Portland Auditor Releases Progress Report for Residential Infill Project

In 2017, after about a decade in the affordable housing and community development industry, my career took a turn and I landed in a position as a long range planner in the Portland region. One of the very first projects I worked on was codifying and adopting changes related to Oregon Senate Bill 1051 of 2017.

SB 1051 required communities with more than 10,000 people to remove certain barriers to housing production, including giving regulated affordable housing projects priority in the land use decisions by limiting the timeline for approval to 100 days. The bill went on to define all housing types as "needed housing," requiring all land use and design requirements related to housing be "clear and objective". This had the effect of outlawing subjectivity in the approval process. While many planners already aspired to remove barriers to housing production, they were limited by local politics. SB 1051 gave planning departments cover--particularly this in higher income communities--to implement needed changes.

Hot on the heals of SB 1051, Oregon became the first state in the U.S. to effectively eliminate single-family zoning with the passage of House Bill 2001 (HB 2001). This groundbreaking law required cities with over 10,000 residents to allow duplexes on all residential lots previously zoned for single-family homes, and for cities with over 25,000 residents, including all of Metro Portland, the law went even further, mandating the allowance of triplexes, fourplexes, and cottage clusters.

The goal was to increase housing diversity, improve affordability, and combat urban sprawl by enabling more middle housing options in established neighborhoods. Now that several years have passed, the effects of this policy on housing production, affordability, and neighborhood dynamics are becoming clearer, offering a critical look at how statewide zoning reform shapes the housing landscape.

Portland’s Residential Infill Project (RIP), finally adopted in 2020 after many years of planning and setbacks, was a landmark zoning reform aimed at increasing housing options and affordability in the city‘s single-family neighborhoods. By allowing for duplexes, triplexes, fourplexes, and cottage clusters on previously single-dwelling lots, the policy sought to address Portland’s housing shortage and promote more diverse, walkable communities. Now, several years in, the real-world impacts of these changes are coming into focus.

Some interesting data and considerations from the Portland City Auditor's monitoring report on Middle Housing in Single-Dwelling Zones, Progress Report 2018-2024 .

My takeaways:

While middle housing is much needed and has provided 1400 more units between 2021 and 2024, most of these units are still out of reach of median income families. For example, the average closing price for middle housing units was $614,223 in 2024, which would require over double the median income cited ($213k+).

That said, smaller units are being produced at a higher rate since RIP's adoption (500-1500 sq ft) and are averaging below 500k. The most common size seeking SDC exemptions was 2 bedroom, 750-999 sq ft.

Between the PHB tax incentives for moderate income homebuyers and the SDC exemptions, developers were able to produce more sub-500k units. Approximately 868 units participated in one or the other program, while 251 of those units qualified for both programs between 2018 and 2024.

Middle income units were $250-300k less on average than attached units. Despite this, they have a higher cost per square foot, which is to be expected.

PHB's sale price limit is $455k, which is presumably affordable to those making 120% AMI. However, by my math, a 455k loan requires ~$172k in income when assuming 1% property tax (which the auditor used) and $450 in other monthly liabilities, which is a low assumption. This drops to about 141k in income required under normal underwriting guidelines with the tax abatement - a HUGE advantage. So without the tax abatement, even these smaller units are unaffordable to median income families unless they are debt free.