Expanding Horizons: HB 4035 and Urban Growth Boundary (UGB) Expansions for Real Estate Growth
Oregon’s historic Urban Growth Boundary (UGB) system was established to prevent urban sprawl and preserve agricultural land. However, tightly constrained boundaries contributed to a persistent shortage of buildable land, driving up lot acquisition costs for residential investors.
To address the state's housing deficit, Governor Tina Kotek and the legislature enacted House Bill 4035 (HB 4035). This legislation streamlines and expands the criteria for cities to execute one-time UGB expansions, opening up new buildable land acreage for residential development.
Key Details of HB 4035
Lower Eligibility Thresholds: Previously, cities were required to prove that at least 25% of households spent 50% or more of their income on rent ("severely rent-burdened") to pursue streamlined UGB additions. HB 4035 adjusts this metric, allowing cities where 25% of residents spend over 30% of their income on rent to qualify.
Expanded Acreage Limits: Qualifying cities with populations over 25,000 can expand their boundaries by up to 150 acres (up from 100 acres).
Agricultural & Forest Land Inclusions: When adjacent urban land is unavailable, HB 4035 permits cities to expand onto select farmland and forestland parcels, solving long-standing expansion bottlenecks for growing municipalities.
Investor Strategies: Where to Deploy Capital Next
As Oregon municipalities utilize HB 4035 to expand, early-stage investors can position themselves advantageously:
Target Secondary and Growth Markets: Cities like Woodburn, Monmouth, Roseburg, and outer Metro communities are leveraging UGB expansions to attract development capital.
Focus on Master-Planned Multiplex Clusters: Newly brought land requires efficient residential density. Cottage clusters and multiplex infill offer ideal density profiles for newly annexed acreage.
Coordinate Infrastructure Development: Verify that municipal utility extensions (water, sewer, power) are scheduled concurrently with UGB annexation timelines.
Position your real estate portfolio ahead of Oregon's growth trajectory. At truHOME Building and Development, we monitor land-use expansions across Oregon to bring investors lucrative development opportunities. Visit www.oregonmultiplex.com to learn how we turn acreage into income-producing assets.
