Housing: Density or Sprawl, Your Choice

The April luncheon brought together experts to discuss the effects of state mandates on local housing in Clackamas County. Attendees gained insight into the current state of housing control and how it impacts their community. The forum offered a unique opportunity to engage with local leaders and learn about the future of housing in Clackamas County.

Featured speakers included Diana Helm, Clackamas County Commissioner; Mike Mitchell, Oregon City Commissioner; and Ben Hemson, Director of Policy and Government Affairs for the Homebuilding Association of Greater Portland. Seth Henderson, Cofounder and Partner at Level Development NW, served as master of ceremonies and joined the panel as a presenter.

Overview

Housing has been one of the most discussed topics in Oregon for years, and this forum set out to cover it in a way attendees had not heard before: how the state arrived at its housing production goals, how Oregon is actually performing against them, and what the wave of new mandates means in practical terms for the county, the city, and the builders expected to deliver the housing.

Seth Henderson opened the program and moderated throughout, filling in for the forum’s regular hosts, reminding attendees that OCBA is a nonprofit serving the community for roughly a decade and now covering issues across all of Clackamas County. Event sponsor Asteria Gardens, a senior housing community, was recognized at the outset, a fitting connection given that the number of seniors needing housing is expected to double over the next ten years, and elected officials from across the county were welcomed and thanked for their service.

Attendees submitted written questions on blue cards throughout the program, and the panel worked through as many as possible in an extended question and answer session at the end. The presentations moved through a statewide and national market overview, the county, city, and homebuilding industry perspectives, and a rapid review of recent legislation. Anyone who would like the full slide deck can request it through OCBA.

Speakers

Diana Helm serves as a Clackamas County Commissioner. She framed her participation simply: Oregon has a housing crisis, and her goal is to lower or eliminate the hurdles so builders can do what they do best. She came to listen as much as to present.

Mike Mitchell has been an Oregon City Commissioner since 2022, elected to a full four-year term in 2024 after serving four years on the city’s Planning Commission, and has lived in Oregon City’s Caufield neighborhood for 18 years. His central theme was how dramatically the rules have changed for cities, with the state now deeply involved in decisions that used to be local.

Ben Hemson is the Director of Policy and Government Affairs for the Homebuilding Association of Greater Portland. He grew up in Wilsonville and spent about nine years with the City of Bend, leading its economic development group during the early implementation of Oregon’s new housing laws. The association represents roughly 600 members across infill, single-family, and multifamily development.

Seth Henderson is Cofounder and Partner at Level Development NW, a firm focused on mixed-use multifamily infill development, with projects including the Old County Courthouse in Oregon City. He brings about 30 years of industry experience and serves on the OCBA board, the Oregon City Planning Commission, and the Homebuilding Association board, and chairs the Oregon City Chamber of Commerce.

Key Takeaways

• Oregon is far behind its own housing production goal. The target calls for roughly 36,000 new units per year, yet 2025 permitting came in between 12,000 and 13,000 units. Hitting the goal would require matching the state’s best year on record, every year, for a decade.
  
• Supply was the unifying theme. Every panelist agreed the path out of the crisis is production across every housing type: single-family, middle housing, multifamily, senior, and affordable.
  
• The answer is “and,” not “or.” Commissioner Mitchell reframed the event’s title directly: the choice is not density or expansion, and meeting the need will require every available tool.
  
• Middle housing reform helped, but it will not solve the problem. Oregon City issued 234 middle housing permits in 2025, but that surge appears to have been pent-up demand: through the first four months of this year the city had zero middle housing permits, no multifamily applications in two years, and very few single-family permits.
  
• State mandates carry a heavy administrative cost. More than 20 housing bills have passed in recent years, each forcing counties and cities to rewrite code and redirect planning staff, and both commissioners noted that home rule is not what it once was.
  
• Cost and land timing are the biggest private-sector barriers. System development charges in some cities have outpaced construction inflation, and the timeline from identifying urban growth boundary expansion land to building on it now runs eight to ten years or more.
  
