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Portland City Councilor Eric Zimmerman: “We Stopped the Slide. Now We Have to Grow.” [5/21/26]
MICHAEL PIERCE:
Welcome back to Multifamily Marketwatch, from HFO Investment Real Estate. I’m Michael Pierce, senior data analyst at HFO.
Today, we’re looking at Portland’s housing progress through the lens of city policy, development feasibility and investor confidence.
HFO partner Greg Frick recently sat down with Portland City Councilor Eric Zimmerman, who represents District 4 and chairs the city’s Housing Committee. Their conversation covered multifamily permitting, system development charges, downtown recovery, Portland’s new form of government and what it may take to bring outside capital back into the market.
Zimmerman’s message was not that Portland has solved its problems. It was more measured than that. His view is that Portland may have stopped the slide, and now the harder work begins: creating enough stability, housing production and confidence for the market to grow again.
Permit applications may be turning a corner
Let’s start with one of the most important data points from the conversation.
According to Zimmerman, multifamily permit applications in Portland had fallen by roughly 50% over the previous two years. For any city, that kind of decline is a serious warning sign. For Portland, it matters even more because the region already has a substantial housing shortage, and the cost of building new apartments remains difficult to justify under current market conditions.
Zimmerman said October data reviewed by the Housing Committee showed a year-over-year increase in multifamily permit applications. He was careful not to declare victory. In his words, “It’s nothing to celebrate yet. But if that’s the case in a couple more quarters, I’ll feel good.”
That caution matters. One month or one quarter does not make a trend. But if permit activity continues improving over the next several quarters, it could suggest that Portland’s development market is responding to policy changes, especially the city’s system development charge waiver.
The SDC waiver is doing what it was designed to do
Zimmerman tied the uptick in permit applications directly to the city’s decision to waive system development charges, commonly called SDCs, for new residential development.
For apartment developers, SDCs are not a small line item. Zimmerman noted that they can run from roughly $20,000 to $60,000 per door. On a unit that costs $250,000 to $300,000 to build, that fee can be enough to determine whether a project pencils or stalls.
The city’s SDC waiver program was designed as a crisis tool, not a permanent solution. It launched with a three-year window and a goal of 5,000 units. At the time of Greg’s interview with Zimmerman in late March, nearly 2,000 units were already in the pipeline.
That is a meaningful response.
For owners and developers, the key takeaway is not simply that Portland reduced one cost. It is that the city sent a signal. After years of concern that Portland had become too expensive, too slow or too politically unpredictable for new housing development, the waiver told the market: We understand the math, and we are willing to move.
That does not solve interest rates. It does not solve construction costs. It does not solve insurance costs, labor constraints or investor skepticism. But it can help move projects from “not feasible” to “maybe feasible,” and in today’s market, that distinction matters.
Downtown Portland needs residents, not just office workers
The conversation then moved to downtown Portland.
Zimmerman described downtown as one of the region’s biggest conversion and redevelopment opportunities. The traditional downtown model separated office, retail and residential uses. That model has struggled after the pandemic, especially in cities where office workers have not returned at pre-2020 levels.
By contrast, neighborhoods such as the Pearl District and South Waterfront have had a stronger residential base. They have people living there after 5 p.m. That supports restaurants, coffee shops, retail, gyms, services and street-level activity.
Zimmerman’s argument is that downtown Portland needs more of that mix.
He put it plainly: “We should be the city of yes.” His point was that when a good housing or mixed-use idea comes across the permit desk, the city should not have old land use assumptions standing in the way.
The Broadway Corridor is a major example. The project, centered on the former post office site near the Pearl District, represents the kind of mixed-development model Zimmerman wants to see: workforce-affordable housing, additional residential development and the potential to attract a major employer to the remaining parcels. Prosper Portland is managing that effort.
The larger point is that downtown recovery cannot depend only on office occupancy. More residents would mean more activity, more perceived safety, more demand for ground-floor retail and a stronger sense that downtown is a neighborhood, not just a central business district trying to recover its old commuter patterns.
For multifamily investors, that is the opportunity and the challenge. Downtown has infrastructure, transit, cultural assets and major employers nearby. But it also needs a stronger residential base and a clearer path through policy, permitting and financing.
Portland’s investment reputation remains a major hurdle
One of the sharpest moments in Greg’s conversation with Zimmerman came when the councilor addressed Portland’s standing with institutional investors.
Zimmerman said, “When Portland is 80 out of 81 markets for investment, that should scare the hell out of us.”
That line matters because it captures the reputational problem Portland still faces. The city does not just need local developers to feel better. It needs outside investors to believe that Portland is once again a place where capital can be deployed with reasonable confidence.
Zimmerman pointed out that Portland needs roughly 20,000 new housing units. That scale cannot be financed with local capital alone. The market needs regional, national and institutional investors. And those investors tend to ask a few basic questions before they return:
Is the city stable?
Is there a visible growth trajectory?
Are rules predictable?
Is public safety improving?
Is the city serious about housing production?
Can projects be entitled, financed, built and operated without constant political whiplash?
Zimmerman’s view is that investors do not need perfection. They need predictability. They need to see a path forward.
That may be the most important theme of the interview: Portland’s fundamentals may still support investment, but capital needs evidence that the city is becoming more stable.
New government, steep learning curve
Zimmerman was also candid about Portland’s new form of government.
The current 12-member City Council took office under a redesigned system, with all members arriving at once. There were no senior council members. No institutional memory. No “sophomores, juniors or seniors,” as Zimmerman put it.
That created a steep learning curve.
Zimmerman described a first year marked by symbolic gestures, reactive decision-making and some late-night budget maneuvering that he viewed as more show than substance. He did not frame the problem as ideological so much as structural: A new council, new districts, new roles and no inherited operating rhythm.
He also said some councilors initially did not understand basic divisions of responsibility, such as why Multnomah County, not the city, is primarily responsible for homelessness services, or why the Joint Office of Homeless Services was created.
That is not a small issue. If elected officials do not understand who controls which lever, they can spend political energy on the wrong targets. They can also create uncertainty for investors, property owners, service providers and residents.
Zimmerman’s takeaway from year one was that coalition building and second-order thinking matter. Governing is not just responding to the headline. It requires understanding the underlying system before trying to change it.
The question for Portland is whether that lesson is spreading across the council as members move into the next budget cycle.
Public disorder: Zimmerman says conditions are improving
Zimmerman also addressed one of the biggest concerns investors and residents have had about Portland: visible disorder.
He said several conditions that hurt Portland’s reputation are being addressed. RV camping, according to Zimmerman, has been largely cleared citywide. Measure 110, Oregon’s drug decriminalization law, has been unwound. And downtown, in his view, feels different than it did two years ago.
His message to investors was direct: “Come see it. It looks better than the last time you were here.”
That is an important point because market perception often lags reality. Investors who last visited Portland during the worst of the pandemic-era disorder may still be underwriting the city as if nothing has changed. Zimmerman is arguing that the conditions on the ground have improved enough to deserve another look.
That does not mean the city has fully recovered. It does not mean public safety, homelessness, addiction or downtown vacancies are solved. But it does mean the city may be moving from crisis management toward rebuilding confidence.
And for apartment owners, that distinction matters.
A city does not need to be perfect to attract investment. But it does need to show that problems are being managed, that leadership understands the stakes and that the operating environment is becoming more predictable.
What this means for apartment owners and developers
So what should apartment owners, investors and developers take from Greg Frick’s interview with Eric Zimmerman?
First, watch the permit data. If the increase in multifamily applications continues for the next two to four quarters, that will be one of the clearest signs that the SDC waiver and related policy changes are affecting real development behavior.
Second, understand that the SDC waiver is a temporary tool. It may help projects pencil now, but long-term housing production will require a broader package: faster permitting, more predictable land use rules, lower regulatory friction and stronger investor confidence.
