The record · Transcript
Council Session — 2026-01-13
Transcript from the session's official auto-captions (17,161 words), shown in readable case and split into speaker turns. Speakers are not yet identified (colors just separate consecutive turns). Auto-captions can contain errors — check the recording for anything that matters.
Session summaryEditor-reviewed
The Portland City Council Homelessness and Housing Committee convened on January 13, 2026, with the body present via roll call and committee minutes for November adopted by unanimous consent. The session addressed three items: an appointment to the Home Forward Board of Commissioners, appointments and reappointments to the Building Code Board of Appeal, and discussion of Legislative Concept 5 (LC5), a proposal on inclusionary zoning before the state legislature. Public testimony was heard on the Home Forward appointment, touching on board composition, behavioral health considerations in affordable housing, and system development charge waiver program impacts on homebuilders. Presentations covered Home Forward's structure, vacancy rates, and mission, as well as candidate qualifications for the Building Code Board of Appeal, including historical appeal volume data. Public testimony on the Building Code Board item also raised concerns about shelter policies and belongings under the public camping ordinance. The LC5 discussion included remarks from a state senator, a Portland Housing Bureau presentation outlining concerns about the legislation's economic analysis requirements and potential financial and legal exposure, and comments from a community advocate presenting a differing interpretation of the bill's intent. Votes occurred on the Home Forward appointment and the Building Code Board of Appeal appointments; outcomes are recorded in the vote ledger. The meeting adjourned at 1:51 p.m., with the next meeting scheduled for January 27, 2026.
AI-drafted from the session's auto-captions, reviewed by an editor — describes the discussion only; recorded votes live in the vote ledger. Captions contain errors.
Procedural markers in this session
Literal phrase counts from the official captions — a measurement of procedure, not a judgment of anyone's conduct. Click a marker to highlight its occurrences below. Captions contain errors.
Procedural episode · turns 0–8
Parliamentary activity detected in this stretch (see the markers above). An editor-reviewed analysis has not been published for this episode yet.
0 And then. Good afternoon. I am calling the meeting of the homelessness and housing committee to order. It is Tuesday, January 13th at 12 p.m. Diego, please call the roll.
1 Good afternoon. Dunphy. Here. Ryan. Here. Morillo. Zimmerman. Avalos.
2 Present. Claire, please read the statement of conduct.
3 Good morning, and welcome to the meeting of the homelessness and housing committee. To testify before this committee in person or virtually. You must sign up in advance on the committee agenda at Portland gov. Council agenda, slash homelessness and housing committee. Or by calling 311. Registration for virtual testimony closes one hour prior to the meeting. In-person testifiers must sign up before the agenda item is heard. If public testimony will be taken on an item, individuals may testify for three minutes unless the chair states otherwise, your microphone will be muted when your time is over. The chair preserves order disruptive conduct such as shouting, refusing to conclude your testimony when your time is up, or interrupting others testimony or committee deliberations will not be allowed. If you cause a disruption, a warning will be given. Further disruption will result in ejection from the meeting. Anyone who fails to leave once ejected is subject to arrest for trespass. Additionally, the committee may take a short recess and reconvene virtually. Your testimony should address the matter being considered. When testifying, please state your name for the record. If you are a lobbyist, identify the organization you represent. And finally, virtual testifiers should unmute themselves when the clerk calls your name. Thank you.
4 Thank you claire. Today we have three items on our agenda. We have two appointments to consider. The first is to the home forward board of commissioners, followed by appointments to the building code board of appeal. Then we will have a chance to discuss legislative concept or lc five, the proposal on inclusionary zoning coming to the legislature in the short session. Before we get to those two items, we need to adopt committee minutes for the month of November. And as you all know, the minutes are approved by unanimous consent. So are there any objections? With no objections, the minutes are approved. Diego, please read item two.
5 Item two. Appoint teresa carr to the home forward board of commissioners for a term to expire February 4th, 2030.
6 All right, so the Portland housing bureau has an appointment for our consideration to confirm the Gresham member of the home forward board of commissioners. So I will go ahead and hand it off to interim director and ivory matthews and christina dirks from home forward. Come on up. Thank you. Please begin and make sure to state your name for the record.
7 Yes. And as pulling it up right now. Okay. Presentation forthcoming. Chair. Avalos. Councilors. Good afternoon. Michael buonocore, interim director of the Portland housing bureau. Existentially odd moment for me is I've only ever been in ivory's role when we've considered these these appointments. So I'm just here for support and questions if needed.
8 Thank you. Good afternoon, chair Avalos and members of the committee. My name is ivory matthews and I'm the ceo for home forward. We do have a brief presentation that we're going to provide. But I'd like for teresa carr who we are going to be considering today, recommending for the appointment for her to introduce herself.
9 Good morning, chair and councilors. My name is teresa carr and I am a citizen of Gresham, have been for the last 25 years and looking forward to the conversation today.
10 Thanks for being here.
11 Okay, I'm here today to request your approval of teresa carr as the Gresham nominated candidate to serve on the home forward board of commissioners. This appointment reflects our shared commitment to regional collaboration and the delivery of affordable housing. Home forward is the public housing authority for the city of Portland and Multnomah county. We were founded in 1941 and are the largest provider of affordable housing in the city and the county, and in the state of Oregon. Home forward serves over 18,000 households each month. Through our affordable housing communities and our rental assistance programs, we provide 7200 plus affordable rental homes within 115 properties throughout the county and provide long term rent assistance to over 10,000 families. Finally, we serve as a jurisdictional partner in many different regards, such as through administering local rent assistance and aligning our federal resources with local coordinated access systems before providing a details about our candidate, I will explain why the city council approves home for board of commissioner Appointments generally, and Gresham appoints specifically. Home forward is a public housing authority governed under Oregon law. Under state law, a housing authority must formally create it be created by a single city or county known as the creating jurisdiction. The city of Portland created the housing authority of Portland by city council resolution in 1941, as the founding jurisdiction of home forward, originally the housing authority of the city of Portland, the city of Portland retains the legal authority to make all commissioner Appointments, including those nominated by Gresham and Multnomah county, even though home for now serves the entire county. State law requires that appointments come through the Portland city council. The city of Gresham nominates two commissioners to represent east county communities on our board, while the nominee is selected by Gresham Portland city council. Formal action is what makes the appointment official, consistent with home forward's legal framework and the intergovernmental agreement between the city, the county and also the city of Gresham. Teresa carr is the director of business development and properties at the port of Portland, where she oversees the port's extensive real estate portfolio and is deeply engaged in regional real estate sector. She has led a team responsible for five business parks, three marine terminals and more than 300 active leases, advancing economic impact through strategic asset management. Teresa has built her career at the port since 2000, holding senior leadership roles spanning community outreach, development and general management. Having grown up with very limited resources and experienced supportive housing firsthand, this work is both personal and deeply meaningful to teresa. She recognized that housing affordability and access are among the most urgent challenges facing communities across the region, and is committed to expanding access to housing, strengthening residents stability and responsibility, stewarding public resources. In closing, today's request and actions affirms our regional partnership and affordable housing and supports inclusive communities. Informed governance I respectfully request your support in confirming this appointment and continuing our commitment to collaborative, equitable housing solutions across our county. Thank you.
