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The Portland-metro region is facing a pressing need to address housing challenges amid population growth, affordability concerns, and homelessness. Recent reports released by Portland鈥檚 Bureau of Planning and Sustainability (BPS) show that 277,221 additional housing units across the region are needed over the next two decades.

The reports, the Housing Needs Analysis (HNA) and the Buildable Lands Inventory (BLI), are required by the state. Large cities must ensure that there is enough buildable land to accommodate their housing needs over the next 20 years. Metro areas are required to develop and update the analysis every six years. The previous HNA was adopted in conjunction with the city鈥檚 2035 Comprehensive Plan.

On Tuesday, BPS staff briefed the agency鈥檚 Planning Commission with their findings and recommended a housing production strategy that will eventually go before the Portland City Council.

Within the 277,221 needed housing units, Portland alone requires around 120,560 to account for city growth, vacancy rates, second homes, historic underproduction in housing units, and homes for the homeless, according to the HNA.

Key insights from the reports include:

• Income and affordability: Despite Portland鈥檚 overall wealth increase, 31 percent of current households are considered low-income and cost-burdened, with 63,000 additional households expected to join them by 2045.
• Family-size units: 28,000 additional family-size units (two or more bedrooms) will be needed by 2045 to accommodate households with children.
• Homelessness: In 2022, more than 5,000 people experienced homelessness in Multnomah County. The HNA indicates a need for at least 4,604 additional housing units to address this crisis.
• Development trend: The HNA highlights that multi-dwelling unit production dominates new residential development, accounting for 91 percent of all housing units produced in 2022.
• Development capacity: The BLI estimates that Portland has capacity for 236,977 new housing units 鈥� 90 percent of those in the central city, mixed-use commercial, and multifamily zones.

Income and affordability challenges

A critical aspect of the HNA is its focus on income and affordability. Startlingly, 88,000, or 31 percent, of current Portland households are classified as low-income and cost-burdened, meaning they spend more than 30 percent of their income on housing expenses. This statistic is expected to increase by 63,000 households by 2045.

Despite Portland becoming wealthier overall, with 39 percent of households earning $100,000 or more annually in 2021, the high number of cost-burdened households remains a challenge. To address this, the report outlines the need for:

• 26,370 units for households earning less than 30 percent of the area median income (AMI),
• 23,497 units for households earning less than 60 percent but more than 30 percent of AMI,
• 13,537 units for households earning less than 80 percent but more than 60 percent of AMI,
• 21,253 units for households earning less than 120 percent but more than 80 percent of AMI, and
• 35,903 units for households earning more than 120 percent of AMI.

This data suggests that more than half of the 120,560 units needed over the coming decades must be dedicated to households earning 80 percent of AMI or less.

What housing types are needed?

Based on the past five years and recent market trends, the HNA report projected that approximately 8 percent of new housing units will need to be single-family homes, while roughly 14 percent should consist of 鈥渕iddle housing鈥� 鈥� accessory dwelling units (ADUs), townhomes, duplexes, triplexes, quadplexes, and small, multi-dwelling structures of up to six units.

In a BPS staff briefing to the agency鈥檚 Planning Commission on Tuesday, Tom Armstrong, supervising planner at BPS, said that the days of new single-family home construction in Portland are likely over.

鈥淭hose single, detached dwellings that you see with a yard that you find across Portland, that鈥檚 what we have here today,鈥� he said.

The majority, approximately 77 percent, of new housing units will need to be multifamily. Within this category, there鈥檚 demand for around 29 percent to be in wood-constructed apartments, 29 percent in towers (31,110 units), and 19 percent in podiums (20,431 units) traditionally known as 鈥渇ive-over-two鈥� construction.

Statewide housing goal

Over the next two decades, Portland must produce approximately 5,200 units per year to meet its 120,560-unit target. However, to align with Gov. Tina Kotek鈥檚 statewide housing construction goal of 36,000 units annually over the next decade, Portland needs to catch up and construct 55,000 units from now until 2035 鈥� roughly 6,000 units per year.

While housing production in Portland dipped during the COVID-19 pandemic, it has since rebounded. In 2021, housing production increased to 5,754 units, and in 2022, it reached 5,935 units, mirroring pre-pandemic numbers. Multifamily unit production constituted most new residential construction, with 89 percent of all housing units produced in 2021 classified as multi-dwelling. In 2022, this share rose to 91 percent.

With alignment of the yearly housing production targets to current construction growth, the Planning Commission raised questions about why the city still struggles with a housing crisis.

鈥淭here doesn鈥檛 seem like there鈥檚 a clear explanation or rationale for the crisis that many of us agree that we have,鈥� Commissioner Erica Thompson said.

Armstrong clarified that the city isn鈥檛 experiencing a capacity issue but rather an affordability problem. Portland has capacity for around 236,977 new units, based on the BLI. That is more than twice the amount needed to accommodate the projected household growth over the next two decades.

To alleviate some of the challenges before developers, BPS has proposed a five-year suspension and permanent changes to several zoning code rules, aiming to provide regulatory relief for housing projects. Changes would affect bicycle parking, development review processes, and green roofs.

The Planning Commission will provide recommendations for the Housing Needs Analysis on Oct. 24. Then the Portland City Council will review them for potential adoption in December. The record will remain open for public comments until Oct. 10.