Salem's roughly 10,400-home shortage now has a new financing tool aimed at closing the gap. A revived state lending program for affordable rental housing is open to Oregon developers just as the state posts its second straight year of rising housing production.

Gov. Tina Kotek announced Monday, Aug. 17, that Oregon housing starts rose 11.3% year-over-year in the first half of 2026, according to the Governor's office. Nationally, starts fell 1.3% over the same period.

"The recent increase in housing starts is a positive sign for builders and for families looking for a home," Mike Riddle, president of the Oregon Home Builders Association, said in the announcement. "We appreciate the focus from the Governor and the Legislature on reducing barriers to production."

State data show more than 50,000 future homes in Oregon's production pipeline. The Governor's office also cited grants this summer to spur more than 8,000 housing units within the urban growth boundaries of several cities, though the specific communities were not named.

The statewide numbers arrive as Salem faces documented demand pressure. As we reported Aug. 13, the metro area is roughly 10,400 homes short of what's needed.

New lending tool for affordable housing

A key piece of the state's push is the Permanent Loan Program, relaunched Aug. 3 by Oregon Housing and Community Services after nearly two decades on pause.

The program includes two products: Elderly and Disabled bonds serving older adults and people with disabilities, and HUD Risk Share loans supporting low-income households. Developers can include mixed-income units and choose flexible prepayment terms.

Before the pause around 2007, OHCS issued $589 million in E&D bonds backing 355 developments and more than 7,000 units statewide. OHCS Executive Director Andrea Bell said at the Aug. 3 launch that the program fills a financing gap private lenders alone cannot close.

"When the market cannot support affordable housing access for everyone, public funders have a responsibility to step up and step in," Trell Anderson, executive director of Northwest Housing Alternatives, said at the program's Aug. 3 launch.

What Salem doesn't know yet

The Governor's announcement does not break down the 50,000-unit pipeline by city or county. Whether Salem is among the communities receiving the urban-growth-boundary grants has not been confirmed. Marion County permit data that would show local starts trends were not included in the state's release.

Kotek credited reduced red tape and state-local-private partnerships for the growth, noting it came despite high interest rates and unpredictable federal actions. Salem developers interested in the Permanent Loan Program can contact OHCS directly; no local application deadline has been announced.