Eugene zoning changes since 2022 have removed several of the biggest barriers to new apartments: middle housing is now allowed in single-family zones, minimum parking requirements are gone citywide, and the city has added new property tax exemptions for dense housing near transit and in commercial centers. Those changes, combined with a state-mandated target of roughly 1,600 new homes a year, mean owners of existing buildings should expect more competition from new supply, along with land that may be worth more as a development site.
This guide walks through the main zoning and policy changes, the projects already moving through the pipeline and the state rent rules that shape what happens after new buildings open. It draws on City of Eugene planning documents and Oregon state sources.
How much housing Eugene is expected to build
The policy changes make more sense once the target is clear. Under Oregon’s new Housing Needs Analysis framework, Eugene’s 2026 draft housing chapter of its comprehensive plan states that the city needs just under 26,000 homes over the 20 years from 2026 to 2046, or about 1,600 homes a year. The 2026 draft housing chapter also sets a policy target of 14,496 new dwellings by 2046 that are affordable to households at or below 80% of area median income.
A city summary of its planned 2026 and 2027 housing actions notes that 1,600 homes a year would be about 70% more than the city currently produces. That gap is the reason for most of the changes described below. The state context reinforces it: Governor Tina Kotek’s Executive Order 23-04 set a statewide goal of 36,000 new homes a year, about 360,000 over a decade.
For existing owners, the takeaway is that Eugene is not trying to slow growth. Its plans, its code changes and its incentives are designed to raise production substantially.
Middle housing in single-family zones
The first major change came from Oregon House Bill 2001, passed in 2019, which required larger cities to allow middle housing in areas zoned for single-family homes. Eugene City Council approved its middle housing code in May 2022, and it took effect at the end of June 2022, in line with the state’s deadline.
According to the city’s middle housing FAQ, the housing types now allowed include:
- Duplexes
- Triplexes
- Fourplexes, attached or detached
- Cottage clusters, with a minimum lot size of 4,500 square feet in residential zones
- Townhouses
The FAQ also notes that covenants, conditions and restrictions created on or after January 1, 2020 cannot prohibit middle housing.
For apartment owners, middle housing matters in two ways. Small infill projects, such as a fourplex on a former single-family lot, compete for the same renters as older small apartment buildings, especially in close-in neighborhoods. And because middle housing raises what can be built on residential land, it can affect the land value underneath older properties that sit on large lots.
The end of parking minimums
The second major change is parking. Under Oregon’s Climate-Friendly and Equitable Communities rules, cities were directed to reduce or remove parking mandates. Starting January 1, 2023, Eugene stopped enforcing parking minimums within half a mile of frequent transit. On November 13, 2023, according to the city’s announcement on CFEC parking reform, City Council amended the land use code to eliminate minimum off-street parking requirements citywide, while setting parking maximums for some uses.
Parking is one of the most expensive parts of an apartment project, particularly when it must be structured or built underground. Removing minimums lets developers decide how much parking a project actually needs, which lowers costs on many urban sites and makes smaller infill lots more feasible. For owners of existing buildings with surface lots, it also opens the possibility of adding units on parking areas that were once required by code.
More code changes in the pipeline
Eugene is continuing to revise its code. The city’s 2026 and 2027 action summary describes Adoption Package 1, which the Planning Commission recommended on July 28, 2026, and which went to City Council in fall 2026. The package would:
- Raise the height limit in the R-1 zone from 30 feet to 35 feet.
- Add standards for micro-villages and single-room-occupancy housing.
- Revise middle housing standards.
- Create an expedited review path for residential projects.
The city also expects to adopt a Housing Production Strategy in 2027, with implementation from 2028 to 2035. Options under discussion include tax exemptions, reductions in system development charges, inclusionary zoning, anti-displacement measures and faster permitting. Owners should watch these decisions, because each one changes the cost of building new apartments and therefore how much competition existing buildings will face.
Tax exemptions that steer new apartments
MUPTE
Eugene’s Multi-Unit Property Tax Exemption, known as MUPTE, has long been the city’s main tool for encouraging apartments downtown. According to the city’s MUPTE program page, it exempts the value of new residential construction from property taxes for up to 10 years in the greater downtown area, while the land remains taxable. Student housing has been ineligible since July 2015. In October 2024, Council approved an Accelerated MUPTE pilot for projects of at least four units and at least 25 units per acre. The city’s page currently states that it is not reviewing new MUPTE applications.
Recent MUPTE approvals give a sense of what is coming:
- Downtown Riverfront Parcel 10A: 76 units with a total project cost of about $46.4 million, according to its MUPTE application.
- Downtown Riverfront Parcel 9A: 80 units with a total project cost of about $48.4 million. Both Riverfront applications assume lease-up beginning in April 2029.
- Station House: an Obie Companies project on East 5th Avenue, proposed in 2024 at 124 units over six stories with a total cost of about $62.1 million, and increased to 130 units by a February 2026 amendment.
Council approved the two Riverfront exemptions on March 10, 2025 and Station House on April 16, 2025.
The 2026 exemptions for transit corridors and commercial centers
In July 2026, Council unanimously approved two new 10-year property tax exemptions for housing completed by the start of 2032. One covers moderate-income housing within a quarter mile of frequent transit, affordable at up to 120% of area median income. The other covers market-rate housing in commercial centers such as downtown, Valley River and Oakway. Both require at least four units at a density of 25 or more units per acre, and both exclude student housing.