• Significant legal changes are arriving now. House Bill 4037, effective in early June, limits appeals of housing projects to the applicant alone, a change estimated to remove 90 days or more from development timelines.

Presentations and Speakers

Setting the Table: How Oregon Is Really Performing

Henderson opened with the origin of the state’s production goal. In 2023, the Governor’s Executive Order 23-04 established the Housing Production Advisory Council to determine how many additional housing units Oregon needs; counting every housing type, the answer was approximately 36,000 units per year for ten years.

He first offered a caution about housing data: permit-based figures overstate production because not every permitted unit gets built, while occupancy-based figures ignore everything under construction. The truth sits somewhere between the numbers each side of the political aisle prefers to cite.

Against the 36,000-unit target, Oregon permitted between 12,000 and 13,000 units in 2025. As he put it, we are nowhere close. As of December, the Governor’s office had revised the annual target down to 29,522 units, which he attributed to reduced projections of people moving to Oregon.

For historical context, he presented Federal Reserve Bank of St. Louis data going back to 1988. Oregon’s best production year on record was 2005, at roughly 30,000 to 31,000 units, meaning the Governor’s target requires matching the best year the state has ever had for ten consecutive years. He also tied the production decline that began in 2022 directly to rising interest rates.

The case study most economists point to is Austin, Texas. Facing an influx of tech employers and rents that spiked as much as 40 percent, Austin deregulated in ways that resemble Oregon’s recent reforms: eliminating parking minimums, upzoning for density, and allowing buildings of five stories or fewer to use a single egress stairwell. Over ten years, Austin grew its housing stock by 30 percent, about 120,000 units, and rents over the full decade rose just 9.15 percent. Supply brought prices back under control.

Henderson drew two lessons from Austin. First, nearly half the units produced were in multifamily projects of more than 50 units, and combined with single-family homes those categories accounted for 75 percent of production. Middle housing is worth pursuing, but converting a single-family lot into three units will not close a gap this size. Second, Austin had abundant land while Oregon operates within an urban growth boundary, so large-scale production here requires both more land for single-family housing and more multifamily development.

He closed with a national outlook. Roughly 85,000 completed apartment units nationwide have been built but never rented, and the country is on track to deliver only about 300,000 new units this year against a ten-year average absorption of about 350,000. That pipeline will be absorbed by the middle to end of next year, and with little new construction starting now, he projected rents could rise six to eight percent per year after that point unless something changes.

The County Perspective: Commissioner Diana Helm

Commissioner Helm began with a candid acknowledgment: there is no easy solution, and there is honest disagreement, including her own reservations, about what type of housing to emphasize. She shared a conversation with a bank teller who asked what happened to starter homes; her answer was that builders cannot make them pencil when land costs what it does, which pushes production toward multifamily. Her worry, looking ten to fifteen years out, is a possible glut of multifamily units while demand for ownership housing goes unmet.

At the same time, the county is bound by the rules the state sets, beginning with House Bill 2001 and its middle housing requirements, and keeping pace has been a genuine struggle. Its response has been to invest heavily in facilitating housing production and removing barriers so private builders can build.

She highlighted the county’s Department of Transportation and Development, where residential permits currently receive a first review within two weeks and the planning department handled more than 400,000 interactions last year while maintaining an approval rating above 90 percent.

She then outlined the county’s multi-year sequence of housing projects. The 2023 Housing Strategies Project increased density and changed parking requirements in its first phase, and will allow duplexes, triplexes, quadplexes, cottage clusters, and more in urban low-density areas in its second. Zoning and Development Ordinance amendments have continued from 2024 into 2026, the county is now assessing urban zoning rules within the Portland Metro urban growth boundary, and from 2027 through 2030 it will implement the Oregon Housing Needs Analysis rules, which let the county evaluate jurisdiction-specific targets from its own vantage point.

