Multnomah County, Ore. — The Board of County Commissioners today took a series of actions to spur the building of affordable housing in Multnomah County, work in partnership with the City of Portland to help prevent more homelessness in our region, and boost the number of homes built and sold to lower- and middle-income families.
In a unanimous vote, the Board passed a resolution to expand the County’s Homeownership Opportunity program by expanding the income eligibility requirements for applicants. The program allows lower- and moderate-income households to buy new homes up to $455,000 and receive a 10-year property tax exemption.
The Board also voted 3-2 to expand the city of Portland’s successful inclusionary housing program by offering additional tax exemptions to developers. Specifically, the County’s exemptions would help encourage housing projects in high-cost areas of Portland such as the central eastside and northeast Portland become financially feasible, while ensuring that a portion of the new units built will remain affordable for the next 99 years for people earning well below the median income whose housing costs might otherwise put them at risk of homelessness.
Finally, the Board voted unanimously to adopt key components of the City’s recent land use and zoning changes into the County’s zoning code and comprehensive plan, aligning the two governments and ensuring consistency for a handful of unincorporated County pockets outside City limits.
“We can only fully solve the housing and homelessness crisis if there are apartments and homes that people can move into, and right now, we are dangerously behind on constructing those units,’’ said Chair Jessica Vega Pederson. “Today’s actions demonstrate Multnomah County’s focus on increasing housing supply and lowering housing costs, and our commitment to taking every action in our toolkit so that more people can find an affordable place to rent, and others can find a home they can buy.’’
Acting to reverse the housing shortage
A 2023 analysis of housing needs in Portland, along with a new inventory of buildable lands, found that the city needs at least 120,560 more housing units within the next 20 years to keep up with demand — requiring, essentially, production of 5,200 units every year until 2045.
The city’s housing needs analysis found Portland’s population is growing wealthier, with 39% of households now making $100,000 or more. (The 2022 median income for a family of four is $106,500.) But 44% of Portlanders are lower income. And 53% of future housing production needs to be affordable for these households to make up for historic underproduction and also to provide housing for the houseless population.
Right now, housing is not being built at nearly the pace needed. Higher interest rates, increasing labor and material costs, and the lingering impacts of the pandemic on supply chains have all delayed development. A secondary result is that without new properties being developed, property tax revenue that pays for critical County services to residents will also stagnate.
By voting to accept the City’s Housing Needs Analysis & Buildable Lands Inventory, the Board is ensuring a shared understanding of the scope of the problem.
The Board also adopted the City of Portland’s recently amended Housing Regulatory Relief Project package, which creates consistent rules across urban, unincorporated properties in the County. (The City and County agreed to adopt consistent land use and zoning practices through a 2002 intergovernmental agreement.)
As part of the City’s efforts to spur production of that housing, particularly for families, elders, and people with disabilities, Portland also amended its development regulations to increase incentives and reduce the time it takes to acquire permits, along with other code requirements. The changes become effective March 1.
Portland’s changes include temporary waivers around such standards as reducing the amount of long-term bike parking and ground floor active-use required, and waiving some design requirements and outreach requirements. The City also made permanent changes to give developers more time to act on land use review approvals from three to five years.
City Housing Commissioner Carmen Rubio requested that the County adopt these same rule and plan changes so that the amendments can be applied within the areas the City manages for the County. The changes are part of a series of reforms being made by the City and County to cut through red tape and reduce barriers to housing production.
The Board voted unanimously to adopt the emergency ordinance.
Increasing housing opportunities for people historically shut out
The Board later voted unanimously Thursday to temporarily expand eligibility for the Homebuyer Opportunity Limited Tax Exemption Program to include more families in the program. Previously, households could earn no more than the median income to remain eligible. But the changes now allow a household to earn up to 120% of the median income, about $137,000 for a family of four. The changes help combat recent high interest rates that have made it especially difficult for first-time homebuyers.
