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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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“It is time to... prioritize affordable housing”

Photo of High-rise constructionThe Portland Housing Bureau and the Bureau of Planning and Sustainability have released a study that will inform recommendations for a possible new bonus system to incentivize private affordable housing construction in the Central City. 

In the next 20 years, Portland’s Central City is projected to gain 30,000 new households. To ensure that the Central City maintains a mix of income levels while accommodating rapid growth, Commissioner Dan Saltzman asked the Portland Housing Bureau (PHB) and Bureau of Planning and Sustainability (BPS) to analyze and then recommend how bonus programs in the Central City’s zoning code could be updated to support affordable housing development. The initial recommendations and report were released today. 

“It is time to streamline our incentive bonus system to prioritize affordable housing,” said Commissioner Saltzman. “This an important tool to encourage the private market to be part of the solution to our affordable housing crisis.”   

Key recommendations include redesigning the Central City bonus system to prioritize affordable housing, retaining the current 3:1 cap on bonus FAR that can be used on a single site, and allowing developments to earn this bonus by:

  • Constructing affordable housing on-site as part of a project affordable to households at 80 percent of the median family income (MFI), and that units be kept affordable for 60 years.
  • Paying into a public benefit fund for the production and preservation of affordable housing, which would be used to create affordable housing at  income levels below 60 percent MFI.

Based on average levels of development activity in the Central City, the proposed affordable housing bonus could result in as many as an additional 60 affordable units (at 80-percent median family income per year). Developers would also have the option of paying a fee in lieu of building the affordable units themselves. If all bonuses were earned through the in-lieu-payment option, $120-200 million could be generated for affordable housing development or rehabilitation over 20 years.

An incentive bonus system allows additional square feet of development for a project in exchange for a public benefit, such as affordable housing. A current bonus system already exist in Portland’s zoning codes and has 18 different bonus options. The recommendations would prioritize a bonus for affordable housing. 

The report will be introduced to City Council during a work session tomorrow at 9:30am, and will be the subject of a public hearing on July 9. Following the July 9 hearing, Commissioners will vote on a resolution to accept the study and provide additional guidance to staff on the development of a new Central City bonus tool.

Download the full report here.

Download a summary here.