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A committee led by Portland Housing Bureau Commissioner Nick Fish and Multnomah County Chairman Jeff Cogen is proposing to add new restrictions to the city’s Limited Tax Exemption program.

The LTE provides property developers with up to 10 years of property tax savings if they build affordable housing in certain areas of the city.

In 2010, the Portland Housing Bureau started the 鈥淏ig Look鈥� policy review project to discover recommendations for program improvements. Last week, the review committee selected recommendations.

鈥淲e wanted to look at the breadth of the program to find where it’s efficient and where it needs to be lined up better with what the city and the housing bureau are trying to accomplish,鈥� said Kate Allen, senior housing policy advisor for the bureau. 鈥淲e want to make sure each aspect of the program is delivering on its goals.鈥�

The LTE program, initiated in 2008, is divided into five different categories: nonprofit-low-income housing, multiple-unit housing, resident rehabilitation, single-family construction and transit-oriented development.

Recommended changes include: awarding exemptions on a 鈥渃ompetitive鈥� basis, meaning the merits of all LTE applications would be reviewed against other proposals to assure project quality and geographic distribution; establishing a $1 million cap of 鈥渇oregone revenue鈥� 鈥� property tax money the city and county forego in exchange for a public good 鈥� for multi-unit developments; and establishing more requirements for single-family construction, including compliance with the Portland Housing Bureau’s minority homeownership goals, green building and workforce equity programs.

Throughout the committee’s two-year existence, feedback has often been sought from the housing development community. Allen said some of the recommended changes were received with enthusiasm, while others were met with skepticism.

鈥淎ny time we add process to a tool that is put out there to incent development, it raises concerns,鈥� Allen said. 鈥淟ike most smart contractors, they don’t want more hoops to jump through.

Jim Kosta, owner of BW Construction, said he applies for 15 to 20 limited tax exemptions a year for his single-family developments. When asked whether the proposed changes would hinder his ability to receive exemptions, he said he 鈥渞eally doesn’t see much of an issue,鈥� except for the 鈥渁dherence to quality design standard,鈥� which is one of the proposed requirements for single-family construction. Among other conditions, the standard would recommend that single-family houses be built only on lots surrounded by sidewalks.

鈥�(Having to build on) lots with sidewalks narrows the availability of lots to build affordable housing on,鈥� Kosta said. 鈥淭o initiate a sizable number of new requirements and slowly bring them into effect would create issues that everyone would have to deal with.鈥�

Some multi-unit developers, like Brendan Lawrence, project manager of the long-delayed Prescott Apartments in North Portland, are worried that the 鈥渃ompetitive鈥� basis would create uncertainty for some projects.

鈥淧rojects are relying on these programs to provide new housing options to areas of town that would otherwise not see new development, and they may not run on the same path as to what the city deems as 鈥榪uality projects,’ 鈥� Lawrence said.

Meanwhile, Allen made it clear that the recommended changes are not set. The review committee, the city and Multnomah County plan to hold multiple meetings, and some public forums also are in the works. Allen added that the changes, if deemed suitable, would first be given a three-year trial period.