SALEM -- In the final hours of their 2016 session, Oregon lawmakers on Thursday approved the last pieces of a bipartisan housing package, including a landmark bill lifting the state's 17-year-old ban on affordable housing mandates.

Senate Bill 1533, approved 39-21, allows a concept known as inclusionary zoning and ends a state ban on construction excise taxes that could add millions in revenue for housing developments. Though it's not as stringent as initially proposed, by opening the door to mandates, the bill delivers advocates a long-sought victory that's eluded lawmakers for years.

The House passed a similar bill last year only to watch it die in the Senate.

"We made compromises on this bill for a reason. It is a start," said House Speaker Tina Kotek, D-Portland, who worked with industry lobbyists on a four-bill deal that also included renter protections, annexation tweaks and land-use changes.

All four bills are headed to Gov. Kate Brown. Lawmakers placed housing high on their agenda this session amid growing pressure over rising rents and housing costs.

"It is going to allow certain local governments a tool they need right now," Kotek said of SB 1533. "But we have more work to do."

SB 1533 would let cities force builders to set aside new multifamily units for working-class Oregonians, in exchange for offering incentives such as tax waivers or permission to build taller projects.

The mandates wouldn't apply to buildings with fewer than 20 units. Cities and counties could also only require no more than 20 percent of units be reserved as affordable.

The bill sets the threshold for affordability at 80 percent of the median family income. That's higher than the traditional 60 percent threshold, but cities can use proceeds from the construction tax and other incentives to encourage developers to voluntarily offer rents at 60 percent or lower.

Supporters argue the mandates will help add affordable options in a tight market. Skeptics say the mandates will make all housing more expensive or possibly contribute too few units to justify any land use tradeoffs.

"This is a very important first step," said Rep. Alissa Keny-Guyer, D-Portland, who worked closely with Kotek on the housing package.

-- Denis C. Theriault

503-221-8430; @TheriaultPDX