public bond money dedicated to affordable housing to stretch further (i.e. build even more affordable housing) than it currently can — is unexpectedly causing some (really unnecessary) heartburn in the progressive/socialist community.

I address the reasons for the heartburn at the end of this (20 minute) piece. But the TL;DR version is this:

Measure 102 allows us to build more affordable housing in the exact same way all of our affordable housing is already built. It is not a new model for building housing, and does not preclude the adoption of better more effective models. Any valid concerns about corruption and lack of oversight are already baked into the current way we bring affordable housing to market. These concerns absolutely need to be addressed; Measure 102 doesn’t exacerbate these risks, nor prevent or postpone addressing them.

We’re understandably having a hard time knowing who to believe about housing right now. Our housing crisis is growing so fast and the effects are so brutal, there’s little consensus on real solutions, and a lot of (rightful) cynicism about the motivations behind the elected officials and other stakeholders proposing piecemeal or suspect solutions. Under these conditions it makes sense that voters feel suspicious of constitutional amendments when it seems like no matter who or what they vote for, rents keep going up and so do luxury high-rises full of 200 square foot micro-studios renting for $3500/month. Meanwhile more and more seniors are sleeping outdoors, and single mothers are sleeping in their cars with their babies. It’s hard not to feel like we’re being duped by developers and the politicians in their pockets when we are confronted with these types of decisions.

I feel ya.

As a radical tenant rights advocate and Overton window shifter, I could talk all day and all night about all that is wrong with the way policy makers are approaching our housing crisis, and everything that’s broken within Oregon’s “affordable housing industrial complex”. I apply a very critical and cynical lens to any proposed “solution” that fails to realize that the root cause of our perpetual housing crisis is capitalism, and am hesitant to support any piecemeal solution that could effectively make it harder to talk about real systemic solutions. And yet, I am voting YES on MEASURE 102, without holding my nose, without hesitation, and I think you should too!

For those of us in the housing advocacy community, Measure 102 is uncontroversial, uninteresting, and shouldn’t even merit the energy of a debate, except perhaps for the purpose of overall education on affordable housing. Indeed, Measure 102, is endorsed by practically every union, housing, and culturally specific community organization across the state, and by elected officials from across the aisle. It really is a no-brainer. It hasn’t gotten much attention because it doesn’t have any organized opposition, and the entire statewide social justice forces are being mobilized to defeat the other very dangerous measures.

Voters Guide from the Coalition of Communities of Color.

Since probably no one was planning on spending 20 minutes of their day reading a riveting article about general obligation bonds, constitutional amendments, and the perils of financing affordable housing, here’s a little table of contents to let you jump around.

• Executive Summary
• What even is Measure 102?
• What is Affordable Housing?
• What about Public Housing?
• What’s not to love about Measure 102?
• A Very Compelling Conclusion

So what’s the deal?

(Executive Summary, Bullet point style.)

In interest of brevity (ha), here’s a play-by-play of the affordable housing situation, and why we need to VOTE YES on Measure 102. If you need more convincing, much of these points will be expounded upon further below.

• When we talk about “Affordable housing”, we’re talking about regulated housing restricted to low-income households. Rent is set to be considered “affordable” for those low-incomes and rent increases are regulated.
• We need more affordable housing — lots more. 135,000 units statewide.
• Building housing is expensive. Workers need to get paid, supplies cost money. Projected rental income is how multifamily housing developments “pencil out”. Affordable housing doesn’t/can’t charge market rate rents. The lower rents make it harder if not impossible to “pencil out”.
• If a developer wants to build housing for the purpose of making as much money as possible, they don’t build affordable housing. That would be irrational under our current self-serving economic system.
• Right now, pretty much all of our dedicated affordable housing projects are built by private nonprofit developers funded through public/private partnerships. This is the status quo.
• Most nonprofits finance the cost of building affordable housing (which is unnecessarily expensive, but that’s for another article) by piecing together several different funding streams to come up with enough money for the project. Sometimes there’s a small funding gap. On average, about 4% of the budget.
• If the gap can be closed, the housing gets built. Everyone wins, especially low-income residents who are struggling to pay the rent or get out of houselessness.
• If they can’t find the funding to close the gap, which happens far too frequently and, for all sorts of reasons, the project is scrapped. The housing doesn’t get built at all. Everyone is sad.
• If there was a dedicated public revenue stream to help these nonprofit developers close this funding gap, more affordable housing would be built. This would be good.
• Our state constitution prohibits public bond money to be mingled in any way with private entities, or other money — like state money, federal money, or mortgage debt. These are all common ways affordable housing gets built.
• Nonprofit developers, in particular, are “private entities” that cannot use this bond money.
• One of the reasons that Portland’s 258M dollar Affordable Housing bond (passed in 2016) could only promise to build 1300 units is because our constitution currently prevents that bond money from being used to form public/private partnerships to build affordable housing the way we already build affordable housing. Instead of using at least some of that money to help close the gap for nonprofit affordable housing projects, the city is not allowed to mingle the affordable housing bond funds with the nonprofit’s financing.
• If Measure 102 passes, we will be able to build more affordable housing, in the exact same way we already build it. There are no realistic “unintended consequences” of its passage. None.
• For the Metro bond currently on the ballot, if Measure 102 does pass, we’ll be able to provide homes for 4,500 more people. That’s a lot of people.
• If Measure 102 fails then we will still use public bond money to build affordable housing, just not as much of it. It’s that simple.
• More affordable housing is better than less affordable housing. So we should vote YES on Measure 102.

