Inclusionary housing and why it matters to all Oregonians

Oregon’s largest city is changing. By 2035, city planners estimate that Portland’s population will grow by nearly 40 percent—to 880,000—with more than 100,000 new households. Without strong housing policies in place, that growth will lead to an even larger homelessness crisis and threaten our farmland and natural areas through subdivision expansions.

One of these housing policies is called inclusionary housing (IH), which requires developers to include affordable housing in developments that would otherwise not include it.

Working with a number of partners, 1000 Friends advocated for an end to Oregon's ban on inclusionary housing, which passed in the legislature, with some qualifications, in 2016. The following year, the City of Portland invited 1000 Friends to participate in its original Inclusionary Housing Formation Committee. Since 2017, Portland’s IH program has been responsible for the inclusion of 1,313 affordable homes in developments totaling 14,021 homes. That saved the public $196 million in subsidies.

Portland is again interested in reviewing progress and making improvements to the policy with help from a new Inclusionary Housing Advisory Committee and has tapped 1000 Friends’ Executive Director Sam Diaz to serve on the committee. 1000 Friends will use this opportunity to advocate for improvements to Portland’s inclusionary housing program and also to consider whether this housing policy could be helpful in meeting the housing needs of Oregonians in other towns.  

Why is 1000 Friends involved in an urban issue? Shouldn’t our focus be on “working farms, forests, ranches, and vast network of interconnected natural areas”?

It’s true: we’ve accumulated a lot of wins for rural and natural areas over the last five decades. But the fact is that many of those areas run right up against urban ones, so when cities sprawl, it’s rural and natural areas that pay the price. Protecting the Oregon outside its cities and towns necessarily requires a constant vigil to ensure those communities are livable and equitable for all on the inside.

Inclusionary housing policy is an excellent example. As Oregon's population grows, pressure to expand city and town footprints  increases - yet we know that UGB expansions have not met Oregonians’ actual housing needs, in price, size, or location. Our land use policies need to house more Oregonians inside our urban growth boundaries, in a range of housing options closer to schools, stores, and parks.  Inclusionary housing is a policy that makes sure new developments  include housing for all income levels. That benefits Oregon families, and makes it harder  to justify subdivision expansions at the expense of rural and natural areas. By using our expertise in land use policy to create opportunities for urban density, we protect all of Oregon.

And of course, without affordable housing in Oregon's ever-more-costly cities, even more people will be forced out of their homes and into the streets. That's a humanitarian catastrophe no one wants. So our work on inclusionary housing not only protects rural communities from sprawl, it helps build more resilient urban communities in the bargain. That’s a two-fer we’ll take any day.

How does the Inclusionary Housing (IH) program work?

The IH Program offers a clear list of affordability options for developers to choose based on the size and location. In areas of Portland where developers receive approval to build large residential buildings with 20 or more homes (or “units”), the City requires some of these homes to be affordable to residents making 80% of area median income, and to develop supplemental incentives to provide homes to those with incomes below 60% area median income. The City encourages developers to prioritize homes as part of the building (called “on-site units”) over fee-in-lieu revenue or units off-site. Lastly, developers must maintain the affordability of these homes for 99 years. You can visit the City’s Inclusionary Housing website to learn more.

What will the IH Advisory Committee weigh in on?

Portland is asking the Advisory Committee to weigh in on changes to the program to help create more housing affordable to more Portland residents. Specifically, the Advisory Committee has been asked to look at: calibration of off-site options, calibration of reconfiguration options, review of incentives to build affordable housing for ownership, full tax exemption options outside of the Central City, and assessing the impact of pre- and post-regulated rent increases since the IH program’s adoption.

Have thoughts about the program? We want to hear from you!

Please submit your questions and ideas to this google form or email us with the email subject line: Inclusionary Housing.