Update: This story has been updated to include a high-end apartment project built in 2010.

Portland is falling far short of its goals for affordable housing in the Pearl District and Old Town Chinatown and would need to build roughly 1,300 new units to catch up, an analysis by The Oregonian has found.

Only 26 percent of housing built or planned passes the city's affordability test, widely missing a target of 35 percent set in 1994 when city leaders launched a revitalization program financed by taxpayers. Hitting the goal now would cost an estimated $240 million in new construction, the analysis found.

City officials failed to routinely track housing construction in the area despite a City Council mandate to do so, The Oregonian's review of public records shows. Officials stopped measuring progress altogether in 2007. Today, 90 percent of the units proposed or under construction are in high-end developments.

The examination of 20 years of housing data provides the first comprehensive look at how loosely city leaders have monitored work by developers in the heavily subsidized River District.

A previous investigation by The Oregonian, in August, found that the Pearl's largest developer failed in its contractual obligation to meet Portland's affordable housing targets. Yet the city produced no documentation that it monitored Hoyt Street Properties' compliance at scheduled 5- and 10-year anniversary dates, as called for under a development agreement.

City leaders over the years have steered nearly $100 million toward housing projects in the district, 250 acres of former warehouse space and rail yards north of downtown. But that spending has not been enough for the city to live up to its stated intent of establishing an inclusive neighborhood.

"They ought to decide one way or the other, 'Are they satisfied?' and, if so, so be it," said John Miller, executive director for Oregon Opportunity Network, an advocacy group representing nearly four dozen housing nonprofits.

"If they're not satisfied," he said, "then we ought to figure out a way to meet the goals."

The Portland Housing Bureau, asked to comment on the city's failure to meet goals, responded in a statement: "While Portland's housing market looks very different today than it did 20 years ago, increasing affordable housing options in high-opportunity areas like the River District remains a city priority."

The Pearl's projected shortfall of affordable housing has an impact on renters across the region.

Portland already suffers from a deficit of more than 20,000 units for residents earning less than half the region's median income. The City Council's failure to meet its affordable housing targets in places like the River District forces struggling renters to look elsewhere, taking away units from people further down the income ladder, and so on down the line.

Jill Franklin is among those who can no longer afford to live in the Pearl.

The 47-year-old mother began burning through savings in 2011 after a divorce so she and her young son could live in Portland's acclaimed upstart neighborhood. She drops $1,950 on rent each month, figuring the benefits have exceeded the costs.

"I took this one," she said of her two-bedroom apartment, "because it was the cheapest I could find."

But Franklin is moving to a $150,000 condo at a complex built in 1971 and located on the outskirts of Lake Oswego. She said affordable units in the Pearl are impossibly scarce.

"I got myself on a waiting list," Franklin said of one income-restricted project.

She doesn't expect an opening until her 11-year-old is out of high school.

'Checks and balances'

Pearl District Affordable Housing 20 Gallery: Pearl District Affordable Housing

City leaders from the very beginning recognized the once-in-a-lifetime opportunity presented by the River District, an area roughly synonymous with today's Pearl plus Old Town Chinatown.

Planners believed the triangle of land –bounded mainly by West Burnside Street, Interstate 405 and the Willamette River – held some of Portland's greatest redevelopment potential.

They envisioned new office space and retail shops at ground level. The city would reverse urban flight by promoting dense development of 5,500 new apartments, condos and townhomes for a mix of low-, moderate- and upper-income residents.

According to the vision adopted by the City Council in 1994, "The housing in the River District should serve a variety of household incomes which will reflect the diversity of the City of Portland as a whole."

The council determined that 35 percent to 55 percent of new units should be affordable, defined as rents within reach of households earning no more than 80 percent of the region's median. The top income threshold in today's terms is $38,850 for an individual or $55,550 for a family of four.

What's more, the City Council created accountability measures. The Portland Development Commission needed to provide commissioners with "hard numbers" at least annually that showed whether the city met its affordability targets.

"Through this system of checks and balances, the City Council will have the direct authority to guide the phasing of new housing production in the District and ensure that resources are made available," the council's 1994 strategy read.

Quality of life

In crafting its housing plans for the River District, Portland's philosophy was to preserve a substantial place in the neighborhood for people like Laurie Lyons.

Stricken by the recession, Lyons and her family fled Bend in 2011. Her husband, Ken, a contractor of 15 years, decided to return to school in Portland.

The couple scored a place at the Ramona, an affordable complex in the Pearl, where they pay $1,028 a month for a three-bedroom apartment.

Affordable for all?

Tuesday:

Wednesday:

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Is Portland disinvesting in affordable housing for the Pearl and Old Town?

"It wasn't like we chose, at our age, to go into low-income housing," said Lyons, now 46.

Given the family's limited finances, Lyons said she feels "blessed" to live in the Pearl. They ride the streetcar regularly, visit nearby parks and send their two girls to Chapman, one of the city's strongest elementary schools.

