Proof: Give Developers Money, They’ll Give You Cheap(ish) Housing

Back in August, Portland City Council decided it would offer up way more money to convince developers to provide affordable housing. In a unanimous vote, commissioners okayed tripling the 10-year tax breaks developers could get for projects containing cheap units, from $1 million per year to $3 million per year.

It’s already having an effect.

Today, council approved a collective $1.2 million in annual tax breaks for three new buildings springing up in some of the city’s trendiest neighborhoods—Williams, Mississippi, and Goose Hollow. Thanks to those breaks, developers will put 81 new affordable units into buildings that sport amenities like dog-washing stations, ample bike parking, and rooftop lounges.

Most of these units won’t be the cheapest of the cheap. Under the city’s policy, developers can get tax breaks for offering 20 percent of a building’s units for 80 percent of the city’s median family income or less. That’s higher than many housing types would like (a max of 60 percent of MFI has long been a city target where affordable housing is concerned). Under the deals the city approved today, 54 units will be listed at a max 80 percent of MFI ($938 for s studio, $1,168 for a two-bedroom, not including utilities). Twenty-seven units will go for a max of 60 percent MFI ($772 for a studio, $993 for a two-bedroom).

Still, it’s pretty clear the units that’ll be made affordable over the course of the 10-year tax deal could go for the city’s ridiculous going market rate. One sits Vancouver and Shaver, near the booming Williams district. Another’s going up on N Mississippi and Fremont. The third’s at SW 15th and Taylor.

These 81 units are a minuscule drop in an enormous bucket Portland needs to fill if it’s going to get anywhere near enough cheap housing to stem displacement and homelessness. (Here’s a rundown of some of the city’s recent efforts.) But, as Commissioner Amanda Fritz pointed out, it’s also a hidden way that you’re tax dollars (or lack thereof) go toward creating more affordable units.

“People wonder what are we doing to promote affordable housing,” Fritz said at today’s city council meeting. “This is one of the hiddent things we don’t have in our general fund budget. We’re saying, ‘yes, this is really important.”