Illustration by Ryan Alexander-Tanner

FOR MONTHS, Portland City Hall has been privately wrestling with the controversial notion that developers and builders (whose campaign cash reliably buys a sympathetic ear in local government) should get a chance at multimillion-dollar subsidies, so long as they promise to help rid Old Town and Chinatown of its dismal parking lots.

Get ready to watch it become a reality, starting this Wednesday, July 16.

Essentially, any developer and landowner willing to provide market-rate housing in the neighborhood—units priced for people earning as much as the city's median income—would be freed from having to pay out required fees meant to ease their project's expected impact on the city's infrastructure.

Those fees are formally known as system development charges (SDCs). They're no trifle.

SDCs are a vital spigot of cash for our transportation, water, parks, and environmental services bureaus. Forgoing those fees in Old Town and Chinatown, city officials say, could cost those bureaus up to $7 million in new revenue over the next five years.

(That's assuming, of course, developers actually decide to bite.)

For backers like Mayor Charlie Hales and Commissioner Dan Saltzman, it's all part of a worthy tradeoff. Especially if it leads to big buildings—which might spur further, unsubsidized development—on land that's pretty much been lying fallow.

Neighbors want housing, they say. And it's another way, Saltzman's been keen to point out, to help keep Portland from turning into San Francisco.

But skeptics—like Commissioners Amanda Fritz and Nick Fish—see a flurry of red flags. It's not just the money—even though both oversee bureaus that would be directly affected. It's also the precedent. That kind of perk has been offered, historically, to developers only willing to provide affordable housing (priced for people making no more than 60 percent of the median income).

Moreover, Old Town and Chinatown both reside in an urban renewal district—meaning the city would be using future general fund and utility revenues to subsidize projects eligible for urban renewal cash.

And Hales is stepping on the toes of the Portland Business Alliance—which argued in an email this spring that fee waivers wouldn't be enough to help apparently flagging projects like a Goodman family collaboration with Gerding Edlen near NW 1st and Couch.

Those arguments are hardly unreasonable. But they also haven't convinced the likely swing vote on the issue, Commissioner Steve Novick.

Novick isn't worried about setting precedents. He says this is a subsidy for one neighborhood, not a redefinition of affordable housing citywide.

He also made sure to say he "respects" Hales' passion—saying the same respect has guided his support for some of Fish and Fritz's priorities (business license tax deductions and tree code enforcement, respectively).

Novick's only nit? The policy would only require market-rate pricing for just 10 years. He wants some protection against a sudden increase in year 11.

But otherwise, "I'm leaning toward supporting the mayor's proposal," he says.

Meanwhile, there's a matter of timing.

Hales' office scheduled the first major hearing right in the middle of Fritz's long-planned overseas vacation. The second hearing on the proposal, when commissioners vote, will come a week later. Sources say Hales' office had offered to bump the first hearing back a week. But that would have put off a vote until July 30, when Fish will be away. Fritz declined the offer.

"It would be bad politics to organize votes around when people are gone," says Dana Haynes, Hales' spokesman, "because people come back." And they might remember.