Oregon Housing’s Turning Point: New Rules, Rising Fees, Softer Demand [7/14/26]
July 14, 2026
Aaron Kirk Douglas

Oregon Housing’s Turning Point: New Rules, Rising Fees, Softer Demand [7/14/26]

A new law rewrites how Oregon approves housing

House Bill 4037 took effect July 1 and bars most public hearings and outside appeals for housing that meets clear and objective standards. The first major test is a 320-unit West Linn project, where an attorney for opponents argues the law violates the state constitution.1

Why it matters: Faster approvals lower a real timing risk for builders and land buyers. The pending legal challenge will decide how durable that advantage is.

Portland clears the Lloyd Center redevelopment

The Portland City Council denied the final appeal on a 10-0 vote, clearing a mixed-use plan with apartments, a park and a seasonal ice rink. The mall closes in early August, with the decision set to be formalized later in the month.3

Why it matters: A marquee infill site is moving forward, adding future housing supply and fresh comps for transit-connected Portland product.

Portland fundamentals hold as the pipeline thins

Average advertised asking rent steadied at $1,736 in April after a soft first quarter, and stabilized occupancy held at 94.5%. Developers added just 405 units through April, leaving about 4,400 under construction as the pipeline slows.4

Why it matters: Flat rents plus a shrinking pipeline point toward a tighter market. Owners keep pricing power, and buyers who act early get ahead of the coming supply gap.

SW Washington keeps building in Vancouver

Two Vancouver projects broke ground: the 222-unit Ellison Ridge, which reserves a fifth of its units at 80% of area median income5, and the 238-unit One26 Vista.6

Why it matters: As Oregon starts slow, Clark County remains the metro’s more active construction story.

Permitting friction sends a project out of town

A developer walked away from a plan to reuse part of the vacant Centennial Mills site, citing river setback, ground-floor and parking demands. A separate review advanced nearly 300 residential units for the rest of the property.7

Why it matters: Permitting delays remain a live drag on Portland’s pipeline, yet the approved residential plan shows the site can still work for the right sponsor.

Beaverton raises fees and utility rates

Facing a budget gap, Beaverton approved a $9.50 monthly services fee and a street fee that will triple by 2029, plus water and sewer increases of about 9 and 7 percent.8

Why it matters: Climbing city fees and utilities raise operating costs in suburban Portland. Underwrite escalating charges rather than today’s figure alone.

Oregon lands on a worst-states-to-move-to list

A Consumer Affairs study ranked Oregon ninth worst for 2026 on affordability and safety, with housing costs consuming 19.4% of median income. The state still scored well on quality of life. Oregon was joined in the bottom ten by New Mexico, Louisiana, California, Arkansas, Oklahoma, Nevada, Alaska, Mississippi, and Arizona. The top-ranked states were New Hampshire, Utah, Idaho, Virginia, and Maine. 9

Why it matters: Migration drives absorption, so perception matters. Softer in-migration is a headwind for lease-up across the state.

Oregon sues over federal homelessness funding limits

Oregon joined a 21-state lawsuit against HUD over rules that could cut support for permanent housing. In Multnomah County, 96% of $38 million in federal homelessness funding subsidizes rent for about 2,300 people.10

Why it matters: Federal cuts would strain the supportive and affordable pipeline and the rent-subsidy demand many owners depend on.

National and Federal Signals

A buyer shortage may replace the housing shortage

A Mortgage Bankers Association paper projects deaths will outnumber births starting in 2030, reframing the market around too few buyers. National rental vacancy rose to 7.3% in 2025 from 5.6% in 2022, and multifamily completions hit a 38-year high in 2024.11

Why it matters: Demographics and immigration are becoming the demand story. Near term, high national vacancy tempers rent growth even in tighter metros.

Builders stay optimistic even as costs climb

In a June industry survey, 46% of builders expect better conditions within a year and 51% expect more available equity, while 37% expect costs to outrun inflation.12

Why it matters: Better capital access could revive stalled deals later this year, but cost inflation keeps a lid on new starts.

