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The City of Portland, Oregon

Portland Housing Bureau

Solving the unmet housing needs of the people of Portland.

Phone: 503-823-2375

fax: 503-823-2387

421 SW 6th Avenue, Suite 500, Portland, OR 97204

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City Explores Zoning Updates to Boost Affordable Housing Development

The Portland Housing Bureau (PHB) and the Bureau of Planning and Sustainability have begun work to develop a new set of tools that will allow the City to leverage market booms to increase affordable housing options.

Unlike “Inclusionary Zoning,” which mandates affordable development elsewhere but is currently prohibited by Oregon law, “Incentive Zoning” provides bonuses to developers who voluntarily include affordable units, and other public benefits, in proposed projects. Incentives for providing public benefits—from eco roofs to bicycle parking to affordability—already exist in Portland’s zoning codes. However, density bonuses intended to encourage affordable housing production may not be commensurate with what developers forfeit by providing below-market units and traditionally haven’t gotten much use.

The City plans to change that. At the end of November, the City’s Executive Oversight Committee (including PHB staff) met with Otak consultants to begin exploring best practices for ownership and rental housing—across the country and internationally—that could be successfully replicated in Portland. The study will also produce economic models that will better match the value of density bonuses with the cost to developers of providing various public benefits.

“The idea is to have a financial model that will stand the test of time and remain effective in different kinds of markets,” says PHB Director Traci Manning.

Otak will work with Economic & Planning Systems (EPS) on the financial modeling, having recently completed similar projects in Seattle and Denver. The process will include round-tables with developers and stakeholders. An initial proposal is due to City Council in the spring, with specific recommendations to follow in early summer.

Manning adds that the study will be an important tool for a number of current and future City planning processes.

“This is a balancing act,” Manning says. “We have to provide density bonus options within the zoning code that are correctly sized to attract developers to include affordable housing in their projects. This process moves the City toward a solution that will help us address the need for affordable housing while also encouraging the type of growth that will allow Portland achieve its economic goals.”