If that’s a sufficient enough endorsement and explanation to convince you to vote yes, and to tell your friends to too, feel free to stop reading. But for everyone else, read on for a deeper dive on the measure, and some important facts about Oregon’s affordable housing landscape. Because we can’t really understand the measure, especially whether or not some of the concerns mounted against it have merit, without knowing a little bit more about “affordable housing”.

But first, what exactly is Measure 102?

Here are the three things Measure 102 does, in plain language:

1. Amend the state constitution to allow public bond money to be mingled with “private” money (e.g. non-profit affordable housing providers) in order to build or buy affordable housing.
2. Require voters to approve the bond, which must include a definition of affordable housing that the bond proceeds will be used for.
3. Require an annual audit to ensure the money is indeed being used to build or buy affordable housing as intended by the voters.

Here’s the Oregon General Election voter’s guide if you want the official language. (Find Measure 102 under the Measures tab; read the Explanatory Statement.)

Measure 102 essentially fixes an unforeseen (like, 159 years ago) glitch in our constitution regarding how money raised through voter approved general obligation bonds can be spent.

Now, I’m no expert on bonds, taxes, or our constitution, but my layperson’s understanding is that voters approve bonds to pay for projects related to good public things that typically benefit the community as a whole, like libraries and schools. These are things that we definitely don’t want privatized, and around which we don’t want any blurry boundaries created through a “public/private partnership”, for very good reasons.

In general it makes sense that the public should own things purchased with public money. Accountability should be to the public, not stockholder profits. As soon as we combine public money with private money to fix a school building or build a new library, then very legitimate fears about how that relationship could ultimately serve the private interest (i.e. generate exploitative profits) more so than the public’s could be realized. This would be bad. It’s important that our venerated public institutions stay 100% public.

Accordingly, our constitution prohibits bond proceeds to be mingled with private funds. Good thinking, constitution writers! (Too bad those constitution writers were also super good at racism and white supremacy.)

This was the very sound thinking behind the constitutional amendment preventing the mingling of public bond money with private money. But this was almost 160 years before anyone contemplated using general obligation bonds to build affordable housing, when no one could have foreseen that the a little bit of dedicated public money could go a long way toward helping affordable housing developers get their projects financed and built. The bond passed in 2016 nudged us to contemplate that.

The constitutional amendment essentially creates an exception to the rule of prohibiting public/private partnerships, as long as it’s for affordable housing. Our libraries and schools will still be safe!

Not only will it help nonprofit developers build more affordable housing, in the exact same way they are already producing the vast majority of our affordable housing stock, if Measure 102 passes bond money could also be used to help a tenant co-op purchase their apartment buildings and convert them to permanent affordable housing. This is one reason why Living Cully, the Latinx led organization championing Tenant Opportunity to Purchase is a strong endorser of Measure 102, and the metro bond.

What is Affordable Housing?

First of all, it’s a really bad name for what it is. I mean, if only some of our housing is officially “affordable”, what does that make the rest of it? Unaffordable? (Well, yes. But instead of “unaffordable housing” we call it “market rate housing”.)

But really, it’s a really bad name. Affordability is always relative. What’s affordable to me is unaffordable to someone else. What’s unaffordable to most, is still affordable to Bill Gates. All of our housing is affordable for someone.

But for all intents and purposes, including accessing various funding streams to finance affordable housing, housing that is in some way officially designated “affordable” is housing that is restricted to low-income residents.

