Overview
Project Overview
The Albany City Council adopted Albany’s Housing Implementation Plan (HIP) in June 2023. The HIP evaluated policies and strategies that the City can employ to address Albany’s current and future housing needs, as identified in the City’s 2020 Housing Needs Analysis (HNA). The HIP outlines priority implementation steps the City can take to encourage the production of needed housing.
Since adoption, the city taken steps to implement priority strategies identified in HIP to encourage needed housing in Albany and incentivize more affordable and smaller housing units.
The HIP was built on community conversations and support for the Expanding Housing Options project, which updated the City’s development code and comprehensive plan to comply with state law (2019 HB 2001) to allow middle housing types where only single-dwelling units were previously permitted.
Contact
Anne Catlin,
Implementation
Implementation
Housing Construction Excise Tax effective January 1, 2026
The Housing CET is a one-time tax on new construction, charged at the issuance of building permits, to create a stable revenue source to support needed housing. Cities of all sizes in Oregon have enacted CETs to raise revenue and incentivize affordable housing, which is particularly challenging to construct for those with the lowest or restricted incomes.
The Albany City Council passed the Housing Construction Excise Tax (CET) on August 13, 2025, with an effective date of January 1, 2026. The tax will be phased in over 3 years. It is paid through building permits and is charged based on the improvement values of new residential development that adds livable space, as well as occupiable commercial and industrial development. The Council agreed to exempt the first $50,000 in improvement values from the new fee. The Residential CET will start at 0.25% of improvement values over $50,000, increasing to 0.5% in 2027 and 0.75% in 2028. The Commercial CET will start at 033%, increasing to 0.66% in 2027 and 1.0% in 2028.
Housing CET Exemption Application
Albany Development Code Changes effective March 2025
The council adopted amendments to the Albany Development Code to reduce barriers to the creation of needed housing and added a couple of standards to increase livability. Summary of the changes:
- Remove barriers for small houses – reduced lot sizes and side setbacks for houses less than 1,250 square feet
- Encourage smaller cottages – by allowing more cottages per lot for those under 800 square feet, decrease the common courtyard for developments with 4 or fewer cottages
- Increase ADU size as a percentage of the main house; keep maximum size of 900 square feet
- Reserve higher density zones for higher density development - set minimum density in the RM and RMA zones and remove maximum densities; max height and lot coverage already determine scale
- Require pocket parks/open space in residential subdivisions of 20 or more lots
- Encourage rear-loaded dwellings to improve pedestrian safety and walkability while preserving on-street parking.
Surplus Property Policy adopted in December 2024.
This policy requires the city to prioritize city-owned surplus property suitable for housing, unless another priority need is identified. This strategy could provide a financial incentive for housing development while allowing the city to control the type of development on the property without incurring additional costs.
Housing incentive programs being considered:
Multi-Unit Property Tax Exemption (MUPTE). This strategy allows the City to provide tax abatements for multi-unit developments in Climate-Friendly Areas near transit in exchange for public benefits. This may be strictly residential or be in a mixed-use building. The tax abatement is available for up to 10 years and applies only to new residential construction. This strategy increases a project's feasibility by lowering initial operating costs.
Low-Income Rental Housing. This tax abatement program would provide a 20-year tax abatement for affordable rental housing. To be eligible, a property must offer rent to low-income residents (at or below 60% of the area median income) or be held for the purpose of developing low-income rental housing. Currently, the City offers a tax abatement for low-income rental properties owned by nonprofits, which requires annual renewal.
Documents
Documents
Housing Implementation Plan Documents
The City of Albany prepared the Housing Implementation Plan (HIP) to identify actions the City can take to help increase housing options that create more housing for more people. The HIP prioritizes current and future housing needs and outlines equitable and actionable policies, strategies, and implementation steps needed to encourage the production of housing that is needed in the Albany community. The HIP summarizes recommendations for adoption of a range of housing strategies or tools to study further—these include regulatory changes, incentives, funding sources, programs, and partnerships.
- Housing Implementation Plan
- Appendix A - Part 1 Background Report
- Appendix A - Part 2 Background Report
- Appendix B - Focus Groups Summary
- Appendix C - Survey Summary
- Appendix D - Housing Strategies Menu
HIP Housing Policies Background Report
This report analyzes and assesses the potential of 3 housing policy strategies recommended in the HIP to incentivize additional housing development in Albany. The Surplus Property for Affordable/Needed Housing and Tax Abatement programs might be used to facilitate the development of affordable housing as well as market-rate housing if it meets public needs (e.g., housing density or mixed-use goals), while the Construction Excise Tax (CET) is designed to be used specifically for affordable housing. Encouraging the development of affordable housing, often undersupplied by the market, is the primary goal of these strategies. A secondary goal may be to incentivize other types of development, such as mixed-use, transit-oriented, or denser housing in some planning areas such as the designated Climate Friendly Areas (CFA) or other town centers.
Albany Market Feasibility Study
The market feasibility study was completed as one component of the City of Albany Housing Implementation Project. The purpose of this study is to assess the feasibility of mixed-use (MU) development forms in the City’s six potential climate-friendly areas (CFAs). CFAs are a requirement of the state Climate Friendly and Equitable Communities rule (CFEC), which requires cities with a population greater than 25,000 residents to designate and plan CFAs to be future areas where greater housing capacity, commercial options, and transit access will allow residents to meet most of their daily needs without the need for a car. The CFAs, therefore, need to allow more flexibility in housing types, density, and mix of uses. These development forms can be more expensive and complex to develop than lower-density construction, so they may not be feasible in all areas immediately. However, the right combination of incentives and positive amenities can help bridge the feasibility gap to achieve these goals. This study summarizes local market conditions for residential and commercial real estate. The study identifies feasibility gaps and proposes strategies and tools to address them.
