TO: Mayor and City Council
THROUGH: Krishna Namburi, Interim City Manager
FROM: Kristin Retherford, Community Planning and Development Director
SUBJECT:
title
Adoption of the Salem Housing Production Strategy
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Safe and Healthy Community; Strong and Diverse Economy; Welcoming and Livable Community.
end
SUMMARY:
summary
The City of Salem has developed a draft Salem Housing Production Strategy, which outlines the specific actions that the City plans to take to encourage housing development and promote fair and equitable housing outcomes over the next six years. The actions in the Housing Production Strategy are based on Salem’s housing needs, demographic and housing data, and input from the community, City Council, and others.
end
ISSUE:
Shall City Council adopt Resolution 2025-11 adopting the Salem Housing Production Strategy?
RECOMMENDATION:
recommendation
Adopt the facts and findings of this staff report and adopt Resolution 2025-11 adopting the Salem Housing Production Strategy.
body
FACTS AND FINDINGS:
The City has developed Salem’s first draft Housing Production Strategy (HPS), which is included as Attachment 2. The draft HPS includes 17 proposed actions that the City plans to take to encourage housing development, preserve existing housing, and promote fair and equitable housing outcomes over the next six years. The proposed actions were developed with broad input from the community as well as Planning Commissioners, City Councilors, City staff, and the consultant team ECONorthwest. The City is required by the State to adopt the HPS this year.
Community Engagement Summary
Since February of 2024, the City has been working with the ECONorthwest to better understand Salem’s housing needs by analyzing data and engaging the community. This has included meeting with community and neighborhood groups and holding focus groups with organizations that serve marginalized or underserved communities, including people with disabilities, communities of color, lower-income residents, students, and people at risk of losing their homes. The City also participated in events that were co-hosted by the Micronesian Islander Community, Willamette University, and Enlace Cross-Cultural Community Development Project. In addition, the City conducted a webinar on June 11, 2024 and a citywide survey to ask the community about their housing needs and challenges. Staff and ECONorthwest presented a summary of Salem’s housing needs - as well as an overview of the HPS project - to the City Council and Planning Commission in a Joint Work Session on June 17, 2024.
In the fall and winter of 2024, the City held several focus groups with the development community to get input on potential barriers to housing development as well as ideas for proposed actions to promote development. This included talking with home builders, market-rate and affordable housing developers, engineers, architects, real estate professionals, and land use consultants. ECONorthwest also interviewed developers to understand the local housing market and the feasibility of development in different areas of Salem. The City conducted a second webinar on January 22, 2025 and survey that focused on potential actions to encourage development. Staff and ECONorthwest presented the potential actions to the City Council and Planning Commission in a Joint Work Session on March 17, 2025.
Summaries of the public input received through focus groups and surveys are available on the Housing Production Strategy project website www.cityofsalem.net/housingproduction <https://www.cityofsalem.net/housingproduction> as well as in Appendix D of the Draft HPS. Presentations from the webinars can also be found on the HPS project webpage.
Proposed Actions
The draft HPS is comprised of 17 actions, including financial incentives, regulatory changes, partnerships, and other tools. The proposed actions are listed below and described more in detail in Appendix A of the draft HPS. The following chart provides high-level information about each action:
• Housing production or preservation: Does the action promote the production or preservation of housing?
• Primary housing type supported: What housing type is primarily supported by the action?
• Potential impact on housing: What is the potential impact that the action will have on housing production or preservation?
• Funding required: What level of funding is required to implement the action?
