What has the City been doing to address Portland’s housing shortage?

In Portland, our Housing Bureau, Permitting & Development Bureau, Bureau of Planning & Sustainability, and Prosper Portland are all in the Community and Economic Development service area. This allows us to be more creative, nimble, and resourceful in addressing Portland's greatest challenges today, including the City's housing shortage and the need to increase affordability across housing options.

View full size image of How the City influences housing development based on area media income (AMI). Arrow lines point to 0 to 60% AMI being "provide funding," with 0 to 120% being "offer incentives & financing" and all include "adopt regulations."

The City's Housing Production Strategy lists actions the City is taking to address this critical issue. The Community and Economic Development service area is undertaking several ongoing efforts to streamline, improve, and quicken the process of increasing housing from deeply affordable units for those earning 0-60% of the area median income (AMI) to market rate housing.

A major driver of rising housing prices in Portland over the last 10+ years is the shortage of available units needed to meet demand. The City is not only focused on how we can help build more affordable units for lower-income families but also on more housing of all types for all families. 

View full size image of Chart showing the number of new housing units from 2015 through 2024. Multi-dwelling, in dark blue, is the largest portion of the graph for each year, ranging from a low of about 1,000 in 2020 to a high of around 6,000 in 2017. Townhouse/duplex, single-dwelling, and ADU each represent around 1,000 combined year over year.

Approaches

Providing Funding

The Portland Housing Bureau offers incentives to support new affordable housing development. Generally, these types of housing receive some public subsidy when they are built and, in exchange, must ensure that the housing is rented or sold at a reduced cost. These efforts include property tax exemptions, development fee exemptions, loans, and other forms of financial assistance—sometimes including direct funding. In fact, from 2015 to 2024:

• About 12% of homes built in Portland received direct funding support from the Portland Housing Bureau or Prosper Portland.
• Another 4% of new homes built received financial incentives from the Portland Housing Bureau.

One way the City created more affordable housing is through Portland's Housing Bond. Portlanders voted to create the bond, which helped the City fund the development, acquisition, and renovation of affordable homes. We exceeded our goals with the bond, creating more than 1,800 units and investing more than $250 million in affordable housing. 

The Housing Bureau has also been implementing the voter-approved 2018 Metro Affordable Housing Bond, which brought an additional $211 million to the City and is on track to produce well over 2,000 new affordable homes with these regional funds. 

In addition, in a collaborative effort between Prosper Portland and the Portland Housing Bureau, a portion of property taxes in areas of Portland known as Tax Increment Financing Districts are set aside to help fund new affordable and middle-income housing. 

Offering Incentives and Financing

PHB's Homebuyer Opportunity Limited Tax Exemption (HOLTE) and System Development Charge (SDC) programs reduce some of the building costs for developers and provide tax relief for new homeowners meeting affordability and income requirements. 

View full size image of Portland map with dark green circles for "open" and light green squares for "permitted" inclusionary housing units.

Under the MULTE Program, multiple-unit projects with 20 or more residential dwelling units receive a ten-year property tax exemption on some or all of the residential and residential related structural improvements to the property as long as program requirements are met. One of those requirements, called inclusionary housing, requires that all residential buildings proposing 20 or more new units provide a percentage of the new units at rents or sale prices affordable to households at 80% of the median family income or below. These projects receive a ten-year property tax exemption on some or all of the property's residential and residential-related structural improvements as long as program requirements are met.

From 2016-2024, this program created 1,967 new housing units affordable at 60-80% AMI and collected $5 million in-lieu fees. There are 674 additional units in the permitting pipeline, able to begin construction in 2025. 

In 2021, the City created the Permitting Improvement Task Force to find ways to make the City's building permit processes work better. The Task Force has multiple projects it is working on to further its goals of reducing permitting timelines, improving the customer experience, and improving performance management.

One important tool that Portland Permitting & Development uses to achieve these goals is the Portland Permit Metric Dashboard, which is updated weekly and tells customers timelines for different phases of the permit review process. This tool allows people to plan their projects and has more information on the process and project timelines.

Additionally, Portland Permitting & Development offers fee reductions specifically for affordability and shelters and fee reductions for income-qualified households. 

Adopting Regulations

Portland's Bureau of Planning and Sustainability is championing proven efforts to increase housing and especially middle housing, which is housing that falls in between single-family houses and larger multi-family buildings. 

The Residential Infill Project (RIP), first adopted by the Portland City Council in 2021 and then expanded in 2022 as the Residential Infill Project Part 2 (RIP2), has accelerated the development of more diverse and affordable housing options in Portland's single-dwelling residential neighborhoods, which make up 75% of the city's land where housing is allowed. This middle housing production has been successful in meeting the changing housing needs of Portland's residents better. Check out our recent progress report on this project, showing how it is helping.

In 2024, the City Council adopted changes to our zoning code to temporarily ease some of the requirements for housing development. This project was known as Housing Regulatory Relief. For example, this legislation reduced the amount of bike parking that has to be included in new buildings and offered flexibility from specific steps in the permit process, such as design review. 

Because new housing development within the City of Portland increases the need for transportation systems, parks and recreation facilities, and water works systems, new housing developments incur System Development Charges to fund a portion of the City's system improvements and capacity increases. This program includes an exemption program, which assists developers by reducing their development costs when building affordable residential housing. Developers are exempt from paying SDCs levied by the City of Portland only when those units meet program requirements.

Prosper Portland, as the City’s economic and urban development agency, uses a range of strategies to provide opportunities for much-needed housing with access to excellent transit service and add to the vibrancy of key neighborhoods in Portland. These strategies include building infrastructure to catalyze affordable and market rate housing for rent and purchase, like The Nick Fish, the Broadway Corridor Redevelopment plan, N/NE Community Development Initiative, and more. This team is also piloting a office-to-residential conversion program in Central City to provide opportunities for additional, much-needed housing with access to excellent transit service; add to the vibrancy of the central city at all hours, and; provide support for downtown small businesses, restaurants, and retailers.

Through these efforts and more, the Community and Economic Development service area is working across its teams and in partnership with the Mayor, City Council, City bureaus, State government, community groups, and the private sector on innovative solutions to address Portland's housing shortage, increase affordable units, and streamline and simplify the homebuilding process. You can find more ways to follow this work and track our progress through key reports, dashboards, and other trackers.