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Portland city officials are hoping to convince multifamily developers to include some affordable housing in their market-rate projects.

The 2014 application period is open for the Portland Housing Bureau‘s Multiple-Unit Limited Tax Exemption program, which provides developers a 10-year tax exemption on the value of structural property improvements in exchange for meeting minimum threshold requirements for affordable housing.

In 2014, as in past years, the PHB is offering $1 million in estimated and projected foregone revenue. That sum represents the first year of foregone revenue and not the total. For instance, PHB staffers recently recommended an exemption for a development by Las Vegas-based Molasky Group of Companies in the amount of $690,000. If approved by City Council on Wednesday, Molasky would receive a similar exemption (its value changes proportionately as the property’s value changes) every year for 10 years, for a total value of approximately $6.9 million.

Molasky and Portland-based E&F Properties are planning to build a 15-story mixed-use building with 196 units, at Southwest Jefferson Street and 11th Avenue. While most of the units of Sky3 Place would rent at market rate – as high as $2,250 a month for a two-bedroom apartment – 20 percent would rent at an affordable rate for individuals earning 80 percent of the area’s median family income – $38,850 for an individual or $55,500 for a family of four. Those apartments would range in rent from $871 a month for a studio to $1,118 for a two-bedroom unit.

The application for Sky3 Place is under the 2013 offering, and not the new one. The PHB formerly offered tax exemptions to all developers who met a minimum threshold, but ratcheted up its requirements in 2012 to try and raise the bar for building design, public welfare and social equity.

Also, to qualify for the current round of tax exemptions, developers must not have applied for a building permit. Andrea Matthiessen, neighborhood and housing program manager for the PHB, said the bureau is re-evaluating that requirement, among others, in an effort to make the MULTE program more user friendly.

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