These exemptions point new apartment construction toward specific places: transit corridors and the city’s established commercial nodes. Owners of older buildings in or near those areas should expect the most new competition. Owners elsewhere are less likely to see subsidized projects nearby.
Development fees and the construction excise tax
The cost of building in Eugene also depends on fees. The city levies a construction excise tax of 0.5% of permitted project value, adopted by Ordinance 20609 in May 2019 and in effect since July 1, 2019. Revenue goes to the city’s Affordable Housing Trust Fund. MUPTE projects and housing affordable at or below 80% of area median income are exempt.
System development charges, the one-time fees new construction pays toward roads, parks and utilities, are another lever. The city exempts qualifying affordable housing from its SDCs: rental housing affordable up to 60% of area median income and for-sale housing affordable up to 80%, with at least five years of affordability. The exemption does not cover regional wastewater fees. According to the 2026 and 2027 action summary, staff are also studying interest-free deferral of SDCs until a building receives its certificate of occupancy, with a decision expected in 2027. The city also runs a Downtown Fee Assistance program that pays SDCs for new downtown housing and has removed the cap on its transportation SDC compact development adjustment.
Rent rules that apply once buildings open
Zoning determines what gets built. State rent rules determine what owners can charge afterward, and they treat new and existing buildings differently.
Oregon’s rent stabilization cap
Oregon limits annual rent increases statewide. Under Senate Bill 611 (2023), the maximum increase is the lesser of 10% or 7% plus the annual change in the West Region consumer price index. The state Office of Economic Analysis publishes the figure each year. According to its rent stabilization page, the maximum allowable increase was 9.5% for 2026, released as a corrected figure in October 2025, and is 10% for 2027.
The 15-year new construction exemption
The same law exempts units whose first certificate of occupancy was issued less than 15 years before the date of the rent increase notice. That creates a real difference between new and existing buildings. A project that opens in 2029 can set rents without the cap until the mid-2040s, while an older building is subject to the annual limit now. For owners of older stock, the cap mainly matters in years of high inflation. For buyers, the exemption is one reason newer buildings can command different pricing.
Eugene’s own renter protections
Eugene adds local rules on top of the state’s. According to the city’s renter protections page, Phase I, adopted by Ordinance 20670 and effective August 13, 2022, caps rental application screening fees at $10, with enforcement beginning March 10, 2025. Phase II, Ordinance 20694, took effect August 25, 2023. It caps security deposits at twice the monthly rent, requires landlords to process applications on a first-come, first-served basis, and requires relocation assistance equal to two months’ rent for no-cause terminations and certain other terminations. On February 25, 2026, Council prioritized work on a Tenant Opportunity to Purchase policy ahead of a third phase of renter protections. Owners considering a sale should follow that work closely, since a purchase-right policy could affect how and when buildings are marketed.
The urban growth boundary and where growth goes
Eugene’s ability to expand outward is limited. The state approved Eugene’s urban growth boundary in October 2017 after seven years of work under the city’s Envision Eugene process, and the 2026 draft housing chapter states that the 2012 boundary held enough residential land through 2032. With limited room to expand, most new housing will come through infill and redevelopment inside existing city limits, which is exactly what middle housing, parking reform and the new tax exemptions are designed to encourage.
Questions owners ask about Eugene’s housing policy
Can someone build a fourplex next to my apartment building?
On most residential lots, yes. Since June 2022, Eugene’s code has allowed duplexes, triplexes, fourplexes, cottage clusters and townhouses in areas once limited to single-family homes, and newer private covenants cannot prohibit them. Site standards such as lot size and setbacks still apply.
Do new buildings have to provide parking?
No. Since November 2023, Eugene has had no minimum off-street parking requirement citywide, though maximums apply to some uses. Developers choose how much parking to build based on what the market and their lenders require.
Are new apartments subject to Oregon’s rent cap?
Not at first. Units are exempt from the state’s annual cap until 15 years after their first certificate of occupancy. Existing buildings older than that are subject to the cap, which the state set at 9.5% for 2026 and 10% for 2027.
Where is new construction most likely to appear?
The city’s tax exemptions point to greater downtown, frequent transit corridors and commercial centers including Valley River and Oakway. The Downtown Riverfront parcels and the Station House project on East 5th Avenue are examples already approved for MUPTE.
How Eugene zoning changes affect existing owners
For owners of existing apartment buildings, the changes add up to several practical points:
- Expect more new supply. The city’s goal of about 1,600 homes a year is roughly 70% above its current pace, and its tools are aimed at closing that gap. New projects, especially downtown, along frequent transit routes and in commercial centers, will compete for renters.
- Location relative to incentives matters. Buildings near downtown, Valley River, Oakway and frequent transit corridors are closest to where the MUPTE and 2026 exemptions steer new construction.
- Land may be worth more. Middle housing, the end of parking minimums and a proposed R-1 height increase all raise what can be built on many sites. An older building on a large lot or with extensive surface parking may have redevelopment value beyond its rent roll.
- Rent rules favor new buildings for 15 years. Older buildings are subject to the state cap now, while new projects are exempt for their first 15 years.
- Local tenant rules affect turnover costs. Deposit caps, screening fee limits and relocation payments for no-cause terminations all factor into operating costs and into how a buyer underwrites a building.
Owners comparing Oregon’s rent rules with other states can review our guide to rent control and property tax rules by state. Those weighing the value of their building as a development site or as an income property can learn more about selling an apartment building in Eugene, and see how Eugene fits into the wider state market in our Oregon apartment market overview.