The City Council approved changing the program on Jan. 17. Under the program, a developer can apply to the program to help find eligible homebuyers. Those homebuyers receive a benefit that lowers their monthly costs — waiving taxes for 10 years on the building, but not the land it sits on — and can help them qualify for financing. The Board previously voted to expand the number of homes eligible to take part in the program from 100 to 500 a year for three years.
Chair Vega Pederson threw her support behind the change in large part because of the equity opportunities the changes will provide for Black, Indigenous and other people of color.
“We know that homeownership is an area where institutional racism has had devastating impacts,’’ Chair Vega Pederson said. Between 1857 and 1926, Black and African American people were legally prohibited from homeownership in Portland. And during the 1960s, hundreds of homes in the primarily Black neighborhoods of North/Northeast Portland were demolished in order to construct Interstate 5 and Legacy Emanuel Hospital.
“We have a history in this city of forcing people out of their homes and neighborhoods that this program can help address,’’ Chair Vega Pederson said. “Owning a home is key to a family’s security and building generational wealth and we fully support this opportunity to put that within the grasp of more people.’’
Board approves increasing affordable housing incentives
On Thursday, the Board also voted to expand a program that the City considers the most powerful of its recent changes: its inclusionary housing program to incentivize affordable housing development in market-rate buildings in medium- and high-cost areas of Portland.
First adopted in 2016, it requires developers of more than 20 units to create affordable units and keep them affordable for 99 years, serving households making no more than 80% of median income. There is a full property tax exemption on all residential units in the Central City and a partial tax exemption on affordable units in other neighborhoods for developers who hold a portion of their units at 60% median income for 99 years.
The City proposed that the County join the City extending the exemptions for the more-affordable units to higher-rent areas such as Slabtown, Inner Eastside and Hollywood.
“it's a pretty good way to create working-class homes in the market-rich areas where both the market and the existing housing subsidies struggle to do so,” said Michael Andersen, a senior researcher for the Sightline Institute who has worked on inclusionary housing in Portland for more than a decade, in remarks to the Board. “This is a good fiscal deal.”
The policy has already helped place as many as 1,300 new affordable units in the pipeline, with many already open, planners shared.
Changes proposed Thursday would also suspend the current tax exemption cap until 2030 and commit to a study on the impacts. The City and County will be required to conduct a study in 2027 to analyze market conditions to see if these incentives are still necessary. And a cap would resume, regardless, in 2030.
County Economist Jeff Renfro described the change as a “low-risk” investment and said the expanded exemption would have no effect on forecast County revenues, which already assumes reduced growth in property tax revenue in light of an ongoing and projected slowdown in development.
Commissioner Julia Brim-Edwards offered an amendment that requires the County to provide annual reports on the program to local taxing districts including the dollar amount of foregone tax revenue and the number of affordable units created, broken down by level of affordability. The amendment passed. Brim-Edwards also offered an amendment to increase the cap to $12 million a year, or $60 million over five years, but the amendment did not pass.
After a lengthy discussion, the Board voted 3-2 to adopt the changes, as amended, with Commissioners Brim-Edwards and Sharon Meieran voting no, citing concerns about the lack of a cap and the potential impact on other jurisdictions who receive property taxes.
Chair Vega Pederson said that although the County does not build housing, it can use its authority to make development easier.
“Multnomah County has limited tools to incentivize housing production, but one of the tools we do have is offering temporary tax incentives in return for building long-term, affordable housing,’’ Chair Vega Pederson said. “The City has seen success through their inclusionary housing program at making developments that include dedicated affordable housing in the highest-cost areas of our city pencil out financially. In order to meet our housing needs, we need to replicate that success in other high-cost neighborhoods.’’
“Portland can’t do this alone,’’ said Commissioner Carmen Rubio. “That’s why I appreciate Multnomah County’s partnership on supporting the expansion of inclusionary housing and the Governor making housing one of her top priorities.
“It certainly feels like the alignment between the City and our government partners grows every day. I value the collaboration, and together we can shape a future Portland that works for everyone.”