Why It Matters
Oregon’s ongoing housing crisis is forcing state lawmakers to rethink the rules that govern where cities can grow. Two newly passed bills now awaiting Governor Tina Kotek’s signature could reshape how communities across Oregon — and potentially across the Pacific Northwest — approach affordable housing development by loosening the strict criteria tied to urban growth boundaries.
For small Oregon cities like Woodburn, a Marion County community of roughly 26,000 residents, the legislation could be the difference between building hundreds of new homes on a ready-to-develop site or watching a viable project stall indefinitely in regulatory limbo.
What Happened
Oregon’s Legislature passed two bills this session that expand and clarify how cities can use a one-time urban growth boundary, or UGB, expansion process first established under 2024 legislation. Urban growth boundaries are state-approved lines that define where and how Oregon cities are permitted to develop, typically restricting construction on surrounding farmland.
The 2024 law, Senate Bill 1537, was designed to allow severely rent-burdened cities a single opportunity to expand their boundaries for affordable housing development. However, multiple cities, including Woodburn, discovered they could not meet all the criteria required to trigger that process — despite clear and documented housing needs.
House Bill 4035 addresses those gaps by fixing and adding to the criteria established in SB 1537. It also includes a specific amendment to streamline the review timeline for Woodburn, consolidating what would normally be multiple, sequential land-use review steps into a single coordinated process. Woodburn city officials emphasized that the bill does not waive any local or state land-use requirements.
The second bill, House Bill 4082, was requested by Governor Kotek herself and expands the one-time UGB expansion option to include the development of manufactured homes specifically designed for older adults — a housing type increasingly viewed as a cost-effective solution for Oregon’s aging population.
Rep. Pam Marsh, D-Ashland, noted that feedback from city officials across Oregon revealed widespread problems with the 2024 legislation’s workability. “That expansion was passed because we have a housing crisis and we really want to get cities into the business of encouraging housing,” Marsh said. “But if the one-time expansion isn’t working, the housing crisis isn’t going away.”
By the Numbers
- Woodburn is eyeing a 120-acre former farming property just outside city limits as a potential housing development site.
- The city of Woodburn has a population of approximately 26,000 residents in Marion County.
- The original one-time UGB expansion opportunity was created under 2024’s Senate Bill 1537, which applied only to “severely rent-burdened” cities.
- Two bills — HB 4035 and HB 4082 — are now awaiting the governor’s signature to expand and clarify that process statewide.
- HB 4082 specifically opens the pathway for the development of manufactured homes for senior residents, a category not covered under the original 2024 law.
Zoom Out
Oregon’s urban growth boundary system has long been considered one of the most restrictive land-use frameworks in the country, praised by conservationists for protecting farmland but increasingly criticized by housing advocates for constraining supply in growing communities. The state’s housing shortage has reached crisis levels in recent years, with rental vacancy rates near historic lows and home prices outpacing income growth across much of the Willamette Valley and coastal communities.
The push to reform UGB expansion criteria reflects a broader regional trend across the Mountain West and Pacific Northwest, where states including Idaho, Washington, and Montana are all grappling with population growth that is outpacing available housing stock. While Oregon’s approach remains more regulatory than many neighboring states, the willingness to revisit and adjust the 2024 law suggests that even lawmakers in a heavily regulated environment are acknowledging that rigid frameworks can obstruct the very goals they were designed to achieve.
Manufactured housing, highlighted in HB 4082, is gaining renewed attention across the region as a lower-cost alternative to traditional single-family construction, particularly for senior populations on fixed incomes.
What’s Next
Both House Bill 4035 and House Bill 4082 are now on Governor Kotek’s desk awaiting her signature. Given that Kotek personally requested HB 4082, both bills are widely expected to be signed into law. Once enacted, Woodburn city officials and developers will be able to move forward with a formal land-use review process for the 120-acre site outside the city’s current boundary. Other Oregon cities that previously could not qualify under SB 1537’s original criteria will also be able to reassess their eligibility under the updated rules.
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