Third, downtown Portland remains a major long-term opportunity. But the future of downtown likely depends less on restoring the old office-only model and more on creating a true mixed-use residential district.
Fourth, governance matters. Investors are watching not only policy outcomes but also how decisions get made. Stability, process and predictability are part of the investment climate.
And finally, Portland’s story may be shifting from decline to cautious recovery. Zimmerman is not saying the city has arrived. He is saying the slide may have stopped. Now the city has to grow.
For multifamily investors, that is the question to watch: Is Portland entering a new phase where public policy, development feasibility and investor confidence begin to line up again?
The next few quarters will tell us a lot.
You can watch Greg Frick’s full interview with Portland City Councilor Eric Zimmerman on HFO’s Multifamily Marketwatch video series at youtube.com/@HFOInvestmentRealEstate.
I’m Michael Pierce, senior data analyst at HFO Investment Real Estate. Thanks for listening to Multifamily Marketwatch. We’ll see you next time.
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Washington Housing Crossroads [05/14/26]
Welcome back to Multifamily Market Watch podcast with HFO Investment Real Estate. I’m Michael Pierce, senior data analyst at HFO. Today we’re looking at Washington State, where several recent stories point to the same challenge. The state knows it needs more housing, but production policy and regulation are still not aligned. In Vancouver, housing production is still falling below target. State leaders are considering a new Department of Housing. A lawsuit is challenging Washington’s recently enacted income tax, and in Spokane, city leaders are debating a mandatory cooling ordinance. Together, these stories highlight a housing market under pressure from rising costs, climate concerns, and policy uncertainty.
Vancouver Housing Shortage
Let’s start in Vancouver. According to the city’s 2025 housing report, residential housing fell 51% last year, compared to the city’s six year historic average. That matters because Vancouver’s long-term growth plan requires 2500 new housing units per year to meet projected demand. Current production is running at less than 1/3 of that pace. The city is also falling short on affordable housing production, averaging more than 500 fewer affordable units that are needed per year. For multifamily investors, this is a fundamental supply and demand issue.
Vancouver’s population is projected to grow substantially over the next two decades, and if housing production remains constrained, rental demand is likely to stay strong, but supply shortages also increase political pressure. When cities fall behind on housing goals, policy makers often respond with new regulations, tenant protections, zoning changes, or subsidy programs. Local officials say many barriers are outside of the city control, including high interest rates, rising insurance costs, labor shortages, and elevated construction costs, but when zoning improves, projects still need to pencil financially. For investors, Vancouver still has strong-term fundamentals, including population growth and proximity to Portland, but the city’s own housing report underscores a growing concern: demand is outpacing production at the state level.
Creation of “Department of Housing” in Washington State in the Works
Washington leaders are discussing whether to create a centralized department of housing. Currently, housing-related programs are spread across 30 agencies and more than 200 separate programs. State officials argue the system is fragmented and difficult to manage effectively. The proposed department would consolidate housing programs into a single agency with clear authority and accountability. Governor Bob Ferguson also set a goal of building 200,000 housing units over the next four years for multifamily developers, a more coordinated system could potentially streamline funding and reduce administrative complexity, but organization alone will not solve the state’s housing shortage. Washington still faces the same core challenges affecting housing nationwide: high construction costs, infrastructure limitations, labor shortages, and financial constraints. Still, the proposal signals that state leaders recognize housing delivery is not only a funding issue, but also an execution issue.
Lawsuit Challenges Millionaire Tax in Washington
Another story worth watching is the lawsuit challenging Washington’s enacted graduated income tax. The legal challenge argues that the state violates Washington’s constitutional limits on non-uniform property taxation, based on long-standing court precedent treating income as property. This is likely to become a lengthy legal battle, potentially reaching the Washington Supreme Court for apartment owners, investors, the issue is less about day to day operations and more about Washington’s long term investment climate. Washington has historically benefited from its reputation as a state without a personal income tax, especially on cross border markets like Vancouver. Whether the tax survives or fails, the lawsuit adds another layer of uncertainty onto an already complex investment environment.
Spokane Considers Air Conditioning Mandate for All Apartments
Finally, Spokane leaders are considering a proposal that would require landlords to keep rental units below 80 degrees. The ordinance is tied to a growing concern that extreme heat events in the Pacific Northwest following the 2021 heat dome. Supporters view cooling requirements as a public health issue, but housing industry groups argue the proposal could create more challenges for older apartment buildings, many of which lack the electrical systems or central cooling infrastructure. The concern is especially important because of older buildings provide naturally occurring affordable housing. Significant retrofit costs could reduce affordability, increase rents, or discourage smaller landlords from remaining in the market. The debate also reflects a broader trend. Cities are increasingly treating climate adaptation as part of housing regulation. Historically, housing standards focused on heating during winter months and asking whether rental housing should also be cooled to save temperatures during extreme heat. The shift could create significant capital expenditure pressure for older multifamily properties.
In Summary
So, what do all these stories tell us about the Washington multifamily market? First, housing demand remains strong, but production is. Struggling to keep pace. Second, state leaders recognize the current housing system is fragmented and difficult to manage. And third, legal and regulatory uncertainty continues to shape the investment landscape. And finally, climate change-related housing standards are becoming a larger operational issue for multifamily owners and investors. The long-term fundamentals in Washington do remain compelling, but policy decisions will increasingly shape operational costs, compliance obligations, and development feasibility. The bottom line is Washington still needs significantly more housing, and the path to delivering it remains complicated. Vancouver’s production is slowing down. The proposed Department of Housing, the income tax lawsuit, and Spokane’s cooling debate all point to the same reality: housing policy, affordability, and regulation are becoming more interconnected for apartment owners, developers, and investors. This remains a market worth watching closely. I’m Michael Pierce, senior data analyst at HFO Investment Real Estate. Thanks for listening. Talk to you next time.
About HFO
HFO’s entire office specializes in multifamily real estate, making us the largest multifamily brokerage in the Pacific Northwest. Your success is our passion. Like and subscribe to Multifamily Market Watch videos on YouTube, articles on LinkedIn, and podcasts on all major streaming markets. Build your legacy with HFO. Call 503-241-5541 or visit our website at HFORE.com for more information. HFO is a partner of the Global Real Estate Advisor network.
Watch HFO’s latest YouTube interviews and subscribe.
Oregon’s 2026 Housing Legislation [05/07/26]
Welcome back to Multifamily Market Watch from HFO Investment Real Estate. I’m Michael Pierce, and today we’re breaking down Oregon’s 2026 legislative session and what it means for apartment owners, developers, and investors.
Oregon’s 2026 Short Session
The short session ran from February 2 to March 6. Lawmakers passed several housing bills, including one reshaping inclusionary zoning and another reducing land use appeal risk, but the session also highlighted ongoing tensions between housing goals and the system that makes it more difficult.
Lawyers: Cautiously Optimistic
HFO partner Greg Frick spoke with land use attorney Ezra Hammer, who described the outlook as cautiously optimistic. Progress is happening, but building housing in Oregon remains expensive and complex.
What Did Not Pass This Session
First, let’s talk about what didn’t pass. SB 566 which aimed to clarify prevailing wage exemptions, failed in the short session. This is significant because prevailing wage rules can increase labor costs by roughly 30% making some projects infeasible, especially affordable housing. Ezra noted that the Oregon Bureau of Labor and Industries has taken a more aggressive and less predictable approach recently, expanding when these rules apply. That uncertainty has already stopped projects, from coastal housing to large redevelopment plans. The broader issue, Ezra said, is the lack of alignment across state agencies. Housing goals exist, but implementation can work against them. This bill is expected to return in a future session.
