The City of Portland has historically offered developers additional density, or transfers at entitlement in exchange for meeting one or more of nearly 20 different civic and community amenities. The incentive programs had been met with varying degrees of success and usage overtime, and the transfer options had created a secondary market for transferable floor area ratio (FAR). Among the issues facing the City was the reality that the vast number of options not only competed with each other but diluted efforts to make strides toward achieving any one of these civic goals, specifically providing incentives for affordable housing production. The goal of the study was to re-calibrate the incentive structure so that developers would find an economically compelling course of action to incorporate incentive measures and build affordable housing.
EPS structured an analysis to evaluate the development feasibility of all types throughout the Central City’s entitlement zones. The analysis compared the feasibility of by-right use to developments with a density bonus that provided affordable housing. Developers and industry professionals were engaged throughout the process, including one-on-one interviews and round-table discussions. Affordable housing experts, brokers, legal experts, builders, and other City staff were also actively engaged throughout. EPS constructed a pro forma model to test a wide range of development scenarios and based on the findings recommended a threshold for FAR and area median income (AMI) that could be more monetized by developers.
As of July 2015, City Council had given support and direction to the Bureau of Planning and Sustainability and Housing Bureau to incorporate these recommendations into the City Plan Update by summer 2016.