Samantha Bayer
Housing & Childcare Shortage May Undermine Semiconductor Success
In July, 2022, Congress passed the federal CHIPS and Science Act, better known as CHIPS. The primary goal of the CHIPS Act is to reduce America’s dependence on Asia for the production of semiconductors by returning manufacturing back to America.
After the CHIPS Act passed, state governments across the country scrambled to make their case for federal CHIPS Act funding to attract new development. In the 2023 session, the Oregon Legislature enacted Senate Bill 4.
Based on the passage of the CHIPS Act and SB 4, Oregon economic officials forecasted $40 billion in new semiconductor investment for Oregon. This new investment would result in the creation of 6,300 new tech jobs and potentially thousands of new construction jobs.
This potential growth comes in the wake of the Oregon Legislature setting aside more than $500 million for grants, loans, and tax credits in hopes of incentivizing new chip manufacturing factories. Oregon is one of the few places in the world that is a true semiconductor manufacturing hub, but domestic production has lost thousands of jobs over the past 20 years as manufacturers shifted operations to Asia.
If the $40 billion in potential Oregon semiconductor projects materializes, it would be a huge economic boost for the state and would confirm that Oregon has a competitive market for semiconductor manufacturing. Presently, all signs point to this historic investment being a success with three Oregon companies already receiving CHIPS Act funding – HP facilities in Benton County will receive $9.5 million, Microchip Technology Inc. in Gresham will get $11 million, and Intel’s campus in Hillsboro will see $115 million. Microchip also received $72 million in federal money to help with manufacturing and research.
In total, the $190 million in grants and loans from CHIPS Act funding have been directed to Oregon’s growing semiconductor industry. That’s a win.
Despite signs of success, new doubts emerge.
Notwithstanding the federal and state government’s historic investment in semiconductors, there is an undercurrent of concern about whether Oregon has enough housing and childcare available to attract and support the thousands of skilled workers needed to see this plan to fruition.
“Investment is good. I want Intel. I want these businesses to expand in Oregon,” said Daniel Hauser, deputy director of the Oregon Center for Public Policy in a recent interview. Despite his enthusiasm, Hauser noted something OPOA has been trying to draw attention to throughout this conversation:
“Somebody is going to need to take care of those workers’ kids and we’re going to need somewhere for them to live.”
Oregon is in an unprecedented housing and homelessness crisis, caused primarily by a significant and chronic shortage of housing supply. This crisis hurts all aspects of our society, and threatens Oregonians’ health and economic well-being. Our state needs to produce over 440,000 new units over the next 20 years to keep pace with current demand. To achieve this goal, Oregon would need to double its current rate of production to produce 36,000 homes a year for the next 10 years. These numbers do not consider an influx of demand from a booming new semiconductor industry.
Oregon’s childcare crisis is also pushing families to a breaking point. According to recent studies, 15 percent of parents in Oregon with children under six years old had to quit, change, or refuse a job because of problems with childcare during 2020-21. Moreover, women are five to eight times more likely than men to experience negative employment consequences related to caregiving. The report also showed that Oregon ranks especially poorly on economic well-being (ranking 30th), and on education (ranking 44th).
Oregon fails to compete with other tech-savvy states.
With these statistics, it is unclear how Oregon plans to compete with other tech hubs offering the same opportunity to a limited and highly-skilled semiconductor workforce. As an example, Colorado just received $90 million to modernize and expand a fabrication facility in Colorado Springs. Like Oregon, Colorado is heralded as a nature and outdoor recreationalist paradise, but Colorado ranks 17th in the Country on economic well-being, and 15th in the country on education. On those factors alone, it looks like Colorado may have the edge over Oregon.
With that said, Colorado and Oregon are both grappling with a housing shortage and coincidentally are up against the same opposition to growing their housing stock – NIMBYS, many posing as environmentalists. However, in Colorado, the Legislature is making housing, land use reform, and funding education the core focus of their 2024 Session. In Oregon, housing will be a priority, but stands to be put on the backburner with this year’s focus on behavioral health and the possible changes to Measure 110.
Executive leadership offers hope.
Regardless of the rest of the Legislature’s priorities, Governor Kotek is still making housing reform a core focus of her office. In November, she announced plans to seek $600 million in legislative funding to boost housing production and shelter the homeless as her top priorities for the upcoming short legislative session.
Moreover, the Governor’s Housing Production Advisory Council (HPAC) is wrapping up their recommendations for systemic reform to Oregon’s planning, building, and financing systems to increase housing production. These recommendations will go to the Legislature, even though many of these policy objectives could be solved by the executive branch alone using authority already delegated by the legislature.
If the HPAC’s recommendations are taken seriously, and Oregon commits to radically breaking down barriers to production, we may be able to truly take advantage of the opportunity the CHIPS Act has afforded our state.
OPOA marks housing and statewide economic development as core priorities.
Last Session, OPOA joined our housing partners in urging the Legislature to take bold and necessary action to maximize CHIPS grant opportunities, including changes to our land use planning system to maximize opportunities for housing, essential services, and industrial opportunities. We warned Legislators that if the status quo remains, we will not be able to take advantage of the incredible opportunity Oregon has in front of it.
OPOA advocated all Session for emergency changes to the planning system to support the production of needed affordable and workforce housing, including increasing our buildable land supply, expediting planning and permitting processes, and limiting opportunities for unnecessary appeals and delay.
This Session, as we’ve done for years, we will continue to try and cut the layers of regulatory red tape that prevents our communities from meeting the real-time needs of Oregon residents, and we will continue to beat the drum that under no circumstances can Oregon let this opportunity pass us by.
The opinions expressed in this post are those of the author and do not represent the opinions or positions of any party represented by the OPOA Legal Center on any particular matter.