Bills That Passed in 2026
SB 1521 – Inclusionary Zoning Reform
Now, let’s talk about what did pass. SB 1521 inclusionary zoning reform. This is one of the biggest wins. It requires jurisdictions in Portland metro area to fully offset the cost of inclusionary zoning mandates through incentives like fee waivers and tax abatements. Inclusionary zoning requires below market units and new developments, which developers argue acts like a tax on construction. This bill doesn’t eliminate the policy, but forces cities to account for the cost. The market response has been immediate, including interest from out-of-state investors who had previously avoided Oregon. The bill could help improve feasibility and restore confidence to the region.
HB 4035 – Urban Growth Boundary Expansion
Next up is HB 4035. It expands eligibility for cities to grow their urban boundaries and lower rent burden thresholds. It also increases allowable acreage and permanent expansion onto farm or forest land when necessary. This is especially important for smaller cities constrained by surrounding land designs. The bill aims to simplify a process that has historically been costly and time-consuming.
HB 4036 – Acquisition of Existing Affordable Housing
Next up is HB 4036. It creates a fund to acquire and preserve existing affordable housing, with new construction often too expensive. The focus shifts to maintaining current units. Older properties face rising costs, expiring affordability restrictions, and the program could help support acquisitions and preservation efforts.
HB 4082 – 55 Plus Housing
HB 4082 is a 55 plus housing pathway. It creates a path for senior housing through the urban growth expansion process, including manufactured housing communities with long-term affordability requirements. With Oregon’s aging population, this could open up new opportunities for developers and more strategic mastermind in communities.
HB 4037 – Housing Development Appeals Limited
Next up is HB 4037 Section 17, and this may be the most consequential change. Section 17 limits who can appeal certain housing developments that meet clear standards. It reduces notification requirements, removes mandatory public hearings, and eliminates most third-party appeals. This could significantly reduce delays, often by a year or more, and increase certainty for developers. However, legal challenges are likely, and some cities are already pushing back on this one. Oregon hasn’t solved its housing crisis. The costs still remain high, and challenges persist, but this session introduced meaningful structural reforms, especially SB 1521 and HB 4037 that address feasibility and timelines. Investor interest may now be returning, but outcomes will depend heavily on how cities and agencies implement these changes.
Key Takeaways
The bottom line is that we are seeing mixed results here, but some of the most significant housing reforms in Oregon has seen in years. For investors and developers, the key bills to watch are SB 1521 and HB 4037 If you’d like to see the full interview with Greg Frick and Ezra Hammer, it’s available on our website. I’m Michael Pierce, and thanks for listening to Multifamily Market Watch. Talk to you next week.
About HFO
HFO’s entire office specializes in multifamily real estate, making us the largest multifamily brokerage in the Pacific Northwest. Your success is our passion. Like and subscribe to Multifamily Market Watch videos on YouTube, articles on LinkedIn, and podcasts on all major streaming markets. Build your legacy with HFO. Call 503-24 1-5541 or visit our website at HFORE.com for more information. HFO is a partner of the Global Real Estate Advisor Network.
Watch HFO’s latest YouTube interviews and subscribe.
Rising Utilities and Taxes [4/30/26]
Welcome back to Multifamily Marketwatch. I’m Michael Pierce, senior data analyst. Today we’re looking at several stories that are relevant for apartment owners and investors in Oregon and southwest Washington. The common theme is simple: housing markets are shaped not only by rents, vacancies, and interest rates but also by governance, operating costs, utility rates, construction volatility, and the willingness of capital to move.
This week, Portland’s housing and budget story came to a governance story. The city moved closer to a new transportation utility fee that would add to the reoccurring cost of multifamily properties. Southwest Washington is facing a proposed natural gas rate increase.
City of Portland Budget Cuts
Let’s start with Portland. Two Portland stories this week should matter to apartment owners. First, Mayor Keith Wilson released his proposed 2026-27 city budget aimed at closing a shortfall of more than $160 million. The mayor’s office described the budget as maintaining critical resources, including affordable housing, while making significant and painful cuts.
OPB reported that the plan would also cut shelter programs, public safety positions, and other services as part of fulfilling the shortfall of more than $160 million. Second, Portland’s new city council continues to face questions about oversight of housing dollars.
Unspent Housing Funds Drama
Axios reported earlier this year that Portland officials had uncovered additional unspent housing funds after a previously revealed $21 million surplus in housing allocations, raising concerns about why these funds were not disclosed during earlier budget discussions.
For apartment owners and investors, the issue is not just whether the city supports affordable housing. The deeper issue is whether Portland can reliably manage housing dollars, shelter capacity and street level operating environment around residential assets that matters for underwriting.
If shelter funding is reduced, owners want to watch whether visible homelessness and service pressure increase in specific neighborhoods.
If housing funds are discovered after budget decisions are already made, investors may question how well the city tracks and deploys its own resources, and if the city’s new form of government is still learning how to coordinate policy, budget, and oversight that can really affect confidence.
In other words, Portland housing story is increasingly a governance story. The question is not only does Portland want more housing, the question is, can Portland align budget decisions, housing dollars, shelter strategies, and accountability in a way that makes the market easier to understand.
Portland Transportation Utility Fee
The second Portland story is more direct for operating statements. Portland City Council advanced a transportation utility fee on April 22, sending it to a second reading. If finalized, the fee would start january 1, 2027 For a typical multifamily dwelling unit, the fee is expected to be about $8.40 per month. Citywide, the fee is expected to raise $46 million a year in new transportation revenue for an owner, $8.40 per unit per month may not sound dramatic in isolation, but that cost really adds up over time and is reoccurring on a 100-unit property, that would be roughly $840 per month, or just over $10,000 per year.
On a 250-unit property, it would be $2,100 per month and $25,000 per year. That becomes part of an expensive story in Portland. It affects acquisition models, renewal assumptions, rent planning, and, where applicable, expense reimbursement strategies. The broader point is that the apartment owners are facing cost pressure from multiple directions at once: insurance, payroll, repairs, utility taxes, regulatory compliance, and now potentially a transportation utility fee. In a strong rent growth environment, owners might absorb some of these costs more easily, but in a softer revenue environment, even moderate recurring charges can affect net operating income. For 2026 acquisition models, owners and brokers should begin treating the transportation utility fee as a probable future operating expense, not a remote political idea.
NW Natural Rate Increase in Washington State
Now let’s cross the river into southwest Washington. Northwest National is seeking a sizable rate increase for Washington customers. KATU reported that the proposed increase would raise rates by about 19% or an average of $12.96 per month per household, beginning in August, if approved. The proposal also includes additional increases of 5.1% in 2027 and 5.9% in 2028 Washington Attorney General Nick Brown has opposed the increase, arguing that Washington residents are already facing high living costs. Northwest National has said that the rate increase is necessary to safely manage its system and that Washington customers have also recently felt rate impacts from the state’s Climate Commitment Act.
Utility Hikes Impact Affordability of Rent
For multifamily owners, gas costs matter in two ways. First, they may. Directly affect landlord-paid operating expenses. If a building has central system or owner-paid gas, a rate increase goes straight to the expense side of the ledger. Second, even when tenants pay their own gas bills, higher utility costs still matter. They affect tenant affordability, renewal decisions, collections, and, in lower- or moderate-income properties, whether households can absorb rent increases at all. That is why utility costs are increasingly a housing issue, not just a consumer issue.
If tenants are paying more for gas, electricity, and insurance pass-throughs, transportation, or food, their ability to absorb rent growth weakens. Owners may still have market demand, but the household budgets can become a limiting factor. For southwest Washington, this is especially important because Vancouver and Clark County remain high demand markets, but high demand does not make residents immune to cost fatigue. Local governments cannot control every macroeconomic factor, they cannot fully control tariffs, fuel costs, or global supply chains, but they can control whether their own system is clear, consistent, and responsive.
