Sherwood Challenges Housing Mandates 1/30/26
A simmering conflict between state housing policy and local control is intensifying in Oregon. Sherwood, a city on Portland’s outskirts, held a special election on Jan. 13, and approved two charter measures that pushed back on recent state housing laws.
Over the past few years, Oregon’s legislature—backed by Gov. Tina Kotek—passed laws to fast-track home building by trimming local red tape. For instance, one new law slashed the notification zone for new developments from 1,000 feet to 100 feet, limiting how many neighbors must be informed.
Sherwood’s Mayor Tim Rosener argues that such state moves cut residents out of the process. “Our residents deserve more than closed-door decisions made in Salem without their input,” Rosener said. The ballot measures would require at least one public hearing for any large housing project and reaffirm the city’s authority over annexations (future expansion of city boundaries). Sherwood aims to ensure local voices are included in the decision-making process before major developments proceed.
ELECTION UPDATE
Unofficial results (Washington County Elections, updated Jan. 30):
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Measure 34-347 (Citizen involvement / land-use process): PASSED — Yes: 2,903 (93.74%) | No: 194 (6.26%)
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Measure 34-348 (Annexation authority): PASSED — Yes: 2,559 (82.76%) | No: 533 (17.24%)
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Turnout: 3,104 ballots cast out of 14,399 registered voters (21.56%)
What voters just baked into the city charter (in plain English):
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34-347 commits the city to citizen involvement in land-use decisions, including at least one neighborhood meeting and one public hearing before major (Type III+) land-use applications are decided, and it requires mailed notice to property owners within 1,000 feet for significant (Type II+) applications.
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34-348 asserts Sherwood’s control over annexation decisions—including language that annexations generally require voter approval (with a carve-out tied to public health emergencies under Oregon law) and that the city has “exclusive authority” to review/approve/deny annexation requests under its own procedures.
Zooming out, the all-seeing eye read on this is: Sherwood didn’t just “send a message,” it sent a certified-letter-in-waiting to Salem—overwhelmingly backing more local process and local boundary control while the state keeps trying to speed housing production
Sherwood’s vote set a precedent for other Oregon communities wary of state mandates. The success of these measures could trigger a local backlash against Oregon’s uniform housing solutions, potentially slowing development as more cities demand public hearings and control.
Renting is still cheaper than buying in Oregon’s 2026 housing market.
An affordability analysis from early January underscores a trend seen across the country: in the current market, renting often beats buying on monthly cost. The Grants Pass Tribune reports that, thanks to high home prices and elevated mortgage rates (around 6–7%), many Oregon households will find it cheaper to pay rent than to take out a mortgage in 2026.
Statewide, average home values are near $500,000, which translates into hefty mortgage payments, property taxes, insurance, and upkeep. Meanwhile, average rents (roughly $1,700–$3,300 depending on location) haven’t spiked as fast. Studies show that in much of the West, including Oregon, renting is less of an income burden month to month than owning is, given current interest rates and costs.
Oregon’s mild rent control law (which limits large annual rent hikes) adds a bit more predictability for renters, whereas homeowners face uncapped expenses like repair bills and rising insurance premiums. Of course, buying a home still has long-term investment advantages—equity build-up and stability—but the breakeven point for those benefits has pushed further out. As one report put it, unless rates fall or prices adjust, “renting is set to remain the cheaper option for many households in 2026.”
Big picture: Oregon isn’t alone—nationally, economists note a similar pattern. Renter retention is near record highs, as fewer people can afford the leap to homeownership. In the Pacific Northwest, the rental market should stay strong: landlords may see sustained demand and slower turnover, while would-be first-time buyers continue to rent until financial conditions improve. It’s a trend to watch, as it influences everything from apartment vacancy rates to when/if millennials and Gen Z make their move into purchasing homes.
Portland’s 2025 Housing & Homelessness—Year in Review (Portland, OR)
Portland Mercury’s year-end recap highlighted a tumultuous 2025 in Portland housing policy. With a new mayor and city council in office, the city took a dual approach: emergency action on homelessness and long-term housing reforms. Mayor Keith Wilson (elected 2024) made headlines with his pledge to end street homelessness by December 2025. Over the year, the city added about 890 shelter beds—a significant increase, though short of the 1,500 beds Wilson sought. By November, the administration also began enforcing the citywide camping ban again, resulting in hundreds of encampment cleanups to improve safety and cleanliness. Despite these moves, the crisis persists, and even the mayor acknowledged work remains, as many people are still unsheltered going into 2026.