12 Thank you very much. I hear we have some public testimony, so why don't we go ahead and take that and then we'll bring it back for committee discussion. Sound good. Thank you diego.
13 First up, daniel myrick, followed by david straub. And then once after david is justin would.
14 Welcome. Please begin.
15 My name is daniel. My name is daniel myrick. Unfortunately. I was unaware of. Mr. Brandon mcfarland's submission and demands to the city of Portland regarding this institution and his filing with the city makes my comments redundant, so I'm going to defer to mr. Mcfarland's demand to our attorney general to investigate this corporation. Thank you.
16 Are the other two online, diego, or.
17 They are not once more for david straub. Oh.
18 Good afternoon. The reason I'm testifying today is I don't have anything specifically against teresa carr. I think she probably a great choice. But it's really the question behind what kind of people are we nominating to be part of the board? Because when I look at the present makeup of the board, there's no one on there who has any behavioral health care background, as far as I can tell. And I think a behavioral health care person would bring a much different perspective to what the board does to begin with the the board, the person might ask, are we looking to build homes or are we also looking to build people? Because when I look at, you know, the current state, we need about 63,000 homes for affordable homes, as far as I know, in the next 20 years, that's going to translate around 400,000 per unit at over $1 billion a year. That's a huge amount of money that we're going to be investing in real estate. And the question then becomes is, can we better spend our money in other ways and get the same end result? For example, we have to look at some of our existing affordable housing units, and are we really just aggregating people who are struggling in life together and not necessarily helping them? Are we kind of hiding the problem? There was a Willamette week article about three years ago, about one of the affordable housing unit complexes that had descended into chaos, as it was described. So my question is, you know, if we're just building homes, we're not necessarily looking at what happens afterwards. A behavioral wellness person would say, hey, are we visiting these places? Are we doing spot checks? Are we looking to see that the people in them are doing well? Also, if you look at things like, you know, is the overall program working, the poverty level is stuck in the teens. I mean, it goes up to kind of the mid teens, comes back to low teens depending upon kind of, you know, higher level economics things that are going on. But it's definitely stuck above 10%. And it seems to be that we're not necessarily helping people in life. And also, as you know, sometimes what we're calling affordable is not necessarily something that's a whole affordable complex. Sometimes we're just giving part of a complex that is affordable, and maybe that's a better way to do it. But also, a behavioral wellness person would ask, okay, are we just kind of sticking these people in 10% and keeping them separated, or are we engaging them with programs so that they can, you know, integrate and interact with the other 90% that are there? And to me, I don't see any programs that are like that going on at home forward. But those are the kinds of questions that behavioral or behavioral wellness person would ask. Also, we have to consider, are we giving these people charity? Are we just giving them a handout? Are we asking anything for them in return? Because if we're just building homes, well, that's what that's what we're doing. But I think that we can ask for something in return and keep it dignified. And are we up with is that my 10s? Anyway? My end result, I guess my end conclusion is a house is not a home unless the person is at peace. And we really need to start looking at behavioral wellness and not just building homes. Thank you for your time.
19 Thank you.
20 Good afternoon. My name is justin wood. I'm a home builder with fish construction northwest. I've been a longtime builder in Portland, also served as the chair of the development review advisory committee several years ago. I've. I have served on some different committee appointments over the years with theresa, and I think I have no reason to believe that she wouldn't be a good person for this. I did want to take this opportunity to tie in a little bit, and I'm hoping that you guys will grant me just a little leeway on this, because I know home forward has a has a big passion for wanting to do affordable housing. And at fish construction, I'm one of the handful of handful of builders here in the city of Portland that has long made it a passion of ours, and an important aspect of ours to try to build housing, the for profit housing for that affordable level. Really your first time home buyers and your you're working class families in the city. The majority of our homes over the last 20 years have taken have been able to use the portland's programs, like the system development charge waiver program and the tax abatement program for us to to put these people into homes. And I feel that's an important piece of what we do to be a partner with the city. Unfortunately, back in August, the council, I applaud the decision. When the council decided to defer sdcs for three years, I think that was an important thing to try and get housing built in the city of Portland. Unfortunately, a small consequence and side effect that it's hit. The handful of us that have tried to use that affordable building program is it's kind of put us in a in a no man's land. We're finding what's happening now is projects that we started, say like last summer in June that use sdc waiver program are now competing against homes that were started in August that had no sdcs through the city's program, the deferral of the sdcs. And so now what's happening is we just this weekend in north Portland in your in your district commissioner Councilor Ryan had a project that we built and we use sdc waiver program, and we had a buyer that went through it. And when we gave the documentation that they needed to provide so that we could remove the sdcs off of their home, they asked us, well, why would I do that when I can go to the guy down the street that doesn't require me to do any of that, doesn't make me fill out a paperwork, doesn't make me do anything to apply. So unfortunately, those of us who've tried to do the right thing for years, there's a when we talked to fb back in August, they estimated we're probably around 200 units. It's important to recognize these are these are buildings that the sdcs have already been removed. They were removed when we pulled the permits. This isn't like foregone revenue that we have to go back and get. It's it's money that the city is expecting to not get back. However, it is making us make buyers qualify for the program, which new new builders don't have to do. So I would suggest there's two pieces to this that we have to follow. One is an income restriction, two is a sales price cap. I think a fairly easy fix that the council could take on. And I'm hoping this, this committee will work on it is to just remove the income cap, keep the sales price cap. There's no reason to raise that. But if we could remove the income cap on those homes that are in the sdc waiver program, I think that would really help us out, because I think that's we're going to be facing some negative consequences over this over the next six months. And I'd hate for us to kind of be hit by an otherwise good program. Thank you.
21 Thank you, thank you for sharing your feedback. We will be definitely looking into your comments.
22 Thank you.
23 That concludes testimony.
24 All right. Well then, colleagues, this is our moment to discuss the appointment. Any any discussion, comments, councilor Ryan? Sure.
25 Thank you. Chair. I think it would be great if we had the sorry I went away from that. That last testimony was really helpful. Thank you. Justin, if maybe teresa could come up and maybe ivory matthews as well. Thanks. First of all, thank you for applying. And I realize you're the Gresham appointment and the Gresham city council already approved you. So I respect that. And I'm grateful that you're applying for this. And I also want to appreciate you, miss matthews, for sending the letter on December 16th about the vacancies and giving us more information on that. And I want to try to connect the dots between like, current news and challenges and then the role of a board member. So as you were coming into this position and you have great experience, I'm highly supportive of you being on this board. Did you have a chance to have any dialog with ivory matthews about the vacancy rate and the plan of action going forward? And I think that a lot of portlanders are just really concerned and confused. So it makes it difficult to keep building and building affordable housing when really smart, compassionate people are like, could you do better on your vacancy rate? So I wanted to use this opportunity to see some checks and balances in action about a current issue that is front and center for home forward.
26 Yeah. Thank you for that question. Chair and councilor Ryan, I have had opportunity to interact with ivory, but we've kept it very just brief and overview of the organization versus addressing the challenges. Because I'm not yet a board member. However, I have, you know, read news articles like the average person has gone on the website and done some, you know, average person research. And I'm looking forward to get to getting to understand how the organization works and seeing what I can bring to the observations that you're making and that others have made today.