Local Predictability is Important
In a high-cost development environment, the local predictability becomes a competitive advantage. So, what should multifamily owners, developers, and investors take away from this week’s story? First, Portland’s budget and housing oversight issues are not just city hall drama; they affect the operating environment around apartment assets. Second, the proposed transportation fee for Portland should be treated as a likely future operating cost for 2026 underwriting; it belongs in the model. Third, southwest Washington utility costs are a growing affordability issue. Whether owners or tenants pay the bills, higher gas rates can affect NOI collections and renewals.
Key Takeaways
The bottom line is housing demand in Oregon and southwest Washington remain real, but the story for apartment owners is increasingly about execution. Do cities manage their housing dollars well? Can they keep shelter and street conditions from undermining the downtown and neighborhood recovery? Will they avoid layering new costs onto housing without understanding the impact? Can utility and regulatory systems preserve affordability while funding necessary infrastructure? Those are the questions that will shape the next phase of the multifamily market. I’m Michael Pierce. Thanks for listening. And talk to you next week.
About HFO
HFOs entire office specializes in multifamily real estate, making us the largest multifamily brokerage in the Pacific Northwest. Your success is our passion. Like and subscribe to Multifamily Marketwatch videos on YouTube, articles on LinkedIn, and podcasts on all major streaming markets. Build your legacy with HFO. Call 503-241-5541 or visit our website at HFORE.COM for more information. HFO is a partner of the Global Real Estate Advisor network.
Watch HFO’s latest YouTube interviews and subscribe.
Clark County and Vancouver Multifamily Market Update [4/23/26]
Welcome back to Multifamily Market Watch. I’m Michael Pierce, senior data analyst at HFO Investment Real Estate. Today we’re looking at southwest Washington, specifically Clark County, and the city of Vancouver. These two areas sit within the same metro, but are behaving very differently together. However, they are producing some of the strongest apartment fundamentals in the Pacific Northwest.
Clark County & Vancouver Washington Vacancy Rates
Let’s start off with the big picture. Clark County’s vacancy is approximately 3.7%. Vancouver is about 6.6%. Portland, by comparison, is closer to 7.4%. That gap is the story. Clark County is operating at one of the tightest vacancy levels in the region, while Vancouver is working through new supply, but still outperforming Portland. This is not a distressed market; it is a market that is separating into distinct sub-markets, each with its own supply and demand dynamics.
Clark County Apartment Pipeline
Clark County, outside of Vancouver, is a small market with roughly 1900 apartment units. Over the past 12 months, there have been no new deliveries and no new units under construction. That absence of supply really explains everything else. Vacancy sits at 3.7% well below historical averages, and is expected to remain near that level through 2026 Rents are holding at approximately 1760 a month, while annual growth is about 1.6% Even more notable, higher end product is effectively full vacancy in four and five star properties is just above 2% This is not a market adjusting supply, it’s a market defined by lack of supply. As a result, pricing remains firm and rent growth continues, even as other parts of the metro slow.
Vancouver, Washington Apartment Pipeline
Vancouver is a market that is slowly absorbing supply. The city is a much larger, more active market with around 39,000 apartment units. Unlike Clark County, Vancouver has been the center of development activity in the region over the past 12 months. There have been 842 units delivered, approximately 905 units were absorbed, and vacancy is currently sitting at 6.6% The key point is the demand is keeping pace with supply. That’s what separates Vancouver from a typical oversupplied market. The defining number for Vancouver is its construction pipeline. There are approximately 2187 units under construction, that represents roughly 5.5% of total inventory. Projects include several large developments, such as a 400 unit on the waterfront and multiple 200 plus projects across the market. At the same time, construction activity has slowed. New starts have declined significantly from peak levels of 2022 and 23. That suggests Vancouver is nearing the end of its current supply cycle rather than entering a new one.
Rent Growth
When we look at rent performance, the trends really reflect the differences between the two markets. Clark County continues to post positive rent growth of about 1.6% annually, with minimal concessions. Vancouver has seen slight softness, asking rent growth is slightly negative, around point 2% Effective rent growth is modestly positive, despite that Vancouver is still overperforming Portland, where rent declines have been more pronounced. But really, the key takeaway is that Vancouver’s rent softness is supply driven, not demand driven.
Clark County Employment Growth
The strength of this market is rooted in its economy. Clark County employment has recovered to approximately 114% of pre-pandemic levels, that is a significant outperformance relative to parts of the Portland metro. Population growth is also stronger. Clark County has grown roughly 4.8% since 2020 reaching more than 527,000 residents. Vancouver alone has grown to nearly 199,000 residents, up more than 4% over the same period.
Population Growth in Portland
By comparison, population growth in the Portland metro has been much slower. Tax policy also plays a role. Washington does not have a state income tax, while Oregon does. That difference continues to influence migration patterns and housing demand. Investment activity reflects these fundamentals. In Vancouver, recent sales show pricing generally in the range of 180 to 250,000 per unit, with cap rates in the mid 5% range, some notable transactions include the Terra at Hazel Dale at approximately 233,000 per unit. There’s also the Very Vancouver at roughly 235,000 per unit. Clark County, by contrast, is very limited transaction volume. Only one sale occurred in the past year at approximately 242,000 per unit. That reflected the lack of inventory and limited opportunities to transact, long-term demand remains strong.
Clark County Population Growth
Clark County is projected to grow more than 700,000 residents by 2045. Housing units are estimated at more than 115,000 units over that period. Even if a portion of that demand is met through ownership, housing multifamily will play a significant role. Infrastructure investment will also support growth. The interstate bridge replacement project with an estimated cost of over $14 billion is expected to improve regional connectivity and support long-term economic expansion.
The Key Takeaways
So, in conclusion, Clark County and Vancouver are outperforming Portland in the metrics that matter most. Clark County is defined by extremely tight vacancy and no new supply, while Vancouver is defined as strong demand that continues to absorb new construction units. Both markets are benefiting from the stronger job recovery, faster population growth, and favorable migration trends. In the near term, 2026 will be a leasing year in Vancouver, as the market continues to absorb recent deliveries, but the broader outlook remains positive. This is not just a stable market, it’s a leading one. I’m Michael Pierce, and this has been Multi Family Market Watch. Thanks for listening. And talk to you next week.
About HFO
HFO’s entire office specializes in multifamily real estate, making us the largest multifamily brokerage in the Pacific Northwest. Your success is our passion. Like and subscribe to Multifamily Market Watch videos on YouTube, articles on LinkedIn and podcasts on all major streaming markets. Build your legacy with HFO. Call 503-241-5541 or visit our website at HF O R e.com for more information. HFO is a partner of the Global Real Estate Advisor Network,
Watch HFO’s latest YouTube interviews and subscribe.
Corvallis–Albany Multifamily Market Update [4/16/26]
Welcome back to Multifamily Market Watch. I’m Michael Pierce, senior data analyst to HFO Investment Real Estate. Today we’re heading to Oregon’s Mid Valley, Corvallis and Albany, two markets that sit right next to each other, but are behaving very differently right now. And this is one of those markets where the headline numbers tell you one story and the real story is happening underneath.
The Big Picture
Let’s start with the big picture. Across Corvallis and Albany combined, you’re looking at a market of about 14,000 apartment units with vacancy sitting around mid 4% range, so demand is still there. This is not a weak market, but rent growth, that’s basically flat, right around zero, maybe slightly positive. So the shift is this: the market is not broken, but it has stopped accelerating, and that’s a very different environment for owners and investors.
Corvallis
Now, let’s break the two markets apart. Corvallis is still the tighter of the two, vacancy around 4.2% rents roughly 1480 to 1500 a month, and importantly, no new deliveries in the past year. So, on paper, this looks like a classic supply-constrained market, but absorption has actually been slightly negative, so demand is there, but it’s not pushing rents anymore.