On the housing affordability front, Portland’s City Council turned to policy levers. In 2025 they approved measures to curb alleged “predatory” rent pricing practices and to incentivize development. A major initiative—in partnership with the state – is its plan to waive building impact fees (System Development Charges) on up to 5,000 new residential units to spur construction of more housing. City leaders also explored bold ideas like social housing: three commissioners traveled to Vienna, Austria to study that city’s model of mixed-income, publicly developed housing. The year wasn’t without setbacks: an official leading the city’s housing bureau resigned amid controversy over $21M in mismanaged funds and disagreements with the Mayor’s office, highlighting the challenges of big institutional changes.
Why it matters: Portland’s experiment is being watched by other metros grappling with similar issues. The city’s mix of aggressive homelessness response (more shelters, stricter camping enforcement) and progressive housing strategies (tenant protections, fee waivers, exploring social housing) could serve as a blueprint—or a cautionary tale—for places like Seattle, San Francisco, and beyond. Locally, these policies will shape Portland’s development climate in 2026: fee waivers might kick-start projects that penciled out marginally before, while any new rental regulations will factor into landlord and investor decisions. And as always, the effectiveness of Portland’s homelessness strategy will influence public sentiment and political momentum for further housing measures in the new year.
SW Washington Deal Spotlight – Corporate Woods Apartments Sold (Vancouver, WA)
A recent apartment sale in Vancouver, Washington underscores a positive outlook for the region’s multifamily investors. The Corporate Woods Apartments, a 47-unit complex in Vancouver, sold for $8.61 million in late December. That price (~$183,000 per door) reflects strong demand for mid-sized properties in the Portland-Vancouver metro. HFO Investment Real Estate brokered the deal on Dec. 19. The 20-year-old property was 95% occupied and, notably, offers no luxe amenities – proof that location and fundamentals still drive value. “Well-located properties with strong occupancy…continue to attract deep investor interest,” said HFO partner Rob Marton of the deal. The buyer (undisclosed, with financing from JPMorgan) plans to hold the property long-term and gradually upgrade units as they turn over, implementing a classic value-add strategy.
Regional context: Vancouver and the greater SW Washington market remain attractive as an extension of the Portland area. Washington’s tax advantages and Clark County’s population growth attract investors, who also benefit from Portland’s nearby economic base. This sale, reported in the Daily Journal of Commerce on Dec. 30, 2025, shows that, despite higher interest rates, deals are happening when asset quality is solid, and prices are appropriately set. It’s also a bellwether for 2026: expect buyers to be more strategic, focusing on occupancy and upside potential (like those unit renovations) to make the numbers work. Overall, the successful closing of Corporate Woods is a confidence boost for our market, signaling that multifamily assets in the Oregon/SW Washington region are poised to remain in demand as we head into the new year.
National Policy Pulse: Housing Supply and Rental Market
Even as local stories take center stage, national housing trends form the backdrop. A key theme for 2026 is housing supply versus demand. The pipeline of new apartment construction is decelerating sharply from the 2025 peak – RealPage analysts note that U.S. multifamily starts have fallen to their lowest level since 2012 due to high financing costs.
Ironically, this comes just after a period of robust building, but as that wave of new units subsides, experts predict a return to undersupply by late 2026 unless construction rebounds.
Fewer new units could tighten vacancy rates and put upward pressure on rents again.
Simultaneously, renters across the nation are extending their tenure. With the cost gap between renting and owning at near-record highs, renter retention is up, and move-outs to homeownership are down. Wage growth has outpaced rent growth in many markets, improving rent-to-income ratios for renters. Combined with mortgages remaining pricey, it’s likely we’ll see the “renting is cheaper” dynamic persist through this year.
For policymakers, the focus is on boosting housing affordability: some proposals target zoning reform (as seen in Seattle, which recently allowed more density in neighborhoods) and increased funding for housing programs (e.g., Washington state’s governor proposing a $244M boost to the housing budget).
On the federal side, changes in administration have shifted approaches – for instance, new guidance on homelessness from Washington, D.C., is influencing how cities like Portland shape their strategies. 2026 will require careful balancing: promoting sufficient new housing to meet demand while managing economic pressures that are driving an increase in American renters. Anyone involved in the housing industry this year will need to monitor both local initiatives and nationwide policies closely.
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