Multi Unit Housing Tax Incentive Program

The Multi Unit Housing Tax Incentive Program (MUHTIP) is a tax abatement of up to 10 years for new or converted housing units, constructed within the City’s designated core area. You can see if a property is located in the core area on the Multi-Unit Housing Tax Incentive Program Map.

To qualify for MUHTIP, projects must include at least two new dwelling units and at least one public benefit. Projects with more than 50 units must provide at least 15% of units at rents affordable to households with incomes at or below 80% of the area median income. Current income limits can be found on our Federal Forms and Information webpage.

For more information, visit: Multi Unit Housing Tax Incentive Program

Low-income Housing Tax Exemption Program

This program offers a property tax exemption for low-income rental housing that is owned or managed by nonprofit organizations. To be eligible, housing must be occupied by households with incomes at or below 60% of the area median income, or vacant land must be intended for development into low-income housing. Applications and renewals for this exemption must be submitted annually.

For more information, visit: Low-Income Housing Property Tax Exemption Program

Salem Housing Authority also has a Low-Income Tax Exemption Program for partners providing low-income housing. To be eligible, housing units must be occupied by residents with incomes at or below 80% of the area median income. Mixed use or mixed income housing may be eligible for a partial exemption for units meeting the eligibility requirements, but excluding commercial space or units occupied by residents with incomes above 80% of the area median income.

For more information, visit: Tax Exemption Program — Salem Housing Authority

Single Property Tax Increment Financing District for Affordable Housing

The Single Property Tax Increment Financing (TIF) District provides a property tax rebate for the development of new affordable housing. The level of affordable housing should equal at least 15% of total units or 20 units, whichever is greater. Projects using additional property tax exemption benefits are not eligible.

For more information, visit: Single Property Tax Increment Financing District for Affordable Housing

North Gateway Urban Renewal Area

The North Gateway URA offers a matching grant program to help finance the construction for new or expanded commercial, industrial, or mixed-use multifamily residential buildings in the North Gateway URA. You can see if a property is within the North Gateway URA boundary on this map. The maximum grant award for a single project is $300,000. Grant funds must be matched dollar for dollar by applicant funds.

For more information, visit: North Gateway Rehabilitation Grant Program

Riverfront Downtown Urban Renewal Area

The Riverfront Downtown URA offers grant funding for a variety of project types, including mixed-use developments with housing. Projects that are solely residential are not eligible. Projects must be in the Riverfront Downtown URA; you can see if a property is within that boundary on this map. The maximum grant award is $300,000, and grant amounts depend on the total project cost.

For more information, visit: Riverfront Downtown Capital Improvement Grant Program

West Salem Urban Renewal Area

The West Salem URA offers a matching grant program to help finance the construction for new or expanded commercial, industrial, or mixed-use multifamily residential buildings in the West Salem URA. You can see if a property is within the West Salem URA on this map. The maximum grant award is $300,000, and grant amounts depend on the total project cost.

For more information, visit: West Salem Redevelopment Grant Program

HOME Investment Partnership Program

The HOME program is designed to provide affordable housing to low- and very low-income households. The City of Salem receives an annual allocation of HOME funds, which are then granted to partners undertaking eligible projects. HOME funds may be used for building, buying, or rehabilitating affordable housing that is for rent or homeownership.

For more information, visit: What is the HOME Investment Partnership Program?

To apply for federal funds, visit: Apply for Federal Grants

Community Development Block Grant Program

The purpose of the Community Development Block Grant (CDBG) is to develop viable urban communities through providing decent housing, a suitable living environment, and economic opportunities for people with low or moderate incomes. Funds can be used for a variety of eligible activities, including property acquisition for affordable housing and housing rehabilitation.

For more information, visit: What is the Community Development Block Grant (CDBG)?

To apply for federal funds, visit: Apply for Federal Grants

Safety and Livability Bond

In November 2022, Salem residents approved a $300 million community improvement bond. The bond funds a variety of different types of projects, including $10 million dedicated to an affordable housing opportunity fund and $7.5 million to acquire sites that will host branch libraries and affordable housing.

For more information, visit: Safety and Livability Bond | Salem, Oregon

Affordable Housing in More Zones

State law generally allows the development of affordable housing in zones that allow commercial uses, religious assembly, or public lands, as long as the zone does not allow heavy industrial uses. The property must be owned by a public body, housing authority, nonprofit corporation, or manufactured dwelling park nonprofit cooperative. The housing must be affordable for at least 30 years and meet one of the following criteria:

• Each unit must be affordable to families with incomes of 80 percent or less of the area median income
• The average of all units must be affordable to families with incomes of 60 percent or less of the area median income
• A manufactured dwelling park must only serve households with incomes of 120 percent or less of the area median income

State law also provides a density and height bonus for affordable housing in areas zoned for residential use.

For more information, visit: SRC 704.010 Affordable housing allowed pursuant to ORS 197A.445 or ORS 197A.445.

Expedited Process for Affordable Housing

The City provides a 100-day land use process for affordable, multifamily housing that meets specific requirements, including the following:

• Multifamily residential building contains at least 5 units
• At least half of the units will be sold or rented as affordable housing
• Affordable units are affordable to households with incomes equal to or less than 60 percent of the median family income
• Affordable units are affordable for at least 60 years (from the date of the certificate of occupancy)
• Application is for a permit or zone change

For more information, visit SRC 300.810(b) and SRC 111.001.

Middle Housing

In 2022, the City started allowing middle housing in residential zones, including Residential Agriculture (RA), Single Family Residential (RS), Multiple Family Residential-I (RM-I), and Neighborhood Hub (NH) zones. Middle housing includes townhouses, two family uses, three family uses, four family uses, and cottage clusters.

