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After months of study, city Commissioner Dan Saltzman and Housing Director Kurt Creager have proposed a set of recommendations for Portland’s inclusionary zoning program. They call for requiring developers of large multifamily projects to include affordable units or pay a fee.

The program as proposed offers developers two options: provide 20 percent of units affordable to renters at 80 percent of median income, or 10 percent of units to renters at 60 percent of area median income.

By law, the city is also required to allow developers to pay a fee in lieu of building affordable units. A proposed fee amount has not been set.

Saltzman’s recommendations will go before the Planning and Sustainability Commission in October, and then to the City Council for consideration. Passage is likely; all five city commissioners signed a letter sent to the Oregon Legislature asking for inclusionary zoning authority.

City officials successfully pushed the Legislature in its last session to lift a law preventing municipalities from establishing inclusionary zoning ordinances. The Portland Housing Bureau submitted testimony saying the average rent for new apartments had risen to $1,954 a month as developers focused on the luxury market.

Some developers and outside experts have criticized inclusionary zoning. A panel of developers, housing activists and others convened by Saltzman’s office has reviewed the program to little agreement. At one meeting, developer Dike Dame warned that the program could halt development, saying, 鈥淚f we mandate a whole bunch of things that aren’t going to work in the real world, nothing’s going to happen.鈥�

Dame’s concerns have been echoed by others. Joe Cortright, an economist, wrote on the website City Observatory that Portland officials should reconsider going forward with inclusionary zoning.

In other markets, inclusionary zoning has provided few affordable apartments, he wrote, and the policy structure 鈥渢ends to drive up the cost of building new housing, thereby restricting supply, and actually aggravating market-wide affordability problems.鈥�

Backers of the policy have largely stayed behind the scenes while the Housing Bureau’s panel of experts and economic consultants considered the proposals.

Shannon Callahan, Saltzman’s policy director, said inclusionary zoning seeks to address the big picture of housing affordability, while developers focus on their own pro formas.

鈥淲e’re thinking about the present and the future of our city,鈥� she said.

The advisory panel was discouraged from taking an official position on the inclusionary zoning proposal. The panel neither voted on nor endorsed the proposal.

鈥淒ifferent people on that panel feel differently,鈥� Callahan said.

Saltzman was out of the office and could not be reached for comment. Creager’s office did not respond to requests for comment.

Dame declined to comment, saying he did not want to discuss inclusionary zoning policy outside of the panel’s meetings. Other panel members did not return calls seeking comment.

The Housing Bureau program would offer a series of incentives as required by the state law. The incentives would vary according to the affordability option. The 20 percent of units at 80 percent of area median income would offer as incentives:

• Density bonuses of 3.0 floor-to-area ratio
• A 10-year property-tax exemption on affordable units
• A construction-excise-tax exemption on affordable units
• Units built based on the density bonuses are exempt from parking requirements.

In addition to the exact price of the fee-in-lieu option, officials have yet to determine guidelines for building off-site affordable housing.