Portland built thousands of apartments in 2017, helping slow rent increases to levels not seen since 2011. But housing remains out of reach for many in the city, according to an annual report from the city’s Housing Bureau released Wednesday.

It’s the fourth year the city has produced the report, assembled from a combination of city, proprietary and census data. It’s also the first year that covers the period when a city affordable housing mandate known as inclusionary zoning policy took effect.

Developers built some 7,300 homes during the year, most of them apartments. That’s more than any of the past 15 years — about 50 percent more than the year prior and double the number built during the typical year in the 2000s.

The glut of supply helped bring average rent increases to an annualized rate of 2 percent. That rate continued into 2018, the report said. Meanwhile, rent concessions — discounts or weeks of free rent — grew more common.

The city also had a banner year for residential construction permits, with 6,000 permits approved representing homes that could be built in coming years. That includes a large pipeline of projects submitted before the inclusionary zoning mandate, which requires developers to set aside rent-restricted affordable units in market-rate housing developments with 20 or more units.

It remains to be seen how many of those projects will be completed, given an upswing in construction costs and the downturn in rent. There’s also been a dramatic slowdown in new construction proposals in the months since the inclusionary housing policy began.

That period overlaps with other headwinds in the construction industry — the rising cost of materials, a labor shortage and higher borrowing rates among them — but developers have pointed to the policy as a major obstacle that could limit future construction and ultimately push housing prices higher as the population continues to grow.

The increases in recent years, which peaked at more than 8 percent in 2015, have already taken their toll. Just under half of the city’s renters — 49 percent — put more than 30 percent of their income toward their housing, exceeding a federal affordability standard. And 27 percent devote half or more their income to paying rent.

Some groups are, on average, unable to comfortably afford the median rents in any neighborhood in the city. They include single-parent, black, Native American and Pacific Islander-led households, as well as households that earn less than 30 percent of the city’s median income.

“Unfortunately, we do continue to see disparities, not only amongst low-income Portlanders but also communities of color,” Matthew Tschabold, the bureau’s assistant director, told the Portland City Council on Wednesday.

The council generally expressed approval for the direction the city’s housing policies are headed while acknowledging work remains.

Commissioner Dan Saltzman, who oversaw the Housing Bureau when the inclusionary zoning policy was created and is leaving the City Council at the end of the year, urged the bureau and his soon-to-be-former colleagues to stay the course.

“Be relentless on inclusionary housing,” he said. “Inclusionary zoning will produce more results than any bond measure. Stick at it and the results will be there.”

-- Elliot Njus

enjus@oregonian.com; 503-294-5034; @enjus