Middle housing could help ease Portland housing crunch
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Portland has been held up nationally as a model for building more affordable "middle" housing units, but recent data suggests a sharp slowdown in construction — a sign that policy is just one remedy for easing the city's housing crisis.
The big picture: A recent Washington Post report highlighted Portland's success in spurring middle housing units (duplexes, fourplexes, accessory dwelling units and "cottage clusters") through its Residential Infill Project (RIP), which loosened local zoning laws to incentivize denser development on a single lot.
- In the first years after the policy took effect, the majority of new permits were for these types of homes.
- These homes often sell for $250,000 to $300,000 cheaper than the average new single family house, helping first-time buyers get their foot in the city's competitive housing market.
By the numbers: Since 2021, when RIP was enacted, roughly 23% of new housing developed in Portland was middle housing, roughly 4,067 units, according to Bureau of Planning and Sustainability (BPS) data shared with Axios. Officials expect that share to grow.
- "We've seen strong continued interest in smaller middle housing types, while larger mixed-use projects are finding it challenging to secure financing," Morgan Tracy, a senior planner with BPS, told Axios via email.
- "This is fairly consistent with previous recessionary housing cycles."
Yes, but: Portland saw its lowest level of housing production in more than a decade last year.
- The city approved just 1,223 permits across all housing types in 2025, down 28% from the year prior, according to the Oregonian — the lowest total since the Great Recession in 2010.
State of play: The slowdown is largely being driven by mounting economic conditions: high interest rates, rising costs due to inflation and tariffs, as well as limited financing options.
- These conditions have made developers cautious about starting new projects, therefore housing production of all kinds has dropped significantly.
- City and state leaders have moved to ease the burden for developers by waiving some fees and enacting code suspensions, which has shown progress in reversing the years-long slump.
What they're saying: Despite lower housing production overall, local real estate agents told Axios that demand for middle housing exists, with some tradeoffs.
- These homes are typically more affordable and centrally located, but there are turnoffs, including limited or no parking, not much outdoor space and shared walls, according to Rachel Freed, owner of Urban Nest Realty, said.
- Plus: "We have no idea how these will grow in equity since it's a newer product, making it hard to counsel clients on the investment side of these purchases," Jimi Hendrix, a broker at Neighbors Realty, said.
What we're watching: Mayor Keith Wilson aims to add 20,000 housing units over the next eight years, and middle housing is expected to play a big role in that goal.