On Real Estate & More – September 2025

OREGON’S SHORTAGE of available homes, especially affordable homes, results from decades of building too little housing, which has led to a multitude of problems: a growing homeless population, unaffordable rents and Oregon median home prices over $500,000.

According to the Oregon Department of Administrative Services, the state needs about 30,000 more homes each year to meet demand. Gov. Tina Kotek recently signed Oregon Senate Bill (SB) 1537 into law to address the state’s housing shortage to remove regulatory barriers, provide funding, and create new tools to speed up and expand housing development, especially affordable housing, while maintaining Oregon’s land use goals. The major provisions of SB 1537 are detailed below and explain why they should have an impact.

  • Housing Accountability and Production Office: SB 1537 creates a joint office called the Housing Accountability and Production Office (HAPO). HAPO’s responsibilities include offering technical and financial assistance (including grants), developing model codes and “ready-build” plans, mediating disputes, and enforcing compliance with state housing laws. The goal is to remove barriers and support housing development across the state. HAPO can provide ready-build designs, model codes, and direct assistance to local governments and developers, lowering both time and cost for affordable housing
  • Opt-In to New Standards & Attorney Fees: SB 1537 allows a housing developer with a pending land use application to opt-in to new local rules even after their application has been filed—effectively resetting the timeline for review.
  • It also expands eligibility for attorney fee awards: if a developer or local government wins an appeal, they may recover legal fees, even for decisions affirmed by the Land Use Board of Appeals (LUBA).
  • Infrastructure Funding, Grants & Loans: The bill dedicates hundreds of millions of dollars; via revolving loan funds, grants, and infrastructure investment, to support housing production, especially affordable housing, in communities across Oregon. Infrastructure cost is often a key reason affordable projects stall. This funding can make more sites viable for development.
  • Urban Growth Boundary (UGB) Expansion Tool: SB 1537 provides a one-time, expedited UGB expansion for qualifying cities—capped at 75 to 150 acres depending on city size—with tight requirements. These include mixed-use planning, complete neighborhood characteristics, and a mandate that 30% of units be affordable. This ensures that any growth beyond existing boundaries isn’t just more market-rate sprawl but includes a substantial affordable housing component.
  • Mandatory Land Use Adjustments: The bill requires local governments to grant adjustments (i.e., deviations) from specific development and design standards for housing within UGBs—provided certain conditions are met, such as minimum density thresholds and affordability criteria. These adjustments are processed as “limited land use decisions” through a streamlined process and are in effect until January 2, 2032. Mandatory adjustments to local development standards (like setbacks, parking minimums, or height limits) give affordable housing projects more design flexibility.
  • Limited Land Use Decisions Expansion: SB 1537 expands the scope of limited land use decisions to include replats, property line adjustments, and changes to non-conforming uses, unless a city opts for a ministerial process. Local governments can apply for exemptions from these requirements through HAPO.

SB 1537 was designed with the intent to accelerate affordable housing production in Oregon, and it represents a substantial, multi-faceted strategy to boost housing production. It pairs administrative reforms (through HAPO, regulatory flexibility, streamlined procedures) with financial investments (loans, grants, infrastructure funding) and a provision for controlled UGB expansion. The legislation aims to preserve Oregon’s land use intentions while speeding housing delivery, increasing affordability, and supporting both local governments and developers. If local governments and developers make active use of SB 1537’s funding, land use flexibility, and streamlined processes, it could meaningfully increase the supply of affordable housing statewide.