Property owners, developers say Portland vacancy fee would fail to fill storefronts

May 2, 2026 - 21:34

Portland's proposed vacancy fee is drawing sharp criticism from property owners and developers who say it will do little to actually fill empty storefronts. Instead, they argue, the real drivers of vacancy are being ignored.

A recent survey conducted by Portland State University's Center for Real Estate asked industry professionals to name the biggest obstacles to leasing commercial space. High taxes topped the list, followed by a persistent shortage of qualified workers. Respondents also pointed to shifting consumer habits and the high cost of building improvements as major factors keeping spaces empty.

Critics of the vacancy fee say it treats a symptom, not the cause. "You can't tax your way to a thriving retail corridor," one developer said. They argue that imposing a financial penalty on empty properties will only add to the burden on owners who are already struggling to find tenants. Some worry the fee could even backfire, encouraging owners to demolish buildings or convert them to other uses rather than pay the tax.

Supporters of the fee, including some city officials, see it as a way to push landlords to lower rents or invest in marketing their spaces. But the survey results suggest that the problem is more complex. Until the city addresses the underlying economic pressures, many in the industry believe storefronts will remain empty regardless of any new fees.