Developers spoke out Wednesday against Portland’s proposal to require builders of residential projects with 10 or more units to make 10 percent of them affordable for median-income households.

The City Council’s Housing and Commmitee Development Committee discussed the so-called inclusionary zoning ordinance Wednesday evening. The proposal is among several ongoing efforts to spur residential development in the city, where a housing crunch is driving up rental prices and forcing tenants to look elsewhere.

Jonathan Culley, a developer with four residential projects in the works in Portland, said he believes that the ordinance could have the opposite effect it’s intended to have.

“You’re going to get less housing,” he said.

He said he has been able build his projects because of the interest rate he can get now, but rates are going to increase and the additional affordable housing requirement could be a “deal breaker” for developers who consider building residential projects.

Another developer, Peter Bass, said he, too, fears that the requirement could have unintended consequences.

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“We’re a community of mostly small developers,” he said. “The small developers will say, ‘If the limit’s 10 (units), I’ll do nine.”

Vin Veroneau of J.B. Brown & Sons said his company mostly does commercial projects but has considered some residential ones, and “the margins are thin.”

Creating “workforce housing,” he said, “is a community responsibility (that) seems to be placed on one subset of the community, i.e. the developers.”

The affordable units would have to cost no more than 30 percent of the city’s median household income. That would be a rent of $1,542 a month for a family of two, according to Mary Davis, director of the city’s Housing and Community Development Division.

Developers could pay fees in lieu of building the affordable units, which the committee recommended should be $64,700 per unit.

Committee Chairman Kevin Donoghue said he doesn’t believe that charging “really-not-low rents … would have an enormous burden on development.”

The committee discussed the possibility of starting out by limiting the requirement to a certain area of the city, such as downtown, to determine whether it drives development away or helps create more housing.


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