Oregon’s commercial real estate sector is undergoing a notable transformation, with an increasing trend of converting commercial properties into residential units. This significant shift, driven by legislative changes, aims to address the state’s pressing housing needs.

HB 2984: A Legislative Milestone

The enactment of House Bill 2984 (HB 2984) marks a major legislative milestone in Oregon’s real estate sector. Effective from January 1, 2024, this law simplifies the process of converting Oregon’s commercial real estate into residential areas. With the need for a zone change or conditional use permit no longer necessary, new avenues for residential property development are becoming available.

Detailed coverage of this legislative development can be found in the Southern Oregon Business Journal, with further information available on the Oregon Legislative Information System. Counties throughout Oregon, including Curry and Coos, may benefit from this legislative change.

Economic Shifts in Oregon’s Commercial Real Estate

The commercial real estate landscape in Oregon has evolved over time, with shifting demand patterns and a growing need for affordable housing. As a result, many commercial properties, such as office buildings and hotels, are being repurposed into residential spaces to meet the changing needs of the market.

This conversion allows developers to tap into the strong demand for housing while revitalizing underutilized or obsolete properties. High vacancy rates in commercial properties, particularly evident in areas like downtown Portland, has led to this change.

Oregon needs more than 580,000 new residential homes by 2040. The aforementioned legislative change may positively impact Oregon’s economy by revitalizing regional economic opportunities and fostering growth, especially in areas with a critical need for workforce housing.

The Rise of Mixed-Use Commercial Properties in Oregon

Advocates for mixed-use developments, such as Jim Teece of Ashland Home Net, support this trend. This approach, blending commercial and residential units, promises to enhance community vibrancy and address housing shortages. Smaller towns, including Port Orford, Gold Beach, Brookings, Bandon and Coos Bay, could significantly benefit from these developments.

State Representative Pam Marsh has emphasized the importance of exploring all options to tackle the housing crisis. Commercial-to-residential conversions are a key component of this strategy, offering a practical solution to Oregon’s housing challenges. Further insights into these developments can be found in an OPB article.

The transformation of Oregon Commercial Real Estate, catalyzed by HB 2984, represents a proactive approach to solving the housing shortage. This change is not only reshaping the state’s real estate landscape but also holds the potential to spur economic growth and community development.