Land Conservation and Development Commission Responds to Request for Flexibility in Affordable Housing Pilot Program
Salem, OR — Last week, the Land Conservation and Development Commission (LCDC) made changes to the affordable housing pilot program rules to increase housing production.
The new rules are the result of a partnership between the Office of Governor Tina Kotek, the Department of Land Conservation and Development’s (DLCD), the Housing Accountability and Production Office (HAPO), and nine state agencies. Together, they identified actions that could result in more housing for Oregon that can be implemented in Spring 2026. An outcome of one of the actions identified by this cross-agency collaboration, this work with the City of Redmond will allow more efficient development of housing through an amendment to the State’s Affordable Housing Pilot Program rules.
Background
Over the last decade, the Oregon Legislature created special programs to help cities build more affordable housing. These programs include one that allowed three Oregon cities to add land to their urban growth boundaries more quickly than usual so they could develop a mix of affordable and market rate homes. Redmond was selected as one of the pilot communities.
In 2025, the City of Redmond learned that the State’s main funding source for affordable housing development, the Local Innovation and Fast Track (LIFT), was fully committed until 2027. Without LIFT funding, construction of both market-rate and workforce affordable rental units in Redmond’s pilot project would have been delayed several years. This was due to a requirement limiting the City’s ability to develop market rate housing without an identified funding solution for affordable housing development.
To avoid a multi-year setback, the City of Redmond submitted a petition for rulemaking to DLCD. The City submitted their petition in December 2025 to create a clear exception to the existing requirement. DLCD and LCDC approved the amendment, allowing Redmond to continue to move forward with the market-rate housing portion of the project while the City continues working to secure funding for the affordable rental housing.
“We are grateful DLCD took into consideration Redmond’s circumstances on Northpoint,” stated Redmond Mayor, Ed Fitch. “Providing the City this flexibility helps ensure we can deliver on building a quality mixed-income neighborhood.”
“We requested the State provide needed flexibility to account for the realities of funding for affordable housing, where it can take multiple years to put together the necessary sources,” said Jill Sherman, a developer with Elden and Company. “Oregon needs more housing at all levels of affordability. The proposed flexibility will further this goal while not reducing the ratio of affordable units or the commitment to providing the affordable housing prior to completion of the pilot project.”
The rule changes made by LCDC create a practical, balanced path forward. The Affordable Housing Pilot Program continues to require all affordable housing units begin construction before the City issues certificates of occupancy for the final 15 percent of market-rate homes. This safeguard keeps affordable housing centered in the project while giving cities and developers the flexibility to keep construction financially feasible.
Ana Bozich, a Community Planning Director with Pahlisch Homes, supported the action. “The change maintains the intent of the Affordable Housing Pilot Program while better reflecting real-world funding cycles, economic conditions, and the urgent need for housing production.”
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