27 Thank you. And ivory, since this was sent to, I think all of us, I'm sure I'm not the only one that got this letter on December 16th. Is there anything you'd like to add since then? I know that we had holidays in between there, would you think? Has there been any new insights that you'd like to share beyond what was in this letter?
28 Yeah, certainly. Thank you, councilor Ryan, for asking that question. So the letter I referenced, just for those who aren't aware of the the letter itself and the details, it was related to the news articles that were recently published around the number of vacant units at home forward currently has in the market. I think that there were parts of the article that was really providing a fair recap of where we currently stand as one of the largest providers of affordable housing in this community, and owning a substantial, you know, a large portfolio, over 7000 units, and we currently have a vacancy rate in the double digits, which includes a number of units that were offline due to comprehensive renovation efforts and due to a major weather event. And so when those units became offline, as most people who are in the real estate business understand, by the nature of the damages that are occurred to particular units, they require a substantial amount of of efforts relating to getting inspections done, getting the insurance company involved, bringing on architects and engineers, all of those things that are required in the rehab process of rehabbing over several dozen units. And we know that that's typically not a process that occurs within 2 to 3 months. And sometimes it just it takes much longer. The other emphasis with those, the number of vacant units, I think that was probably not explained very well in the report, out of the article, was that we just purchased two new communities in the city of Portland, and those the purchases of those two new developments were a couple of hundred units. And so when you look at vacant units, while the number on the surface seemed to be alarming to folks who would read that article and be really alarmed, it wasn't anything that any real estate, whether you're public or private faces and administering real estate and property in a community. And so I really appreciate folks who have asked us about what's happening and allowed us the opportunity to explain the details of what was happening within the portfolio without making judgment before having all of the facts. So I really appreciate the opportunity to answer those questions.
29 Thank you, thank you, thank you, miss matthews. I wanted to make sure we highlighted that since it is on the tip of a lot of people's tongue, and I think the more updates we get on the solution to that and seeing the number come down will be helpful. I also want to connect the dots, perhaps to testimony that was earlier. I've been a strong advocate for behavioral health and been quite embarrassed about our state and our county's lack of response for decades to that. And I do think we're at a crisis right now. I think it's pretty obvious you can see it with your own eyes on our streets. And there was a lot of truth to be told with the testimony that I think we're putting increasing numbers of folks that have multiple challenges when they're in, in our in our housing, in our affordable housing. And you hear this when you're out listening to constituents, you hear it from people who are in the buildings, who have reported they don't feel as safe as they used to. And so I just want to amplify the testimony on what is the the action that will take place, because we increasingly hear safety concerns. Back when I was housing commissioner for a brief period of time, I remember constantly getting that feedback from housing providers that they felt like there wasn't enough money being offered for security, enough money being offered for services. And I don't think the county and the city has got to the bottom of that. And I think we've been too quiet about that challenge and we don't name it. And so when we don't name it, it continues to not be solved. So I hope that as a board member, the dialog continues will be elevated. And though that's not your background, would any of you like to speak to our humanitarian crisis that's on our streets and increasingly also in our affordable housing units, in particular, because of the density, it's everywhere from a family of recovering addicts. I'm not shy to this topic. I'm not in denial about this topic because of that as well. So I just wanted to get that daylighted as well. Any conversations you'd like to have with us right now about solutions going forward?
30 Certainly I will, I will first just state that just to provide some context about who home forward is, we are not behavioral health specialists. That's outside of our wheelhouse. We know that our community is facing a behavioral health crisis, and our foundation and framework was built upon independent living. But we do recognize that, as I tell folks all the time, no good deed goes unpunished. And we do recognize that the good deeds and the efforts that we make in terms of housing, individuals and our community, we do see that the folks who have mental health crisis that might be living in the private market, those individuals who have mental health crisis are also living in units that we have as well. And this is where we have engaged partners in these efforts, where we might not have the financial resources to help those folks. We don't receive mental health dollars, and we don't receive funds to be able to support people in many cases in the way that they need those supports. But we realize that, you know, we do our best and reaching out to our partners who do have those resources to be able to help families. We you know, we do have a small amount of units within our portfolio where we do engage directly with mental health providers, but that's a very small part of our portfolio. It's not the bulk of our portfolio, but there is definitely a crisis, and I appreciate that those conversations being brought up in this arena, because we need your help too, and we need for everybody to understand that this is not a home forward problem. This is not a home forward crisis. This is a community crisis where all of us have to engage together to be able to help each of our families be successful in their respective housing situations.
31 I thank you for being transparent. I agree that it is a crisis. We're on the same page about that. I not in your role, so I respect how you characterize home forward and what it is and what it isn't. You also acknowledge that you have residents that need those services. What steps would you like to tell policymakers, both at the city and county and the state, that could lead us to better solutions than we currently have?
32 Certainly. So one of the things that we've done at home forward is we've beefed up our policy department. Since I've been at the agency, we actually have a full blown policy team where we have three fte staff, people who focus directly on state and local policy, which is christina, who's in here now with us. And we have taryn wing, who focuses on federal policy. And one of the things that we do with those with that department is that we take opportunity to help our partners be able to advocate for those resources that come directly to our partners, because those resources help then in turn, help our families as well. And so we try to engage from that perspective and bring in resources that we can help people have, whether it's full wraparound services to help with their mental health needs or whether it's temporary resources, resources to get them stable on whatever type of whatever types of of services that they need to keep them stable, stably housed. Because our goal is, you know, we're not in the business of evicting people, and we're not in the business of not housing people who are in need. We want to keep people stably housed. But we do recognize that in order to keep people stably housed, that they need those full supports, those mental health, those behavioral health, all of those supports to be able to live, work and thrive like any other citizen in this city. And that is something that we don't just talk about. We have lots of data and information to prove that we are taking actions, to be able to be engaged in every conversation there is, to be able to access resources to help our families live stably in this community.
33 I realize we have a really packed agenda, so I will wrap this up. I do want to do a follow up meeting on that. I my mind is thinking about measure 110 money. Is it a resource for home forward? Because the reality is we have people that aren't getting services and we have people that are living in units that are not dealing with mental health and behavioral health, behavioral health up here, there's mental health, there's addictions underneath it. And what I've heard from people that don't feel as safe as they used to, because they noticed that some of their neighbors don't seem to be getting those services. So I don't think we're saying anything that all of us don't know. I just want to have further dialog so that we can get to the solution. And I think that board members, like the one being appointed today, will provide some refreshing oversight. And I wanted to make sure I highlighted this by someone was coming on to the board who was definitely. Theresa's definitely capable in this role. So I just wanted to make sure that we daylighted what a lot of portlanders are talking about. But they but elected officials sometimes don't talk about it. So I thank you so much for participating in this conversation.