• Implementation timeframe: Within what timeframe will the action be implemented or completed? (Near-term means the action will be completed in 2026 or 2027, medium-term means in 2028 or 2029, and long-term means in 2030 or beyond.)
|
Action |
Housing Production or Preservation |
Primary Housing Type Supported |
Potential Impact on Housing |
Funding Required |
Implementation timeframe |
|
A. Develop a New Urban Renewal Area (URA) |
Production |
Variety - including affordable housing |
High |
Medium (contract in place) |
Near term |
|
B. Develop a Single Property Urban Renewal Program |
Production |
Multifamily housing, including affordable housing |
Medium |
Low |
Near term |
|
C. Develop a New Middle Housing URA Program |
Production |
Middle housing |
Medium |
Medium |
Long term |
|
D. Fund Infrastructure Improvements to Support Housing Development |
Production |
All housing types |
High |
High |
Medium term |
|
E. Revise System Development Charges (SDC) Methodology |
Production |
Middle housing and smaller homes |
Low to Medium |
Medium |
Medium term |
|
F. Identify a New Multi Unit Housing Tax Incentive Program area |
Production |
Multifamily housing, including affordable housing |
Medium |
Medium |
Medium term |
|
G. Support Housing Development in Areas of Opportunity |
Production |
Affordable or mixed-income housing |
Low to Medium |
High |
Medium term |
|
H. Support Development of Permanent Supportive Housing |
Production |
Affordable housing |
Low to Medium |
High |
Near term |
|
I. Support Development by Community Land Trusts |
Production |
Affordable homeownership |
Low to Medium |
Medium |
Medium term |
|
J. Provide Homebuyer Assistance |
NA |
Affordable homeownership |
Low |
High |
Medium term |
|
K. Revise the Zoning Code to Support more Development of Needed Housing |
Production |
All housing types |
Low to Medium |
Low |
Medium term |
|
L. Revise the Zoning Code to Preserve Nonconforming Housing |
Preservation |
Existing housing |
Low |
Low |
Near term |
|
M. Improve the Permitting Process |
Production |
All housing types |
Low |
Low |
Near term |
|
N. Advocate for Manufactured Home Park Residents |
Preservation |
Manufactured homes |
Low |
Low |
Near term |
|
O. Increase Developer Understanding and Awareness of Existing Programs |
Production |
All housing types, including affordable housing |
Low |
Low |
Near term |
|
P. Expand Ready-Build Plans |
Production |
Middle housing and accessory dwelling units |
Low |
Low |
Near term |
|
Q. Affirmatively Furthering Fair Housing |
NA |
All housing types (protected classes) |
Low |
Low |
Near term |
In addition to the proposed actions, the draft HPS includes a list of recommendations for potential future actions. These are actions that the City can explore, such as a homebuyer tax exemption, code changes to support recreational vehicles, and an urban growth boundary land exchange.
Evaluation of Proposed Actions
The draft HPS includes a high-level evaluation of the proposed actions across numerous factors, some of which are included in the summary chart above. Other factors include administrative effort, revenue generated, and community support. The draft HPS also examines whether each action encourages the development of low- or moderate-income rental housing, promotes affordable homeownership, or preserves existing low- or moderate-income housing. These evaluations are included in Chapter 3 of the draft HPS.
In addition, the draft HPS describes how the actions promote fair and equitable housing outcomes, as required by State rules (Appendix F of the draft HPS). This includes a comprehensive look at how the actions facilitate access to housing choice for communities of color, low- income communities, people with disabilities, and other protected classes; promote compact, mixed-use neighborhoods to reduce greenhouse gas emissions; increase housing stability for residents; and enable housing options for residents experiencing homelessness. The City also examined whether each action would have an impact on Salem’s potential Walkable, Mixed-Use Areas; these are areas that the City is required to designate as part the State’s Climate-Friendly and Equitable Communities rules.
Implementation and Monitoring of Proposed Actions
Each action in the draft HPS is anticipated to be a distinct project that would generally be implemented after adoption of the HPS. The details of each action - such as specific code changes, the size and location of a new Multi-Unit Housing Tax Incentive Program area, or specific changes to SDCs - would be determined as the action was implemented. Many of the actions would include extensive community engagement and require a future decision or vote by the City Council. For example, the proposed action to revise the zoning code would become a project led by the Planning Division. Staff would engage the development community and others to determine what code changes would potentially facilitate greater housing production and develop a code amendment. Ultimately, the proposed code amendment would go before the City Council for approval.
