How Gov. Tina Kotek’s $376 million housing package could help this city of 2,000

Rainier sits 50 miles northwest of Portland, along U.S. 30. The quiet city of roughly 2,000 residents abuts the Columbia River, with city blocks scaffolded like massive steps up the green hills leading away from the water.

It’s a perfect place to live, several residents said. Rainier has the allure of a small city with little crime in a scenic area halfway between the coast and Portland.

But the city has a problem: Limited land, challenging terrain and a lack of development dollars have translated into an extreme housing shortage and rising rents and...