Portland City Councilors may tweak a policy meant to boost homeownership for lower-income Portlanders due to a lack of buyers. The change, which councilors will consider on Wednesday, would allow people of all incomes to buy homes initially intended for lower-income buyers.

The Portland Housing Bureau says the decision could address the issue of hundreds of new homes currently sitting empty, while some councilors worry it will further push homeownership out of reach for lower-income Portlanders.

“I think there are a lot of things we could be doing to address the challenges for developers,” said Councilor Elana Pirtle-Guiney at a June housing committee hearing, where councilors first discussed the change. “I just don’t think that making it even harder for folks who are making average income or less to enter homeownership is the right way for us to be addressing those challenges.”

In Portland, developers are required to pay certain fees on new construction. These fees, called system development charges, or SDCs, are based on how new construction might impact city utilities, like the sewer system or transportation. On average, these can cost developers around $20,000 per new housing unit.

More than a decade ago, the Portland Housing Bureau established a program that exempts developers from these fees if they guarantee the house is being sold to a household making at or below the region’s area median income (which, for a family of four, currently sits at $128,300). The asking price cannot rise above a price set annually by the housing bureau, currently capped at $455,000. Under this program, the homebuyer is also exempt from property taxes for a decade.

“These programs have been critical tools in helping us provide homes to families at or below the median family income,” said Justin Wood, owner of Fish Construction NW, a company that’s built many affordable homes using the SDC waiver.

But a new policy pushed by two of the state’s most prominent politicians has complicated its success.

Last year, under the direction of Mayor Keith Wilson and Gov. Tina Kotek, Portland City Council adopted a plan that would temporarily waive SDC fees for any new residential homes — regardless of the residents’ incomes. This policy, meant to jumpstart the slow pace of new residential development in Portland, is in place until October 2028.

This created a much easier process for developers hoping to avoid paying SDCs. Instead of having to verify a buyer’s income — and limit the number of qualified buyers in the process — to get SDCs waived, developers could sell to anyone.

Wood and other affordable housing developers said this put them at a disadvantage.

“We started to see ourselves competing against new construction homes that didn’t require the buyers to meet the income qualification,” said Wood, speaking at the June committee hearing. “Meanwhile, our homes were still subject to those restrictions, significantly reducing our pool of eligible buyers.”

Josh Roper, policy director at the housing bureau, said he’s seen a slowdown in people buying homes in the affordable housing program in the past year, anecdotally. He did not share any data with councilors to show this shift.

According to the city, an estimated 700 homes limited to middle-income buyers are sitting unsold in Portland. To address this, the city has suggested temporarily removing the income requirement for the program. It would still require homes to be sold at the same affordable price set by the housing bureau. It also requires owner occupancy, in hopes of deterring speculative investors from plucking up cheap homes and reselling them at a higher price.

Both the Portland Metropolitan Association of Realtors and the local Home Building Association have advocated for this change, which would remain in place until the broader SDC waiver expires in late 2028.

Some city councilors agree it’s the right call. At the June committee hearing, Councilor Candace Avalos said it addresses the “uneven playing field” created by the new SDC waiver — and creates ease for prospective homebuyers.

“It’s a pain in the neck to have to go through income verification,” Avalos said.

Councilor Tiffany Koyama Lane and Pirtle-Guiney both raised concerns about how the solution could harm lower-income Portlanders’ chances of buying a home.

“The loser here is somebody who really needs this middle-income housing,” said Pirtle-Guniey. “And who won’t have access to it.”

The proposal advanced out of committee with a 3-2 vote. Councilors will debate the policy again at Wednesday’s council meeting.

News Source : https://www.opb.org/article/2026/07/07/portland-affordable-housing-lower-income-policy-homeownership/