The timeline for implementing each proposed action is included in the draft HPS (see earlier chart for high-level implementation timeline). All of the actions except one - the development of a new middle housing URA - are proposed to be completed in four years. That timeline considers staff capacity, availability of funding, potential impact on housing, and other factors.
Appendix A of the draft HPS outlines the different steps that City staff plan to take to implement each action. If the City cannot implement an action by the timeline included in the HPS, the City must notify the Oregon Department of Land Conservation and Development (DLCD) and may propose a revised implementation date or an alternate action(s) that addresses the same housing need of the action that the City could not implement.
As implementation begins, the City will monitor the progress made on each action. The draft HPS provides a list of indicators that the City plans to use to measure and evaluate its progress. Example indicators include number of middle housing units built within a new middle housing URA, number of households served by a homebuyer assistance program, and number of affordable housing units built with the new MUHTIP incentive. The list of indicators is included in Chapter 3 of the draft HPS.
Public Comments Received
Several public comments have been received by the writing of this staff report and are attached as Attachment 3.
Substantive Findings and State Approval Process
Salem’s HPS has been reviewed for conformance with the applicable Statewide Planning Goals, Comprehensive Plan goals and policies, and Oregon Administrative Rules - specifically OAR 660-008-0050 - adopted by the Land Conservation and Development Commission. Attachment 4 contains findings that indicate that the draft HPS complies with all such applicable goals, policies, and administrative rules.
An HPS that is adopted by the City must be submitted to DLCD no later than 20 days after the City’s adoption. DLCD will then review the sufficiency of the HPS based on applicable State rules and within 120 days after receiving the submission, either approve the HPS, approve it subject to further review and actions, or remand it for further modification as identified by the department. A determination by DLCD is not a land use decision and is final and not subject to appeal.
The Planning Commission held a public hearing on the draft HPS on May 6, 2025. The Commission stated that the plan is too vague and that it’s unclear how the actions will encourage housing. The Commission discussed the need to create a priorities list in the plan but did not request specific changes to the draft HPS. The Commission voted to recommend that the City Council not adopt the HPS (Attachment 5).
Other actions were considered in the development of the plan. The list of actions was whittled down to the 17 actions; these actions have been chosen as the top priorities by virtue of being included in the HPS. Full details of each action are not included in the HPS as those details will be worked out during implementation. Descriptions, implementation steps, the City’s role, and alignment of each action with the Comprehensive Plan are included in Appendix A. Further details of each action will be determined during implementation, as stated earlier in this staff report.
BACKGROUND:
In 2019, the Oregon Legislature passed House Bill 2003, which aimed to help communities meet the housing needs of Oregonians. The law requires cities of more than 10,000 residents to study their future housing needs and develop strategies to encourage the production of those identified housing needs. In November 2020, DLCD adopted administrative rules that implement the new law, and those rules outline the specific components that cities must include in their HPS.
Salem adopted its Housing Needs Analysis (HNA) in 2022 with the adoption of the Our Salem project. That multi-year project redesignated and rezoned enough land to accommodate Salem’s projected housing needs, including land for multifamily housing. Developing a HPS is the next step in helping meet Salem’s housing needs, as it focuses on actions to promote the production of housing. Developing an HPS is also listed in Salem’s updated Comprehensive Plan as a project to implement and advance that plan’s goals and policies.
The City received a Housing Planning Assistance Grant to help develop the proposed HPS from the Oregon Department of Land Conservation and Development (DLCD). The State therefore is paying for the consultant ECONorthwest to help the City develop its HPS. The City is required by State administrative rules to adopt its HPS by December 31, 2025. In four years - after the adoption of the HPS - the City is required to report to DLCD on the progress that is being made on implementing the HPS actions.
Eunice Kim
Long Range Planning Manager
Attachments:
1. City Council Draft Resolution 2025-11
2. Draft Salem Housing Production Strategy
3. Public comments
4. Substantive Findings
5. Planning Commission Notice of Recommendation