The projection covers all of Marion and Polk counties—not only Salem—and finds Oregon already follows several recommendations while remaining far apart on lot sizes and other policies.
The Salem metropolitan area could add as many as 1,610 homes annually by allowing smaller residential lots, expanding housing choices in existing neighborhoods and permitting more homes near jobs, according to a new housing playbook from the U.S. Chamber of Commerce and AEI Housing Center.
The estimate does not apply only to the city of Salem. The federally defined Salem Metropolitan Statistical Area includes all of Marion and Polk counties, meaning the projection covers multiple cities and unincorporated communities governed by different zoning codes and infrastructure systems.
The report estimates the two-county region is short approximately 10,400 homes, equal to about 6.1% of its housing stock. It projects that the region could add 400 homes annually through smaller lots in new subdivisions, 700 through lot divisions and additional housing on existing lots, and 510 by permitting housing in commercial and other employment areas. Together, the changes would increase recent home production by an estimated 110%.
Those figures are modeled possibilities, not construction forecasts or government housing targets. The report does not assign the projected homes among Salem, Keizer, Woodburn, Dallas, Independence or other communities. It also acknowledges that roads, schools, sewer and water capacity differ among jurisdictions.
Where Oregon Already Matches the Report
Oregon has already adopted several policies that resemble the playbook’s recommendations.
House Bill 2001 required larger cities, including Salem, to allow duplexes, triplexes, fourplexes, townhouses and cottage clusters in residential areas that permit detached houses. Senate Bill 458 subsequently required local governments to allow expedited divisions of middle-housing properties so individual units could be separately owned.
House Bill 2138, approved in 2025, will broaden middle-housing requirements and extend them to some urban unincorporated land. Applicable local governments generally must comply with the new provisions by Jan. 1, 2027. That change could affect portions of Marion and Polk counties outside incorporated cities, although it still would not create uniform rules throughout the entire metro area.
Salem implemented its middle-housing regulations in 2022 and eliminated minimum off-street parking requirements citywide in 2023. The City Council also adopted a Housing Production Strategy in 2025 with 17 actions addressing zoning, permitting, financial incentives and available land.
Where the Region Falls Short
The most significant difference is lot size.
The Chamber-AEI playbook recommends allowing residential lots as small as 1,200 square feet in new subdivisions and through divisions of existing properties. In Salem’s Single-Family Residential zone, detached houses and duplexes generally require at least 4,000 square feet. Three-unit developments require at least 5,000 square feet, while four-unit developments and cottage clusters require at least 7,000 square feet.
Oregon also allows commercial buildings to be converted into housing under certain conditions, and Salem has rezoned some corridors for mixed commercial and residential development. That is narrower than the report’s recommendation to permit new market-rate housing by right across commercial, mixed-use and light-industrial areas.
The report diverges more sharply from Oregon by criticizing rent control and urban growth boundaries. Oregon uses growth boundaries to direct urban development and protect farm and forest land, while the playbook argues that boundaries restrict land supply and increase prices. Oregon also limits rent increases for most covered properties; the maximum allowable increase is 9.5% in 2026.
Moving fully toward the playbook would require state and local governments to permit much smaller lots, expand market-rate housing rights on commercial land and further reduce development standards, fees and approval delays.
Salem’s ongoing Housing Code Project could address some of those issues within city limits, but reaching the report’s regional projection would require action by multiple cities and both counties. Even then, the 1,610-home figure should be viewed as a measure of potential—not a promise that builders could produce that many homes every year.