The income restrictions that determines someone’s eligibility for affordable housing are based on Median Family Income (MFI) for the area. Most, if not all of our affordable housing stock usually targets these three income categories:

• 0–30% MFI (extremely low income)
• 30–60% MFI (very low income)
• 60–80% MFI (low income)

You don’t get to rent affordable housing unless your income is under or within certain thresholds. (And sometimes you get kicked out of it when your income goes up too much; sometimes you don’t. This is an important issue, but one of the many specific complexities that I’m not going to expound upon here.) The ranges can vary (60% is often subbed out for 50%, for example), and different jurisdictions may prioritize certain ranges over others, depending on the income needs of their residents. But 80% MFI is definitely the high end of the income spectrum when it comes to official “affordable housing”. Funding dedicated to affordable housing is never used to build housing for those making above 80% MFI.

Measure 102 requires that ballot measures for affordable housing bonds define “affordable housing”, and that an annual audit would be required, both of which have been modeled by Portland…

Portland’s first of its kind affordable housing bond measure promised voters that the bond would build housing for those earning under 60% MFI, with at least 600 of those units for extremely low income residents earning between 0–30% MFI. (This is the housing we need most, but it is also the most expensive to build and maintain because residents of this housing can afford very little rent every month.) A bond oversight committee was established to hold the city accountable to that promise. However, since the constitution doesn’t allow any of that money to be used in partnership with private money, Portland’s bond could only promise 1300 total units. About half of those 1300 have already been created, but if measure 102 passes we will be able to stretch the remaining bond money to create even more units than promised.

Also on the this year’s ballot for voters in the Portland Metro area is a 652.8 million dollar bond for affordable housing (Measure 26–199). In this case, the bond is designed to create housing for those earning under 80% MFI (which doesn’t preclude some of that housing being targeted for lower incomes, similar to Portland’s). Now, you might think that a household making 80% MFI might not seem worthy of tax-payer funded housing, but we have to remember that Metro’s boundaries are big, and affordable housing for 60–80% MFI might be a higher priority for some areas outside of Portland’s core. Even in Portland’s core, a single mom of two, earning a dollar more than $43,980 wouldn’t qualify for affordable housing created with Portland’s bond. But this mama is no doubt struggling to find a place for her family to rent under $1100 (what HUD considers affordable for her). The metro bond could create that housing.

If both the metro bond and Measure 102 pass, the bond funds are projected to build 3900 units of affordable housing. But if 102 fails, the bond estimates only being able to build 2300 units. Those additional 1600 units are estimated to help an additional 4500 more humans put a roof over their head that they can afford.

Graphic from the Yes for Affordable Housing campaign. https://www.yesforaffordablehousing.com/

What does it even mean for housing to be “affordable”?

Federal HUD guidelines considers housing “affordable” for a household rent is no more than 30% of the household’s gross monthly income. But low-income folks who pay 30% of their income on housing can’t necessarily live off of the remaining 70%, and some high earners could certainly spend more than 30% of their income on housing and have plenty of money left over for regular weekend getaways to Hawaii. It’s all relative.

So affordable housing charges rents that, in theory, are affordable to households in those income categories. Some extremely cost burdened renters are paying well over 50% of their income on rent, leaving them to make hard sacrifices to keep a roof over their head. If these same households had access to affordable housing, they would pay much lower rent, and ideally not be forced to choose between rent and food, or rent and medicine.

Here’s what you should be paying for rent, based on your income and family size, in order for it to be considered affordable.

Bigger conversations about our housing landscape would do well to completely re-evaluate all of the values, definitions, assumptions and metrics that underwrite all of our current housing policies and practices. Until we can have serious conversations about de-commodifying land entirely, we should be talking about public land trusts, tenant-owned housing co-ops, treating housing like a utility, massive expansion of mixed income public housing, and anti-displacement focused tenant protections, such as bullet-proof rent control to prevent low-income tenants from being displaced from their homes and gentrifying communities.

A YES vote on Measure 102 won’t preclude or stifle those important conversations.

In fact, if more local jurisdictions start to follow Portland and Metro’s lead in putting bond measures on the ballot to build affordable housing, calling more attention to who we’re building housing for and why might just jumpstart or turbo charge those conversations!

More soberly, if Measure 102 fails, this could effectively lock in higher costs for all local governments any time they might want to approve bonds for housing projects. The statewide housing crisis isn’t just an urban phenomenon. Rural communities are in desperate need of affordable housing, especially in tourism based communities seeing more of their “small mom and pop” rentals converted to AirBnBs. With much smaller coffers and tax base, there would be little point or possibility in these jurisdictions passing bonds to build housing if they weren’t able to stretch those dollars most effectively through public/private partnerships.

But what about Public Housing?

