Amid housing crisis, Oregon issues building permits for multifamily units at the slowest pace in 12 years

Oregon is in a housing crisis. The state needs to build 95,000 housing units to compensate for years of underdevelopment and to house its growing homeless population, according to a recent state report.

Multifamily units—from duplexes to large apartment buildings—are one of the most efficient ways for Oregon, or any region, to quickly increase housing, according to the National Multifamily Housing Council.

By this metric, Oregon is failing. Local, county and state housing officials issued permits for only 4,800 multifamily units in 2024—the lowest total in 12 years. Preliminary data shows 2025 will barely exceed that dismal figure.

And not all of those permitted projects will result in available housing.

When Gov. Tina Kotek took office in 2023, she declared a homelessness emergency in the state and signed an executive order that set the ambitious target of producing 36,000 new housing units a year. The state has fallen woefully short of that goal.

Oregon will need nearly 500,000 more housing units to meet demand over the next 20 years, according to a “Oregon Housing Needs Analysis,” released by the Department of Administrative Services in December.

READ MORE: Oregon’s Housing Crisis Burdens Nearly Half of the State’s Renters

An increased housing supply does far more than shelter homeless people and set them on a path to more stable living. Boosting supply also makes existing housing more affordable, research shows. Further, when people can buy new condos or duplexes, they build equity in their homes, creating wealth, according to former state economist Mark McMullen, now at Common Sense Institute Oregon.

Building new housing also benefits the overall labor market, beyond merely creating new jobs in construction. Some employers can’t add workers because prospective hires can’t find an affordable place to rent or buy.

In Lincoln County, with its miles of rugged coast and beautiful beaches, a lot of housing is taken up by short-term vacation rentals, making it unavailable for job seekers. To work for the public school district or Samaritan Health Services, two of the county’s biggest employers, “you want to have a couple of choices of places to live or homes to buy, and that’s not an option,” says Karen Rockwell, executive director of the Lincoln County Housing Authority.

Oregon legislators are trying to build better and simpler paths to “middle housing”: duplexes, triplexes and townhomes. In July, five new laws were enacted to provide more funding for housing development and simplify permit and construction processes. One of the new laws restrains local governments from blocking the construction of duplexes and triplexes on land zoned for single-family homes.

No matter how many millions of dollars or incentives the state puts into affordable housing, however, it isn’t enough to match the lagging efforts of the private sector.

“[The state] can certainly stimulate additional building activity,” McMullen says, “but it’s really dwarfed sometimes when we look at these large market forces.”

Those forces include increased caution by banks, fewer local lenders in Oregon, and higher interest rates on loans. When deciding to fund a construction project, out-of-state banks often rely heavily on economic and census data, McMullen says.

That information often paints an incomplete picture.

“People are worried about our education rankings, our crime rankings, homelessness rankings. If you’re looking at this stuff, it doesn’t look as great as it used to,” McMullen says. “I still think there’s a tremendous quality of life here.”