Portland's supply of affordable housing could increase modestly - by 35 to 60 units a year - under an incentive concept to be reviewed Tuesday by the City Council.

The concept would allow developers to build taller buildings in the central city in exchange for a commitment of rent-restricted units - either in that project or via a cash payment the city would spend elsewhere.

City officials have been searching for options to boost the supply of affordable housing amid Portland's surging rental market and a failure to meet goals in the South Waterfront and Pearl District.

The new concept is an example of voluntary inclusionary zoning. Oregon is one of two states that prohibits local governments from being able to mandate construction of affordable units as part of large projects (although a bill in the Legislature could lift the preemption).

"This an important tool to encourage the private market to be part of the solution to our affordable housing crisis," Commissioner Dan Saltzman said in a statement.

Under the concept, developers seeking more density would need to add on-site units affordable to families earning up to 80 percent of the region's median, or $58,800 for a family of four. Developers also could buy extra density from the city and officials would spend the money on units elsewhere, serving families earning up to 60 percent of the regional median income.

Housing officials say the city's existing density bonus system is too broad. Developers can currently secure extra density by satisfying conditions among 18 options, such as building an eco-roof or installing bike lockers.

"It is time to streamline our incentive bonus system to prioritize affordable housing," Saltzman said in the statement.

The new recommendations would allow developers to build more units only if they satisfied affordable housing conditions, a tweak likely to awaken advocates who support existing bonus provisions. The recommendations follow a technical report from outside consultants.

The City Council will discuss the concept at a 9:30 a.m. work session. If it gains momentum, the City Council in July will direct city staff to formalize a proposal.

-- Brad Schmidt

503-294-7628

@cityhallwatch