We do have some public housing stock built largely (if not exclusively) with federal money. This housing is owned and operated by the local federal housing authority, which is Home Forward in Portland. This housing is among the most affordable housing in Portland. Unfortunately, there is so little of this housing that waitlists open up only oncer every few years. We need way more of it. But the federal government has been too busy financing unnecessary wars and cutting taxes for the rich, leaving nothing left over for public housing. The scraps of federal money dedicated to low-income housing pays for Section 8 vouchers (which allow low-income households to access market rate housing) and helps maintain some of our public housing stock, but there’s none to build public housing and unfortunately, there hasn’t been for decades. Home Forward has built new public affordable housing developments, but using many of the same (competitive) financing mechanisms that the nonprofits use.

The federal government’s abdication of its basic duty to provide essential infrastructure (housing) for its citizens, relegating that duty to the private market (what could go wrong!?) is a national problem. Every state in the nation has had to figure out how to produce housing for their low-income residents without help from the federal government, or deal with the consequences. Some have done this more effectively than others, but all have unique and complex housing ecosystems that have coalesced around this goal.

Unlike many states, Oregon has no dedicated public revenue stream to build/buy/preserve affordable housing. A real-estate transfer tax could be used for this, if the realtors hadn’t managed to get that constitutionally preempted while no one was paying attention in the immediate aftermath of the economic crisis. There are also efforts to cut back on the mortgage interest tax deduction (state welfare for homeowners) so that that money could be used for affordable housing. The realtors are trying to prevent that by begging you to vote yes on measure 104. Don’t do it. (In general, never vote for anything that the realtors are bankrolling.) The lack of a dedicated revenue stream for affordable housing in Oregon is a well known problem that has severely hindered the state from addressing its housing crisis.

General obligation bonds are one way to create a dedicated revenue stream, and Portland blazed the trail for this in 2016 by passing the state’s first affordable housing bond. Now we just need to pass Measure 102 to make sure that those bond dollars can be used more effectively to build even more units.

Seriously, even if you don’t want to pass the Metro bond (which is silly, just vote yes), you should still vote YES on Measure 102. We already passed the Portland bond, we might as well get the most bang for our buck, right?

Measure 102, what’s not to love?

Well, there’s no organized opposition to the measure, which should tell you something. The only published letters of opposition (that I’ve seen) are either factually incorrect, uninformed, or blatantly fear mongering in a thinly veiled attempt to head off future bond measures.

A quick reading of the very few anti-Measure 102 articles present 3 primary concerns:

Fear #1: There’s no definition of affordability. Since affordability is relative, Measure 102 could allow public money to be given away to developers to build “affordable housing” for millionaires, i.e. million dollar condos.

Reality: Bonds are only passed with voter approval, and Measure 102 requires that the bond define affordability. Indeed, it is theoretically possible to mount a local ballot measure campaign (no small task) to ask voters to vote to build “affordable housing” for millionaires. It is true that nothing in the measure prevents this from happening.

However, these voters might be reluctant to agree that that’s a good use of their property taxes. This threat of someone managing to get such a measure on the ballot and then voters approving affordable housing bonds to build housing for the rich is a real risk that we’re just going to have to take.

Fear #2: There’s no requirement that the public/private partnerships build all or even mostly affordable housing. A developer building 100 market rate units could still line his pockets with bond money for a just a handful of affordable units included on the ground floor.

Reality: This claim seemed dubious, but just in case there was a possibility that all of the complex compliance mechanisms we have in place wouldn’t prevent this from happening, I reached out to my pal, and star legislative housing advocate, Alison McIntosh at the Oregon Housing Alliance to ask her if this was true. She said:

“Absolutely untrue. There are strict requirements for this, and there is no way any attorney or regulatory body (or affordable housing advocate) would let any city anywhere spend public dollars on units that aren’t affordable. The bond contracts are really very serious and strict — the city is making a deal with the bond holders, and they are promising to do what they said they would do in the ballot measure. There is no getting around this to try to give money to units that aren’t affordable.”

Fear #3: An annual audit that isn’t required to be “independent” won’t actually hold anyone accountable. Thus Measure 102 is effectively allowing our public dollars to be corrupted by greedy private developers and the politicians they write big checks to.

Reality: Hey, I share your cynicism. Our public officials haven’t exactly been bending over backwards to ensure us that they aren’t misusing every dollar in their coffers, or making backdoor deals with their big donors.

In general, our public officials will be a lot more accountable if there is an informed electorate paying attention to what they say and do and spend our money on (or not) and holding them accountable. The lack of accountability is only as severe as it is because we’ve been letting them get away with it. So, let’s stop doing that by getting involved in oversight boards, asking hard questions, and daylighting inconsistencies. We shouldn’t stop paying attention once the bonds and laws get passed. Corruption is always possible, no matter how tightly a law is written. It’s up to us let our electeds know that we’ll be militantly vigilant despite their assurances that we don’t need to be.

