December 21, 2016 -- Portland joined hundreds of municipalities across the country this morning with a unanimous City Council vote to adopt Oregon’s first Inclusionary Housing policy. The program, proposed by Commissioner Dan Saltzman and the Portland Housing Bureau (PHB), will link the production of affordable housing to market-rate housing development by requiring affordable units in new multifamily residential developments.
“Our vote today ensures that economically diverse neighborhoods and housing affordability will be preserved for generations to come,” said Commissioner Dan Saltzman.
State law prevented local municipalities from adopting Inclusionary Housing programs until Senate Bill 1533 passed in the 2016 legislative session, lifting the pre-emption. At the direction of Commissioner Dan Saltzman, PHB worked to develop a program for Portland in the months following the bill’s passage together with a panel of industry experts representing housing, development, and community members to advise on the policy and inform the details of the proposed program.
“We are grateful to the development community and housing advocates for their great effort and commitment in helping the housing bureau and Commissioner Saltzman craft a well-balanced policy that harnesses the creative energies of the housing development industry to ensure that Portland is an equitable and inclusive city,” said Portland Housing Bureau Director Kurt Creager.
The program will require developments with 20 or more units to reserve 20 percent of those units for households at 80 percent of the Area Median Income (or $58,650 for a family of four), with additional incentives for developers to include more deeply affordable units for households at 60 percent AMI (or $43,980 for a family of four).
“Inclusionary Housing is a big and important step that will add another strategy to help provide more affordable housing in Portland. The Inclusionary Housing Program will help create the diverse neighborhoods that Portlanders value, and keep Portland a livable city for all,” said Mayor Charlie Hales.
The Inclusionary Housing policy was approved in a 5-0 vote and will go into effect February 1, 2017.
Additional Inclusionary Housing Program Details:
- Will provide incentives to offset the cost of providing the affordable units, including Construction Excise Tax (CET) waivers, System Development Charges (SDC) waivers, density bonuses and property tax exemptions.
- An exemption from minimum parking standards for development projects that are close to transit and provide on-site or off-site affordable dwelling units.
New construction of 20 or more units must provide those units on-site, off-site or pay a fee in lieu of constructing affordable units, which will go into an affordable housing fund.
An “off-site option” allows developers to comply with the inclusionary requirements by either building new units or dedicating existing units at a site that is near the development site.
The program will separate the inclusion rates of the Central City and the rest of Portland into two “inclusion rates” to account for the difference in scale and development costs in each area:
- Central City will require projects with 20 or more units to provide 20 percent of units at 80 percent MFI or 10 percent of units at 60 percent MFI.
- Outside the Central City will phase in a lower inclusion rate, starting at 15 percent of units at 80 percent MFI and 8 percent of units at 60 percent MFI. On January 1, 2019, these rates will increase to match those in the Central City.
Learn more about the details of the program here.