Albany
Albany tells a different story: vacancies around 5% rents closer to 1400 a month, and about 177 units delivered in the past year, that’s real supply, but there’s the key: Albany absorbed most of it. So, this isn’t a weak market, that’s a market that took supply and is adjusting to it. Simple framing is Corvallis equals tight but flat, Albany equals softer but stabilizing.
Corvallis Development Pipeline
Now, here’s the most important part of the discussion. If you look at CoStar, Corvallis shows around 90 units under construction, that’s it. So, naturally, you think there’s no supply chain coming. The market should stay tight, right? But the reality is, when you look beyond Costar into city data, local reporting, and development tracking, you’re actually seeing 300 plus actively under construction, and closer to four to 500 total units when you include affordable and mixed-use projects. To put that in context, Corvallis has a market of about 7700 units total, so instead of a 1% pipeline, you’re looking at something closer to five to 7% of inventory in motion. That’s a completely different story. So, why the gap? Because Costar is missing affordable housing, subsidized projects, early stage developments, and most importantly, student housing.
Oregon State University Housing Impact
Now we have something I like to call the OSU effect. The real driver here is the Oregon State University. This is the anchor of the Corvallis housing market. Here’s some key numbers: enrollment around 38,000 to 39,000 students, and growing on campus housing today is roughly 5000 beds, and a long-term goal of 7500 That’s an increase of about 2500 beds over time, and that’s already happening. You’re seeing projects like a 680 bed residence hall being erected, private student housing development with hundreds of beds and additional proposals in the pipeline, so the key insight is student housing doesn’t always show up as units, it shows up as beds. So, when a six or 700 bed gets delivered, that’s equivalent to two or 300 apartment units of impact, but it doesn’t show that way up in the data.
What does it all mean?
Okay, so what does this mean for the markets? We’ve got two forces happening here on the demand side, we have 38,000 students, a stable employment base, and limited traditional supply. On the supply side, we have 400 plus units in a broader pipeline, 1000s of future student beds coming up, and growing affordable housing stock that creates a split market. Traditional apartments that feel tight, but a new supply is quietly increasing competition, and that’s why rent growths have flattened, not because demand disappeared, but because supply is finally starting to respond.
Corvallis Pricing and Cap Rates
Now, let’s bring it back to the investors. Corvallis, the pricing is around 200k per unit, and the cap rates are in the mid 5% range right now. Albany sales are closer to 170k per unit, with cap rates around 6% So, the translation here is Corvallis has the premium pricing based on perceived scarcity, and Albany has more yield and more flexibility, so the risk is if you’re buying in Corvallis, assuming no supply, you may be paying tomorrow’s prices on yesterday’s assumptions. In context to the economy, this is an area for stable demand, but not one that can outrun supply mistakes.
Housing Demand in Corvallis and Albany
If we zoom out and look at long-term housing needs, both markets will still need housing long term, of course. State estimates show that roughly seven 8000 units are needed over the next 20 years for each market, so yes, short term equals supply catching up, long term equals still under supplied.
The Key Takeaway
Here’s the key takeaway: Corvallis and Albany are not declining markets, but they are changing markets. Corvallis looks pretty tight, but supply is coming, and Albany looks soft, but is stabilizing. And for investors, this is the shift – it’s no longer. Chasing rent growth, it’s about understanding timing, because in this market the biggest risk is in vacancy, it’s misreading the pipeline. Thanks for listening. I’m Michael Pierce. This has been Multifamily Market Watch. Talk to you next week.
About HFO
HFO’s entire office specializes in multifamily real estate, making us the largest multifamily brokerage in the Pacific Northwest. Your success is our passion. Like and subscribe to Multifamily Market Watch videos on YouTube, articles on LinkedIn, and podcasts on all major streaming markets. Build your legacy with HFO. Call 503-241-5541 or visit our website at www.hfore.com for more information. HFO is a partner of the Global Real Estate Advisor network.
Watch HFO’s latest YouTube interviews and subscribe.
Policy and Capital Market Developments Across OR and WA [4/9/26]
Welcome back to Multifamily Market Watch. I’m Michael Pierce, senior data analyst at HFO Investment Real Estate.
Today’s update is different from your typical market report, instead of focusing on one geography, we’re looking at a series of policies and capital market developments across Oregon, Washington, and at the federal level. Taken together, these stories point to a larger shift in how housing is being approached. It is a shift towards more regulation, more intervention, and at the same time, more urgency around supply.
Affordable Housing Subsidies Under Discussion
Let’s start in Portland and talk about vacant affordable housing and operating subsidies. City leaders are currently reviewing whether to redirect between roughly 21,000,050 $6 million in unspent housing funds to address a growing issue: vacant affordable housing units. The number being discussed is significant. There are nearly 1900 subsidized units sitting vacant across the city. That’s not a demand problem, it’s an operation problem. The proposal would allow funds from the city’s housing investment fund and related programs to be used for rental assistance, eviction legal aid, and potentially rent buy-downs for nonprofit housing providers. There’s been no final decision, but the discussion is ongoing.
For years, the focus on housing policy has been building new supply, but this conversation is different. It’s about keeping existing affordable housing operational.
Nonprofit housing providers are facing rising costs across the board, including insurance, financing, staffing, and regulatory compliance. The result is that the units exist, but they are not functioning as part of the active housing supply.
If Portland moves forward with subsidizing operations or rent levels, it could represent a meaningful policy shift. Instead of focusing only on new development, the city would be directly supporting ongoing operations for market rate owners and investors.
This is something to watch closely, because once operating subsidies become part of the conversation, it raises broader questions about competitive dynamics, policy expectations, and how housing is supported in the long term.
Homeland Security Court Ruling
A federal court recently issued a ruling that touches on housing in a very different way. The court ordered the Department of Homeland Security to stop using tear gas and other chemical munitions in ways that affect residents in a 209 unit affordable housing community near the ICE facility in Portland. The court found that residents were likely experiencing harm from exposure inside their homes, and the injunction will remain in place while the case proceeds. At the same time, Oregon passed House Bill 4138 which requires law enforcement agencies to limit the use of facial coverings and clearly display identification during operations.
This is not a typical housing policy story, but it has some real implications. It forces the idea that residential environments carry legal protections, even when located near government or enforcement activity. For housing providers, especially those near government facilities or high activity areas. This introduces additional considerations for liability exposure, operation disruptions, and potential legal challenges. It’s a reminder that location risk is not just about economics, it can also be a policy or legal exposure. [Note: on Monday, April 27, the orders restricting DHS were paused by a federal appeals court, and federal agents are cleared to use tear gas and chemical munitions again. In a win for the Trump administration, officers can continue to use crowd control weapons outside the ICE facility in Portland without restrictions, at least for now.]
Capital is selective in Oregon and SW Washington
Now, let’s shift to the capital markets. Multifamily investment activity in the Portland metro has slowed as 2026 begins, trailing 12 month volume of approximately 1.1 billion, that’s down 33% year over year. In Vancouver, which is typically one of the most active submarkets, the decline is even sharper, with volume down more than 60% Despite the slowdown, deals are still getting done. One example is the $48 million sale of Terra at Hazel Dell, a 206 unit property in Vancouver. So, capital has not disappeared, but it’s being a lot more selective. So, what is this signaling? Transaction volume is often the clearest indication of investor sentiment, and right now that signal is cautious. Investors are weighing interest rates, operating costs, and policy uncertainty, but they are still active in stabilized assets, suburban markets, and well-located properties with predictable cash flow.
