City Councilor Jamie Dunphy knows it’s a tall task, but he has big ideas for the Hazelwood neighborhood he represents.
“In 15 years, I want to build a 14-story tower,” Dunphy said.
Dunphy is talking about a social housing project: affordable housing owned and managed by local government and nonprofit developers rather than businesses that profit from rents. Social housing usually includes significant management input from residents. And in some cases, the government limits the amount of profit a private developer can make, effectively lowering rents across the board.
In April, City Council tasked the Portland Housing Bureau with studying social housing models and requested a report by May 31, 2026. As an early step in that process, a group of local leaders and City Councilors — including Dunphy (D1), Candace Avalos (D1) and Mitch Green (D4) — traveled to Vienna, Austria in September — arguably the world capital for social housing. The goal was to see, in person, how social housing works hand in hand with an interconnected system of services.
They liked what they saw. Alongside other City Councilors, Dunphy wants to push local bureaucracy in a direction that can help realize his vision.
That vision? A Portland neighborhood not unlike Vienna, where housing, maybe with a theater or a music venue built in, is affordable to everyone. Where busy trains are filled with people of mixed incomes, and playgrounds where children of all ages, ethnicities and social status play in lush green spaces. Shade-covered sidewalks leading to grocery stores, coffee shops and business districts built by the community living there and paid for with low-interest loans from the local government to profit-limited developers.
Dunphy said the European city isn’t completely free of homelessness or graffiti. But he added that the systems built up in addition to housing — the support aspect of supportive housing — appear to better address issues than simply policing perceived blight. In other words, providing for community needs through what some call “intentional activation” can reduce the side effects of poverty.
“(Vienna) created this opportunity where community keeps community safe, where activation is used instead of the tools of law enforcement,” Dunphy said.
Dunphy said before he left Portland, he was already thinking about how a social housing project like those in Vienna might one day take root on a vacant plot of land where the Gateway Shopping Center’s Fred Meyer closed in September. Already a borderline food desert, losing Fred Meyer means the loss of a pharmacy, clothing, shoes and other services neighbors depend on.
In the 1980s and 1990s, lawmakers had high hopes for the area. Gateway had the potential to become the “downtown of the East,” so the city’s zoning code still allows developers to build up to 14 stories of residential construction in the area.
“No one ever has, but you can,” Dunphy said. “It’s such a missed opportunity.”
Local leaders who went to Vienna recognize that social housing cannot simply be built in isolation, Dunphy said. How people get to and from work, where they buy groceries, enjoy restaurants, shopping and other small businesses are all considerations in how the city builds the environment surrounding the housing.
“Part of the reason we went to Vienna was to understand what that full ecosystem looks like,” Dunphy said.
Avalos said the idea for a social housing project is one of many possibilities, and any decisions the city could make about the Gateway Shopping Center should center the voices and needs of people living in the Gateway area.
To that end, Dunphy and Avalos are holding a town hall Oct. 8 to hear from neighbors.
“Councilor Dunphy and I returned from Vienna inspired with ideas and looking for opportunities to pursue alternative housing models,” Avalos said. “We think the vision of Gateway that East Portlanders have expressed — a ‘Gateway to the World’ that thrives thanks to multicultural diversity, broad housing stability, and inclusive economic opportunities — may provide the right landscape for such models.”
Vienna
After World War I, Vienna faced poverty, famine and a housing crisis with tens of thousands of homeless and housing insecure people. In a period known as “Red Vienna,” the city started building municipal housing — housing owned and managed by the local government — paid for with taxes on luxury items.
By 1934, the fascist party arrested, executed and banned members of the Social Democratic Party, following a three-day civil war. By 1938, Adolf Hitler annexed Austria, expelling and murdering the city’s Jewish population, and stopping construction of social housing projects through World War II. That led to the destruction of more homes and another homelessness crisis. In 1945, after World War II, Social Democrats regained political control and started again building social housing units through long-term, interest-free loans.
Today, over 40% of Vienna’s housing stock is social housing.
Dunphy said seeing the city in person helped him understand what a successful community feels like, and how the government can use policy and its budget to build supportive neighborhoods.
