Council Votes on Inclusionary Housing

The Portland City Council passed two ordinances Wednesday morning creating a program that would require developers to include less expensive housing in multi-family buildings of 20 units or more.

Last week the council approved a series of amendments to the ordinance, clearing the way for a council vote this week, though a hearing on the ordinance scheduled for last Thursday was cancelled due to inclement weather.

“This may need to be tuned. It may not work perfectly in the marketplace, but the council has the opportunity to do that tuning as they have in the past,” Mayor Hales said at Wednesday’s meeting.

The ordinances, which would become effective in February, require developers to designate a certain percentage of units in multifamily homes at prices affordable to renters making less than the median family income for the Portland metropolitan area.

Exactly how that would break down can vary, and the ordinance offers some incentives to offset the price of lower-cost units – either by constructing new units or dedicating a share of units in existing developments to lower-income households.

The ordinance would require 20 percent of housing units in multi-family housing rent at prices affordable to those earning no more than 80 percent MFI, or 10 percent of units in affordable to those earning no more than 60 percent MFI either by constructing new units or dedicating existing units to households with lower incomes.

The ordinance primarily addresses new constructions, but offers developers the option of setting aside existing housing

• Newly constructed developments must reserve 20 percent of existing units to incomes at or below 60 percent of MFI;
• Existing units must be 25 percent of total units at 60 percent MFI, or 15 percent of total units must be at 30 percent MFI.

Earlier this year the Oregon legislature repealed a long-held ban on local governments requiring developers to include lower-priced units in their projects.

According to numbers generated by the United States Department of Housing and Urban Development and published by the Portland Housing Bureau, in 2016 the median family income for a family of four was $73,300; 80 percent of MFI for a family of four was $58,650. To be affordable to a family making MFI in Portland, a three-bedroom home would have to be priced at $1,905 (including utilities); for a family making 80 percent of MFI, rent and utilities would need to total $1,525.

According to the State of Housing report released by the housing bureau earlier this month, $1,525 was the average rent for a three-bedroom rental unit in Portland (excluding utilities). That report noted there are few areas in the Portland metropolitan area where a family making 80 percent of MFI could afford rent, and none where families making 50 percent or less of MFI could afford rent. The report also noted that the median income for renters, at $30,000, is lower than the median family income for the metro area -- and that median income for Black, Native American and Hawaiian Pacific households is about $27,000.