September 2025
In addition to House Bills
3137 and
2373, the 2025 Oregon Legislature passed several measures that impact the real estate industry.
While the Oregon Real Estate Agency cannot provide guidance on these new laws, staying informed about these changes can help you better serve your clients and understand evolving market conditions.
Reforms construction defect claim procedures for homeowners associations and condominium associations. Establishes a seven-year statute of limitations for tort claims and mandates independent moisture intrusion inspections at two and six years after substantial completion. It also adds additional notice requirements when associations engage in litigation involving a defect. Applies only to developments with declarations recorded after the effective date.
Extends the property tax exemption for vertical housing development projects by moving the sunset date from December 31, 2025, to December 31, 2031.
Extends the property tax exemption for nonprofit low-income rental housing by moving the sunset date from June 30, 2027, to June 30, 2033.
Extends the property tax exemption for new or rehabilitated multi-unit rental housing by moving the sunset date six years, from January 1, 2027, to January 1, 2033.
Allows a tenant in a fixed-term tenancy to terminate their rental agreement early if their landlord has already given them the required 90-day notice that the tenancy will not continue past the fixed term, provided the tenant gives at least 30 days written notice to the landlord. Prohibits landlords from collecting any fees or unpaid rent that would have accrued between the date designated in the tenant's termination notice and the date the tenant returns possession of the premises. Applies to fixed-term rental agreements entered into on or after the measure's effective date.
Expands middle housing requirements to more areas, removes restrictive covenants, and streamlines approval processes. Reduces traffic analysis for small developments, allows density bonuses for affordable/accessible units, limits appeals for land divisions, and permits more single room occupancy housing with reduced parking requirements. Implementation rules are due by 2028.
Allows the Land Conservation and Development Commission to require local governments to approve specific types of residential development on qualifying lots and establishes standards for both land use decisions and building construction plan reviews.
Prohibits municipalities with populations over 15,000 from requiring frontage improvements (curbs, sidewalks, gutters) as permit conditions for building renovations that don't increase square footage, cost under $150,000 (annually adjusted), and don't change occupancy classification. When frontage improvements are required, municipalities and the Department of Transportation must coordinate with property owners to identify existing design or construction plans. Starting January 1, 2031, these restrictions apply to all municipalities regardless of population size.
Establishes a statewide homeownership rate goal and creates a publicly available homeownership goal dashboard that tracks the state's progress toward the goal.
Directs the Housing and Community Services Department to award loans to fund the predevelopment costs associated with the development of new affordable housing.
Limits the maximum allowable rent increase on spaces in mobile home parks and floating home marinas to six percent annually, beginning in 2026, for parks and marinas containing more than 30 spaces. Creates an exception to this rent cap, for a maximum of a 12-percent increase if approved by a majority of the tenants, when certain infrastructure upgrades are required in the park or marina. Prohibits a landlord from requiring interior inspections or aesthetic or cosmetic improvements of home as a condition for purchase.
Removes limits on how many real estate professionals can serve as voting members on county and city planning commissions with more than five members.
Prohibits new community rules from banning manufactured homes or prefabricated structures in planned communities that allow other types of residential housing. Also, extends funding through January 2, 2031, for two programs: grants supporting tenant-landlord dispute resolution services for low-income residents, and the Manufactured and Marina Communities Dispute Resolution Advisory Committee.
Requires residential landlords to offer tenants an alternative method of accessing their dwelling unit beyond software on tenant-owned phones or electronic devices. Acceptable alternatives include access codes, fobs, key cards, or additional physical keys. For a dwelling to be considered habitable, landlords must also provide working locks for all unit entrances and latches for all windows that provide access to the unit.
Allows a landlord to collect hold deposits only after approving tenant applications. Deposit must be returned within five business days if applicant discover significant habitability issues or if landlord fails to execute the agreement.
Allows property owners and landlords to reclaim premises from squatters with a 24-hour written notice to vacate. Clarifies that the notice does not grant legal occupancy rights to the squatter and classifies remaining on the property after the notice period as unlawful holding by force. Requires 24-hour notice to be included in eviction complaint forms filed in county circuit courts.
Approves City of Roseburg and Douglas County ordinances for a specific land swap within Roseburg's urban growth boundary, city boundaries, and city-county comprehensive plans. Requires the Department of Land Conservation and Development Director to issue a confirming order.
Clarifies application procedures relating to urban growth boundaries (UGBs) and UGB expansion. Allows a sponsoring jurisdiction of a Housing Project Revolving Loan Fund project in an urban renewal district to repay the Housing and Community Services Department by pledging its full faith and credit, taxing authority, or alternative revenue source, rather than a payment-in-lieu fee.
Removes references to the statewide wildfire hazard map and map-related provisions in statutes authorizing a county to approve accessory dwelling units and replacement dwellings in high wildfire hazard zones.
Allows landlords to terminate tenancies based on purchase offers with 60 days' notice (reduced from 90 days) if they provide written evidence of an accepted purchase offer and pay the tenant one month's rent plus any additional required amounts. For fixed-term tenancies, termination can only occur after the fixed term expires with 90 days' notice and written evidence of the purchase offer. Effective September 26, 2025.
Prohibits rental housing discrimination based on immigration or citizenship status.
Clarifies that mixed income housing may qualify for the property tax exemption for Housing Authority Rental Properties. Increases the maximum area median income (AMI) in which housing authority mixed income housing must reduce rental rates for tenants from 60 percent of AMI to 80 percent of AMI. Eliminates requirements for a housing authority mixed income housing project that at least 20 percent of units are rented to tenants whose income is up to 50 percent of AMI and at least 40 percent are rented to tenants whose income is up to 60 percent of AMI. Establishes the Mixed Income Public Development Loan Fund (MIPDLF) and requires all units of multifamily mixed income housing financed by the fund to be subject to an affordable housing covenant for at least 30 years. Takes effect January 1, 2026.
Expands eligibility for the long-term rental assistance program implemented by the Oregon Housing and Community Services (OHCS) Department to include individuals under 25 who are or recently have been residing in a childcare center and specifies the specific types of correctional facilities they must have confined in to qualify. It directs OHCS to consult with the Oregon Youth Authority in addition to other entities in designing the program.
Establishes the Affordable Housing Insurance Program (Program) and the Affordable Housing Premium Assistance Fund at the Department of Consumer and Business Services for the purpose of mitigating the costs of property insurance premiums for eligible entities. Establishes eligibility for the Program, constructs Program functions, outlines rulemaking authority, and directs the department to submit periodic reports on the Program to the Legislative Assembly. Appropriates $5 million for the biennium beginning July 1, 2025, to the Department of Consumer and Business Services for deposit into the Affordable Housing Premium Assistance Fund.
Requires the Oregon Housing and Community Services Department to prescribe multilingual notice forms and requires landlords to provide extended notice of impending affordability-restriction terminations.
Establishes deadlines and procedures for reviewing final engineering plans for residential development and creates a new streamlined land use decision process for certain residential zone changes, planned unit developments, and variances. Prohibits local governments from applying residential design standards to housing developments of 20 or more units within urban growth boundaries unless they are multifamily structures.