"We wouldn't have had the quality of life that we have now," she said of living elsewhere.

Portland politicians and planners have long recognized the importance of building mixed-income communities.

In the River District, the city wanted to create a neighborhood where bartenders and bankers alike could afford to live, work and play – limiting transportation costs, carbon emissions and urban sprawl while providing a sense of equity.

"It's the right thing to do, socially," said David Listokin, co-director of the Center for Urban Policy Research at Rutgers University.

Portland push for affordable housing made sense given the substantial public investment in the River District, said Chuck Connerly, director of urban and regional planning at the University of Iowa.

On the other hand, Connerly said, market forces can be hard to overcome.

"The desire to gentrify your downtown and the desire to have a mixed-income downtown are contradictory impulses," he said, "and they work against each other."

Lack of reporting

As Portland's Pearl District transformed, city officials provided neither the regular checks nor the effective balances they promised.

The annual reports that the City Council demanded were quickly forgotten.

Portland Development Commission officials presented data in 1999 to the City Council showing early success. The Oregonian's analysis of the data shows 864 new units had been built, 46 percent of which were affordable.

From that point forward, officials produced reports for only 2000, 2001, 2006 and 2007: five out of the past 20 years. The final two both were written in 2007 and were virtually identical.

By then, the tide had started to turn. The Oregonian's review of city data shows that of the 5,133 units built from 2000 to 2008, only 26 percent was affordable.

If the trend continued, the development commission warned in its final, 2007 report, Portland affordability goals "will not be met."

After that, the city stopped counting altogether.

The development commission, originally tasked with creating the River District affordability reports, handed over all its housing staff and responsibilities to the newly created Portland Housing Bureau in 2009.

Spokesman Jeff Selby, when asked why the bureau did not start producing the annual reports, initially said by email it wasn't the bureau's job.

Later, Selby said annual reports weren't necessary after 2007 because River District developers by then had built a total of more than 5,500 new housing units. He was citing the district's target for construction of all housing of any kind, affordable and unaffordable. Selby did not address the City Council's 1994 requirement for reports on affordability.

Traci Manning, the city's housing director since 2011, and Commissioner Nick Fish, who supervised the bureau from 2009 through 2013, declined to be interviewed.

In a written statement, Fish said creating the Housing Bureau and taking over the development commission's reporting responsibilities was a "long and complex task."

"My priority in leading that transition was to ensure that we continued to increase affordable housing options for Portlanders of all income levels," he said.

City's spending plan

Portland officials have bypassed steps that would help satisfy the city's affordable housing goals for the River District.

When The Oregonian asked why the city hadn't produced any reports on affordability in the River District since 2007, Commissioner Dan Saltzman said in an interview that he would order housing bureau officials to step up.

"Going forward, we need to have annual reports," said Saltzman, who took over management of the housing bureau in June 2013.

The Oregonian's investigation determined independently that about 2,400 of the roughly 9,350 units built, proposed or under construction – or 26 percent – meet the city's 20-year-old affordable housing goals.

Saltzman said he still hopes to hit the council's affordability objectives for the River District but that he doesn't know if it's possible.

"If we're not going to achieve it by 2020, we need to own up to that and produce more realistic numbers," he said.

Meanwhile, the city has chosen not to dedicate key properties it owns for affordable housing in the district.

The Portland Development Commission holds a full city block at Northwest 6th Avenue and Glisan Street and land along the railroad tracks near Union Station.

But the commission is considering a deal to sell the Union Station site to prominent developer Homer Williams, who plans to build office space. Williams would pay $5.5 million, which is $1.5 million below what a city appraisal determined the land could fetch as market-rate housing. Agency documents say the office building would "help further stimulate the Portland economy and provide space for new and expanding businesses."

City leaders also have chosen to limit urban renewal spending on affordable housing in the River District.

A projected $166.8 million is available to spend in the urban renewal area over the next five years. The city plans to spend just $40.5 million of it on affordable housing. That's counting $17.6 million for projects in the pipeline and therefore already included in The Oregonian's estimate of the housing shortfall.

Instead, the vast majority of urban renewal money in the district will go to projects such as commercial redevelopment in Old Town Chinatown. One project alone, the proposed renovation of the shuttered Centennial Mills, takes up $16.2 million of the urban renewal budget. Officials are weighing whether to increase public investment in the city-owned property to $38.5 million.

The Centennial Mills project would feature about 125 new apartments in addition to office and retail space. There's no discussion of making the units affordable.

Jillian Detweiler, an aide to Mayor Charlie Hales, said River District funding priorities could be revisited.

"Of course it's a concern," she said of the city's failure to meet its affordability targets. "I do think we set ambitious goals. We've accomplished a remarkable amount of affordable housing in a high-cost area.

"But we're not interested in reducing our ambition."

-- Brad Schmidt