Oregon Governor Tina Kotek and Portland Mayor Keith Wilson have announced a series of policy changes aimed at accelerating housing development in Portland, specifically targeting the slow pace of market-rate apartment construction.
The proposals stem from discussions with a diverse group of stakeholders, including developers, construction firms, housing advocates, and government officials, convened by Kotek and Wilson in March.
Key initiatives involve expediting the construction process and transforming vacant office buildings into housing units. Many of these proposals will require approval from the Portland City Council before they can be implemented.
To kick off these changes, Kotek has instructed the state’s Building Codes Division to assist Portland by sending staff to expedite the permitting process. The city’s sluggish pace of permitting has been a significant factor in its current budget crisis, as fees from permits fund the Permitting & Development office.
In contrast, Wilson’s proposed budget for the upcoming fiscal year, which begins in July, includes plans to cut 63 jobs from the Permitting & Development office. These budget cuts were announced shortly after Kotek and Wilson introduced a plan to waive building fees in a bid to stimulate new construction in Portland.
City councilors have expressed concern that cutting jobs from the permitting department could hinder the city’s ability to capitalize on an increase in development once the fee waivers take effect. However, Wilson believes that enlisting state staff could mitigate this risk.
“It’s not replacing folks,” Kotek clarified. “It’s saying, ‘How can we do this differently?’”
The partnership between state workers and the city staff is aimed at finding practical solutions to ongoing permitting challenges. Another initiative announced by Wilson is the revival of a program allowing licensed developers to bypass certain certification processes, thereby fast-tracking the existing permitting system.
Local real estate professionals, developers, and politicians have been advocating for a more efficient approach to converting commercial real estate into housing, especially as downtown Portland has seen rising vacancy rates due to an increase in remote work.
The Portland City Council adopted incentives for property owners interested in converting commercial buildings to residential properties in 2023, but the response has been tepid.
At the press conference, Wilson disclosed plans to allocate $15 million for developers willing to take on office-to-housing conversion projects.
According to Wilson, these funds will come from the Portland Clean Energy Fund (PCEF), which levies a tax on large retailers to finance renewable energy initiatives.
In what was later clarified, a spokesperson indicated that the money would actually be drawn from previously approved allocations intended for such projects under a PCEF plan ratified by the council in December.
Wilson emphasized that repurposing existing buildings instead of constructing new ones is crucial, as it could reduce the project’s greenhouse gas emissions by up to 80%.
“So that’s right in the mission of PCEF,” Wilson stated.
Moreover, Kotek announced the establishment of an “economic development strategy” aimed at revitalizing Portland’s economy over the next six months, a response to economic challenges heightened by the COVID-19 pandemic.
This initiative aligns with Kotek’s previous efforts through a task force convened in 2023 to stimulate downtown Portland’s economic recovery in the aftermath of the pandemic.
Kotek assured citizens that these efforts to accelerate housing development would not compromise safety standards.
“We’re all committed to maintaining health and safety requirements,” she remarked. “This is about not getting stuck in the paperwork. We can take some of those things off the table and still build good, safe, affordable housing communities around the city.”
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