Portland’s 10-Year Property Tax Abatement
A Turning Point for Market-Rate Development
Portland’s housing market has been in a holding pattern for years — squeezed by high construction costs, rising interest rates, and regulatory friction. But a recent policy change could alter the math in a big way.
For the first time in recent memory, market-rate multifamily development in Portland now qualifies for a 10-year property tax abatement through the city’s Multiple-Unit Limited Tax Exemption (MULTE) program. It’s a strategic shift aimed squarely at getting cranes back in the sky.
What Changed — and Why It Matters
Previously, the MULTE program was reserved almost exclusively for affordable housing projects or mixed-income developments with deep affordability components. But under the city’s updated inclusionary housing rules, market-rate projects that include the required number of affordable units (typically 15–20% at 60–80% AMI) are now eligible for a full 10-year property tax exemption on the residential portion of the project.
For developers, this means the city is finally acknowledging what the private sector has been saying for years — that projects can’t get built if they don’t pencil.
The Financial Impact on Feasibility
Property taxes on new multifamily construction in Portland typically run around 1.3% of assessed value annually. On a $40 million project, that’s roughly $520,000 per year, or more than $5 million in total savings over the exemption period.
That level of relief can turn a stalled deal into a viable one. It gives developers room to manage higher construction costs, tighter lending standards, and the added costs of inclusionary housing compliance — all without inflating rents.
A Needed Catalyst for Housing Production
Portland’s housing production has plummeted in recent years, with multifamily permits down over 60% since 2020. The city’s leaders are now taking a pragmatic stance: if the private sector can’t produce housing profitably, the supply problem only gets worse.
By extending this incentive to market-rate projects, the City is betting on partnership over penalty — leveraging tax abatements to generate long-term affordability and supply rather than chasing short-term revenue.
Seneca’s Perspective
At Seneca Development Co., we view this policy shift as a smart, necessary recalibration. It aligns public incentives with private capital — a framework that can finally get new housing built at scale.
Our pipeline already includes projects in Oregon and the broader Pacific Northwest where feasibility has been constrained by high soft costs and local tax burdens. The expanded MULTE program may open new opportunities to move forward on deals that were previously sidelined.
We believe this is a positive signal — not just for developers, but for the city itself. Portland’s leadership is showing a willingness to evolve and adapt, which is exactly what’s needed to restore investor confidence and unlock more housing.
Key Takeaways for Developers
Eligibility: 20+ unit multifamily projects meeting inclusionary housing requirements.
Benefit: 10-year exemption on residential improvements (land remains taxable).
Application: Must be approved by the Portland Housing Bureau before construction.
Compliance: Affordable units remain regulated for the duration of the abatement.
Looking Ahead
The 10-year tax abatement won’t singlehandedly solve Portland’s housing shortage — but it’s a meaningful step in the right direction. It demonstrates that the city is willing to collaborate with the private sector to get housing built.
For developers, it’s time to revisit Portland. The economics are shifting — and for the first time in years, the numbers are starting to work again.
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