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The Multnomah County Board of Commissioners on Thursday approved an amendment that expands the reach of the city of Portland鈥檚 Multiple-Unit Limited Tax Exemption (MULTE) by offering additional tax exemptions to developers. The exemptions are intended to help housing projects in high-cost areas of Portland such as the Central Eastside and Northeast Portland become financially feasible.

First adopted in 2016, the city鈥檚 inclusionary housing program requires developers of projects with 20 units or more to make either 20 percent of the units affordable for households earning up to 80 percent of area median income (AMI) or 10 percent of the units affordable for households earning up to 60 percent of AMI, while keeping the units affordable for 99 years, Portland Housing Bureau development incentives manager Dory Hellyer said during Thursday鈥檚 board meeting.

But through the MULTE program there is a full property tax exemption for all residential units in the Central City and a partial tax exemption for affordable units in other neighborhoods for developers who hold a portion of their units at 60 percent of AMI for 99 years.

The city proposed that the county join the city in extending the exemptions to areas such as Slabtown, the inner eastside and Hollywood, a county press release states. The tax exemption applies only if a developer chooses to include in the building units affordable to households earning up to 60 percent of AMI. Developers will not receive the exemption if they opt to pay a fee instead, provide units elsewhere, or choose the option for households earning up to 80 percent of AMI.

The policy has already helped add as many as 1,300 new affordable units to the pipeline, with many already open, planners shared in the press release.

Changes passed Thursday will also suspend the current tax exemption cap until 2030 and commit to a study on the impacts. Hellyer said there had been in place a cap averaging $3 million per year, or $15 million over five years. Once reinstated in 2030, the new cap will average $6 million per year, or $30 million over five years.

The city and county will be required to conduct a study in 2027 to analyze market conditions to see if these incentives are still necessary. A cap will resume, regardless, in 2030.

Multnomah County economist Jeff Renfro described the change as a 鈥渓ow risk鈥� investment to spur development. The expanded exemption will have no effect on the county revenues forecast, which already assumes reduced growth in property tax revenue because of an ongoing and projected slowdown in development.

The board approved an amendment that requires the county to provide annual reports on the program to local taxing districts, including the dollar amount of foregone tax revenue and the number of affordable units created, broken down by level of affordability.

The changes will go into effect March 1.