Oregon Multifamily 2026: Salem Bills, Softer Rents, New Risks 02/03/26
News update compiled by Aaron Kirk Douglas, HFO Director of Market Intelligence
The market for multifamily housing in Oregon is evolving as we enter 2026, and new policies are taking effect. Nationwide trends are making things complicated. The average asking rent for an apartment in the U.S. decreased for the first time in 15 years in 2025. Many new buildings and higher operating costs have slowed rent growth and increased the number of empty apartments.
Housing advocates and industry leaders still think conditions could improve in 2026, despite these problems. The housing crisis in the Northwest could begin to improve with new funding tools. Legal changes and a market that is slowly rebalancing could also help. In the next few months, we’ll see if public and private groups can turn this momentum into real progress. Specifically, they aim to make things more affordable in Oregon and Southwest Washington.
Notable bills in Oregon’s short 2026 legislative session (Feb. 3-Mar. 6) include:
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HB 4080: Allows tenants to install portable plug-in solar panels (up to 1.2 kW) and limits landlords/HOAs from prohibiting them.
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HB 4082: Eases urban growth boundary rules to allow land expansion for manufactured home parks or senior housing that’s affordable up to 120% AMI.
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HB 4120: Allows landlords to designate buildings as non-smoking with 90 days’ notice, even for existing leases.
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HB 4123: Restricts landlords from disclosing confidential tenant information and imposes statutory damages for violations.
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HB 4136: Limits the mortgage interest deduction on second homes (unless the home is for sale) and redirects the revenue to a state down-payment assistance fund.
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SB 1514: Repeals the 2021 law requiring “reasonable” time, place, and manner for homeless camping bans, giving cities/counties more leeway to enforce public camping regulations.
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SB 1521: In the Portland metro, bars local governments from enforcing affordable housing unit mandates on developers unless they offset the developer’s financial losses—effectively softening current inclusionary zoning rules.
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SB 1523: Requires landlords to offer non-electronic alternatives if using online “tenant” portals—meaning tenants can opt out of online rent payment systems; allows reasonable portal/credit card fees and ensures traditional access methods remain available.
Officials in Oregon are working on ways to restart development.
Oregon Housing and Community Services (OHCS), the state’s housing agency, has launched a Construction Loan Guarantee Program to make it easier to secure financing for affordable housing [8]. The program will backstop construction loans for qualifying projects, with $20 million provided by the legislature. As a result, this will give private lenders more confidence and help projects get funding even when costs are high. Oregon’s 2026 legislative session will focus on several housing bills. These include zoning changes and tenant protections. The trend shows that housing supply and affordability will be top priorities in Salem.
Portland continues policy debate as it discovers millions more in unspent funds
The City Council of Portland continues to debate how to use $21 million in landlord registration fees that the Rental Services Office didn’t use between 2021 and 2024. On Monday, the City announced it had millions more in unspent funds but didn’t know yet exactly how much.
Initially, the city intended to use the $21M to monitor the number of apartment units and assess the effects of its housing policies on rentals. However, a new plan released last week would send about $5.6 million (over a quarter of the total) to Prosper Portland, the city’s development agency, to help cover a funding shortfall for an affordable/middle-income housing project in the Broadway Corridor. This plan has divided the council, highlighting the conflict between helping renters immediately and investing in long-term housing. In early February, there will be a final vote. Some councilors say that if the development funding falls through, the money should go back to rent aid.
Neighborhood effects of ICE:
Gray’s Landing, an affordable housing complex in Portland, has taken legal action due to its proximity to a federal immigration facility. The building’s management has sued the Department of Homeland Security, saying that frequent protests and the way federal agents control crowds at the ICE office across the street from the apartment community make living there “unbearable.” Residents report frequent encounters with tear gas and rubber bullets in their homes.
National News
Immigration crackdown hits rental demand:
Under the Trump administration’s intensified immigration enforcement, some multifamily owners are reporting notable tenant loss and income disruption tied to deportations and fear in immigrant communities. A recent national survey (John Burns Real Estate Consulting) found that 40% of apartment operators had experienced negative impacts from immigration raids or policies in certain markets. In extreme cases, landlords have suddenly found many units empty.
For instance, one Miami landlord with many undocumented immigrant tenants saw his occupancy plunge to 70% (30% vacancy)—normally 98% full—after enforcement actions ramped up. He also noticed that the remaining tenants were paying more slowly. They were worried about conserving cash in case they had to move or disappear. Nationwide, there are reports of apartment communities near high-profile ICE operations (including Chicago, Minneapolis, and even Portland) where prospective renters have pulled back. In one case, an ICE raid led to a 10% drop in occupancy at a Southeast U.S. apartment property as residents fled or went “underground.” Many foreign-born renters are opting to double up with relatives or avoiding signing leases out of fear, according to the survey analysis. Additionally, industry advisors are currently receiving inquiries about how to manage unexpected vacancies and ensure legal compliance in the event of ICE intervention.
ICE intervention is a new risk factor for multifamily demand that wasn’t fully priced in before. Properties in areas with large immigrant populations (especially undocumented) could see unexpected vacancy spikes, bad debt, or turnover if federal crackdowns continue.
Owners should be mindful of their tenant demographics; in affected communities, strategies like offering shorter lease terms or flexible payment plans might help retain residents who are nervous about future moves. On the flip side, some markets with little immigration exposure won’t feel a thing—meaning the impact is very localized (“one-sided risk rather than a demand tailwind,” as the report put it).
For investors, the report stresses the need for geographic diversification and awareness of policy-driven influences on occupancy.
Additionally, given tight labor markets, the finding that 30% of firms saw immigration policy hurting staffing (maintenance and construction crews often include immigrant labor) is notable.
Apartment owners may support immigration reforms not only for humanitarian reasons but also to protect housing demand and the availability of workers. In summary, immigration enforcement is now a variable in our sector: in some places, it’s creating housing churn and instability, which requires adaptive management and careful monitoring in the months ahead.
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