The most familiar way to get more homes built is the one most people don't want.

Oregon is basking in a bit of bipartisan consensus. The state, most people agree, needs more homes.

That's it. That's the extent of the consensus. As the state's brief 2024 legislative session launched this week, Oregonians on left and right were girding for battle over what, exactly, to do about this shared housing shortage. In the middle of the battlefield was a bill developed by Gov. Tina Kotek, which includes various ideas from left, right and center aimed at accelerating homebuilding.

But as many lawmakers and interest groups try to tug the contents of that bill in their direction, it's also worth stepping back to ask: What, in the broadest sense, caused this decades-long underproduction of housing that we can all agree exists? Before Oregonians start negotiating over specific policy goals like quick-and-dirty sprawl allowances or revolving zero-interest loan funds, they should understand in some more general way why this problem, unlike shortages of toilet paper or baby formula, seems unable to solve itself.

The answer to that question - what actually causes housing shortages? - is the starting point for a new Sightline series that begins today. In the weeks and months to come, we'll lay out a housing agenda that Oregon could achieve under its most housing-focused government in many years.

But first, as so often happens in the first U.S. state to impose state-level urban growth boundaries, we need to talk about urban sprawl.

TO AVOID GROWING OUT, GROW IN. BUT WHAT STOPS INFILL?

For decades, many Oregonians have claimed that the simple answer to Oregon housing problems is that in Oregon, developers are not allowed to build subdivisions wherever they can afford to. Instead, gradually expanding "urban growth boundaries" around every city let the state and regional governments dictate where new suburban development is allowed.

To which other Oregonians have long replied: but there's lots of space for more homes inside urban boundaries. It's in backyards, abandoned malls, half-empty parking lots, and the sky.

Damon Motz-Storey, head of Oregon's Sierra Club chapter, spoke for many environmentalists on Sunday.

"I see empty lots in popular, central Portland neighborhoods all the time,"

Damon Motz-Storey, head of Oregon's Sierra Club chapter, spoke for many environmentalists on Sunday. "I see empty lots in popular, central Portland neighborhoods all the time," Motz-Storey wrote. Motz-Storey was right; as right as they'd said it about Hillsboro, Salem, Monmouth, or Burns.

But Motz-Storey's accurate observation also raises a question. Why does one see empty lots all the time? If these would be good locations for housing, why weren't homes built there already?

The answer, once you clear away all the details, is not complicated. The thing that stops homes from being built in a housing shortage is that the cost of building them outweighs the revenue they would bring in.

Pointing at an empty lot or shopping mall isn't, in itself, an answer to a housing shortage. To actually create more infill housing in a market economy, one or both of these two things needs to happen:

the cost of building infill homes needs to go down, or

the amount of money to be made by building infill homes needs to go up.

Those are the options. There aren't any others.

WE WON'T STOP RENT HIKES UNTIL WE CUT THE COST OF BUILDING HOMES

A market economy, of course, can include governments and public programs. And that's one way to solve for the two-factor equation above: with public housing subsidies.

When the government spends tax money to subsidize a poor person's rent, or to hire people to build and manage a new below-market apartment building, that's a form of option (2) above. This can be good. But it's only as good as we can find public money for it - and there are always plenty of competing ideas for how to spend public money. (On Wednesday, state economists estimated that Orego...