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For developers contemplating multifamily projects in Portland, the City Council‘s appeals process represents a perplexing puzzle.

After the City Council upheld the Pearl District Neighborhood Association‘s appeal of the Design Commission’s approval of the Fremont Apartments, developers began to wonder where the council stands on new housing projects.

鈥淚t’s chilling for anyone who goes down the fairway with entitlements,鈥� Cairn Pacific principal Tom DiChiara said.

The City Council reconsidered its decision to uphold the appeal and opened the door for further discussion. Now the council is scheduled to revisit the appeal on May 10.

In the case of the Fremont Apartments, if the development team were required to go back to the drawing board, the project would change substantially. The proposed 17-story tower would no longer be vested under pre-inclusionary housing rules, so any new application would have to include affordable units.

Inclusionary housing rules require developers to either set aside 15 percent to 20 percent of multifamily units as affordable units or pay a hefty fee. Fremont Apartments was part of a flood of multifamily projects 鈥� totaling 19,000 units 鈥� that were submitted for city approval before inclusionary housing rules took effect on Feb. 1, 2017.

The developer of the Fremont Apartments, Lincoln Property Company of Dallas, did not respond to interview requests.

The back-and-forth regarding the Fremont Apartments has added to a sense of uncertainty for multifamily projects that come before the City Council. The council also voted to allow a height increase for NBP Capital‘s proposed multifamily towers in the RiverPlace area; that project has not been examined by the Portland Design Commission yet. Instead, NBP Capital reportedly circulated project information at City Hall.

The uncertainty comes amid broader signs of oversupply in luxury apartment housing and increased costs for land and construction. Developers have expressed concern that the economic expansion, now in its ninth year, can’t keep going forever.

Rents have declined in Portland, slipping 0.6 percent in March compared to a year earlier. Many managers of new luxury apartment buildings have taken to offering concessions.

鈥淭here is a lot of fear and hesitation and challenge to keep our development cycle going,鈥� Brad Malsin, principal of Beam Development, said at a City Council meeting in March. 鈥淟and prices are escalating, construction prices are escalating and people are fearful 鈥� developers are fearful that (with) inclusionary zoning, we can’t make a lot of projects work.鈥�

Malsin began to criticize the City Council’s initial move to uphold the neighborhood association’s appeal of the Fremont Apartments, but he was cut off by Mayor Ted Wheeler.

鈥淭hat process is not closed,鈥� Wheeler said. 鈥淢ove on.鈥�

In a subsequent interview, Malsin added that allowing neighbors to halt a project at City Council sends a bad message to developers.

鈥淚 think it’s problematic, and you’re sending out mixed messages,鈥� he said. 鈥淭he Fremont Place Apartments are a prime example of people 鈥� citizens 鈥� intervening at the wrong stage of the development process.鈥�

The public has ample time to comment on development proposals during early stages, Malsin said.

鈥淭o have people come in at the last minute and have people say you’re blocking my view, I find that incredibly disturbing and undermining public process and public planning,鈥� he said.