To learn more, visit: Middle Housing

Middle Housing Land Divisions

Land developed or proposed to be developed with middle housing can be partitioned or subdivided so each dwelling is on its own lot. This land division is processed in accordance with ORS 197.360 through 197.380 instead of the standard partition or subdivision process. The middle housing land division process offers a shorter completeness review period and a shorter timeline for issuing a decision once an application is complete. There are also limitations on the conditions of approval that may be imposed on a middle housing land division.

For more information, visit SRC 205.051 Middle housing land division

Multifamily Housing in Mixed-Use Zones

The City allows standalone multifamily housing in its mixed-use zones. This includes the Mixed Use-I, Mixed Use-II, Mixed Use-III, Mixed Use-Riverfront, Central Business District, West Salem Central Business District, and Edgewater/Second Street Mixed-Use Corridor zones. In these zones, development is not required to include a mix of uses.

To find the zoning of a property, visit: Find your property zone (map).

Commercial Conversions to Housing

State law generally allows commercial buildings to be converted into housing without a zone change or conditional use permit. Such conversions are not allowed in areas that are zoned for industrial uses.

For more information, visit: SRC 704.015 Commercial to residential conversions allowed pursuant to ORS 197A.445 or ORS 197A.445

Single Room Occupancy

In 2023, the City updated the Salem Revised Code to allow single room occupancy housing more broadly. Single room occupancy is an allowed use in residential zones, mixed use zones, and the commercial office, central business district and West Salem central business district zones.

To find the zoning of a property, visit: Find your property zone (map)

No Parking Minimums

In 2023, the City eliminated minimum off-street parking requirements for all uses citywide. Parking may still be provided, but there is no longer a minimum amount required. This provides greater flexibility for how much of the site must be devoted to parking, potentially allowing space that would have otherwise been needed for parking to be devoted to additional housing units.

Housing Code Project

The City is working to revise Salem’s zoning code to encourage more housing development. This project has included taking another look at regulations for single family, middle housing, multifamily, residential in mixed use zones, trees, and infrastructure. The City is identifying barriers to housing development and determining potential solutions. This project is expected to result in a code amendment that would go through the adoption process in 2026.

To learn more or sign up for email updates, visit: Housing Production Strategy. Current project information can be found under the project documents bar.

Recent Changes in State Law

The City regularly updates Salem’s zoning code to implement new legislative bills and changes in State rules and laws. An update is expected in 2026 to implement bills passed during the 2025 Legislative Session. Proposed code changes are expected to include:

• Providing a density bonus for middle housing that includes an accessible unit (Type A) or affordable homeownership unit
• Allowing attached cottage clusters
• Allowing for denser single-room occupancy developments
• Streamlining the approval process for planned unit developments, variances for residential development, and zone changes to higher-density zones

Climate Friendly and Equitable Communities

The City will be updating the zoning code to promote walkability in Salem, as part of the City’s ongoing implementation of the State’s Climate Friendly and Equitable Communities (CFEC) rules. These updates are expected to primarily affect non-residential development but could include minor changes to standards for single family and middle housing related to driveways and garages.

Additionally, the City will be designating Walkable Mixed Use Areas (WaMUAs) intended to encourage compact, walkable development with a mix of uses, including residential, office, retail, and services. Currently, there are three proposed WaMUAs: Downtown, North Downtown, and West Salem. Designating WaMUAs complies with the State’s CFEC rules and the zoning in these areas is already closely aligned with the requirements for WaMUAs.

These changes are expected to go through the adoption process in 2026.

To learn more, visit the land use section of Salem in Motion: Connecting People and Places.

Legislative Land Use Proposals

The City periodically proposes updates to the Salem Revised Code to implement new state laws and address issues and priorities from the community. This includes code amendments related to housing development. Recently adopted changes to the code and current efforts are described on the Legislative Land Use Proposals page.

To learn about proposed code changes and other planning efforts, sign up to receive email updates.

Land Use Applications and Building Permits

Building permits and land use applications can be submitted through the Permit Application Center Portal, known as PAC Portal. You can also pay fees through the PAC portal. If a pre-application is desired or required for your project, you can schedule the pre-application conference through the PAC Portal as well. Finally, the PAC portal includes a search function where permits, licenses, and land use actions can be found using the address, permit number or other relevant information.

See the following webpages for information on:

• Electronic Plan Submittal Guidelines for PAC Portal
• Land Use Applications
• Building permits: Building in Salem
• Building Permit and Land Use Fees

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Permitting Dashboard

The City offers information on development application timelines. Review timelines vary depending on complexity, workload, and applicant response time. This dashboard can be used to better understand and plan for how long planning and permitting applications are likely to take. The dashboard publishes updated metrics each month, including average review times for planning applications, multifamily housing and residential permits.

To view the Development Application Dashboard, visit: Development Application Dashboard

City staff can answer questions about the information covered on the map. For detailed discussions about a project, a pre-application conference can be helpful. To request a pre-application conference, follow the instructions here: Request a Pre-Application Conference.

Contact the Planning Division at planning@cityofsalem.net or 503-588-6213 or in person at the Permit Application Center located at 440 Church Street SE for information on the following topics:

• Zoning Designation
• Overlay Zones
• Historic Districts
  • Contact Jake Morris at jjmorris@cityofsalem.net or 503-540-2417.
• Comprehensive Plan
• City limits
• Urban Growth Boundary

Contact the Development Services Division at developmentservices@cityofsalem.net or 503-584-4646 or in person at the Permit Application Center located at 440 Church Street SE for information on the following topics:

• Water infrastructure
• Storm infrastructure
• Sewer infrastructure

Contact the Urban Development Division at urbandev@cityofsalem.net or 503-588-6178 for information on the following topics:

• Urban Renewal Areas
• Multi-Unit Housing Tax Incentive Program