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Inclusionary Housing FAQ

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Subjectivity to Inclusionary Housing

1. How do I determine if my project will be subject to the Inclusionary Housing zoning? All permits that are not previously vested as of February 1, 2017 will be subject to the Inclusionary Housing Program if the proposed building includes 20 or more new residential units. More about vesting.

2. My project has less than 20 new residential units. Can I voluntarily opt-into Inclusionary Housing? Yes, projects with less than 20 new can opt-into Inclusionary Housing by either paying a fee to obtain available density bonus or by providing affordable units. It is important to note that the options for voluntary projects are limited to Options 1 and 2 and some of the incentives for buildings with 20 or more units may not be available to those with less.

Please feel free to email us with your questions at

Unit Types & Reasonable Equivalency

1. How are unit types determined? Please see section III.GG. Unit Type in the Administrative Rules.

2. How does PHB determine if units are “reasonably equivalent”?
There are four ways in which PHB tests reasonable equivalency between units within a project:

  1. IH Unit make-up must be representative of the make-up of the entire building. An equal percentage of each Unit Type will be required to be IH Units.
  2. IH Units must be reasonably equivalent in square footage to the other units of the same type within the building.*
  3. No more than 25% of the total units per floor can be designated as IH Units, excluding the top floor. IH Units received from a Sending Building cannot be located in the Basement.
  4. Units amenities for IH Rental Units are determined to be reasonably equivalent if the finishes have equal lifetime expectancies and the appliances have the same Energy Star rating as those in the Market Rate Units. Reasonable Equivalency for IH Homeownership Units is met when the appliances have the same Energy Star rating as those in the Market Rate Units.

*For rental projects, IH Units must be at least 90% of the average square footage as the other same Unit Types in the building.

*For homeownership projects, IH Units must be at least 85% of the average square footage as the other same Unit Types in the building.

For more detailed information on Reasonable Equivalency please read section V.A. of the Administrative Rules.


Eligible alternative scenario for On-Site Options 1 and 2 only

1. What is Reconfiguration? Reconfiguration allows for buildings, using Option 1 or 2, to alter the minimum number of units required under Inclusionary Housing by redistributing IH bedroom requirements into units of two bedrooms or larger. Calculating reconfiguration is done after first determining the minimum number of required IH Units and the required unit mix based on the plans submitted.   Once the unit mix has been determined, the PHB Reviewer will calculate the total number of IH bedrooms a project is required to provide, based on the Option selected, and confirm that the project’s requested Reconfiguration (as stated on the IH Intake Form) meets program requirements. If the floor plans change, the unit mix will need to be reassessed and the reconfiguration recalculated as well.

2. Who qualifies to use Reconfiguration? Any building that chooses Option 1 or 2 and has two-bedroom or larger unit sizes within the building can use reconfiguration. This option cannot be used to downsize the number of larger units required, i.e. you cannot exchange two two-bedroom units that are required in exchange for four additional one-bedrooms or studios. Reconfiguration cannot be used to exchange one-bedroom units with studios.

3. Can a Building that elects to send its IH Units Off-Site (Options 3 & 4) utilize Reconfiguration? Only Buildings who choose Option 1 or 2 can utilize reconfiguration. Buildings opting to send their IH Unit obligation off-site are ineligible to use Reconfiguration.

4. How does Reconfiguration work? For every two-bedroom unit or larger, you can trade the same ratio of studios and/or one-bedrooms. For example, you can exchange two one-bedroom units for a two-bedroom unit and three one-bedroom units for a three-bedroom unit.  You can continue this type of pattern until there are no longer any required studios or one-bedroom units left. You are not required to “max-out” on the number of larger units. Please see examples below:

Reconfiguration Example

Sample Unit Mix: 200 Units

  50   Studios
100   One-Bedrooms
  32   Two-Bedrooms
  18   Three-Bedrooms
200   Units

STEP 1: Calculate required units based on option chosen

Sample Building choses Option 2 (10% of units at 60% MFI).

10% of 200 units = 20 units
20 IH Units are needed to meet the IH requirement.

   5   Studio IH Units
 10   One-bedroom IH Units
   3   Two-bedroom IH Units
   2   Three-bedroom IH Units
 20   IH Units

STEP 2: Calculate the number of bedrooms required

Total Bedrooms required is 27 bedrooms.

   5   Studio IH Units*                   =   5 x 1   =     5
 10   One-bedroom IH Units        = 10 x 1   =   10
   3   Two-bedroom IH Units        =   3 x 2   =     6
   2   Three-bedroom IH Units     =   2 x 3   =     6                    
 20   IH Units                                                =   27 bedrooms

*Studio units are counted like "one-bedrooms"

STEP 3: Choose an option that meets the minimum unit and reasonable equivalency requirements and works best for the project

Multiple options can be generate, where each achieve the 27-bedroom minimum requirement that was calculated from Step 2.