34 Thank you.
35 Councilor.
36 Thank you. First, miss miss matthews, I just want to say I am capable of holding two ideas in my head at once. One, I think that the way that you have explained to us and to the public about the specific situations of why home forward's portfolio has some significant vacancies right now is absolutely makes sense. There's always situations like that, and I think you've handled yourself with grace in a situation that is deeply unfair and uncharitable in a lot of ways. And I have also heard you say specifically that you recognize we are in a moment of crisis, and sometimes we are put into positions in which we don't get the burden of being treated fairly, that we have to do better than the public can ever expect us to do. And so I hope you hear that the city of Portland wants to be as good of a partner to getting those vacancies taken care of, figuring out the financing component of it, figuring out the the affordability levels. And I will also just say that home forward is has a long history of being an amazing tool in our toolbox. And when you are needing to hammer in a bunch of nails, you want a really good hammer. But sometimes the. This is a stretched analogy, but sometimes you're faced with a screw and you can't use a hammer on a screw. And a lot of times we need to have different tools, and I don't think it's reasonable for us to try and assume that all partners can be all things. And I think that some of the biggest problems we've had as a community in responding to the homelessness crisis is that we have reinvented the wheel and asked everybody to try and either stand up new services that they've never done before, or we've tried to empower organizations that maybe didn't have the necessary capacity or skills to deal with that kind of tension. So all that to say is we are all in this together. It's deeply unfair. The crisis is real. We need to figure out how to solve this problem. And you all. I appreciate that you are really trying to take this seriously and approach this not in a defensive way, but in a community and partnership focused way. Which brings me to miss carr. We are in a moment of crisis. Absolutely. And the crisis is getting worse. I'm interested to know, you know, your perspective on what you think that you will be bringing in terms of meeting that urgency and that moment right now. We also, you know, we have a federal government home forward is primarily our contracted federal housing provider, federal housing program provider, in which we know the big beautiful bill has slashed both rental assistance and actual dollars coming to our community and changed the terms for section eight vouchers. What do you think is going to be your role on this new on this board? What urgency are you bringing to this, and how do you plan to meet this moment?
37 Such a great question, and one I've thought a bit about. No, my role is not. My background is not in affordable housing. It is, as you heard miss matthews say earlier, it's really around commercial real estate. And I think much like affordable housing, there are some synergies there and there's some similarities there. Right. And we're not facing dissimilar things in our communities currently. There's a crisis in businesses currently in this region. And so what I think I bring to the table is my understanding of the region, my understanding of how policy plays a part of the conversation, and bringing forward ideas that maybe the other board members have not brought forward before. But really, the first couple of months I will be onboarding and understanding more. And I am a firm believer that you, you know, unless you have something brilliant that no one's ever thought of, probably not the case for me. Just just to be transparent, it's time to learn, right? And a time to really be reflective and understand. And and I understand, I mean, to the, to the point that I can understand the crisis. Being an outsider of the organization, I see it, I feel it. You know, Gresham has its fair share of issues, and I work very closely with Gresham mayor, very closely with Gresham city manager, know them all very well, and I feel very strongly that my role on the board is also to represent Gresham. And Gresham wants and feels, and so I'll be working very closely with them to understand what that is as well.
38 Well, as a city council representative of east Portland, we know that the the dividing line around 160 or whatever it happens to be, it doesn't matter. So consider us partners in this work. We are fighting for the same people to get the same protections for our community. And thank you for your willingness to step up and serve at this moment, because it is a challenging time for public service, and we need everybody to dig in and lean into the, the, the challenge. So thank you.
39 Thank you. Councilor.
40 Thank you for fielding all those questions. As you can see, it's complicated and it is bigger than just your appointment. But we're really looking forward to your partnership and helping to solve these problems. So thanks for your answers, both of you. I'm not seeing anyone else in the queue, so I'm going to go ahead and move us forward to a vote. I would like to entertain a motion to send the resolution document number 20 2617 to the full council with the recommendation it be adopted.
41 So moved second.
42 Okay, diego, please call the roll.
43 Dunphy. Hi, Ryan.
44 Hi,
45 Morillo. I Avalos.
46 Thank you for your service.
47 I with four eyes and one absent. The motion carries the motion to refer the resolution document number 2026. Dash zero 17 to the full council with a recommendation it be adopted.
48 Thank you, thank you. Diego. Thank you to you.
49 Thank you. I appreciate you.
50 All right. Diego, please read the next item.
51 Item three. Appoint and reappoint members to the public code board of appeal for terms to expire February 3rd, 2029.
52 And to my colleagues, we are running about 12 minutes behind schedule, so I would like to see us try to get through this no later than one at minimum. We've got our next item set to start at 1245, but we need to start at least by one. So the second set of appointments for our consideration is for the building code board of appeal, which is within the Portland permitting and development. I want to welcome our new director, Eric couch, along with deputy director. Hey, hey, how do you pronounce your name?
53 Elshot is here, but he's.
54 He's right here.
55 Hi, jeff. Thank you. And natalie didion. Okay, wonderful. Go ahead and take it away.
56 Sure. I just wanted to start. I wanted to introduce myself. My name is Eric couch. I'm the new director of Portland permitting development. And I just want to say I'm excited to be here. I'm excited to work with council and our community. With that. Natalie didion will be presenting today, so I'll go ahead and hand things off to her.
57 Hello, councilors. Can you hear me? Okay. Yes. Okay. So thank you for this time. My name is natalie didion, and I am the building official for the city of Portland. I am responsible for overseeing the implementation of the state and local building codes. And one piece of this work is leadership of the Portland permitting and development administrative board of appeals. Through weekly hearings, that board reviews requests from permit applicants to meet the intent of the building code through alternative means or methods. When appeals are not approved at that administrative level, applicants may appeal to the building code board of appeal and as the liaison to that board. That's why we are here today, is to request the approval of my recommended candidates. Okay, so here's some more detailed information about the building code board of appeal. This is a quasi judicial body made up of members from the community with knowledge and experience with building code requirements. This board consists of three members and three alternates. And as I mentioned, this board hears appeals that have already been heard at the administrative level and denied. The board members are qualified volunteers and their decision regarding building code requirements is binding. Members are appointed by city council for three year terms with the option for reappointments. And that's why we're here. Okay, so here's the list of candidates I have recommending the reappointment of our current members Eric bressman, elizabeth brett, and sharon norby. Currently, we have only one position filled on our alternate seats, and we are recommending two new appointments for the vacancies. These are jennifer alger and joseph penzone. The reason behind recommending reappointments of current members is the extremely low volume of appeals that the current board has seen for the past several years now. For example, this past year, out of 286 administrative appeals boards, only five went to the building code board of appeal. In 2024, there were two, 2023 had one, and 2022 had zero. I contribute this to the general slowdown in permitting that came with COVID, but there have also been changes to the efficiency and effectiveness of the appeals heard at the admin level. So here's some background information about the candidates, starting with the current members I am recommending for reappointment. First is Eric bressman, who is a retired architect with over 40 years experience. He has participated in the adoption of building codes at the national and state level. As an architect, his role focused on quality control of project documents, specifically on code compliance. Next, elizabeth brett is currently a senior project manager whose work involves guiding projects from concept through construction. Her career has focused on supporting educational, government and nonprofit organizations, and encouraging youth and young adults in educational endeavors. She is also a licensed architect with over 25 years experience. Third, we have sharon novey, who is a project architect with over 30 years of design, building and construction work focused on shaping and anchoring cities and neighborhoods. She has first hand experience working with architecture, office and offices and construction companies. Her recent project efforts include maintaining and restoring existing buildings, with a focus on extending the life of buildings central to communities. Okay, so here's my recommendation. Recommended candidates for new appointment to the two open alternate seats jennifer alger is a small business owner with over 25 years experience in construction. Self-employed since 2010, her business is certified by the certification office for building inclusion and diversity and is certified as a women business enterprise slash disadvantaged business enterprise. Her work specializes in construction management and contracting. Projects include commercial development for diverse industries all the way from corporate offices to healthcare and multifamily residential, and then finally, joseph penzone is a licensed architect with over 35 years of experience, leading project teams on both private and public projects. He is currently a technical architect and consultant for architects with legal claims and business and project management. He maintains continuing education on technical aspects of architecture, the building codes and problem solving and communication skills. So to wrap up, here is what I'm hoping to see as our next steps. If reappointed, eric's third term would run from February 4th of this year until February 3rd of 2029. Elizabeth and sharon's second term will also run for the same timeline, with new appointments. Jennifer and joseph terms will be on the same timeline, serving in two of the alternate seats. With these three appointments and two new appointments, the building code board of appeal will have its required three members and three alternates, and I appreciate your support in referring these five appointments to full council for approval. So thank you and I'm happy to answer any questions. I believe I also have all five candidates present, so if you want to speak to them as well.
