As homelessness rates surge in Oregon, lawmakers have slashed funding for eviction prevention and affordable housing services in favor of temporary shelters. Despite urgent need, the state’s 2025 housing budget cuts nearly $1 billion from the previous biennium while setting up a new statewide shelter network and expanding some tenant protections.
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Housing Crisis Deepens
Oregon is facing one of its worst homelessness crises in decades. According to Portland State University’s 2024 homelessness report, the number of people experiencing sheltered homelessness rose by 24% in a single year, the sharpest increase since 2007. Governor Tina Kotek declared a homelessness emergency on her first day in office and extended it through early 2026. Eviction filings have also surged, with cases nearly doubling since 2019. Despite this, eviction prevention programs saw their funding drop from a proposed $173 million to just $33.6 million in the new budget.
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Budget Cuts Amid Crisis
House Bill 5011, passed during the 2025 legislative session, reduced the Housing and Community Services Department’s budget from $3.6 billion to $2.6 billion for the next two years. Most of the funds will be directed toward shelter services, rental assistance, and disaster recovery. Advocates criticized the decision, warning it sidelines proven, long-term housing solutions in favor of temporary fixes.
“Sadly, in a tight budget year, we were not able to fund housing and homelessness programs to the full extent proposed by the Governor,” Rep. Pam Marsh, D-Ashland, told Street Roots.
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Funds Prioritize Shelters
Despite national research confirming permanent housing as the most effective way to end homelessness, Oregon lawmakers funneled the largest share of the budget into temporary shelters. A 2024 Portland State University study showed tiny home villages and motel shelters produced better long-term outcomes than congregate shelters; a fact echoed in years of similar findings.
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Statewide Shelter System Launched
Lawmakers passed House Bill 3644 to create a formal statewide shelter program under the Housing and Community Services Department (HCSD). Regional coordinators will manage funds for local shelter programs, with 70% earmarked for low-barrier, 24/7 shelters and the rest for recovery-based and culturally specific shelters.
“We haven’t solved all the problems, but we have created a system that needs to be sustained and maintained, and the state has to have a role,” Gov. Kotek said.
The bill, passed along party lines, declares an emergency and will take effect after the governor signs it. HCSD must finalize program rules by January 1, 2026, and appoint regional coordinators by May 1, 2026.
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Tenant Protections Still Advanced
Although eviction prevention programs faced severe cuts, lawmakers passed several tenant protection measures focused on shielding vulnerable renters. These included legal rights protections and legislative tools aimed at easing the path for new housing development.
“In addition to work on the homelessness front,” Marsh said, “we produced a lineup of housing legislation that is pragmatic and focused and that will help us get more housing on the ground.”
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Advocates Hope for Next Year
Despite setbacks, advocates remain hopeful that future budgets will offer stronger housing investments. Marsh said she aims to secure increased funding in 2026, depending on the state’s financial outlook.
“The plan will ensure that whatever dollars we put into the shelter network are well spent, transparent, fairly distributed, and locally directed,” Marsh added.