That being said, with regards to Measure 102, and also a direct quote from Alison the expert:

“The biggest jurisdictions (Portland, Metro) already have what is considered to be an independent auditor, meaning they are independently elected and accountable to voters. In addition to that, most local jurisdictions do a few things: first, the auditor whether independently elected or not is supposed to have free reign to audit whatever in city government they want; second, it is standard practice to hire an independent auditing firm to do the City’s financial audits every year; and third; it is also standard practice to have to do program audits of how the program is doing, publish the reports, and provide them to Council publicly. Those are all things the City of Eugene already does, as do Portland, Metro, and most other jurisdictions. Given all those protocol and safeguards, I feel comfortable with the word “audit” as is.

Further, “independent” that word isn’t defined in the constitution, so what does requiring an “independent audit”? If a local government hires an outside auditing firm, is that considered independent?”

The rest of the unnecessary heartburn from progressives with regards to Measure 102 boils down to two additional, but in my opinion unfounded, concerns:

#1. All developers are bad and greedy, we shouldn’t be giving them any public money.

This is just reactionary silliness. I’m not aware of entities that build housing for free, or who build housing and aren’t called “developers”. There are absolutely bad, greedy developers. The vast majority of them want to have nothing to do with building affordable housing and that won’t change when measure 102 passes. The “bad greedy” developers that will be getting bond money are by and large respected nonprofit developers. The same nonprofit developers who already build all of our affordable housing. Their “greediness” will allow them to build more of it, and still not make a profit off of it.

Now, don’t get me wrong. There are 1000 problems with the status quo in terms of how affordable housing is brought to market, and how affordable it really is. We should identify and address these problems. It’s going to be hard and uncomfortable to have the conversations and make the necessary changes.

Measure 102 passing makes those problems no worse or harder to identify, nor fixing them any harder.

#2. Privately owned Affordable Housing isn’t the solution to our housing crisis! We need public housing and land trusts and limited equity co-ops and rent control!

Yes, yes we need all of those things. Yesterday. But none of these things are on the ballot. Measure 102 doesn’t prevent them from being on the ballot later or in anyway reduce the momentum for putting them on the ballot.

Measure 102 isn’t asking us to choose between real solutions and band aids. It’s just asking us to make the current band aid a bit bigger, while we continue to work on the cure.

Indeed, Measure 102 nor the housing bonds are silver bullets, or even 3D printed bullets when it comes to the systemic causes and solutions needed to meaningfully address our housing crisis. But we aren’t being asked to choose between real solutions and bandaids. Provocative conversations about more meaningful solutions are only barely starting to make it into mainstream discourse. Meanwhile, there are more families sleeping on the street everyday.

Voting YES on Measure 102 will get more families off the street and into homes, and won’t have any impact on the momentum to build a movement for systemic change. This isn’t a debate about reform versus revolution. Those families will have a lot more energy for the revolution if they have full bellies and a roof over their head.

Everyone should vote YES on this measure. Hopefully you learned something useful if you’ve read this far, but hopefully you also could see why it shouldn’t require over 4000 words to make the case to fix a constitutional glitch that will help us increase our affordable housing stock without any negative unintended consequences. It’s good for us to scrutinize these measures, especially when it comes to constitutional amendments (lest another ban on real estate taxes get passed while we’re not paying attention).

Any good progressive, especially a socialist, is right to feel cynical and suspicious of this. In our current political environment of corporate personhood, lack of corporate accountability, and private capital driving the income gap between the rich and poor to grand canyon like proportions. But we need to be careful not to be overly reactionary when we read the words “private entity”, “corporation”, or “developer”.

We are right to be cynical, the more questions we ask the more we understand how the sausage is made, which is always good. But a reactive no vote based on conspiracy theories or uninformed worst-case scenarios doesn’t reflect political maturity or working-class solidarity. All of our current choices in the housing crisis buffet may well be far from the radically transformative changes that we want and need to see. But there are too many people sleeping on the street for us to stand our ideological ground when it comes to non-controversial things like this with no real “unintended consequences”.

Let’s not spend one more second quibbling about Measure 102. The folks who need your yes vote don’t have the the patience to hear the privileged justification for voting no. Let’s get more housing build for the folks who need it most, and build a movement to take back the land from private interests altogether. (With a pit stop on the way to pass rent control.)

Also, vote yes for Honest Elections (Measure 26–200). Let’s get money out of politics!