58 Thank you so much for your presentation. And I believe we do not have public testimony. Correct.
59 We have one individual signed up.
60 Okay. Well then let's go ahead and take that and then we'll bring you back.
61 Cassidy. Kimball.
62 Welcome. Please go ahead.
Procedural episode · turns 63–71
Parliamentary activity detected in this stretch (see the markers above). An editor-reviewed analysis has not been published for this episode yet.
63 Hello. Thank you. I just wanted to bring attention to a very current issue that I believe is a temporary solution to a much larger and ongoing problem. I volunteered a lot of different shelters and organizations around the city, and I'm consistently seeing a lot of issues involving guests losing their belongings due to the current public camping ordinance that we have here in Portland when, quote, reasonable alternative shelter is available. With that, I work a couple different places. These shelters have small amounts of beds and usually 1 or 2 bathrooms. And from what I've noticed is that they're not always run by the city. I'm not entirely sure how they fully work, but I've noticed that they're not allowed to bring their belongings in. They can't bring in their carts with all of their stuff. And so most people are not using the shelters, because if they can't bring the carts that they keep all of their belongings in, they can't go inside and they can't leave it outside of the shelter, because then their stuff will be taken either by someone else who is also in a vulnerable position, or by the rapid response bio clean company that is a for profit company that Portland is using. With that. This issue, I would say, is cyclical. It they're forced to deal with very harsh conditions, with only the supplies that they've worked hard to collect and just to make their lives just a little bit more manageable. And with that, it just it constantly is restarting. They lose their supplies and then they have to go out and get more. So also, the places that I volunteer at are not trauma informed care centers. However, staff and volunteers, I being one of them constantly and have to try to do what we can to help people with mental health situations. I am not fully like certified or trained in those things. I just do what I can, when I can, and I would just love to see the city trying to work more in creating programs for mental health at the shelters and giving the employees there and the volunteers there a better understanding of how to talk to people at these shelters, because at one of the shelters that is connected to a place that I volunteer at, they talk to the people coming in with lots of vitriol and don't usually have a lot of care and patience for the people coming in. Usually these people are on their phones and not talking to them or looking them in the eyes. And so a lot of people also don't come because it feels inhumane and that they're not respected as a living, breathing human being. I saw this at the library. Somebody wrote this out, printed them out, put these fliers out. It says, we are human. We deserve rest. We deserve safety. We deserve dignity. We deserve to exist without being hunted by policy. And let your voice be heard. So thank you.
64 Thank you for your time. Okay.
65 Concludes testimony.
66 Sorry. Thanks, diego. Great. You can come back up. Colleagues, we are entering discussion and as a reminder, I want to get us out of this by one, if we can. So, counselor Ryan.
67 Yes. First of all, thank you, chair. Point of order. We've had a couple testimonies that were really good and worth listening to. They weren't totally on the topic. I would like to suggest that we have like in a couple of committees. I'm in having testimony at the beginning of the of each committee meeting so that we can take in those general comments when they're an off topic of one of our items. Thank you. I don't really have a lot to say on this, except I want to say it's good to have you on board, Eric.
68 Thank you.
69 Yeah. Is this one of your first days on?
70 This is my seventh day, so we're on my second week now.
71 Well, welcome. And it's always good to see you, natalie. Thank you so much for that report. I think that you have really qualified folks in this. I do have a logistics question. I'm taken with how organized you are and that you have all your alternatives, your alternates there. When do they get to get into action? The alternates, like, are they are they used often. Is it like sports where someone can't make it and you and the bench gets to play that night or tell me more?
72 It's a good question. I think in the past when there were more. Appeals coming to the the board, it was a set date. And so it was an alternate alternate would step in if someone wasn't one of the members wasn't available because we haven't had as many. That has not really been an issue. One of the things because like I said, we only had five this past year, I do want to start still having the meetings every month, and I want the alternates to be included so that we are still connecting with with each other, coming, coming together to discuss building code topics. But yeah, it's a good question. It hasn't really come up with the alternates needed recently, but I would like to keep them engaged.
73 Well, that was a satisfying answer. I just want to make sure jennifer and joseph get into the action, and so it makes sense that you include them.
74 Then I think they're excited too.
75 Yeah. And you gave the reasons why the numbers are down. Do you have numbers from before COVID? Well, actually, when we were the third or fourth highest city in the country in terms of investments, and there was a lot of building as opposed to the bottom, which we are now. So what was it like then? How many did we get per year?
76 So the.
77 Building a lot in Portland.
78 Sorry. Yeah, I have it back to 2013. The highest was in 2017 and that was there were 34 that year. But prior to that there were still under 20 2015 was 16, 2016 was 14, 2019. There was like 12. So potentially one a month. And then it just.
79 So they were all at least double of what they are now. Okay. Thank you. That was good for perspective. Appreciate it. And welcome aboard.
80 Councilor.
81 Yeah thank you. I was this is maybe the smallest dumbest thing, but I noticed that this committee, this committee of five is having all their expiration dates on the same day. Usually I see them on committees have staggered expiration dates. What's the history there?
82 Well, so Eric grossman, who's currently on the board, his did expire back in September and then which was about the six month. And then sharon and beth did just expire in December. Okay. And so just trying to get everyone on board makes sense.
83 Okay. Yeah. And it's only three members and two alternates total.
84 Well it's it's three and three. There is technically one alternate already on the board through September I believe. Gotcha.
85 Just was interested in that that sort of one factor like oh everybody expires in 29 okay. So great. Sounds good. Thank you.
86 Colleagues, any further questions? Well thank you. I'm super grateful for the presentation and just the work that you all are doing and engaging the community to solve some of these hard problems.
87 So they just raised their hands. The ones that are here that are on this.
88 Sure.
89 And I think we have three online as well.
90 All right. Thanks for being here.
91 Yeah yeah. Thank you. Okay. Well seeing no further questions. Oh, sharon, did you want to make a comment as. Oh okay. Oh I see oh I see okay okay.
92 Raise your hand.
93 We see you online. Got it. Thank you. All right. Well then let's go ahead. I will entertain a motion to send report document 2026 zero 18 to the full council with the recommendation to be accepted.
94 So moved second.
95 Moved by councilor Ryan, seconded by councilor Dunphy. Diego, please call the roll.
96 Dunphy.
97 Hi, Ryan. Hi, Morillo. Hi, Avalos. Hi.
98 With four eyes and one absent, the motion carries. And the report document number 2026, dash zero 18 will move to the full council with a recommendation. It be accepted.