She was frank about the burden: every new law out of Salem sends staff back into the code, and the layering of state, Metro, and county rules makes the work cumbersome and slow.

On affordable housing, the Housing Authority of Clackamas County has delivered substantial results. Using affordable housing bond funds, the county is opening 451 new affordable apartments in 2026, including 52 units with supportive services, and between 2021 and 2025 it developed 1,170 new affordable apartments across projects including Rosewood Station (212 units), Las Flores (171 units), Good Shepherd Village (143 units), Vuela (121 units), and Fuller Station Apartments (100 units), among others. She celebrated that record while stressing its limits: the county builds county projects, and the region needs private developers producing on top of that work.

She closed with a call for collaboration, hoping the state, local governments, and developers can one day write legislation together at the same table rather than advocating from opposite ends of each bill, and expressed confidence that the right people are in the room to fix what is broken.

The City Perspective: Commissioner Mike Mitchell

Commissioner Mitchell opened by challenging the premise of the event’s title. The answer will not be density or sprawl, and he prefers the word expansion, because the region can grow without what people picture as sprawl. More importantly, it has to be “and,” not “or,” using every tool available.

Of the more than 20 housing bills the state has adopted in recent years, two genuinely moved the needle in Mitchell’s assessment. House Bill 2001 ended single-family-only zoning, meaning that anywhere the city allows single-family homes it must also allow duplexes, triplexes, quadplexes, and cottage clusters, and Senate Bill 458 enabled expedited land divisions for small middle housing projects. The rest were largely administrative, helping at the margins without changing production numbers.

What those bills have changed is the workload. Every new law forces staff to analyze current code, draft new code, and take it through the Planning Commission, a public process, and the City Commission, all of which costs time and money. Mitchell credited Community Development Director Kelly Hart and her staff for managing a burden that has pulled significant planning time away from residents.

He then turned to ten years of permit data. The impact of HB 2001, implemented by city ordinance in 2022, is visible: roughly 30 middle housing permits in 2023, about 20 in 2024, and 234 in 2025. Variables like interest rates cannot be isolated, he acknowledged, but the middle housing response to the law change appears real.

The concerning numbers are everywhere else. The city has received no multifamily permit applications in the last two years, and single-family permitting is equally alarming, running as low as zero in 2024 and topping out around 50 in the best recent year, in a city of 38,000 people. The middle housing surge also looks like pent-up demand rather than a new baseline: four months into this year, the city had received zero middle housing permits. The 2025 spike was an important blip, but a blip.

Mitchell also noted where the city preserved flexibility. When implementing HB 2001, Oregon City protected density limits in geologic hazard areas, and under Senate Bill 1537, which grants developers automatic adjustments to code standards, it is one of only a few cities in the state to receive a waiver by demonstrating that its existing variance process works for builders and the city alike.

Looking ahead, the city has two major work products in motion under House Bill 2003. A housing capacity analysis is underway now, examining infrastructure constraints, overlay zones, and state targets to determine how many homes the city could realistically build. It will be followed in the 2027 to 2029 biennium by a housing production strategy addressing how to get there through simplified processes, incentives, and tools such as land banks or shared equity programs, with extensive public involvement.

He closed on a personal note. The old saying is that you cannot fight city hall; in this case, cities cannot fight the state legislature. His focus for the remainder of his term will be lobbying for the city’s interests, work Kelly Hart has already begun in Salem, while using whatever local control remains in ways that are right for residents. Home rule is not what it was 20 years ago, he acknowledged, but the challenge can be met by working together.

The Builder Perspective: Ben Hemson

Hemson brought the industry view. The association’s housing policy agenda comes down to three things: land availability, permitting time and efficiency, and cost.

His presentation focused on two structural issues. The first is land supply. He pushed back on the density-versus-sprawl framing: Oregon already chose density decades ago with Senate Bill 100 in the 1970s, and that commitment remains a regional ethic. The real question is not whether to sprawl, but how to bring land online fast enough to matter.

