Portland's zoning changes have notably increased the production of middle housing in the city, a report by the Bureau of Planning and Sustainability contracted with Cascadia Partners reveals. After the adoption of the Residential Infill Project (RIP) and its expansion with RIP2, duplexes, triplexes, fourplexes, Accessory Dwelling Units (ADUs), and cottage clusters have found their way into areas largely dominated by single-dwelling units. A notable surge in permitting activity for these types of housing has emerged since the changes were implemented, according to the progress report.
The RIP initiative, introduced by the Portland City Council in 2021, and expanded upon in 2022 as RIP2, was envisioned as a solution to the climbing housing prices in Portland, and it seems to be delivering on its promise, the report indicates over 1,400 ADU and middle housing units have been permitted from August 1, 2021, to June 30, 2024, in single-dwelling zones, the focus of this development has largely been concentrated between the Willamette River and I-205. These developments have been particularly relevant as the activity in commercial and multi-dwelling zones has slowed, propelling single-dwelling residential zones to contribute a larger share to the city's overall permitting activity—rising to 23% in 2023 and further up to 43% in the latter half of 2024.
More than just increasing the supply, RIP has made headway in making housing more affordable. The report highlights that average sales prices for middle housing are now trending between $250,000 and $300,000 less than those for new single-dwelling homes. This shift appears to be influenced by the project's cap on building sizes, nudging development from larger to smaller units, therefore decreasing costs; following RIP's introduction, the average sale prices for new middle housing decreased by $200,000. Participation in the Portland Housing Bureau's (PHB) affordable homeownership programs has seen an uptick in single dwelling zones with a marked shift from single detached homes to middle housing, as the progress report details.
The introduction of middle housing into Portland's residential landscape is addressing the affordability issue from another angle too; with rising interest rates, the income required to afford new market-rate homes has increased—making middle housing a crucial alternative. Middle housing types, such as triplexes and fourplexes, average $460,000, thus requiring an annual income of roughly $116,000 for a three-person household, which is about half of the income required to afford a new detached house at 2024 prices. Meanwhile, demolition rates have held steady with the introduction of RIP, which indicates that this increased count of middle housing units is coming to fruition, not through destructive means but constructive change, and when demolitions do happen, they lead to almost double the units that were there before RIP’s adoption came into the picture.
An example of the efficacy of this project is a three-story triplex development in North Portland comprised of 1500-square-foot, three-bedroom homes, each sold separately for $435K - $490K, well below the new detached house's average closing price. You can learn more about this progression in housing diversification from the Portland Bureau of Planning and Sustainability's report.
