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Beneath a canvas tent illuminated by strings of light bulbs, nonprofit advocates, lenders and elected officials gathered on a chilly January day to break ground on Portland’s largest affordable apartment building in decades.

The building on Block 45, in the Lloyd District, will tower 12 stories, offering 240 rent-restricted units in a fast-developing neighborhood.

Amid rhetorical pats on the back and ceremonial shoveling, the event gave Mayor Ted Wheeler the chance to showcase a project that will offer far more affordable units, and for a lower investment of city taxpayer dollars, than other high-profile projects that have attracted media scrutiny.

Home Forward‘s Lloyd District project was originally conceived as a roughly equal mix of market-rate and affordable units. But when the public agency’s development staffers took a close look at the numbers, they changed their strategy. All 240 apartments would be affordable, primarily using low-income tax credits.

鈥淚t’s an amazing change that we’re very excited about,鈥� said Shannon Callahan, interim director of the Portland Housing Bureau.

The change in scheme comes as financing for affordable housing projects faces a number of hurdles, including declining values of tax credits and scant federal support. As Wheeler embarks on spending the city’s $258.4 million housing bond, he’s under pressure to build as many units as possible. The City Council has set a goal to build 1,300 affordable housing units by 2029.

The city’s record has given ammunition to critics. Wheeler’s November announcement that the city had awarded $6 million to Framework, a high-profile, technologically advanced and expensive timber tower in the Pearl District, to subsidize 60 affordable apartments drew media attention for offering a muted bang for the buck.

In contrast, the city is providing less to the Lloyd District project 鈥� $5.6 million 鈥� yet it will produce four times as many affordable units. As Wheeler and others have noted, the Home Forward project at 1010 N.E. Grand Ave. will be Portland’s largest single-building affordable housing development in 50 years.

At the Lloyd District ground-breaking event, Wheeler said the Block 45 project leverages the city’s contribution at 1,317 percent, with a per-unit subsidy of $23,333.

鈥淚s there anybody here who has gotten a better rate of return on investment than that? No,鈥� Wheeler said.

The city also donated the land, valued at about $3 million. Multnomah County is providing $5 million and Home Forward is spending $11.6 million in reserves.

Wheeler called Home Forward’s decision to make each of the 240 apartments affordable a 鈥渂old change in course.鈥� Home Forward, the public housing authority for Multnomah County, is also involved in Framework along with developer Project^.

So what changed?

鈥淲hat changed was the environment changed in terms of the housing emergency that we have here,鈥� said Jonathan Trutt, Home Forward’s director of development and community revitalization.

Balancing affordable and market-rate apartment units in a given development is complicated, Trutt said. Market-rate units bring higher rents, but are built without tax credits.

鈥淚t’s this sliding scale series of trade-offs,鈥� Trutt said.

The Block 45 project will ascend to 12 stories, providing 88 studios, 109 one-bedroom units and 43 two-bedroom units available to families making no more than 60 percent of the Portland area’s median income. Some of the apartments will be set aside for survivors of domestic violence. The building is projected to open in 2019, and the affordability requirement will stretch for 99 years.

The project is designed by LEVER Architecture and LRS Architects. A joint venture of O’Neill Construction Group and Walsh Construction Co. is building it.

The 鈥渓ion’s share鈥� of financing for the Block 45 project comes from low-income tax credits, Home Forward spokesman Tim Collier said.

Those tax credits have recently fallen in value in part due to the new federal tax law signed by President Trump. By lowering corporate tax rates, the law reduces the demand for tax credits.

鈥淚t’s a little topsy-turvy because of all the changes in the tax code,鈥� Trutt said. 鈥淟ow-income housing tax credit is a key financing source.鈥�

The price per credit fluctuates with the economy and tax structure, Trutt said.

鈥淚t goes up and it goes down,鈥� he said. 鈥淚t tends to be most volatile, and it is volatile now when there’s uncertainty. It’s not a great time to have one of your key financing tools be less robust.鈥�

Demand remains strong for low-income housing. The Albert, a 72-apartment North Portland building that includes 18 affordable units, has a waiting list of seven people for one-bedroom apartments, and another five for two-bedroom apartments, manager Yelena Ivashentsev said.

The Housing Bureau is racing to catch up. In addition to pushing Block 45 forward, the bureau in September purchased the site of the Safari Showclub, at聽3000 S.E. Powell Blvd., for $3.72 million. Following demolition, construction is expected to produce 100 to 300 affordable housing units.

In February 2017, the bureau bought the Ellington Apartments in Northeast Portland for $47 million, preserving 260 units, including 44 affordable ones.

Wheeler, in recent remarks to the Housing Advisory Commission, likened preserving units to 鈥渢reading water.鈥� The city must prioritize building new housing, he said.

Wheeler in December replaced Housing Bureau Director Kurt Creager with Callahan, a former policy adviser to Commissioner Dan Saltzman. The shake-up came after years of complaints that the Housing Bureau placed a low priority on unit production.

In 2015, the Housing Bureau loaned $2.4 million to Hacienda Community Development Corp. to build a new office for the nonprofit organization. The project included no housing.

The Block 45 project appears to be an attempt to make up for lost ground. The tower will rise amid a flurry of private development in the Lloyd District, from the Hotel Eastlund and Hassalo on Eighth to the Hyatt Regency hotel near the Oregon Convention Center and the proposed Oregon Square superblock project.

The affordable apartments will ensure the working class maintains a foothold in the neighborhood, advocates said.

鈥淭his city, and this neighborhood, belong to them as much as it belongs to any of us,鈥� Home Forward Executive Director Michael Buonocore said. 鈥淎nd the 240 apartments that will be built here will help us make sure that that continues to be true.鈥