Flood Risk Disclosure Requirement
So, let’s move a little bit north and talk about Washington. Several policy developments are worth watching here. Washington has passed legislation requiring landlords to disclose flood risk to tenants. The law will apply to leases signed after 2026 It also requires landlords to inform tenants that standard renters insurance does not cover flood damage. This matters because it’s part of a wider trend. Disclosure requirements for housing providers are expanding, not just in Washington, but nationwide, and they increasingly cover climate risk, insurance gaps, and property conditions. Individually, these rules are manageable, but collectively they increase operational complexity.
Statewide Residential Development Expansion
Washington also passed one of the most significant housing supply measures in the region. Cities of more than 30,000 residents will be required to allow residential development and commercial and mixed zones. That means housing can be built in underutilized commercial sites without requiring rezoning. This could open 1000s of potential development sites across the state, including markets like Seattle, Tacoma, Spokane, and Vancouver. This matters because it’s a clear supply side policy shift. Instead of restricting development, the state is actively trying to expand it for developers, investors. This creates new land opportunities, more flexibility, and potentially faster timelines on their projects.
Income Tax on Millionaires
Washington is also considering a new tax policy. The governor supports a 9.9% tax on income above $1 million beginning in 2028. The proposal is expected to generate approximately $3.7 billion annually, and tax policy does influence behavior, it affects where they live, where capital flows, and how investment decisions are made for housing that can translate into shifts in demand, particularly at higher income levels.
Department of Housing
And to add another layer onto the bureaucracy, Washington is also exploring the creation of a statewide department of housing. A task force is currently gathering input and will present recommendations later this year, if created, a centralized housing agency could consolidate funding programs, standardize regulations, and potentially streamline development process that could change how multifamily projects are financed and approved across the state.
National Examination of Housing Supply
At the national level, Congress is looking at supply and more scrutiny. Industry estimates that the US will need approximately 4.3 million additional apartments by 2035 They’re looking at incentives for development, redevelopment for underused properties, and regulatory reform. The second proposal would require institutional investors to sell single family rental homes within seven years. While focused on single family housing, the broader signal is clear: there is an increasing attention to large scale ownership of rental housing across Oregon, Washington, and at the federal level.
A final word
Three themes are emerging: First, housing policy is shifting towards supply expansion, particularly through zoning reform and redevelopment. Second, the regulatory requirements for landlords continue to grow, especially around disclosures and operational standards. Third, capital markets remain cautious but active, with investors focusing on stability and long-term fundamentals. The broader signal is clear: policymakers are trying to increase housing supply while increasing oversight of the rental housing industry for owners, developers, and investors. The challenge will be navigating both at the same time, because going forward, success in the market will depend not just on fundamentals, but the understanding of policy. And, as always, continue to listen to Multifamily Market Watch, where we will be updating these stories as they progress. I’m Michael Pearson, thanks for listening.
About HFO
HFO’s entire office specializes in multifamily real estate, making us the largest multifamily brokerage in the Pacific Northwest. Your success is our passion. Like and subscribe to Multifamily Market Watch videos on YouTube, articles on LinkedIn, and podcasts on all major streaming markets. Build your legacy with HFO. Call 503-241-5541 or visit our website at HFORE.com for more information. HFO is a partner of the Global Real Estate Advisor Network.
Watch HFO’s latest YouTube interviews and subscribe.
Positive Economic Signals in Oregon and SW Washington [4/2/26]
Welcome back to Multifamily Market Watch. I’m Michael Pierce, senior data analyst, HFO Investment Real Estate. One of the most common questions we hear right now is simple, with all the policy debates, lower rent growth, and reduced transaction volume. Are there any positive signals emerging in Oregon and southwest Washington? If you look at only apartment fundamentals, the answer can feel unclear, but when you step back and look at capital investment, infrastructure, and policy actions announced since the beginning of the year, a different picture begins to emerge, and it’s a picture that suggests continued long-term commitment to the region.
Apartment Fundamental Cycle
Before we go project by project, it’s worth framing the moment we’re in the part of the cycle where apartment fundamentals have softened, construction has slowed, and capital markets remain cautious. That tends to dominate the conversation, but at the same time, large scale investments are still being made, and those investments tend to be long-term signals of economic confidence.
OHSU Expansion
The most immediate example is Oregon Health and Science University. Next month, OHSU will open the Vista Pavilion, a 14-story hospital tower with roughly 530,000 square feet. The project carries an estimated cost of $650 million It will expand cancer care and add approximately 128 beds. Why does this matter? It’s one of the largest recent private institutional investments in Oregon, and it reinforces something important. OHSU is not just a health care provider, it is one of the state’s largest employers and one of Oregon’s most stable economic anchors. Projects of this scale signal long-term confidence in the region’s population, workforce, and demand for services for housing that translates into sustained demand for nearby rental housing over time.
Airport Expansion
The second major milestone is at the Portland International Airport. The $2 billion redevelopment of the main terminal is now entering its final phase, with completion expected in June. This project modernizes the airport’s core facilities and expands capacity for future travel demand. Large transportation investments tend to have a ripple effect that extend well beyond the project itself. It influences business travel, tourism, logistics, and trade, and over time they shape how a region connects to the broader economy. For multifamily housing, improved connectivity generally supports job growth and population movement.
Moda Center Redevelopment
Another development to watch is the proposed renovation of the Moda Center, Oregon lawmakers have approved legislation allowing state-backed bonds to support a major upgrade to the arena, contingent on a 20 year lease extension by the Portland Trailblazers. Sports venues are not typically primary economic drivers, but they do play a role in urban stability. Maintaining a major league franchise helps support event traffic, downtown activity, and the broader ecosystem of restaurants, hotels, and retail in a period where downtown Portland is still working to recover. That kind of stability matters.
Permitting Streamlining in Oregon
On the policy side, Oregon has taken a step towards improving development timelines. The state approved a program designed to accelerate permitting for larger projects. The thresholds are significant: projects valued at $100 million or more in the Portland metro and 25 million or more in rural communities. Permitting timelines have been one of the biggest constraints on development. This program sends a clear signal the state wants to remain competitive for large-scale investment. For developers, this could reduce uncertainty and improve the feasibility of major projects over time.
PGE Acquisition of PacificCorp Washington Operations
Another major development is in the utility sector. Portland General Electric has announced an agreement to acquire Pacific Corp’s Washington operations and certain assets for approximately $1.9 billion This includes service of about 140,000 customers in southwest Washington. The transaction could transfer both generation and distribution assets, including thermal and wind facilities, but why does that matter? Energy infrastructure tends to follow growth. When you see a transaction of this size, it reflects increasing electricity demand, ongoing grid modernization, and long-term population and economic expansion for housing, that’s just another indirect signal of future demand.
Tanking Permit Approvals in Portland
Now, let’s bring it back to housing more directly. One of the most important signals in Portland right now is not what’s being built, but what is not being built. In 2025 the city approved permits for just over 1200 new housing units, that’s the lowest level since the period immediately following the Great Recession, and much of that decline is coming from multifamily, it matters because in the short term it reflects higher interest rates, rising construction costs, and policy uncertainty, but in the long term it suggests something else, a tighter future supply pipeline. Today’s slowdown is setting up tomorrow as supply constraint.
Today’s Slowdown Powers Tomorrow’s Rent Increases
If demand stabilizes or grows and new construction remains limited, that will eventually support stronger fundamentals in the next cycle.
Secondary Market Growth Signals
another positive signal is the continuation of manufacturing investment across Oregon secondary markets. Couple of examples are 100,000 square foot pharmaceutical facility in Bend, expected to add about 150 jobs, a 600,000 square foot precision manufacturing facility in Prinville, a major printing investment in Roseburg, and the restart of the fiberboard plan in Dillard, expected to employ around 140 people. These are not headline-grabbing metro projects, but they are important. They show that economic growth is not limited to Portland, but they support housing demand across smaller and mid-sized markets throughout the state.
