Oregon’s housing crisis persists. Here’s what the 2025 Legislature and governor are trying to do about it

By BRYCE DOLE/Oregon Public Broadcasting

In 2024, homelessness increased in Oregon. Rental costs outpaced wages. Thousands of Oregonians faced eviction. For the second consecutive year, local governments issued fewer housing permits.

Oregon’s housing crisis persists. On this, many Democrats and Republicans agree: In urban and rural communities alike, too many Oregonians struggle to live in a housing market with too few affordable homes. Where they diverge is how to fix it.

From funding shelters to boosting senior housing to capping rent increases on manufactured homes, lawmakers have put forward a number of bills this session aimed at speeding up housing production and making the state a more affordable place to live. Many housing bills sit before lawmakers on the Joint Committee on Ways and Means, who write the state’s budget.

But lawmakers are contending with $500 million less in revenue than formerly predicted for the state’s next budget, which begins July 1. That could make it harder to pass many housing bills that tap into the state’s general fund.

“I would not say I’m optimistic about the revenue,” said Sen. Khanh Pham, D-Portland, chair of the Senate Committee on Housing and Development. “But I’m optimistic about the understanding that we have to invest in housing if we want to address the homelessness crisis as well as the addiction crisis and all the other serious problems that Oregonians are facing right now.”

Since 2023, the state has invested billions of dollars in its housing efforts, much of which was buoyed by federal funds that have since dissipated. Without those efforts, Kotek and Democrat leaders say, more people would be out on the street. Still, Republicans say the state should change course, that the state isn’t advancing fast enough.

“We don’t seem to finish anything,” said Sen. Dick Anderson, R-Lincoln City, the vice chair of the Senate Committee on Housing and Development. “We don’t even see more housing coming online, yet we put a lot of money in. So all I’m saying is we need to stay with housing, but we need to quit doing what we’ve been doing and do something else.”

This week, Anderson and Senate Republicans issued their own list of solutions to housing issues, saying what has been done so far has not been good enough.

With less than a month to go in this year’s legislative session, here are some of the major housing proposals still on the table:

Kotek’s housing proposals

Gov. Tina Kotek has long staked her political career on confronting Oregon’s housing problems. For the upcoming biennium, she is proposing a budget with $800 million toward housing and homelessness.

“The Governor is pushing hard to make sure the housing and homelessness crisis receives the investments and policy changes needed by the end of the session,” Roxy Mayer, Kotek’s press secretary, said in a statement Thursday.

Among her proposals is House Bill 3644, which asks for more than $217 million in general fund money and lays out the policy framework to run a statewide shelter program. It would specify what kinds of facilities should be eligible for state funding, how that money would be disbursed to communities and what data organizations would be required to report back to the state in order to receive money.

Because of the latest forecast, however, it’s unclear to what extent the Legislature will be able to fulfill the governor’s vision for a shelter program.

“It’s quite vulnerable in a budget that is tough like this one,” said Rep. Pam Marsh, D-Ashland, the shelter bill’s chief sponsor, who is the chair of the House Committee on Housing and Homelessness. “I’m hoping that we can somehow find a little bit of general fund money to keep some of the innovative housing proposals going.”

The governor is also asking for $173.2 million in her 2025-27 budget for homelessness prevention, funding eviction prevention programs, including through legal services and rental assistance. Kevin Cronin, the policy and advocacy director for Housing Oregon, an affordable housing advocacy organization, said: “I’m really concerned with the revenue forecast and its effect on these two programs in particular.”

“We’re trying to play defense this week on making sure that people know the importance of rent assistance, making sure people know that rent assistance prevents evictions, making sure people know that we need places for people to go today,” said Cronin. “That’s really important. Voters want people to have a place to go right now. They want people off the street, and so we need to make sure that people that are in that situation have a place to go.”

Factory housing

House Bill 3145 aims to boost factory-produced housing for low-income households. It’s a bipartisan bill that allows the state to use $50 million in bonds from the Local Innovation and Fast Track Housing Program Fund for pilot projects that bolster affordable modular housing development.

