SOUTH PORTLAND — An ordinance that could increase affordable housing passed an initial test, but could need more incentives for developers before it gets final City Council approval.

The inclusionary zoning ordinance, modeled after one in Portland, would require new housing projects of 20 or more units to set aside 10 percent of the units as affordable for middle-income residents. Alternately, developers could pay $100,000 per unit to a city fund set aside for affordable housing. 

During their July 17 meeting councilors discussed some incentives in the proposed ordinance that would be offered to developers who provide affordable housing, including a scaled-back density bonus that would be restricted to certain areas of the city. 

The density bonus, which ranges from to 5 to 25 percent, would allow developers to build additional units beyond what is allowed by zoning.

There would be no density bonus to developers who want to build in zoning districts AA, A and VR. The A and AA zones include most single-family residential neighborhoods and the VR zone encompasses the letter streets on either side of Ocean Street in Knightville.

Another change to the ordinance since it was first introduced is an amendment that automatically qualifies developers for incentives if they are providing inclusionary housing.

Prior to the amendment, in order for a developer to be eligible for bonus incentives the city may offer, the developer also had to include at least one low-income unit for rent or one middle-income unit for sale. 

Other incentives offered to developers could be a reduction in permit fees, if at least 33 percent of the units are middle-income units, and eligibility for a subsidy through Affordable Housing Tax Increment Financing, with City Council approval.

If developers choose to build beyond the 10 percent requirement, the amount of time the housing has to remain affordable decreases. For instance, if a developer chooses to build 100 percent of the units as affordable middle-income units, then they only need to remain so for 10 years. 

Councilor Claude Morgan, who voted for the ordinance during Monday’s first reading, said he may need some extra “sweeteners” or “carrots” for developers to get his vote at a final reading. 

Morgan seemed pleased the density bonus was removed from neighborhoods that have historically complained about density.

He warned, however, that the zoning ordinance would need five votes to pass. 

Councilor Susan Henderson said the ordinance “will be a small step in the right direction.”

“This is a very, very modest proposal and I think if we can’t do this, we are really pathetic,” Henderson said. 

Councilors Eben Rose, Brad Fox, Maxine Beecher and Mayor Patti Smith also supported it. Councilor Linda Cohen was absent. 

The zoning ordinance, if passed, would be retroactive to Feb. 27, when the council held its first workshop on the issue, and would include proposed housing developments at Sable Oaks and on Clark’s Pond Parkway.

first reading was held June 5, but councilors thought the issue needed more work. A second reading is scheduled for Aug. 7.

Melanie Sochan can be reached at 781-3661 ext.106 or [email protected]. Follow her on Twitter @melaniesochan.