99 Thank you so much. Thank you all for your service and for being here today. Appreciate you.
100 Have a great day.
101 All right, diego, please read the last item.
102 Item for discussion on legislative concept five inclusionary housing.
103 So colleagues, when the council adopted the 2026 state and federal agendas back in December, there were a couple of follow up items that we agreed required further discussion. And one of those is a proposal on inclusionary zoning sponsored by senator con pham. So for our discussion today, we're going to hear first from senator pham because she's in legislative days. So we want to get her in and out real quick. And then we'll have a presentation from the Portland housing bureau on the bill. Proposal and implications for Portland. And then I will be and then after the presentation, why are my notes these notes are making sense. And then after that, we are going to have some folks who are from senator pham's office also come and discuss their perspective. So we're going to kind of stagger it in that way. So with that, do we have senator pham online already? Yes. Okay. Senator go ahead. We've got a few minutes for you to to share.
104 Thank you, chair Avalos. And thank you. Members of the house, the housing and homelessness committee, thank you for giving me some time to speak to you today. For the record, my name is khan pham and I'm a state senator and the chair of the senate housing and development committee. I spoke to you in December about lc five, the legislation that I've introduced for the short session that would provide greater flexibility and guardrails for current and future municipal programs for inclusionary housing. And I'm here today to ask you to provide direction to your government affairs team to ensure that the city of Portland doesn't serve as an impediment for advancing this carefully written pro homes initiative. In the 2026 short session. I want to share that just for some context. Before I joined the legislature, I was a community organizer and as an organizer, mostly working with low income and bipoc communities. I actually back in 2016 and those years around then, I advocated for the city's original is program. In 2016. I had many conversations with people, and when I was talk about how it would result in more affordable housing and amenity rich neighborhoods, and then when people ask me how developer, how it would be paid for, I said, well, developers would pay for it. It would come out of their profits. But now that we have the benefit of ten years of data and experience, I, as a champion of is still now, over a decade later, I've had the opportunity to see the difference between funded and unfunded inclusionary housing. Contrary to what I blithely said before, when inclusionary zoning is unfunded, we found developers didn't just let the costs come out of their pockets without any funding support, they chose to go to other states or cities. New building permits disproportionately started shifting to b 19 units where it might otherwise have been 40 units. Portland's unfunded mandate likely contributed to the loss of hundreds of new homes that, had they been built, would have led to more portlanders living here today, and to portlanders enjoying lower overall rents. As chair of the senate housing committee, it's my job to figure out how to pass bills to ensure that the state of Oregon builds more homes. We are in a housing crisis, and if we don't build enough homes for our growing population, we will have even more skyrocketing housing prices that are keeping working people and families unable to stay in Portland and and thrive. I've heard each of you in this committee affirm your desire to ensure that Portland continues to accelerate housing production as a means to address housing affordability, homelessness, and economic revitalization. So this session, I'm bringing you a finely crafted bill that doesn't ask the city of Portland to undertake anything that it's not already doing, and in fact, provides direction for other cities to follow. Portland's lead in crafting effective, flexible, and successful inclusionary zoning programs that encourage construction of both market rate and affordable housing. I'm very proud of the work that Portland has done on its eyes, and I want to be clear that my office and other pro housing advocates have engaged and worked with various entities with the city of Portland to advance this concept for about a year, starting with its inclusion in a larger omnibus housing bill in the 2026 session or 2025 session. The specific statutory language of the bill reflects multiple conversations with the city attorney's office, the Portland housing bureau and the office of government relations. Over the past eight months, I've heard three main concerns from city staff. The first is related to a worry that any requirement would open the city to bad faith litigation. On that point, my office has worked directly with the city attorney's office and other stakeholders, and we find lc5 statutory language to mitigate this risk. Under the new amendment, the burden of arbitrating the city's recalibration analysis falls almost entirely on a litigant instead of the city. If the city analysis is not appealed within seven days, just seven days of adoption of the analysis, then it is valid and the city is legally allowed to apply is mandates to all buildings. If it is appealed and the appellant loses, an appellant must now pay the attorney fees of both sides. We think this is an effective deterrent for any kind of frivolous litigation. The second concern I've heard is that the method of economic analysis is too prescriptive. So we've added recently catchall language that explicitly addresses that concern, stating that a city can use whatever economic analysis or funding method it wants, as long as the math actually shows that the costs and benefits are in balance. Lastly, we've heard that lqt5 is more restrictive than current statute. Again, I want to reiterate that this bill does not require the city of Portland to do anything more than it already does. The rental program already complies, and the condo program would likely comply by extending the current sdc waiver for mixed income condo buildings, lqt5 gives the city other options, too, and some of them are new. The only meaningful constraint of lqt5 is to prohibit the city from continuing an eis program. If the program is not funded in the future, we know that in the future, local city and county governments are going to face tough budget constraints, and we don't want housing production to be on the cutting block. I think I hope that this can be a statutory nudge to ensure inclusionary zoning is prioritized, so it continues to provide the benefit of cost effective, affordable housing and socioeconomic integration of new neighborhood development. An unfunded, malfunctioning inclusionary housing program is the worst of both worlds. It limits production of desperately needed market rate housing and still doesn't result in any affordable homes being built. While giving inclusionary housing a bad name. As the senate chair, I've repeatedly seen how well-meaning local governments can unintentionally hamper housing production, and this small struggle over is is in many ways a microcosm of how we ended up in this housing crisis in the first place. As a state legislator, it's my responsibility to ensure that good intentions of municipal governments do not override the overarching imperative that each city is held accountable to actively building homes. This bill has the support from a wide variety of business leaders, affordable housing advocates, tenants groups, and housing developers. We literally have abi and the realtors in agreement with the community alliance of tenants. They've reviewed the legislation and believe this policy will advance the production of affordable and market rate homes, both ownership and rental. I ask that you use this hearing this afternoon to encourage city staffers to explain why they why they continue to express skepticism for this initiative, even with all the changes that have been made and what it would take for them to be supportive of this bill. And I hope you'll ultimately encourage the city of Portland to issue a formal estate affordable, a statement of formal support, or at least neutrality, on this piece of important legislation. Thank you.
105 Thank you so much for your time. And as we all know, this is really complicated and it's why we're having this conversation. So we can try to unpack some of those questions. So thanks for setting the stage. With that. Let's bring up staff to. Oh sorry. Yes. Sorry. Senator pham, before you go, councilor Ryan has something.
106 To ask.
107 I just want to thank you, senator, for your helpful and inspiring testimony. You are a champion to build more affordable housing, and your knowledge is laced with some humility, which was very inspiring. You've been through a lot in the last ten years to get to the details of getting the actual outcomes, and I just really appreciate the transparency in the testimony. And bravo to the coalition that you brought together. I've been involved not as long as you, but I haven't often seen that coupling of the lobby that is supportive of your legislation. So thank you. My lens is now in a better place as I listen to the rest of the presentation.