The latest bill asks for more than $600,000 from the state’s general fund, Marsh said.

“What we’re trying to do is really juice the market for these modular factories in the manufactured housing industry and other factory-based components,” said Marsh, whose Southern Oregon district was decimated in 2020 by the Almeda fire, which destroyed hundreds of mobile and manufactured homes.

She added, “ I do believe that modular manufactured [homes] can be a significant contributor to the work that we do to reduce the housing deficit.”

Regulations

Senate Bill 974 is another bipartisan effort that seeks to streamline and speed up the timeline for building single-family detached homes and middle housing developments inside the urban growth boundary.

By cutting regulations in the review process for home design, planning and engineering, the bill would speed up the home building process on raw land “from 2-3 years to under one year,” according to the legislation.

“Oregonians are more concerned than ever about the rising cost of housing,” a bipartisan group of lawmakers said in a joint statement Thursday. “Our job in the legislature is to ensure government isn’t standing in the way of building more homes in communities across Oregon.” The lawmakers said the bill is “a great way to show that Democrats and Republicans alike are serious about tackling our housing crisis and using every tool we have to increase production.”

Anderson blames regulations for Oregon’s slow progress on housing production. He pointed to the downward statewide trends in housing permits, “which is shocking to me, and certainly isn’t a good look for people who are paying the bill for all this money that supposedly is going towards housing, and yet we’re producing less.”

“I’m a believer of time is money, and for developers,” he said. “Time is money, because they’re borrowing funds to make this happen. So I see that as a huge bill.”

The bill passed through both legislative chambers. It’s heading to Kotek’s desk for approval.

Revolving loan fund

As high interest rates hinder housing production, Senate Bill 684 aims to create a state fund to provide builders with low-interest loans, so long as some units they build are set aside for lower-income renters.

Most of Oregon’s subsidized affordable housing is built using funds from federal programs like the Low-Income Housing Tax Credit, said Sen. Pham, the bill’s chief sponsor. “And that is very over-subscribed, very competitive, and it really limits the amount of affordable housing that we’re able to build,” she said.

This program, she said, wouldn’t be dependent on those funds. Instead, the Legislature would establish a one-time “construction revolving loan fund.” Put simply, the state would provide loans to developers to build both market-rate and affordable housing. Once the homes are built, the loans would be repaid and reinvested into the fund.

“Construction loans are some of the most competitive financing to get,” said Pham. “If the state is able to offer subsidized below-market-rate loans, we’re still able to get the funding returned to us. But for the four or five years that that loan is out, we’re able to provide some bridge financing that enables certain projects that otherwise might not be able to pencil to actually come to fruition.”

The bill asks for between $20 and $50 million in general fund money.

Senior housing

In recent years, a growing number of Oregon’s older residents are becoming homeless. Rep. Marsh says Oregon needs more studio and one-bedroom units for seniors and she is proposing a package to curb the problem.

“We know that seniors are the demographic that are showing up in great numbers in our shelter system,” Marsh said. “And there’s every likelihood that’s going to continue, because we have a tsunami of older people coming at us from a demographic perspective and we frankly underinvested in senior housing over the years.”

House Bill 3589 would create a state program with about $24 million aimed at incentivizing housing development for older adults and people with disabilities, said Rep. Marsh. It would use funds from the State Senior Property Tax Deferral Fund, a program which allows seniors to defer paying their property taxes until someone sells a property or moves out property is sold or someone moves out.

Another bill, House Bill 3506, would use about $3 million from that same fund for home modifications for seniors, such as ramps or grab bars for people with mobility challenges.

“We hope that that package will actually sort of get us going, understanding how to develop senior housing and get it on the ground and respond to this demographic crisis that’s really in front of us,” said Marsh. She added, “It’s very clear that we need to do some very focused and urgent work on senior housing.”

• This story originally appeared June 6, 2025 on Oregon Public Broadcasting.