“It was a different experience than I have had, as a lawmaker, to be able to see what could happen after good decisions were made 100 years ago,” Dunphy said. “It’s really exciting.”
Back in Portland
The major thoroughfare running through East Portland, Interstate 84, has no freeway exits or onramps for the length of District 1.
“It was not a piece of infrastructure built for the people who live here,” Dunphy said. “It was to get freight past the people who live here.”
Long ignored or mismanaged by the local government, the area remains economically stunted, according to Dunphy.
It is also the most demographically diverse district in the city, and the most impacted by high rents.
In District 1, 57% of the population is rent burdened — meaning people spend over 30% of their income on housing — and 32% is severely rent burdened, spending more than 50% on housing. Of the people living in District 4, which includes downtown, 45% are considered rent burdened, with 24% as severe, according to city data. The districts also contrast in racial and ethnic diversity, with white Portlanders making up 75% of District 4 residents, and 53% in District 1.
Dunphy said the city should be more intentional about how it invests in infrastructure, rather than making blanket policies that apply in Northwest Portland just as they do in the outer East side.
Instead, he said, Vienna showed what is possible. With 100 years of local government supporting social housing, Dunphy said Vienna is more prescriptive in how it meets the needs of the city’s communities — like doctor’s offices or performing arts spaces in city-owned buildings, or a city-created lake as a centerpiece for a housing development. There, social housing means not only a roof over your head, but everything else people need to live and thrive.
In Gateway, the city’s zoning code allows for such a project. Dunphy said a sustained, holistic approach to the neighborhood, less vulnerable to the volatility of private markets, could be an answer to the challenges Gateway has long endured. It will also take patience.
“I won’t see Portland look like Vienna in my life,” Dunphy said. “So, I have to be OK with that and be realistic and act with intention now.”
Prosper Portland, the city’s independent economic and urban development agency, was formerly known as the Portland Development Commission. The agency is responsible for development projects across the city, including implementing plans for commercial, retail and transit developments. It also manages tax incremental finance, or TIF, districts across the city — urban renewal areas designed to incentivize private investment.
While TIF districts are intended to pour property taxes directly back into the neighborhood they came from to spur development, Prosper Portland has at times failed to achieve the results from the private market that it hoped for. The Gateway Regional Center TIF district has existed since 2001, and a plan to expand middle-income housing, homeownership and grants for small businesses was finalized in 2024.
Lisa Abuaf, Prosper Portland director of development and investment, told Street Roots the City Council and Prosper Portland’s approved Gateway Action Plan guides Prosper Portland investments. That includes $33 million toward purchasing land, commercial property lending and direct housing investments, plus over $15 million in other affordable housing projects through the Portland Housing Bureau.
“Stakeholders consistently shared that livability issues and the lack of economic diversity are core impediments to creating a healthy and safe neighborhood and economy in Gateway,” Abauf said.
Dunphy has long been critical of Prosper Portland, for its outsized role in economic development.
“Prosper Portland continues to not meet the goals that they set for themselves, and blame the neighborhood when it doesn’t succeed,” he said.
Abauf added that Prosper Portland will continue to collaborate with public, private, and nonprofit partners working to address livability and safety issues.
“Also, as has been widely acknowledged, public financial investment is just one piece of the equation,” Abauf said. “Prosper Portland and city leadership will continue to work with private sector partners whenever viable private investment opportunities are presented.”
Green, who spearheaded the resolution to study social housing earlier this year, said to finance social housing projects, it is critical that the city starts by looking at current housing-adjacent spending — like temporary shelters, housing vouchers, Metro supportive housing services dollars — to figure out how it might better be spent in long term investments.
“If we’re not looking at those dollars first as an opportunity to repurpose, I think we’re going to miss a mark with a lot of voters in the city,” Green said.
Green said local developers often argue that building market rate housing — non-subsidized housing subject to the whims of the economy — does not pencil out, so they don’t invest in building housing affordable to most Portlanders. But, Green said, that is due to a market that demands rents grow 10% each year before investors will finance the project. Municipal investment can do the same project without adding increased profits into the costs, making the city what Green called a “price maker” rather than a “price taker.”
