Vertical Housing Development Zone

Estacada’s Vertical Housing Development Zone (VHDZ) encourages multi-story mixed-use development in the City’s Downtown (D) Zone.


Developers with interest in mixed-use multi-story development projects may be interested in a City of Estacada program that provides a partial property exemption of 20 percent per floor above the ground floor. A developer can earn the partial property tax exemption by locating a qualified project in the City of Estacada’s Vertical Housing Development Zone (VHDZ).

Estacada’s VHDZ is entirely located in the Downtown (D) zone, which is well-positioned and designed for for mixed-use multi-story development. The partial property tax exemption applies to new construction on the first four floors of residential development built above a non-residential ground floor. The maximum tax exemption on the new construction is 80 percent per year over the first ten years of the project.

Additional Exemption for Low-Income Housing

This partial property tax exemption is not limited to low-income housing, though low-income projects receive an additional property tax exemption. In addition to the exemption for the residential portion of a mixed-use building, the land would also be eligible for a partial tax exemption of 20 percent for each floor dedicated to low-income residential housing (maximum exemption is 80 percent).


Financial modeling shows that a vertical housing based tax exemption moves some multi-story mixed-use projects from the red to the black. This tool helps close the gap for developers who are willing to take a risk in an untested market. Estacada’s VHDZ encourages private sector development that combines first floor commercial activity with residential capacity on upper floors. This mix of activity increases property values, improves viability of local businesses, and makes for a great quality of life for residents. It also diversifies local housing options, giving residents a wider range of housing solutions.

In order for a project to qualify, it must meet the following criteria:

  • Project must be entirely located within a vertical housing development zone.
  • Project must be a multi-story building used for residential and non-residential uses.
  • At least 50 percent of the project’s ground floor that fronts the primary public street must be committed to non-residential use. For the project’s ground floor to be considered committed to non-residential use, all ground floor interior spaces that front on the primary public street must be constructed to building code standards for commercial use or planned for commercial use upon completion.

Certification Process

  1. Eligibility Determination: Applicant contacts Economic Development staff to determine if project is entirely located within the vertical housing development zone.
  2. Application: Applicant completes and submits Application for Certification.
  3. Pre-certification: Staff review Application for Certification and supporting documents to confirm project meets VHDZ threshold criteria.
  4. Conditional Confirmation: If staff determine project meets threshold criteria, a conditional confirmation letter will be issued detailing the potential property tax exemption and next steps.
  5. Construction: Applicant proceeds with construction of their project as planned.
  6. Final Certification: Following completion of project construction, applicant submits an updated Application for Certification form reflecting any updated project information; an updated site plan and architectural pages that show the final “as built” square footages; and Certificate of Occupancy, sent within 10 days of receipt. City staff will use this to reconfirm project meets threshold criteria.
  7. County Tax Assessor notified: Once all of the above steps are completed, the City of Estacada will inform the County Tax Assessor’s office that the project is occupied (or ready for occupancy) and has been certified.

Does your development project qualify?

The first step in determining if your project is eligible is to contact city economic development staff: contact info to the left. Don’t hesitate to reach out with questions.

Application and Map can be found below.

Supporting Documents

Vertical Housing Development Zone Map (PDF)
Vertical Housing Development Zone Application (PDF)