PORTLAND, Ore. (Portland Tribune) — Housing advocates are concerned that as Portland prepares for more condominiums and apartments to accommodate more than 200,000 new residents during the next two decades, city officials plan to cut back the size of new buildings in parts of the affluent Northwest, pushing the new growth elsewhere.

However, the proposal to lower the allowed density in much of the Northwest’s Historic Alphabet District could open up the city to $30 million or more in legal claims from landowners, one lawyer says.

Property owners in much of the district — mainly between 17th and 24th avenues north of Northwest Couch Street — recently received notice that any new projects would have to be smaller. That’s because the city plans to cut the maximum floor-to-area ratio — the area’s density, in other words — in half.

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Martha McLennan, executive director of Northwest Housing Alternatives, says the recommendation, which was issued by the Portland Planning and Sustainability commission on Aug. 23, would kill the group’s plans to build a 160-unit project at 1727 N.W. Hoyt St. It would provide 60 years of affordability for seniors making $15,000 or less.

Moreover, the recent move to effectively downzone the affluent Northwest ensures that new housing will be forced into a smaller chunk of the city — raising rents and costs while pushing density to the city’s less affluent areas.

“Reducing the potential for housing in Northwest Portland puts more pressure on the rest of the market,” McLennan says, “And that increases prices.”

The property eyed by McLennan’s Milwaukie-based group has been vacant since 2007. The property’s owners, lawyers, Mark O’Donnell and Tim Ramis, have floated a number of ideas to redevelop the property, sparking opposition from neighbors and members of the Northwest District Association.

Now a member of Ramis’s firm, Jordan Ramis, is warning on the firm’s website that the city could face legal claims, citing Measure 49, which calls for landowners to be compensated when government actions reduce property values.

The city’s changes call for “removing over 2 million square feet of potential housing from the Alphabet Historic District in Northwest Portland,” wrote lawyer Ed Trompke. “The proposal … affects the equivalent of 27 blocks currently zoned for high-density housing. The square footage allowed on these properties would be cut in half, and thousands of apartments may not be built. If the City Council approves the recommendation, the city’s Measure 49 exposure could easily exceed $30 million.”

Trompke declined to comment. But O’Donnell, the co-owner of the property, said he and Ramis will “without question” file a legal claim should the City Council cut back their development rights. The plan is scheduled for hearings on Oct. 6 and Oct. 13.

Eric Engstrom, a city planner who is familiar with the proposal, says Trompke’s portrayal sounds like “a little bit of a stretch.” He thinks hundreds of units, not thousands, are likely to be affected. That’s because most of the Northwest isn’t being eyed for new building projects. “There are hundreds of buildings there that the owners have no intent of redeveloping,” he said.

But Susan Emmons, executive director of Northwest Pilot Project, is concerned. Her nonprofit advocates for senior low-income housing, such as the property at 1727 N.W. Hoyt.

“To take 27 city blocks and remove them from the potential of housing when we say we have a housing crisis or a housing emergency is pretty alarming,” she says. “We get 100 calls a week from seniors that are homeless or are at risk of being homeless. I mean people are desperate.”

The Historic Alphabet District was named to the National Register of Historic Places in the year 2000. While the 1727 N.W. Hoyt building is itself not on the register, it is considered a supporting building for the district’s designation.

The Northwest District Association formally requested lowering the development potential of the area in a letter July 26, arguing that large developments are incompatible with the area’s character.

The proposed downzoning of the Alphabet District is one of several city proposals that have sparked concerns from Metro regional government, which wants to increase population density in the city. “I am writing today to raise a flag of concern that a series of decisions under development or pending before the city have the potential, when viewed collectively, to reduce the amount of housing that we can expect to be produced in Portland,” wrote Martha Bennett, chief operating officer of Metro.

McLennan says the Northwest is ideal for affordable housing, calling it a “high opportunity neighborhood, with good access to transit and services and things people need.”

Because small affordable housing developments don’t pencil out, the city’s proposed changes “kind of eliminate that (Alphabet District) neighborhood from potential affordable housing development,” she adds.