Portland’s 10-Year Property Tax Abatement
Portland exempts new apartment buildings from property tax on their residential improvements for 10 years, and since March 1, 2024 the exemption extends outside the Central City to eligible neighborhoods for projects that restrict units at 60% of median income (Ordinance 191610). The City values the expansion at 5% to 8% of a project's total cost. It comes with a 99-year affordability covenant and a deadline for the cap that limits it.
Sources: Portland Housing Bureau; City of Portland, February 2024 presentation to Multnomah County; Multnomah County, 2026-2027 levy code rates (code 001).
MULTE is not new.The geography is.
The Multiple-Unit Limited Tax Exemption (MULTE) has been tied to Inclusionary Housing since February 1, 2017. Since then it is "only available to buildings that are subject to and meet the affordability requirements" of Inclusionary Housing (Portland Housing Bureau). Market-rate buildings that include the required affordable units have qualified for years. What changed on March 1, 2024 is how much of the building the exemption covers.
Council passed Ordinance 191610 on January 31, 2024, effective March 1, 2024. It extended the full exemption to higher-cost areas outside the Central City for projects that restrict units at 60% of median family income (City of Portland, Ordinance 191610). The City's own framing was to "balance" the program: the exemption covered all residential units in the Central City but only the affordable units in all other areas (City of Portland, February 2024 presentation).
The 2024 change did not create the abatement. It widened the geography where the full 10-year exemption applies.
Who qualifies.Twenty units and a covenant.
A building needs 20 or more residential units and must meet Inclusionary Housing. Rental buildings meet it by restricting 20% of units at 80% of median family income, or 10% at 60% or less (Portland City Code 3.103.040). At least 5% of the restricted units must be Type A accessible under the Oregon Structural Specialty Code.
Source: Portland City Code 3.103.040 (20% of units at 80% of median income, or 10% at 60%). Illustration on a 100-unit building.
The covenant is the cost of entry. Restricted units stay affordable for 99 years from the final certificate of occupancy (Portland City Code 3.103.020), against an exemption that lasts 10. Land and commercial space remain taxable. Projects apply during building permit review; buildings that applied under the Inclusionary Housing program before March 1, 2024, received a partial exemption, sit in an eligible neighborhood and have no certificate of occupancy yet may file an amended application (Portland Housing Bureau).
Where the building sits.It sets the exemption.
| Location | Units at 80% of median income | Units at 60% of median income |
|---|---|---|
| Central City Plan District | 100% of residential improvements | 100% of residential improvements |
| Eligible Neighborhood Analysis Area | Affordable units only | 100% of residential improvements |
| Everywhere else in Portland | Affordable units only | Affordable units only |
Source: Portland Housing Bureau, MULTE program page. Eligible areas include Interstate Corridor, MLK-Alberta, Hollywood, Montavilla, Belmont-Hawthorne-Division and Sellwood-Moreland-Brooklyn, among others.
The 60% option is the lever. A developer who chooses 10% of units at 60% of median income in an eligible neighborhood exempts all housing units in the building, not just the restricted units, per the City's February 2024 presentation (City of Portland). The City's analysis found the old partial exemption did not offset the affordable-unit cost in higher-rent areas such as Slabtown, the Inner Eastside and Hollywood (City of Portland, February 2024 presentation).
What it is worth.5% to 8% of cost.
The City's February 2024 presentation estimates that the expanded exemption outside the Central City, available to projects that include 60% AMI units, is worth 5% to 8% of a project's total cost, or about $250,000 on average per affordable unit (City of Portland, February 2024 presentation). It is the City's estimate, not a measured result. That sits against a cost base that has moved fast: the City's February 2024 presentation says Portland construction costs "have risen more than 50% since 2016."
The tax being exempted is large. City of Portland property in levy code 001 carries a combined rate of $27.5984 per $1,000 of taxable assessed value for 2026-27 (Multnomah County). On $10 million of assessed residential improvements that is about $276,000 a year. Assessed value, not market value, sets the bill, and the exemption applies to the improvements only.
Source: Multnomah County, Table of Consolidated Tax Rates for Levy Code Areas 2026-2027. Dollar figure is arithmetic on the published rate.
A 10-year exemption removes a decade of residential improvement tax from the operating budget.
A cap that doubles.Suspended until 2030.
The City and Multnomah County limit how much tax revenue MULTE can forgo. The City's February 2024 presentation (City of Portland, February 2024 presentation) describes the new cap as 2x the current one. Ordinance 191610 adopted a rolling cap of $30,000,000 within a five-year period and suspended the cap until December 31, 2029, with automatic reinstatement on January 1, 2030 (City of Portland, Ordinance 191610). Under the ordinance, properties within urban renewal areas are exempt from the cap, and the City's presentation says units in TIF districts do not count against it.
Source: City of Portland, Ordinance 191610 (passed January 31, 2024); February 2024 presentation to Multnomah County (new cap $6M a year average or $30M over five years, 2x the current cap). The cap is suspended through December 31, 2029.
The City projected annual new exemptions would rise from $1 million to $2 million a year to $7 million or more if development recovers, two to three times the old cap (City of Portland, February 2024). A City review report is due by December 31, 2027, and the City committed to a new calibration study in 2027.
A state bill.A fixed review date.
Ballard Spahr reports that the Oregon Legislature passed SB 1521 on March 4, 2026, requiring local jurisdictions to fully offset the cost of their inclusionary zoning requirements through direct cash payments, fee waivers or tax abatements (Ballard Spahr, March 2026). Tax abatements like MULTE are one of the three tools the firm names. How the law applies to Portland's existing program, and when, is outside what the sources above state.
The exemption does not solve Portland's supply problem alone. It changes the carrying cost of the buildings that do get built, and it comes with a 99-year affordability covenant, a $30 million five-year cap and a scheduled review.
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Sources- Portland Housing Bureau, MULTE program
- City of Portland, Ordinance 191610 (January 31, 2024)
- Portland City Code Chapter 3.103, Property Tax Exemption for Multiple-Unit Housing Development
- City of Portland, February 2024 presentation to Multnomah County on MULTE
- Multnomah County, Table of Consolidated Tax Rates for Levy Code Areas 2026-2027
- Ballard Spahr, Oregon SB 1521 (March 2026)