108 Thank you so much.
109 Thank you. All right. Let's bring up staff, please. Okay. So we are we've got interim director and jessie connor here to provide an overview of lc5. And I'll also note that we have director chase and city attorney adrian del couto del couto here to help answer questions as well. After this presentation, we will also have michael anderson here from, I don't know, from sightline from khan's office, maybe both, I don't know, to give us some more context as well from this community perspective. And then we'll have a discussion. So with that take it away.
110 Thank you. Chair. Chair. Avalos. Councilors michael buonocore, interim director for the Portland housing bureau. And we find ourselves here today in a somewhat uncomfortable and unfortunate situation, which we like to colloquially refer to as the work week at. This is uniquely unfortunate insofar as as it's been acknowledged, senator pham is a champion of affordable housing. We do not want to find ourselves in a position where we are strongly recommending to council to oppose lqt5, but that is where we are. However, our hope is that if it does not advance that you have a commitment from us to continue to work with the senator and craft something that we think will work better for the city of Portland and and for the state. So with that, we'll offer a bit of context before we dive further into that recommendation. Oh, so we will we'll give you some background on both at the state, at the city of Portland, on our engagement around lqt5, and then how we have collaborated with senator farms office, things that we have seen improved through that engagement process, and the remaining concerns that lie at the root of our recommendation to oppose the legislation. And then some recommended next steps.
111 For the record, jesse connor, is she her pronouns? I'm the senior policy analyst at the Portland housing bureau. In 2016, through senate bill 1533, the state repealed the preemption on inclusionary housing, allowing local governments to create a program that would require certain housing developments to include a portion of affordable units. The state included several sideboards. First, that a mandatory program could not require units affordable below 80% ami, or the area median income. Second, that the policy could only apply to buildings with 20 or more new units. The policy must provide a payout option or a fee in lieu of providing units, and the policy must also provide some sort of financial incentives for the affordable units, such as fee waivers, financing or tax exemptions. Notably, the statute supported local government decision making in several important ways. The list of incentives was not exhaustive nor exclusive, allowing governments to identify the most appropriate options and present those to the public for comment. For the fee in lieu, the state directs a local government to determine the amount. Additionally, the state also authorized cities and counties to determine the manner in which any incentives are provided under a mandatory policy. Following the state's authorization of the city began a policy concept, financial feasibility analysis, and stakeholder engagement process, including the convening of a panel of experts consisting of professionals with public and private housing development, housing policy and finance financing expertise on behalf of the city. The housing bureau engaged in economic and real estate consultant team to develop prototypical development scenarios at a variety of cost. Operating and developer return assumptions. The financial offset package was created to include construction, excise tax waivers, system development charge waivers, property tax exemption, and development incentives such as additional height, density, and parking waivers. Portland's inclusionary housing program was adopted at the end of 2016, with an effective date a couple of months later in February 2017, and committed to periodically reviewing the program for technical, administrative, and financial feasibility. Over the life of the program. The city has regularly made technical and administrative revisions based on internal and external stakeholder feedback. In 2023, the calibration study resulted in an expanded program availability and significantly increased offsets in higher cost development areas. The calibration approach closely mirrored the 2016 approach, convening an external stakeholder group of industry experts focused on the private market engaged a team of professional economists experienced in local program evaluations, and created a financial feasibility analysis reflective of current market conditions. A variety of development prototypes by geography, unit mix, height and construction materials. And on this slide, you'll also see some of the cost and revenue assumptions used in our current methodology, including hard costs. So the construction materials is an example of that. Some of the soft costs, such as architectural and design, system development charges, developer and investor return assumptions, residual land values, market rate, rents and affordable rents based on unit type and mix, residential rental operating expenses and vacancy rates. Michael.
112 So as senator pham said, this concept was first proposed in the 2024 legislative session to update the existing state statutes that govern the local inclusionary housing program, with an intention of making it more friendly to other cities to adopt. And there are some ways in which it adds flexibility from the current state law. So it allows affordability to be set at either 60% or 80% ami now, and would allow the program to apply to smaller developments outside the city of Portland. So smaller buildings with ten plus units. Here is just sort of a mapping of the ways in which we have engaged with the sponsor so far that has included extensive engagement by fwp staff, as well as from legal counsel and from the office of government relations. And so through that engagement process, we appreciate that there has certainly been a good faith effort from the senator's office to hear our concerns, and there are some ways in which we feel the concept has improved. It has lowered the requirement to eliminate financial impact from 120% per unit cost to 100%. Where it stands now reduced the frequency of required calibration studies from every three years to every six years, and proposed edits to lower legal risk and a big remaining issue is that while legal risk has been improved, our assessment is that it has not been reduced to a degree that is satisfactory for the city. So a bit about some of the outstanding concerns. One is the required economic analysis. So there's a requirement to periodically do an economic analysis and update the programs, which dictates what the analysis should include. And while the concept language includes options for how a jurisdiction conducts that analysis, it insists that the analysis arrives at offsets in amounts totaling no less than the expected marginal loss in value for the development as calculated, and so in essence, it means each project must be made entirely whole, and in the absence of being made entirely whole with a degree of subjectivity in that criteria, there's a there's an obligation for the city to make up any difference. And the thorough analysis that we described that we currently undergo is not designed with that in mind. It requires that we offer financial offsets and incentives to fully eliminate any financial impacts to projects. And in the most recent calibration study, which we can forward to all of your offices, the rigorous economic analysis that was conducted by economics technical consultant in collaboration with us, was designed to arrive at offsets that landed within a range of of 100%, covering the expense associated with inclusionary housing. So it's designed to provide a reasonable assurance that our requirement for affordable housing is not deterring the development of new projects and reasonable, reasonable assurance at the project level. Is not the city guaranteeing that every project will be made 100% whole every time? So again, this would require that each project be fully compensated. While the language of the legislation does not prescribe that, an analysis would have to be done for every project, we would have to do that practically as a matter of ensuring that we were hitting that very specific target. And the requirement is particularly complicated to guarantee for homeownership units since the future homeowners receive that property tax benefit and not the developer. So just a very broad scenario. If we found ourselves under this legislation and new development came forward, they were not paying a fee in lieu, but were in fact moving forward to provide units under this program. And we were in the scenario where building permits were under review, and the applicant claimed that the offset package wasn't big enough to cover their expected marginal loss in the value of the housing. That claim would be based on their assumptions about what the lost rental income for the property for the next 99 years would be, their own assessment of vacancies, value of zoning and development bonuses, other factors. So that has the potential of slowing down the permitting process. And as described before, the potential financial impacts to the city. So these are some of the constraints that we face in this scenario, as we would need to prepare for whatever we anticipated relative to providing sufficient offsets to deliver these programs at precisely 100%. We have to also negotiate that with Multnomah county. That is not entirely just within our purview to design. And then in scenarios in which we might not have a package of tax or other non-cash incentives, we would have to have funding available if we needed to provide cash payments to make a project whole. And so if we were, if we found ourselves in a scenario where this no longer became financially feasible for the city, we would have to sustain, we would have to suspend having the program at all. So we have we've gotten feedback from the league of cities that's represented here specifically for this conversation. And there are a number of reasons why other cities are not pursuing aia and do not intend to pursue it based on this legislation passing. They find, you know, some folks find it costly. It's time intensive. And even for larger cities, the amount of time and capacity required to administer the program is significant. There is legal risk that other cities, you know, assess for themselves, and they also weigh this against other options that they have to promote affordable housing production that they deem easier. So we are we've been told by the league of cities that this legislative concept does not make other any other city in the state more likely to adopt inclusionary housing program. So, as I said earlier, we remain committed to working with senator pham on helping to develop some sort of. Evolution that we believe would not create undue exposure or liability for the city of Portland. We also have the results of our social housing study upcoming, and we would like to see those help inform our next calibration study. So to have the opportunity to ask ourselves as a city is, do we want to continue to incentivize the production of 60 and 80% ami units, or are there other types of ways that we would like to incentivize affordable housing options that we could bake into that analysis, and then could potentially help inform what future legislation looks like? And with that, we will take your questions.
