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Downtown office market slump now reducing Multnomah County assessed values, budget staff say
Summary
County analysts reported an $8 billion decline in downtown commercial real market values between 2019 and 2024 and warned that office high‑rise losses have begun pushing real market value below maximum assessed thresholds, which translates into slower property‑tax assessed value growth for the county.
County budget staff told the Board that downtown commercial and office market declines are materially affecting property‑tax assessed values and therefore the general fund outlook.
"It's almost an 8,000,000,000 decline $8,000,000,000 decline in real market values," Jeff Renfro said when summarizing the downtown core analysis. He said office high‑rises account for nearly half of that decline and that the mechanics of Oregon's maximum assessed value rules mean falling real market value can quickly translate into lower assessed value when market value drops below the older maximum‑assessed threshold.
What staff presented: visuals comparing 2019 to 2024 real market and assessed values for the downtown core showed most office properties in the study have lost value; of the top 20 office properties by 2019 market value, declines ranged roughly 42% to 74%, and eight of those buildings now show real market value equal to assessed value, up from three in 2023. Renfro said the downtown core properties analyzed represent about 15% of total county assessed value and that core office properties represent roughly 3.5% of county total assessed value.
Implications: because residential and multifamily account for the majority of assessed value countywide, Renfro said a downtown office decline alone is not likely to cause an absolute fall in property taxes immediately, but it can create a drag that slows assessed‑value growth and contributes materially to the FY26 shortfall. Renfro said staff will use the new dataset to run scenarios that estimate revenue impacts under different real market‑value trajectories.
Board reaction: commissioners asked about conversion to residential use, demolition vs. retrofit examples from other cities, and the likelihood of a broad private‑market solution without public subsidy. Renfro said some subsidized conversions might be feasible but that wholesale conversion without subsidy is unlikely; he suggested other actions to increase downtown vitality (connectivity, events) to support recovery.
Next steps: staff said they will continue scenario planning with updated 2024 data and incorporate those results into future forecasts and budget deliberations.
