Jason Sturgill

ECO-ROOFS AND BIKE LOCKERS are regularly found in Portland's new apartment buildings, largely because "green" Portlanders demand such amenities. But under the city's outdated incentive program, builders also get special permission to build taller or denser by including such features. That's probably going to change.

Last May, Housing Commissioner Dan Saltzman launched a study looking at Portland's density bonus incentives. Now the results are in, and it turns out the city's practically giving them away.

"Many of those are no longer necessary or effective," Saltzman said at a city council work session on the report Tuesday, June 23.

Developers building in central Portland currently have a smorgasbord of 18 density bonus incentives—things they can do to win permission to build higher or denser than a parcel's zoning allows. In addition to bike storage and eco-roofs, bonus options include open spaces, water features, and underground parking.

But as Portland's growth spurt continues with no sign of slowing, the city doesn't need more water features. It needs affordable housing. So city officials are considering cutting the list of incentives to bare bones—making affordable housing on site or paying into an affordable housing fund the only two options available to builders who want a density bonus.

"This is an arcane and complicated menu of options," Mayor Charlie Hales said at Tuesday's work session. "It may seem a radical option, but we really need to look at skinny-ing that list."

According to projections, the affordable housing bonus plan that commissioners are considering could result in up to 60 affordable units (at 80 percent of median family income) each year. Which could mean up to 1,300 new units over the next two decades. During that same time, inner Portland is expected to gain 30,000 new households.

"Obviously narrowing the options makes a whole lot of sense," says Portland Planning and Sustainability Commission Chair André Baugh. "But we're not going to solve the problem of affordable housing with the bonus system."

Without the ability to force developers to include affordable housing (an option currently precluded under state law), altering the density bonus is one way to coax cheaper housing into the city.

"We need to put development of affordable housing at the top of the list," says Susan Anderson, director of Portland Bureau of Planning and Sustainability. "The bottom line is that the results of this study show that an affordable housing bonus would work well here."

David Schwartz, vice president of Denver-based Economic and Planning Systems, Inc., the consulting company hired to conduct the study, said his firm looked at six other cities to determine what options other municipalities use that could be viable for Portland.

"It's important to get rid of overlapping policies that allow the density bonus to just be given away," Schwartz said. "It's an unfortunate reality, but developers often don't have the expertise or ability to provide affordable housing on site."

Schwartz also says that revamping the list will make it clear to developers that the city places real importance on creating cheap units.

Hales says Portland has been "too permissive" about what types of developments it's allowed, and that in the current housing market the city should make affordable housing "the most attractive bonus for developers."

Developers are worried about their bottom line, and much of Schwartz's presentation to commissioners focused on explaining how restricting the bonus could pencil out, allowing for a 15 percent profit margin. City Commissioner Amanda Fritz, who seems to support the plan, thinks that's an awfully optimistic number.

"I wish I could make an investment and know I was going to get a 15 percent rate of return," she says. "I guess I would need to get together a huge amount of money and invest in real estate."

City council's scheduled to hold a public hearing on the revamped incentive plan July 9.