“You’re just not going to build into that this extra cream for someone who never lifted a finger, somewhere else, who’s taking a capital risk,” Green said. “Instead, the city of Portland takes the capital risk and says, ‘We’re going to underwrite the production of limited profit housing with these public dollars.’”
Rather than charging a renter whatever the market will allow, prices under the Vienna social housing model are based on the cost of the building loan and maintenance. When the loan is paid off by the developer, the rent goes down. If some maintenance costs are required, the rent may increase temporarily. Green said cranes were in the sky, still building new housing as local leaders visited Vienna.
“There’s this idea in the United States and cities like Portland, that if you get scary, radical ideas like social housing or a Renters’ Bill of Rights, or anything of that nature, then you’re going to make it impossible to build,” Green said. “And it’s simply not true when you go and visit a place like Vienna.”
Green and Dunphy said Portland may continue to see an increase in climate refugees as environmental disasters continue to worsen, and the city should be prepared for that. Green said the city has various funding sources available, including the Portland Clean Energy Fund, which is focused on supporting climate projects into the future.
“I can’t think of a better nexus than having PCEF help fund the creation of a second downtown for the city of Portland, so that way people don't have to commute as far to get to work,” Green said.
He added that new housing is typically more efficient than old housing, and with more dense development, a more robust public transit system can reduce emissions from vehicles. Burning fossil fuels for transportation is responsible for at least 28% of greenhouse gas emissions in the U.S., according to the Environmental Protection Agency.
A 2024 Multnomah County heat mapping study found inequities in temperatures depending on the neighborhood. The study found that the Lents neighborhood, Mall 205 and industrial areas near Portland International Airport — all in District 1 — are the hottest areas in the county.
Gentrification and displacement
Lisa Bates, a Professor of Black Studies at Portland State University, researches housing and community development policy in the context of gentrification.
Bates said with recent federal disinvestments and a history of ineffective urban renewal areas that center private development, Portland is in an interesting moment to ask if a social housing development could be a more effective catalyst for economic and community activity. It also means developing without displacing people who already live in the area takes a different set of priorities and resource allocation than the city is currently using.
“It has to be cultivated, and organized and authentically put together,” Bates said.
In fact, Bates said, it requires an entirely different way of thinking about development, away from the current “affordable housing industrial complex.”
In Portland, public dollars are often put toward low-income housing meant for people making under 60% of the area median income, or AMI. Programs like the city’s inclusionary housing program, for instance, require all new residential developments with more than 20 units to include 10% of the units affordable at 60% AMI, or 20% of the units affordable at 80% AMI.
Portland has historically shied away from building workforce housing or mixed income housing, and Bates said mixed income housing can destigmatize the communities who live in public housing in the long term.
“Part of social housing is not means testing — not income-checking constantly” Bates said. “That is philosophically quite different from what we have in Portland and have had for quite a long time.”
Bates said many neighborhoods have for years experienced “micro-segregation,” where Black Portlanders and people of color end up moving into low-income apartment buildings everyone understands are intended for low-income people. The apartments are often next to properties made up of single family homes mostly owned and occupied by white Portlanders. Building social housing that is affordable and welcomes people of all income levels, not for profit but as a community-centered development, can ultimately contribute to better outcomes for all, Bates said.
Akasha Lawrence Spence is a former Oregon legislator and current CEO of Fifth Element, which helped organize the trip to Vienna.
“In Vienna, you cannot tell somebody’s income or status, or what their life outcomes will be, based on their ZIP code,” Spence told Street Roots. It’s a common refrain from housing advocates in Vienna, one that Dunphy and Green expressed as well.
Spence added that creating social housing for a larger segment of the population — provided for people with incomes up to 150% AMI — means communities are not segregated, and health, education or other outcomes are not clear based on what area a person lives in.
Dunphy said it will take time to see the results of today’s investments, again acknowledging that he may not even see the vision fulfilled within his lifetime. But he still thinks it’s worth it.
“We have to plan now for the next 100 years,” Dunphy said.
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This article appears in October 1, 2025.