The Metro urban growth boundary was drawn in 1979. Since then, the region’s population has more than doubled, while the boundary has grown only about 14 to 15 percent across roughly three dozen expansions. The deeper problem is the planning horizon between identifying an expansion area and building homes on it. Kingston Terrace in King City was identified in 2018; dirt started turning at the end of 2025. Cooper Mountain and Frog Pond East and South, also identified in 2018, have yet to see meaningful construction, and Sherwood West, identified in 2023, will likely not see homes until the 2030s. Builders cannot respond to market demand with land that takes a decade to become buildable.

His second focus was cost, specifically system development charges, the impact fees nearly every Oregon city levies on new construction. Construction costs have risen roughly 40 to 50 percent since 2016, yet some SDC increases in Clackamas County cities have gone far beyond that. In one Wilsonville expansion area, SDCs of roughly $62,000 combine with permitting fees, construction excise taxes, and a supplemental SDC to reach about $105,000 in fees on a single-family home, implying a home price around $713,000. Wilsonville can sell $700,000 homes; his greater concern is a market like Sandy, where the SDC now runs about $55,000 in a market that supports $400,000 to $500,000 homes. SDCs fund vital infrastructure, he acknowledged, but the region must find additional ways to finance it if housing is going to get built.

On legislation, Hemson observed a shift in how the state regulates local processes: instead of setting floors for public noticing requirements, new laws increasingly set caps, along with paths to exempt development from certain processes. These changes help, but they do not move the needle the way land supply and cost would, since experienced builders already plan for outreach. He also noted the friction these mandates create with cities, which he considers essential partners, pointing to a January charter reform measure in Sherwood widely seen as an attempt to reassert local control over noticing.

He closed with two developments worth watching. House Bill 4035 creates a one-time urban growth boundary expansion path allowing certain cities to add up to 150 net acres for housing, a positive step that still faces the same timeline problem. And the Housing Accountability and Production Office, created in 2024, is emerging as a useful arbiter between developers and local governments, recently ruling that the City of Redmond could not require 20-foot alleyways where 16 feet met its standards. Requirements beyond what is necessary, the office established, must come with incentives or funding rather than being imposed on development.

Recent and Pending Legislation: A Rapid Review

Henderson returned to close the presentations with a fast tour of recent legislation.

He began with the Climate Friendly and Equitable Communities rules, intended to reduce transportation-related pollution through the elimination of parking minimums and a requirement that 40 percent of parking stalls include infrastructure for future electric vehicle charging. He offered a reality check on the parking provision: lenders will not finance a project they believe cannot lease up, so in most markets parking gets built regardless of what the code allows.

House Bill 4037 drew his strongest emphasis. Effective in early June, the bill passed the Senate 28 to 2 and the House 52 to 1, and its central provision is dramatic: the only party who can appeal a housing project is the applicant. For a developer who has spent years fighting what he described as frivolous appeals, the significance is hard to overstate, though he predicted the legislature went too far and will eventually walk the provision back. In practical terms, the change removes roughly 90 days from the entitlement and permitting process, and in cases that would have been appealed, it may save one to two years.

House Bill 3746 reduced the construction defect statute of repose on for-sale condominium product from ten years to seven. In his view, the change fixed nothing: it simply moved the date lawsuits get filed from just before the ten-year mark to just before the seven-year mark, and nearly every architect and general contractor in Oregon still carries an insurance exclusion for condominiums. He also described a recently passed wage law under which a project owner and general contractor can both be sued for a subcontractor’s failure to pay workers, even when the owner and contractor paid in full, a liability structure that discourages developers and general contractors from working in Oregon.

