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Portland expands IH incentives but councilors press for data on district impacts and fee‑in‑lieu efficacy
Summary
The Portland Housing Bureau reported program changes and results from its 2023–24 review — deeper property tax exemptions in more areas, simplified parity rules, and roughly 1,200 new private market units tied to inclusionary policies — while councilors pressed for follow‑up on vacancy rates, 60% AMI occupancy and the effect of the SDC waiver on developer behavior.
The Portland Housing Bureau updated the Homelessness and Housing Committee on changes to the city's inclusionary housing (IH) program following a 2023–24 periodic review and described initial program outcomes.
Dori Hellyer, development incentives manager at PHB, and Jessie Connor, senior policy analyst, summarized how state policy sets baseline parameters (the state allows local IH programs but limits applicability to buildings with 20 or more units and restricts mandatory affordability to no lower than 80% of area median income under default state rules). Portland implemented local choices in 2016 and later refined them: the city prioritizes onsite affordable units, offers an option of 10% of units at 60% AMI with deeper offsets, and implements a 99‑year affordability covenant for restricted units.
PHB described incentives including development bonuses (additional FAR/height where zoning allows), construction excise tax exemptions for restricted units, and expanded use of the multiple unit limited tax exemption. After the 2023–24 review PHB expanded deeper tax exemptions into more areas to offset higher costs in some neighborhoods and simplified administrative requirements (unit size averaging, clearer parity calculations, expanded off‑site options and consolidation).
PHB reported program outcomes to date: just over 1,200 new private market units have participated in the program citywide; the majority of inclusionary units are delivered at the 60% AMI option; about $5,000,000 in fees‑in‑lieu have been collected (largely from smaller projects that opted in rather than triggered the 20+ threshold); and roughly 600+ inclusionary units are currently in permitting or under construction.
Councilors pressed for more granular analysis. Several expressed concern that the temporary SDC waiver might reduce the incentive for developers to participate in IH and that project designers are structuring developments (e.g., 19‑unit schemes) to avoid the 20‑unit threshold. PHB said planning bureau analysis found an increase in projects in the 12–19 unit range from roughly 5% to about 10% in a prior period but recommended further study of broader causes and geographic effects. Councilors requested follow‑up data on vacancy and occupancy of 60% AMI units, where PHB said compliance reporting exists but may lag.
Committee members asked PHB to return with additional context on market drivers, vacancy data and geographic effects so policy choices can be better calibrated to production and affordability goals.