There’s also one notable development in downtown: LAIKA Animation Studios is partnering with civic groups and OHSU Dornbecker Children’s Hospital in a new public art installation in downtown Portland. The project will feature a series of large sculptures designed to attract visitors and encourage foot traffic. It may seem minor compared to the multi billion dollar infrastructure projects, but these kind of initiatives play a role in how people experience the city. They support tourism, street activity, and public perception, and in a recovering downtown environment, those factors matter.
The final word
So, what do all of these signals tell us? First, large scale capital investment is happening. Second, the region continues to invest in infrastructure, healthcare, and energy. Third, policy makers are beginning to address the development constraints, and fourth, the slowdown in construction today is likely to shape the supply conditions of tomorrow. The Pacific Northwest economic story right now is not one dimensional. Yes, apartment fundamentals have softened. Yes, policy uncertainty does remain, but beneath that, there is a steady flow of investment and activity that suggests long-term confidence in the region. For investors, the key is to look beyond the current cycle, because the projects being announced and completed today is what will shape housing demand in the years ahead. Thanks for listening to Multifamily Market Watch. Talk to you next week.
About HFO
HFO’s entire office specializes in multifamily real estate, making us the largest multifamily brokerage in the Pacific Northwest. Your success is our passion. Like and subscribe to Multifamily MarketWatch videos on YouTube, articles on LinkedIn, and podcasts on all major streaming markets. Build your legacy with HFO. Call 503-241-5541 or visit our website at HF O R e.com for more information. HFO is a partner of the Global Real Estate Advisor Network.
Watch HFO’s latest YouTube interviews and subscribe.
Multifamily Delinquencies: What it means for Multifamily deals in 2026 [3/26/26]
Rising Multifamily Delinquencies
Welcome back to Multifamily Marketwatch. This is Michael Pierce, Senior Data Analyst at HFO Investment Real Estate. Today, we’re gonna talk about a signal that lenders, buyers, and owners are all watching more closely. Rising multifamily delinquencies. And a key measure just hit the highest level since the global financial crisis.
This is not a panic episode. It’s a read-the-room episode because credit conditions shape pricing, deal volume, and who can refinance versus who gets forced into a decision. Here are two numbers that I want you to keep in your pocket. Multifamily delinquencies in bank portfolios hit one point three seven percent in Q3 2025, according to CredIQ and Multifamily Dive.
Second, the bigger story is where the stress is concentrated. Serious delinquencies, as in ninety days or more past due, reached one point zero nine percent, roughly seven point one billion in loans in that category. So this is not just a late rent roll math. This is we need a plan part of the delinquency curve.
Delinquent Balance: $8.9 Billion
The total delinquent balance in the dataset was reported to be around eight point nine billion. So the majority of the delinquency is sitting in the most serious bucket. So why is this happening now? Two things keep coming up. One, rate structure. Many 2021 and ’22 deals were financed with floating rate debt when rates were low and buyers were underwriting rent growth that looked pretty reliable.
Then rates rose fast. Floating rate loans repriced fast. Costs went up faster than the income on those properties. And two, operating expenses. Insurance, property taxes, maintenance, payroll. In many markets, those costs have risen sharply and not always in a nice, predictable way. Put those two things together and you get a squeeze.
Net operating income is pressured, debt service is higher, and refinancing gets harder because lenders care about coverage ratios and proceeds. That’s the central setup for 2026, a big refinance calendar paired with borrowers who may have to bring cash in, restructure, sell, or negotiate an extension. So let me translate this into normal human terms.
How Lenders React
When delinquencies rise, lenders don’t just shrug. They tighten. They ask for more documentation. They underwrite to in-place cash flows more than rosy pro formas. They build in more reserves. They demand more equity. They get more conservative about tenant and market assumptions. And here’s the most important nuance. The data we’re citing is bank-held multifamily loans, not the whole universe of multifamily finance. But bank posture matters because it shapes the market’s overall tone, especially for local and regional borrowers. Also, we’re seeing related stress signals across the broader commercial mortgage market. including CMBS metrics such as special servicing and distress rates.
Even if multifamily is not the worst property type right now, the capital markets don’t neatly separate everything into little boxes. When lenders get cautious, everyone feels it. So what does this mean for Oregon and Washington? In the last couple of weeks of widely circulated reporting, we did not see a clean market rate apartment delinquency story that was specific to Oregon or Washington with property-level details that you could reliably take to the bank. But we can absolutely connect the delinquency trend to local fundamentals because fundamentals drive lender comfort and buyer underwriting.
Portland and Seattle Vacancies
Here’s a quick snapshot from a recent brokerage marketing report. In Portland, CoStar puts the vacancy rate around seven point three percent in February with average asking rent of one thousand six hundred and fifty-four. Average cap rate was five point six percent and an average sale price per unit of two hundred and forty-three thousand dollars, the same as a year ago. In Seattle, the same source cited vacancy around seven point three percent, an average asking rent of two thousand seventy-three dollars, and an average sale price per unit of three hundred and sixty thousand, down about five thousand from a year ago.
Those are not the only numbers in the universe, but directionally they matter. Portland has been working through a heavier supply wave and higher vacancy, which can translate into conservative underwriting and slower rent acceleration. Separately, a national rent growth update in February showed very low rent growth for Portland, and Seattle posted a slight month-over-month decline.
What does all this mean?
Again, we’re not cherry-picking for drama. The point is, when rent growth is modest and vacancy is elevated, borrowers have less cushion, and when borrowers have less cushion, lenders get more demanding. So why does this matter to multifamily brokers and owners, investors and developers? Four reasons. First, refinance risk becomes pricing risk. If the seller has a loan maturing or a floating rate loan with a painful reset, that influences their decision-making. Some owners will choose to sell. Others will seek preferred equity. Others will negotiate for extensions. Brokers who understand the maturity wall can identify motivated situations earlier and structure better outcomes.
Second, underwriting is shifting back to show me. Buyers are leaning hard on in-place income and verifiable expenses. Third, opportunity is emerging, but it’s uneven. Distress is not everywhere. It’s often concentrated in specific vintage deals, aggressive floating rate capital stacks, heavy renovation assumptions, or markets where supply outran demand. That creates a selective opportunity for well-capitalized buyers. Fourth, development economics still remain tight. If debt is expensive and takeout assumptions are conservative, new starts require more equity, better sites, and more patience. These economics determine which projects pencil and which ones have to wait.
What to do if you’re an owner or investor
If you’re listening as an owner or investo here are a few practical steps: one, know your debt. If you have floating rate exposure, understand your recap, maturity date, and coverage at today’s rates, not last year’s. Call an HFO broker if you need help obtaining loan quotes for a refinance. Two, tighten the story on operations. Track your expense drivers cleanly. If insurance or taxes jumped, document it clearly. Lenders and buyers are going to ask. Three, if you are thinking about selling or refinancing in 2026, start earlier than you think you need to. The market is rewarding preparation right now.
This is Michael Pierce with Multifamily Marketwatch, and remember, we’re here to help. For more Oregon, Washington, or national multifamily insights, follow us at Multifamily Marketwatch or connect with our team at HFO Investment Real Estate at 503-241-5541. Thanks. Have a great day.
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UO Next Generation Housing (03/19/26)
Welcome back to Multifamily Market Watch. I’m Michael Pierce, senior data analyst to HFO Investment Real Estate. Today we’re heading to Eugene, where the University of Oregon is trying to do something that sounds simple, but never is. Build a lot more student housing in a real neighborhood on real blocks under real zoning codes with neighbors who have strong feelings about what a real neighborhood should be.
University of Housing Next-Gen Housing
This is the University of Oregon’s Next Generation Housing Development Plan. The plan’s been around as a long-term concept, but what makes it news right now is the status. Phase one is already in motion, and phase two depends on land use approvals from the City of Eugene.
