Portland's Zoning Overhaul Spurs Surge in Affordable Starter Homes

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In 2021, Portland rewrote its zoning rules to incentivize the construction of duplexes, triplexes, fourplexes, and even sixplexes over single-family homes. By tying allowed square footage to the number of units, the city gave developers a financial reason to build more affordable "middle housing" instead of large, expensive standalone houses. The result has been a surge in permits for these multi-unit projects, which often list for hundreds of thousands less than nearby single-family homes.

Why it matters

Portland's approach aims to address the city's affordable housing crisis by making it more financially viable for developers to build smaller, denser, and more affordable starter homes. This contrasts with other cities like Minneapolis that have struggled to spur similar housing diversity through zoning changes alone.

The details

Portland's 2020 "middle housing" overhaul tied the allowed square footage on a lot to the number of units built. A standalone house is capped at half the lot's size, but adding more units increases the allowed square footage - up to 3,000 for a duplex or 4,000 for a fourplex. This gives developers a financial incentive to build multi-unit projects instead of large single-family homes. In the first year, nearly 90% of new permits were for middle housing and accessory dwelling units, with fourplexes dominating. These units often list for hundreds of thousands less than nearby single-family houses, and average prices have dropped from over $800,000 in 2018 to around $615,000 in 2024.

• Portland rewrote its zoning rules in 2020.
• The new rules took effect in 2021.
• In the first year after the rules took effect, nearly 9 in 10 new permits were for middle housing and accessory dwelling units.
• As of 2024, average prices for these starter homes had dropped to around $615,000, down from over $800,000 in 2018.