A proposed ordinance that would require larger residential developments to include affordable housing units was shot down by the Planning Board, but the proposal may have enough support from the City Council to become law.

Opponents of the ordinance argue that the new rules will slow residential development in the city, while proponents believe that it will help address the need for workforce housing in the city.

“We’re talking about building housing that the mayor of Portland can afford to live in,” said Councilor David Marshall. “We’re not talking about just trying to help people who are low-income. We’re talking about producing housing that the middle-income people can afford.”

But developers like Jonathan Culley of Redfern Properties believe the city should focus on incentives for workforce housing, rather than restrictive zoning rules that could have unintended consequences.

“While an (inclusionary zoning) ordinance may provide more affordable housing for a few, it is likely to raise the cost of housing for the majority,” Culley said. “More than anything, to address housing affordability, we need to add to the housing supply. I hope the city takes steps to encourage housing development, and rejects imposing restrictions that may cause housing developers to shun Portland for more friendly municipalities.”

FOR MIDDLE-CLASS FAMILIES

The proposed ordinance, which is opposed by the Portland Community Chamber of Commerce, seeks to address a shortage of housing for middle-class families. Until recently, affordable housing projects that catered to low-income families were the only significant housing development to occur. Over the last year or so, several market-rate and luxury housing developments have been proposed, approved and built in the city.

The Greater Portland Council of Governments released a report in January concluding that middle-income families are being priced out of Portland. A household making $36,000 a year could afford a rent of $911 a month, the report said, but the median rent in Portland, $1,183 a month, is 30 percent higher than what is considered affordable.

As proposed, the inclusionary ordinance would require developments with 10 units or more to set aside at least 10 percent of the units for people making 100-120 percent of the area median income or lower. Currently, that threshold is $77,500 to $96,875 for a family of four, according to the city.

Developers that comply would be eligible for a 25 percent increase in housing density and be considered for local tax credits.

The developer could get around that requirement by paying $100,000 per unit into the city’s Housing Trust fund.

On Tuesday, the Planning Board voted 6-1 against recommending passage of the ordinance to the City Council, which has final say. The council is expected to take up the ordinance sometime in October.

Planning and Urban Development Director Jeff Levine said board members seemed to share the concerns of developers, who argued that such an ordinance would hamper the development of housing in the city.

Levine said inclusionary zoning ordinances have been adopted in about 500 municipalities in the U.S., including several communities around Boston and in Burlington, Vermont. He said it’s difficult to discern the impact in other communities, since the zoning is only part of a larger set of tools used by communities to encourage workforce housing.

“I don’t think I have a crystal ball on how this would affect the housing market. There are so many factors,” Levine said.

The proposed ordinance was referred to the Planning Board in April by the council’s Housing and Community Development Committee. Committee Chairman Kevin Donoghue said he continues to support the ordinance, which has been a council goal since early 2014.

“I continue to support the sound policy recommendation of the Housing and Community Development Committee,” Donoghue said in an email. “I am confident that the same or similar policy will continue to find favor with the City Council.”

COUNCIL MAY GO ITS OWN WAY

The council often follows the board’s recommendations, but this time, the council may be set to go its own way. At least three councilors, plus Mayor Michael Brennan, said they support the drafted ordinance or some similar version, while two others indicated they were still making up their minds. Councilor Nicholas Mavodones had mixed feelings about the ordinance when it was presented to the committee, but he ultimately supported it. He did not respond to a request for comment about his position.

“I think there is a way to craft a proposal that will create more affordable housing without necessarily being an impediment to development,” Brennan said.

Only two councilors said they opposed the ordinance, including Councilor David Brenerman, who cast the dissenting vote when it was reviewed by the committee.

“I’m pleased with the action of the Planning Board,” Brenerman said. “I’m not sure that I’ll have any effect on the outcome at the council.”

Brenerman said the city should focus on offering incentives for workforce housing, rather than adopting a policy that could be a disincentive. He also believes the city needs to encourage the ongoing development of market-rate housing, the development of which is occurring in the city for the first time in more than a decade, rather than focusing so much on affordable housing.

“We need market-rate housing as well,” Brenerman said. “The more units we have, the more likely it is we can drag down the cost of market-rate housing, which is good for anyone who wants to live in the city.”

 

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