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How about an affordable condo in the same building as a Ritz-Carlton hotel?

The developers of the 35-story being built in downtown Portland have indicated to city officials that they will offer price-restricted units within the $600 million building to meet inclusionary housing requirements. That’s a reversal from earlier plans to instead pay the Portland Housing Bureau a fee in lieu estimated at $7 million to $8 million.

The units are proposed as for-sale condos, not rental apartments. The only previous Portland project to bring to market for-sale condo units with inclusionary housing restrictions was a Habitat for Humanity project, stated Martha Calhoon, a spokeswoman for the Housing Bureau.

BPM Real Estate Group has indicated it will allot 20 percent of the Block 216 units to be affordable at 80 percent of area median income. With 138 units in the massive mixed-use tower, 28 would be designated as affordable, according to the Housing Bureau.

The choice raises the prospect that affordable-housing tenants will not only share a building with Ritz-Carlton hotel guests and office tenants, but also floors with luxury condo buyers. That will make the market-rate condos a tough sell, said Brad Golik, a Luxe Christie’s International Real Estate broker who specializes in luxury condos.

鈥淭hat really takes away from the lure of the Ritz-Carlton, quite honestly,鈥� he said. 鈥淧eople are buying the exclusivity of it, and allowing affordable housing takes away from that.鈥�

Based on 2020 data, prices would be set at $226,404 for a studio unit, $250,449 for a one-bedroom unit and $318,664 for a two-bedroom unit. Those prices are pegged to annual incomes ranging from $51,600 to $66,320. Any mortgage payments would depend on buyer financing.

That compares to prices for the market-rate units of about $1.6 million for a one-bedroom unit to upwards of $7 million for top-floor penthouses.

Perception-sensitive luxury real-estate buyers may shy away from the building, Golik said.

鈥淲ho’s going to pay those prices if they don’t have that exclusivity they expected with the Ritz-Carlton brand?鈥� he said. 鈥淚 don’t think that’s a win for the people buying it, quite honestly.鈥�

BPM Real Estate Group, led by local developer Walt Bowen, did not respond to messages seeking comment via a representative.

Listing agent Sarita Dua of Keller Williams Realty declined to comment.

Last year, Bowen’s group sent investors some documents forecasting prices of $1,350 to $1,900 per square foot for the condos, The Oregonian reported. But a lot has happened since, and the market and perception of living and working downtown has changed dramatically.

Not only has the deadly coronavirus made sharing floors with others seem unappealing, but the virus and ongoing protests have curtailed retail business and turned downtown streets lifeless, at least temporarily.

鈥淭he idea of living or working downtown is very different today than it was before George Floyd,鈥� Cairn Pacific multifamily developer Noel Johnson said, referring to the death of a Minneapolis man that sparked nationwide protests. 鈥淎nd so, in the face of that uncertainty, it makes sense not to incur the extra $8 million paid to the city.鈥�

Sensationalistic media coverage of the sometimes-violent protests in downtown Portland hasn’t helped. One prospective East Coast buyer who was interested in the condos held off while watching the protests unfold on TV, Golik said.

鈥淭hey’re painting a picture that the city is burning down,鈥� he said. 鈥淚t’s not that way everywhere in the city, but it’s what he’s seeing, and it’s put a negative feeling on moving to Portland.鈥�

Block 216, which will be one of Portland’s tallest buildings upon completion, attracted blue-chip brands such as Ritz-Carlton and an opportunity zone fund managed by Baker Tilly Capital. Mosaic Real Estate Investors contributed a $460 million, four-year construction loan.

Providing affordable housing on-site also means Bowen’s group will have fewer condos to sell at top-of-market prices during a period of economic uncertainty. If the project team sets aside 20 percent of units as affordable, 110 units would be available for luxury buyers.

Luxury condo buyers face no great rush to snap up a property, Golik said.

鈥淔or many of them, it’s a second (or) third home,鈥� he said. 鈥淭hey can be patient. With what’s going in the city, they will probably be much more patient, I would guess.鈥