Astoria, Ore. – Governor Tina Kotek held a press conference on Monday to announce the upcoming public hearing for a new bill aimed at tackling Oregon’s ongoing housing crisis. The proposed legislation, House Bill 2138 (HB 2138), seeks to streamline the development process and increase housing density across the state in an effort to create more affordable housing.
Introduced on January 13, 2025, HB 2138 is designed to eliminate bureaucratic hurdles that often delay construction and development projects. Governor Kotek emphasized the importance of removing barriers to promote housing options for Oregon residents. “We’re coming into this session with a bill to continue to remove barriers, to continue to streamline things, to get more options to our communities,” Kotek said. “The goal of House Bill 2138 is to build on the bold bipartisan policies already in place and continue to work on those to make Oregon a natural leader in innovative housing policies that will bring down the cost of housing.”
The proposed bill mandates that local governments permit the construction of middle housing in all residentially zoned areas. Middle housing includes a variety of housing types such as duplexes, triplexes, quadplexes, cottage clusters, and townhouses. Cottage clusters, which are small units grouped around a shared common area, are specifically highlighted in the bill as a key solution for increasing density.
The bill is part of a broader effort to combat the state’s housing shortage and affordability issues. “It’s oftentimes difficult to produce affordable homes or accessible homes. We don’t see it as broadly in the marketplace as we need to based on what Oregonians need,” said Matthew Tschabold, director of Kotek’s Housing and Homelessness Initiative, during the public hearing.
Under the legislation, cities with populations of 25,000 or more would be required to allow middle housing. Smaller cities in the Portland metropolitan area and urban unincorporated areas, such as the Dunthorpe neighborhood near Lake Oswego, would also be affected by the bill’s provisions.
The bill further aims to ensure that private restrictions, including homeowners’ association (HOA) rules, cannot block or limit the development of middle housing units. This provision would retroactively apply to existing restrictions, meaning that any prior rules that might prevent such developments would no longer be enforceable.
Another significant aspect of the bill is the proposal to streamline the land division process. Local governments would be required to approve land division applications within 120 days, and developers would be allowed to bypass certain traffic studies that can often cause delays.
Jesse Russell, CEO and founder of Hiatus Homes in Bend, expressed his support for the bill. “It eliminates outdated restrictions, removes costly delays, and makes it easier for developers like me to create housing that regular Oregonians can afford,” he said.
The bill also includes provisions to protect housing density by preventing local governments from reducing allowable units per acre within urban growth boundaries. This would ensure that zoning changes do not decrease the availability of housing. Cities would need to adopt the necessary zoning changes to comply with the bill’s requirements by July 1, 2025.
In an effort to further address affordability, the bill expands the ability to develop single-room occupancy (SRO) units. SROs are affordable housing options with shared kitchens and/or bathrooms. Under the bill, SRO developments would be permitted in urban growth boundaries, with each lot allowed to have up to six units.
However, not all aspects of the bill have been met with unanimous support. A section of the bill that would repeal the requirement for demolition reviews of homes listed in the National Register of Historic Places has raised concerns among residents in historic neighborhoods. Many fear that the bill could lead to the destruction of important landmarks. In response, Governor Kotek’s office issued an amendment to remove this provision, with more amendments expected in the coming weeks.
Another provision, which removes the need for traffic-impact studies, has drawn criticism from some who argue that it could strain local infrastructure. A resident from North Albany testified that the city’s roads could not support a surge in new development without significant traffic concerns. Governor Kotek addressed these concerns by asserting that the traffic impact would be minimal in most cases and that the goal of the bill is to expedite housing development. “What it will do by removing that study is getting us quicker to permitting, getting us quicker to construction; time is money,” she said.
To implement the changes, the Land Conservation and Development Commission would be tasked with adopting new rules by January 1, 2028. If passed, the bill would be implemented immediately, with local governments required to adopt the necessary zoning changes by mid-2025.
Governor Kotek concluded the press conference by reiterating the bipartisan nature of the housing issue. “Housing is a bipartisan priority for the session,” she said. “We need everyone at the table to tackle this issue.”
