The Portland City Council voted 4-0 Wednesday to revive a tax break designed to encourage developers to make 20 percent of apartments they build affordable to low-income renters.
The Multnomah County Commission must also approve the tax break for it to take effect. It is not a forgone conclusion that the panel will do so.
City Commissioner Amanda Fritz pointedly left the room just before Wednesday's vote because she did not approve but did not want a "no" vote to delay the change.
The city, school districts and other property-tax funded jurisdictions could forego up to $30 million in tax revenue over the next decade if enough developers with apartments in the making sign on. But it's not clear how many would take advantage of the program. City housing officials have estimated the new incentive could result in 100 to 300 discounted units.
Mayor Ted Wheeler pushed the proposal with hopes that developers who submitted project proposals before the city's new mandatory low-cost housing rules took effect this year will voluntarily make some units affordable in exchange for the property tax break. To get the break, developers will have to make at least 20 percent of a housing project's units affordable to households making, at most, 80 percent of the city's median family income.
Portland's rapidly rising rents and shortage of affordable units are directly tied to a lack of supply, particularly in the moderate- and low-rent ranges.
Fritz questioned if Wheeler's plan will be as effective as possible by targeting earners at 80 percent of the median income. She said it might be wiser to require that units be affordable to households at 60 percent of the median income – the level as in the required lost-cost housing rules passed last year.
Rather than tanking Wheeler's plan to have the break take effect immediately, which requires a unanimous vote, Fritz excused herself before voting began, saying she had to "see a man about a dog." She left the council dais and stood in the council chambers doorway as her colleagues explained and then cast their "yes" votes.
Even though the tax cut passed through City Hall, it will also have to be approved by the Multnomah County Commission, which has a tax abatement agreement with the city. It may not pass. In a statement, Deborah Kafoury, chairwoman of the commission, echoed many of Fritz's concerns.
"As someone deeply committed to helping people out of homelessness and into housing, I share the mayor's goal to have more affordable units," Kafoury said. "But it's precisely because of this mission that I really need to understand what this means for thousands of families in this community who don't make 80 percent of the median income, but are surviving on 30 percent."
Kafoury said she will confer with her fellow commissioners before convening a vote in April.
-- Gordon R. Friedman
503-221-8209; @GordonRFriedman