A conversion scare raises the bar on adaptive reuse

Buckling columns at a 1,600-unit office-to-apartment conversion in New York forced evacuations and an investigation, with warnings of tighter lending and higher insurance for similar projects.13

Why it matters: As Portland leans on conversions to add housing, execution risk is now front and center for lenders and insurers.

AI has not triggered the feared layoffs

A LendingTree analysis of Census data found 96% of businesses using AI reported no employment changes, and most use it to supplement rather than replace work.14

Why it matters: A steady white-collar jobs base supports apartment demand, easing one worry hanging over absorption.


Sources:

1. The Oregonian/OregonLive, “Oregon law ending public hearings for most new housing is ‘blatantly unconstitutional,’ lawyer says,” Jul 10, 2026. 

2. [deleted]

3. KATU, “Portland City Council rejects appeal, clearing Lloyd Center redevelopment project,” Jul 8, 2026. https://katu.com/news/local/portland-city-council-rejects-appeal-clearing-lloyd-center-redevelopment-project-construction-bureaucracy-ice-rink-save-demolition-landmark-local-community-eyesore

4. Multi-Housing News / Yardi Matrix, “Portland Multifamily Report – June 2026,” Jul 9, 2026. https://www.yardimatrix.com/blog/portland-multifamily-market-report/

5. REBusinessOnline, “Ethos, Vance Begin Development of 222-Unit Multifamily Project in Vancouver, Washington,” Jul 2026. https://rebusinessonline.com/ethos-vance-begin-development-of-222-unit-multifamily-project-in-vancouver-washington/

6. Vista Residential Partners, “Groundbreaking on 238-Unit One26 Vista in Vancouver, Washington,” Jul 2026. https://vistarp.com/vista-residential-partners-pccp-llc-and-principal-announce-groundbreaking-on-9-acres-for-development-of-238-unit-one26-vista-in-vancouver-washington/

7. KGW, “Aspiring nightclub owner says Portland’s ‘nightmarish’ permitting process has him looking for the exit,” Jul 7, 2026. https://www.kgw.com/article/money/business/portland-centennial-mills-club-developer-permitting-nw-naito/283-e1967c3d-426c-4ce8-80a0-f14ccf2f2f1a

8. The Oregonian/OregonLive, “Beaverton residents will see higher fees as city faces cash crunch it says it can’t easily fix,” Jul 8, 2026. 

9. Statesman Journal / Consumer Affairs, “Oregon lands on list of worst states to move to. See why,” Jul 6, 2026. https://www.koin.com/news/oregon/consumer-affairs-oregon-ranking/

10. The Oregonian/OregonLive, “Oregon again sues feds over Trump homelessness funding limits that could cut housing support,” Jul 9, 2026. 

11. Bloomberg, “Low Birth Rate Risks Creating US Housing Glut Over Coming Decade,” Jul 8, 2026. https://www.bloomberg.com/news/articles/2026-07-08/low-birth-rate-risks-creating-us-housing-glut-over-coming-decade

12. NMHC, “Multifamily Construction Market Shows Moderate Improvement, Builders and Developers Remain Optimistic About the Future,” Jun 30, 2026. https://www.nmhc.org/news/press-release/2026/multifamily-construction-market-shows-moderate-improvement-builders-and-developers-remain-optimistic-about-the-future/

13. Bisnow, “One Project’s Buckling Beams and Sagging Floors Rattle NYC’s 19M SF Conversion Pipeline,” Jul 8, 2026. https://www.bisnow.com/new-york/news/construction-development/pfizer-building-evacuation-office-residential-conversion-fdny-collapse-risk-135321

14. The Business Journals, “Fears over AI job losses abound. New data tells a different story.,” Jul 1, 2026. https://www.bizjournals.com/bizjournals/news/2026/07/01/ai-doesnt-mean-layoffs-at-most-businesses.html

HFO Investment Real Estate is Oregon’s and SW Washington’s leading multifamily investment brokerage by transaction volume. We specialize in apartment investment sales. Looking for someone to sell your apartment building? Call us at (503) 241-5541.

Oregon Permit Shot Clock Proposed by Prosperity Council [7/21/26]

Back to Insights & Updates