Option A:
  9 Three-bedroom IH Units           = 9 x 3   =  27 bedrooms
  9 Total IH Units

Option B:
  3 Two-bedroom IH Units              = 3 x 2   =   6 
  7 Three-bedroom IH Units           = 7 x 3   =  21                
10 Total IH Units                                              27 bedrooms

Option C:
  2 One-bedroom IH Units             = 2 x 1   =    2
  5 Two-bedroom IH Units             = 5 x 2   =  10
  5 Three-bedroom IH Units          = 5 x 3   =  15                
12 Total IH Units                                             27 bedrooms

For questions or any assistance regarding these examples, please email or call 503-823-9042

On-Site Consolidation

Eligible alternative scenario for On-Site Options 1 and 2

1. What is On-Site Consolidation? On-Site Consolidation is a method of fulfilling the IH requirements utilizing Options 1 or 2 for sites that have multiple buildings. It allows for one or more buildings on the same site to transfer their IH Unit obligations, referred to as a “Transferring Building”, to another building, called a “Consolidated Building”, on the same site.

2. Who is eligible to use this and how does it work? Any development with two or more buildings on the same site, as determined by Bureau of Development, Planning and Zoning can elect to transfer their IH Units to another building on the same site. The Consolidated Building must first meet its own IH requirements. Once those have been met the remaining market rate units in the building can be considered to consolidate the IH requirements of other same-site buildings in the development. The IH Units transferred must be reasonably equivalent to the units in the Transferring Building.

3. Can a Transferring Building transfer their IH Units to multiple Consolidated Buildings? No. IH Units can only be transferred from one building to another. They cannot be split between multiple buildings.

4. Can a Transferring Building transfer a portion of their IH Unit requirements to a Consolidated Building? No. If a building opts to transfer their IH Units to another building they must send all of their IH Requirements to a Consolidated Building that can absorb the full requirement. IH Units cannot be split between multiple buildings.

5. Can there be more than one Consolidated Building on-site? Yes, there can be more than one Consolidated Building on-site

6. Does the entire site have to choose the same IH Option? No, each building on the site chooses its own IH Option. If transferring units to a Consolidated Building the Transferring Building can only choose Option 1 or 2 but its choice does not impact the other buildings on site from choosing a different IH Option. In addition, each building can elect to reconfigure their requirements assuming they meet the baselines requirements of Reconfiguration.

7. Does the Consolidated Building have to be built in the first phase? No, PHB does not restrict the phase in which a Transferring or Consolidated Building are built.

8. Can a Consolidated Building also be a Receiving Site for a Building that is not located on Site, but has elected to send its IH Units Off-Site (Options 3 & 4)? Yes. A building can be both a Consolidated Building and a Receiving Site assuming all Reasonable Equivalency requirements can be met.

9. What happens if a proposed Consolidated Building does not meet the IH Unit requirements of a Transferring Building? The Transferring Building will either need to:

  • Provide its IH Units within its own building;
  • Elect another building on the same site to become its Consolidated Building (pending PHB approval);
  • Select Option 3 or 4 and propose a Receiving Building to send its IH Units off-site (pending PHB approval); or
  • Pay the Fee-In-Lieu

10. How are the IH incentives split in On-Site Consolidation? The eligible IH incentives would be distributed between the Transferring and Consolidated Buildings in the following manner:

  • Transferring Building:
    • Floor Area Ratio Bonus (in accordance with PCC 33.120)
    • Parking Requirements including parking exemptions (in accordance with PCC 33.266) 
  • Consolidated Building*:
    • Ten-year property tax exemption on either the:
      • Affordable portion of the building (if outside Central City Plan District (“CCPD”) or inside CCPD with a base or built FAR of less than 5:1); or
      • Full residential portion of the building (if located in CCPD with a base or built FAR of 5:1 or greater)
    • Affordable Housing Construction Excise Tax exemption on the IH Units
    • SDC Exemptions (for IH Units restricted at 60% MFI or below)
    • Floor Area Ratio Bonus (in accordance with PCC 33.120)
    • Parking Requirements including parking exemptions (in accordance with PCC 33.266)
  • * For the Consolidated Building to receive any of the financial incentives listed above, the following conditions must be met prior to the permit issuances of both the Transferring and Consolidated buildings:
    • PHB approves the Transferring Building’s proposed Consolidated Building
    • PHB approves the incentive program applications for the Consolidated Building 
    • PHB determines that the application for the tax exemption meets the requirements of Section IV.C of the IH Administrative Rules

11. Are there any exceptions to Reasonable Equivalency for projects using On-Site Consolidation? All reasonable equivalency requirements must be met between the Transferring and Consolidated Buildings with the exception of the percentage of IH Units per floor, if the Consolidated Building is more than 25% IH.

DMWESB-SDVBE Requirement

This requirement applies to Option 3: Build Off-Site - New Construction.

DMWESB-SDVBE stands for Disadvantaged, Minority, Women and Emerging Small Businesses or Service Disabled Veteran-Owned Business Enterprises.

FAQ on Option 3, DMWESB-SDVBE Requirement

For more information on the IH requirement of DMWESB-SDVBE please review section IV.A.3.l in the Inclusionary Housing program Administrative Rules.


FAQ on Option 5: Fee-in-Lieu


PHB - Inclusionary Housing

phone number503-823-9042Have questions? Please email or call to speak with a Inclusionary Housing specialist. Messages are generally returned within two business days.