Finally, he covered a bill that failed, and why its failure matters. Oregon statute excludes bonded and loan-funded projects from prevailing wage requirements, yet the Bureau of Labor and Industries has been applying prevailing wage broadly. He cited a Eugene riverfront development where BOLI ruled that because the city-built road and utilities serving the site cost more than $750,000, the entire project was subject to prevailing wage; since five-story buildings trigger commercial rather than residential wage rates, the developer removed the fifth floor from all three buildings, permanently eliminating that housing. A bill clarifying that bonded affordable housing projects should not be subject to prevailing wage drew 75 percent supportive written testimony and never made it out of committee, even though exempting those projects would, by his estimate, produce 10 to 15 percent more affordable units with the same public money.

His final example was the state building code. A recent cycle required energy recovery ventilation units in apartments over a certain size, adding $4,000 to $5,000 per unit; the next cycle removed the requirement for units up to roughly 1,200 square feet. A building that simply meets Oregon’s energy code already performs at the equivalent of a LEED Silver rating, so his request to the state was simple: pause the code changes for a few years and let builders catch up.

Questions and Discussion

The blue card questions produced one of the liveliest exchanges of the afternoon.

Asked how cities can encourage higher density, Mitchell pointed to the code changes already underway while noting the balancing act: codes exist so neighbors have reasonable expectations about what happens next door.

On the planning timeline problem, the panel offered practical ideas: compressing concept, master, and infrastructure planning; streamlining permitting, with Helm citing Bend’s overhaul as a model; and encouraging landowner-coordinated master plans, which have moved through in roughly a year compared to six or seven for city-initiated efforts.

Asked whether the county met its affordable housing goals, Helm confirmed the county exceeded them, and noted it has planned more cautiously for the next round of roughly 900 units between now and 2030.

On Senate Bill 1537, Mitchell explained what Oregon City gained by keeping its variance process: automatic adjustments assume flat, square lots and break down against real conditions on the ground.

Several questions focused on system development charges, including whether the county would follow Austin’s example of waiving fees for affordable housing. Helm answered candidly that the short answer is no, since service providers set their own SDCs, but supported exploring deferral of fees to occupancy. Mitchell added that Oregon City is working on both deferring SDCs to closer to occupancy and tiering charges so smaller homes pay less. Both agreed the state must help identify alternative infrastructure financing, and Hemson pointed to Portland’s SDC waiver as proof that fee relief works, with more permits in the waiver’s first eight months than in all of 2024.

On transportation, Helm acknowledged the region is lagging: service cuts are rippling through the county’s six transportation providers plus TriMet, and transit planning has not kept pace with where new multifamily housing is being located.

Asked about affordability, Helm returned to fundamentals: supply and demand, with land, permits, and materials among the greatest expenses. She called for updating antiquated land use laws and taking a fresh look at whether the region has room to grow. Hemson agreed middle housing is a solution but cautioned against fixating on one housing type at a time; every type is needed at once, including single-family homes.

Asked directly whether they support expanding the urban growth boundary, Helm answered yes, particularly where adjacent land already has services nearby, invoking the cautionary example of Damascus, 10,000 acres brought into the boundary with the entire area on septic systems. Mitchell answered yes with a significant caveat: developable land between Oregon City’s limits and the UGB could be master planned with room for schools and parks, but the city cannot afford to extend infrastructure to it.

One card captured the frustration in the room: the housing house is on fire, and the panel is discussing studies scheduled for 2027 through 2029. How can this move faster? Henderson offered his own answer: stop changing the building code for a few years and let the industry build.

Conclusion

The forum delivered on its promise of a different kind of housing conversation. Rather than debating whether Oregon has a housing crisis, the panel started from the data showing how deep the shortfall runs and worked through what each level of government and the private sector can actually do about it.

The closing message was a call to action. The shortage will be resolved through production and supply, and everyone has a role to play: writing to elected officials, supporting leaders and policies that support additional housing, and thanking the city and county staff who absorb the workload every new mandate creates.

Attendees were encouraged to request the complete presentation deck through OCBA and, as always, to submit feedback and suggest topics for future forums. The strong turnout and pointed questions made clear that housing will remain at the top of that list.