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Portland advances downtown zoning changes to spur office to housing

City planners say about a third of downtown commercial space is vacant, and a zoning package now heads to the city council with a revised fall or winter timeline.

Reported · Written up by our desk · Industry

Portland is pursuing downtown zoning changes aimed at making it easier to convert vacant office and retail space into housing, as vacancy remains elevated in the Central City, HousingWire reports. City officials link the push to the pandemic and hybrid work models, and they say about a third of downtown commercial real estate is vacant.

The zoning effort, called the Central City Code Amendments Project, was sent toward a city council vote after the Portland Planning Commission voted unanimously on July 14. A council decision could come this fall or winter, after the project’s target dates have already slipped once.

Portland’s draft zoning package does not currently include financial incentives, unlike conversions in other cities that have paired zoning updates with tax abatements or direct subsidies, the outlet notes. The Central City Code Amendments Project would be the most significant rewrite of downtown development rules since 2018, when the city adopted its Central City 2035 plan.

The zoning rewrite also sits within a broader housing affordability recalibration, including a shelved vacancy tax concept and state-backed requirements for inclusionary housing supported by cash, tax exemptions, or fee waivers. HousingWire adds that Gov. Tina Kotek signed March legislation to fix a Portland affordable housing mandate that had backfired by offering no public incentives, leading developers to build fewer units when more housing was needed.

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