Full Breakdown
Declining Property Values Impact Portland's Local Governments
2/10/2026, 1:16:52 PM
Overview of the Market Decline
Portland's commercial real estate market is experiencing a significant downturn, with the combined market value of the city's 20 largest office buildings plummeting nearly 70% since 2019. Records from Multnomah County indicate that these properties, valued at approximately $3 billion in 2019, are now worth about $986 million. This dramatic decline is attributed to various factors, including the COVID-19 pandemic and increasing property tax appeals from owners.
Financial Consequences for Local Governments
The sharp decrease in property values has led to substantial budgetary challenges for local governments in Multnomah County. The assessed values of these properties have dropped from a combined $1.2 billion to $890 million, resulting in millions of dollars in lost property tax revenue. County economist Jeff Renfro noted that the anticipated property tax growth has slowed significantly, from a typical increase of $20 million per year to just $8 million. As a result, Portland is facing a projected budget gap of $67 million for the upcoming fiscal year.
Rising Tax Appeals
The number of property tax appeals has surged, with 529 appeals filed in the current tax year, up from 313 in 2023 and 422 in 2024. This trend is expected to continue, potentially exceeding 1,000 appeals, which can take years to resolve and often result in refunds to property owners. The appeals have already cost local governments in Multnomah County over $30 million combined in 2023 and 2024.
Criticism of Property Tax Laws
Local governments attribute part of their financial struggles to Oregon's property tax laws, specifically Measures 5 and 50, which limit tax bills and cap assessed value growth. Critics argue that these laws hinder local governments' ability to generate adequate revenue. Jenna Jones from the League of Oregon Cities emphasized the need for legislative discussions to reform the property tax system to ensure it is fair and equitable for both local governments and community members.
Opposition to Tax Reforms
Any proposed changes to the property tax system would require voter approval, as these laws are enshrined in the state constitution. Bill Sizemore, the author of Measure 50, has expressed opposition to any reforms, urging local governments to examine their spending before seeking additional funds from taxpayers.
Future Outlook
Without significant changes to the property tax system, Portland's city leaders may face ongoing budgetary constraints. Renfro indicated that the county does not expect a turnaround in property values or a corresponding increase in property tax revenue in the foreseeable future, suggesting that local governments will need to navigate continued financial challenges in the coming years.
