Inclusionary Housing Calibration Study

Information
The Housing Bureau periodically reviews the Inclusionary Housing program and makes necessary adjustments. For this periodic review, the analysis priorities, analysis components, and project teams, are referred to as the Inclusionary Housing Calibration Study.
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A brief introduction to Inclusionary Housing

Inclusionary Housing (IH) is designed to help cities address affordable housing shortages and foster economically diverse neighborhoods by requiring developers to include affordable housing in new developments that would otherwise not include it. Inclusionary housing policies were first developed to counteract economic and racial segregation. By providing an immediate supply of affordable housing in neighborhoods already rich with services and amenities, IH has become one of the only affordable housing strategies to successfully create sustainable mixed-income communities. Inclusionary Housing programs exist in cities across the country, and the requirements vary by location.


Inclusionary Housing in Portland

On February 1, 2017, Ordinance 188163 went into effect, adding the Inclusionary Housing (IH) program to the City’s portfolio of affordable housing development tools. Under Portland's IH program, all buildings proposing 20 or more new units must provide a percentage of the new units at rents affordable to households at 80% of the median family income or below (the City has defined additional regulatory options under the umbrella of this requirement).

In the five years Portland's program has been in effect, the City has permitted, or is in process to permit, a minimum of 1,313 Inclusionary Housing units from 92 private development projects — the equivalent to more than 196.9 million-dollar public subsidy from privately-financed developments.

The development and adoption of Portland’s IH program was based on direction given under the 2035 Comprehensive Plan Policies in Chapters 3 and 5 as well as the IH Policy Framework (see below). Any policy and program adjustments are made in alignment with the IH Policy Framework.

IH Policy Framework

  • Citywide program, calibrating the inclusion rate and incentives by geography
  • Set mandatory program at 80% AMI, and develop supplemental incentives to reach below 60% AMI
  • Prioritize units on-site over fee-in-lieu revenue or units off-site
  • Inclusionary housing requirement for all buildings with 20 or more units
  • Inclusionary units maintain market comparable quality, size, bedroom composition, and unit distribution in the building
  • Maintain affordable units for 99 years

Calibration Study

With the adoption of the mandatory IH program, the Housing Bureau committed to periodically reviewing the program and making any necessary adjustments. Based on program review memos, informal discussions with industry stakeholders, and City Council hearings for approval of IH projects’ financial incentives, policy and program calibration and refinements may be needed in certain sub-geographies, for homeownership units, and or for certain development situations. The priorities for analysis, analysis components, and project teams, are collectively referred to as the IH Calibration Study.

Priorities for Analysis

  • Calibration of off-site options
  • Calibration of reconfiguration option
  • Review of calibration for homeownership
  • Full tax exemption outside of the Central City at 5:1+ FAR
  • Impact of pre- and post-regulated rent increase since the IH program’s adoption

Analysis Components

  • IH unit resident experience survey
  • Site utilization analysis
  • IH program comparative analysis
  • Residential and commercial development prototypes analysis

Project Teams

  • Internal City team lead by Portland Housing Bureau with support and participation by Bureau of Planning and Sustainability and Bureau of Development Services.
  • External stakeholder work group facilitated by Housing Bureau staff, convened to support review of analyses findings and discussion of potential recommended program changes.

Final Report

Report prepared by BAE Urban Economics.


External Stakeholder Work Group

The IH Calibration Study Work Group consists of 10 development and housing professionals, representing the private, public, and community development sectors that will meeting from Winter 2022 – Spring 2023. Members are tasked with supporting staff assessments by reviewing analysis components and findings from the calibration study and providing input and feedback that will inform potential recommendations for changes to the program.

Work Group Members

Michael Anderson, Sightline
Andrew Colas, Colas Construction
Paul Del Vecchio, Ethos Development
Sam Diaz, 1,000 Friends of Oregon
Ernesto Fonseca, Hacienda CDC
Julie Livingston, Home Forward
Kymberly Horner, Portland Community Reinvestment Initiatives, Inc.
Stefanie Kondor, Related NW
Erica Thompson, Hennebery Eddy Architects
Sarah Zahn, Urban Development + Partners

Work Group Meetings and Materials

Staff contact: Jessica Conner; Jessica.Conner@portlandoregon.gov