What the Data Really Says About Vacancy in Portland

Key insights from PSU’s 2026 Vacancy Tax Survey

As conversations around a potential vacancy tax continue in Portland, new data from Portland State University’s Center for Real Estate offers a clear look at what is actually driving vacancies across multifamily and retail properties.

Read the full report here: PSU Vacancy Tax Survey Results

Vacancy Is Driven by Market Conditions

Across all property types, the primary driver of vacancy is: Weak demand from tenants.

Other contributing factors include:

• Lack of qualified applicants
• Oversupply in some segments
• Regulatory complexity and delays
• Cost of tenant improvements (retail)

Intentional Vacancy Is Rare

The data is clear: Nearly all respondents (about 99%) do not hold units or spaces vacant without the intent to lease them.

When vacancies are intentional, they are tied to normal operations like renovations, staffing needs, or preparing a property for sale.

Operators Are Already Adjusting

Housing providers are actively working to fill units using:

• Lower rents and concessions
• Increased marketing
• Flexible lease terms

These are standard responses to changing market conditions.

A Vacancy Tax Is Unlikely to Change Leasing

51% of respondents said a vacancy tax would be extremely unlikely to change their leasing strategy.

Leasing decisions are already driven by market realities, not preference.

But It Would Impact Investment

The more significant impact is on future housing supply: 63% said a vacancy tax would be extremely likely to change investment and development decisions.

Common expected outcomes include:

• Selling properties and exiting the Portland market
• Reducing or delaying new development
• Increased difficulty accessing capital

A majority of respondents also expect negative impacts on:

• Equity investment (88%)
• Debt financing (71%)

It’s Not Seen as an Effective Solution

88% of respondents do not believe a vacancy tax would effectively reduce vacancies.

Instead, respondents point to broader solutions like improving economic conditions, streamlining regulations, and supporting both tenants and housing providers.

The Bottom Line

Vacancy is not a strategy. It reflects market demand, regulatory environment, and broader economic conditions.

Policies that focus only on penalizing vacancy risk missing the root causes and may impact future investment and housing supply.

Read the full PSU Vacancy Tax Survey Results