Oregon housing law funds affordable projects and changes local development rules

A city or county may create a program that gives grants or loans to developers for eligible housing projects. Eligible projects must build or convert housing that is affordable to low- or moderate-income households. Rental housing may serve households earning up to 120 percent of area median income. The local program must set project and developer requirements. The project must stay affordable at least while the related state loan remains unpaid. The state Housing and Community Services Department must review provisionally approved applications before final approval. Funding is secured by an affordable-housing covenant, generally recorded first in county property records. The law takes effect June 5, 2026. A local program applies according to the ordinance or resolution that creates it.

Local governments must allow certain affordable housing and may use faster approval procedures for some housing applications. The rules cover qualifying affordable housing on commercial, public or religious-assembly land, some commercial-to-residential conversions, middle-housing land divisions, and applications within specified urban growth boundaries. Affordable housing must meet income and affordability limits, usually including a 30-year affordability period. Local governments may deny or limit projects that lack needed services or face specified slope, flood, hazard or natural-resource constraints. For covered clear-and-objective applications, local governments may not require a public hearing before deciding and may limit appeals to the applicant. Certain flood-prone projects must meet added safety, evacuation and emergency-planning requirements. The amendments to the general housing-application rules become operative July 1, 2026. Expedited middle-housing land divisions must generally be decided within 63 days after a complete application.

A landlord must end a tenancy immediately when a natural disaster destroys the rented home and must return the tenant’s deposit and prepaid rent. The rules apply when a dwelling unit is destroyed or becomes inaccessible because of a natural disaster. They do not apply to rental agreements governed by ORS 90.505 to 90.850. The tenant does not owe rent while the home is inaccessible or destroyed. Unless the tenant caused the disaster, the tenant is not responsible for cleaning the premises. After the emergency ends, the landlord must notify the tenant and allow a search for valuables, although the landlord may require a liability release. The parties may agree to different terms after the disaster. The tenancy ends immediately when the dwelling is destroyed. Rent stops while the unit is inaccessible, including while a government agency has posted it as unsafe or unlawful to occupy.