Meanwhile, neighbors in Fairmont are pushing back on height use traffic and broader questions of how campus edge is supposed to behave. And if you’re listening from a multifamily lens, this matters because student housing is a pressure valve. When the university adds beds to campus, it changes demand patterns for nearby rentals. When it doesn’t, the private market absorbs that demand, whether it likes it or not.
What the Plans Are
So, let’s walk through it. One, what U of O is trying to build. Two, what it’s asking the city to approve. Three, what the neighborhood concerns actually are. And four, what can it mean for Eugene’s rental market and development conversions? Okay.
First up, so what is the U of O trying to do? The University of Oregon’s framing is consistent. The goal is to build learning center residential communities that support student success and reduce pressure on surrounding housing markets. Universities like to say that, but yes, it’s partly messaging, but it’s also grounded in practical reality. Students have to live somewhere. The plan is described publicly by the University, envisions multiple projects over the next 20 years and beyond, but the immediate focus is on two resident halls as an early implementation step, with construction timed into phases.
Phase one is already under construction. The university has posted construction updates describing active work, like excavation, footing in columns, concrete decks, and significant construction traffic and equipment activity.
In other words, this isn’t a slideshow anymore. It’s cranes and concrete, and phase two is where the politics and zoning math really start showing.
Phase two is still tied up in approvals, but that’s where neighborhoods are getting loud.
What are the numbers?
Before we go any further, let’s pull some real numbers on the size of the plan, because a lot of the public conversation talks about housing in just general terms. The university mostly measures in beds, not units, because residence halls aren’t apartment style units in the traditional multifamily sense. At the full plan level, the University of Oregon’s Next Generation Housing Development Plan identifies roughly 3410 to 3490 new resident hall beds, plus another 230 to 280 beds aimed at graduate and family housing.
So we’re talking roughly 3600 to 3700 units in the broader plan pipeline. Now zooming into the piece that’s driving the current East Campus land use fight. The Phase Two residence hall project is planned with two major halls, with Phase One and Phase Two each described of about 800 beds, that’s roughly 1600 beds total in the East Campus two-phase buildout, delivered in stages with Phase One already moving and phase two tied up in city approvals. There’s one really important footnote here, though. You’ll see slightly different bed counts in different documents and news coverage of the first hall, because designs evolved and the quote unquote bed count can vary based on the room mix. But the best headline takeaway for market impact is the overall plan is measured in the mid 3000s of added beds, and the East campus project alone is roughly 1600 beds across two phases, and from a Eugene rental market standpoint, that’s not background noise, that’s a meaningful supply event in the near campus ecosystem, especially because student housing just add roofs, it reshapes demand patterns for nearby rentals before the doors even open.
What the U of O Wants
So, what is U of O asking Eugene to approve? Here’s the heart of it: U of O is seeking land use changes in the east campus area that would allow residence halls as a permitted use and allow taller buildings than current limits.
The cleanest way to describe the request is UO wants more intensity on the east edge of campus and is asking the city to adjust rules to make it possible.
The university’s own land use summary describes a proposal to amend the east campus overlay so that residence halls are allowed and maximum height can increase while also creating transition limits near nearby single family zoning. The city’s land use description echoes that same request: permit resident halls in the overlay and increase the maximum height with specific transition distance changes near residential properties.
Planning Nighmares
If you’ve been to any of the Portland or Eugene planning meetings in the last 20 years. You already know what happens next. The debate becomes the edge, the transition zone, the buffer, the step down, whatever your local dialect calls it. You owes position is basically we can design a transition that’s respectful and still build meaningful housing supply close to the campus services, transit, and student life. Neighbors’ positions are basically the transition exists for a reason, and taller dorms are not a gentle edge, they’re a wall. So, for the pushback, what are the neighbors actually saying? The themes are predictable, but that doesn’t always make them trivial. The first item is height and massing on the Grateful Edge. Neighbors describe the East Campus area as a transition buffer between taller university buildings and low-scale residential blocks. The fear is not just taller buildings, but the sense that once height limit moves, the character shift is permanent.
Compatibility Arguments
The second issue is use compatibility. The resident hall is a different kind of neighbor than a smaller scale apartment building, even when the building is well managed. The perceived intensity, turnover, and student activity pattern is a different animal. Some residents argue dorms were historically prohibited in that transition area for exactly that reason. Their third issue is traffic and circulation. More beds means more daily trips. Not all students have cars, but enough have cars to matter. Construction traffic also tends to amplify anxiety, because it’s loud, disruptive, and visual long before the final product exists.
Fourth issue is process and trust. This is the big one. In almost every contentious land use case, the technical details matter, but the emotional fuel is trust. The reporting describes residents who feel engaged but not meaningful, and that key concern still remains unanswered.
Neighbor demands and what’s next
Meanwhile, the university argues that it met public involvement requirements and held focus groups and open houses. And if you really want the honest summary, the debate is about height in dorms, but it’s also about whether the neighborhood feels it had some agency over the outcome.
So, what’s happening next? From a market standpoint, status matters because timing shapes supply. Phase one is underway, and the reporting describes phase one is expected to be completed around the fall of 2027 That timeline matters because student housing impacts don’t start when the ribbon is cut, they start earlier when student, parents, and leasing ecosystems adjust expectations.
The Public Hearing Process
On the entitlement side, the public hearing process is active. The neighborhood reporting describes an open record period for additional written testimony and a scheduled council deliberation date. Separate local coverages describe the council’s action schedule around land use requests and the process moved through hearings and decision points. In short, phase one is moving forward. Phase two is in the approval tunnel. The neighborhood pushback is part of that tunnel, and the exact calibration height transition rules and permitted uses could shift based on how the city lands the decision. Now let’s connect the part where our clients really care about rent pressure, vacancy risk, and development feasibility.
Student housing supply is a demand valve. When UO adds a meaningful number of on-campus beds, it can reduce the spillover into nearby neighborhoods, especially for students who would otherwise take the closest off campus units, that does not mean rents collapse. It means the market gets a little less structurally tight at the margins. Bedroom mix really matters. Student demand is not uniform.
Demand Factors
A shift in on campus capacity can change demand for certain unit types off campus, studios in one bedrooms near campus, shared rentals, and larger roommate friendly units, if the university captures more students in residence halls, that can shift the composition of who competes for what in the private market.
And don’t forget that development conversions change when the public sector or a major institution adds a big block of beds. Private developers watch absorption and leasing velocity differently.
How many students will need off-campus housing, and how far does that demand spread, neighborhood friction can slow supply, even when the need is obvious. This is the quiet lesson for every city.
Public vs. Private Providers
We need housing is easy to say. We need housing right here is where the debate becomes real. If phase two approvals are delayed or repealed, students still show up, and the private market continues to carry the load. So, from the multifamily perspective, U of O’s plan is not a side story, it’s one of the few levers that can add concentrated housing supply in a near campus orbit, and that’s a really big deal in Eugene. Here are two practical questions for broker and development clients that we have. If I’m talking to a developer, an owner, or even an institutional buyer looking at Eugene assets, we need to answer two questions first. What gets approved on height and transition rules, and what is the litigation or appeal risk?
The difference between a clean approval and a delayed approval can result in two leasing cycles of continued off-campus demand pressure. Second, what is the expected bed count impact and delivery timing, and how does that map to the private pipeline? If phase one delivers on schedule and phase two follows, the market impact could become visible in leasing patterns before the buildings even open.
Closing
Okay, well, that’s the episode for this week. U of O’s next-generation housing plans sit on an intersection of institutional growth, land use rules, and neighborhood identity. Eugene is about to run into a real-time experiment in what happens when a city tries to add housing where the demand is strongest. We’ll keep tabs on this and let you know any updates. I’m Michael Pierce, and this has been Multifamily Market Watch. Thanks for listening, and talk to you next week.
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