Oregon continues to grapple with a profound housing crisis, a challenge that has intensified across the state. As 2024 concludes, the symptoms are stark: homelessness has increased, rental costs consistently outpace wage growth for many residents, thousands face the threat of eviction, and for the second consecutive year, local governments have reported a decline in housing permits issued. [2, 9] This complex set of issues underscores the urgent need for intervention.
While there is broad, bipartisan agreement within the state’s political landscape regarding the severity of the housing shortage and its cascading effects, lawmakers hold differing views on the most effective path forward. [2, 9] With the 2025 legislative session approaching, both the Legislature and Governor Tina Kotek are actively considering a range of measures designed to increase housing supply, improve affordability, and address the immediate challenges faced by vulnerable populations.
The Depth of the Crisis
The statistics paint a clear picture of the scale of Oregon’s housing problem. The increase in homelessness documented in 2024 highlights the most visible and acute manifestation of the crisis. Beneath this surface, exorbitant rental prices strain household budgets, forcing difficult choices and pushing more individuals and families toward instability. The fact that rental costs have consistently exceeded average wages means that even those with full-time employment struggle to secure or maintain stable housing.
The looming threat of eviction for thousands of Oregonians adds another layer of urgency, demonstrating the precarious position of many renters. Compounding these issues is the slowdown in housing construction. A second consecutive year of decline in local government housing permits [2, 9] signals that the rate of new home creation is insufficient to meet the growing demand, perpetuating the supply-demand imbalance that drives up costs.
Legislative Responses Take Shape
Against this backdrop, several key legislative proposals are emerging as focal points for the 2025 session. These bills, spanning various approaches from boosting innovative construction methods to streamlining regulations and targeting specific demographic needs, represent the state’s multifaceted strategy to combat the housing emergency. While the bipartisan consensus on the existence of the crisis is strong, the debates surrounding the solutions [2, 9] reflect the complex economic and social factors at play.
Focus on Innovative Solutions
One significant proposal gaining traction is House Bill 3145. This bipartisan bill aims to leverage factory-produced housing as a means to accelerate the creation of affordable units, particularly for low-income households. Recognizing the potential for modular and prefabricated construction to speed up the building process and reduce costs, HB 3145 proposes a substantial investment.
The bill specifically seeks to authorize the state to utilize $50 million in bonds from the existing Local Innovation and Fast Track Housing Program Fund. [2, 3, 7] These funds would be directed towards pilot projects designed to test and scale up the use of factory-built homes for affordable housing initiatives. This proposal builds directly upon prior state investments, including a $20 million allocation [2, 3] that was part of Governor Kotek’s emergency housing package. That earlier funding included a targeted $5 million investment distributed among four factories [2, 3] to boost their capacity for producing affordable housing components. In addition to the bond authorization, HB 3145 also requests over $600,000 [2, 3] from the state’s general fund to support its objectives.
Addressing Affordability and Development Hurdles
Another critical piece of proposed legislation is Senate Bill 684, championed by Sen. Pham. [2, 3, 5, 6] This bill tackles the financial barriers to building affordable housing by proposing the establishment of a dedicated state fund. The primary function of this fund would be to provide low-interest loans to builders who commit to setting aside a portion of their newly constructed units for lower-income renters. [2, 3, 5, 6]
SB 684 envisions this as a one-time “construction revolving loan fund,” [2, 3, 5, 6] designed to operate independently of traditional federal programs such as the Low-Income Housing Tax Credit. [2, 3, 5, 6] The intent is to create a flexible, state-controlled funding source that can stimulate the creation of affordable rental housing without being solely reliant on the complexities and competition associated with federal credits.
Simultaneously, a separate bipartisan effort, Senate Bill 974, targets regulatory obstacles that slow down construction. [9, 16] This bill proposes cutting regulations specifically to streamline the building process for single-family homes and middle housing types (such as duplexes, triplexes, and small apartment buildings) located within the urban growth boundary. [9, 16] By reducing bureaucratic hurdles and speeding up permit processes, SB 974 aims to significantly shorten the time it takes to construct new housing, with the ambitious goal of reducing the typical 2-3 year timeline to under one year. [9, 16]
Targeting Specific Needs
The legislative agenda also includes measures focused on the housing needs of specific vulnerable populations. House Bill 3589 proposes the creation of a $24 million state program [9, 16] specifically designed to incentivize the development of housing tailored for older adults and people with disabilities. [9, 16] This program would be funded through the State Senior Property Tax Deferral Fund, [9, 16] leveraging resources dedicated to seniors to address a critical housing gap for these demographics, who often require accessible and supportive living environments.
Fiscal Realities and Challenges
While the legislative proposals offer potential pathways forward, their success hinges significantly on the state’s fiscal health. These efforts are being challenged by a recent forecast that predicts a $500 million reduction [9, 16] in revenue available for the state’s next two-year budget cycle. This projected shortfall could potentially impact the funding prospects for bills that rely heavily on allocations from the state’s general fund, [9, 16] forcing lawmakers to make difficult choices and potentially scale back ambitions if revenues do not improve.
As the 2025 legislative session approaches, the debate over how best to solve Oregon’s persistent housing crisis will intensify. The proposed bills represent a range of strategies, from innovative construction and dedicated funding streams to regulatory reform and targeted support. The outcome of these legislative efforts, and how they are shaped by the state’s financial forecast, will be crucial in determining Oregon’s ability to increase housing supply and improve affordability for its residents.