113 Thank you. And folks, we're going to have questions of ph. And then when we're done with that, we will invite the invited testimony of michael to come after. So, councilor Dunphy.
114 Thank you. I'll start by saying. I think I'm closer to understanding the city's position at this moment. I've been a little challenged. I think I understand, and please help me walk through this. And I'm going to use wildly stupid numbers. And they're not real. But let's say an apartment building is being built and there's $20 million apartments, and they decide under the program, one of those will be affordable. And we're going to call that a $200,000 apartment. And in this circumstance, if this state law were in in action, the city would be obligated to fill the difference between if it had been $1 million apartment versus it being a $200,000 apartment. And we functionally have to make up that difference in a prescribed financial way. Is that sort of the the, the big chunk of it? Whereas right now we have a range where 80 to 120 is possible. And it sort of depends on the circumstances. Is that a big part of it that, like we know now is prescribed?
115 Very broadly speaking? I think you're correct. I mean, the you have I think you understand you've oversimplified the. Absolutely. What is the delta. Absolutely. Yes.
116 Wildly oversimplifying for this for my own cartoonish brain. Yes.
117 The way these q and a's will go is that I attempt to answer and then I spin around.
118 And you look at the the brilliant people sitting behind you.
119 Yeah. Oh, already I need adrian.
120 All right.
121 Great. Adrian.
122 Come on. Yeah.
123 For the record, adrian delgado, city attorney's office. I will also attempt to answer this question, starting out with I am not an economist. Nobody here at this table is an economist. But it would be great to hear one. So yes, the city would be required to pay the difference and net loss value over the term of the 99 year regulatory agreement. So it would be making that prediction over what would the if we're looking at rental, what would the loss and rental value be between an affordable unit and then the other market rate units over that time.
124 Does that take into consideration?
125 I mean, does that assume that the two units are built the same that like, and is that the experience that we have in the market right now? Because I've seen a couple of projects where, for lack of a better term, there's a poor door where there's the affordable units go in through a different entrance and they are built of a lower quality. Is that something we are tracking through our current program, or is there an expectation that someone would be the affordable unit is built the same as the not affordable unit?
126 That's correct. And hopefully the poor doors you have seen are not in this city. But this was okay. This program was designed to ensure that things like square footage and quality of building materials were not downgraded for the affordable apartments.
127 Gotcha. And so this gives us less flexibility in terms of the amount we have to compensate to the developer for the potential lost income over the 99 years that they are charging less, and it gives us an annual requirement for ongoing expenses for an analyzing our program rather than how we're currently doing it. That's sort of the two big buckets that like annual analysis and the prescriptive formula to make sure developers are whole sort.
128 Of the annual analysis.
129 I think an analysis is going to be required under lc5 every six years.
130 Oh six okay, okay. How much are we currently receiving as a city and the in lieu program. And how much are we annually maybe, and how much are we giving away in property tax abatements at this point?
131 I would have to get back to you with specific numbers. I can tell you it's relatively rare that we get fee in lieu. For the most part, the it's producing affordable units.
132 Okay. Yeah. That is all my questions for now. Thank you.
133 Councilor Morillo.
134 Thank you chair Avalos. And thank you guys so much for being here. You looked so sad when you came up here. It will all be okay. We will figure it out together. Like councilor Dunphy, I was also wrapping my head around this issue, and I'm, you know, it sounds like fb feels pretty strongly that the city should take a no position. I'm wondering if, since the council seems a little bit split on the issue, if a neutral position would suffice, or if you think this is like an existential threat to housing. And then I have a follow up question on that as well.
135 Yes, I would say we unfortunately feel unequivocally that we recommend to you that the position is to oppose.
136 Okay, I.
137 Appreciate sadness. Yeah.
138 I guess a follow up question I have is you gave us some background on the history of funded and unfunded inclusionary zoning and the workarounds that some of these developers do when we don't have funded or incentivized inclusionary zoning. So I guess my question is if economic or political conditions were to shift and the program is no longer funded, do you think it's preferable for us, as the city of Portland, to reduce the goals of the inclusionary zoning program, to balance the funding or leave the current requirements in place, but unfunded?
139 I think we it it is responsible for us to ensure that the program is is funded if we're going to require it. Yeah.
140 Okay.
141 That's helpful for me for now. I'll pause there.
142 Councilor. Ryan.
143 Yes. Thank you.
144 Thank you, chair Avalos, and I appreciate your candor. That was really helpful that you answered that question directly. So it makes me want to ask, what would it take to get your staff to be a yes on this bill?
145 Adrian would have to tell us it's a good idea. No, I mean, I really I think we believe that the way the program functions now is governed by the decision making that that you all put in place for us. And there's a there's a collaborative process as we go through these calibration studies to make sure we're doing it right. And that process includes, you know, public testimony from developers and from community members and from advocates. And so I would say, you know, the the the city is doing a good job of managing its inclusionary housing program, and we would be supportive of. You know, the development of legislation that maybe didn't add benefit to us, but, you know, helped create an environment in which other cities were more likely to to do it. But I think, you know, I think we currently have what we need to manage the program well. And this imposes criteria on us that that does not have a value add for the for the city of Portland.
146 Thank you.
147 Thank you. I think my colleagues have mostly asked what I wanted to ask. It also just sounds like a big part of this. An overarching part of this is like local control. I feel like I keep hearing that too. So maybe explain to me a little bit more about what that means for us. I mean, you started to say it in that last answer, but can you just expand a little more on that?
148 Sure. Well, an example is that there is a. There's sort of some menu of options of what an economic analysis can look like. So there is some flexibility, but also there is rigidity and that you have to sort of operate from that menu and again arrive at a different conclusion than we do currently. So I think that is, you know, that that is a diminishment of, of local control. It's it's an assumption that this set of criteria and this outcome is more correct than the one that that we are doing or that we might design for ourselves in the future.
149 Okay. Yeah. Please.
150 Chair, I would also just like to to offer one of our reoccurring concerns has been that the concept has not been vetted by an economist. We think that would be a good idea. And so I question the focus that not the focus, but the marginal loss in value is the measure is the correct and right measure that we should be using in a feasibility analysis. So I don't understand still why that is the metric that we are using. And I question based on the robust methodology that we currently use. Why is it that and perhaps not the inclusion of something else? What offer for your consideration?
151 Thank you for that. I'm not seeing other hands colleagues last call to ask some questions, and then we'll bring up our next panel.
152 Feel good.
153 Thank you all.
154 Okay. Thank you. Thank you for your time okay. And so lastly we're going to bring up michael anderson from sightline institute to offer us some more perspective from the community on on this bill.
155 Thank you so much, chair Avalos and members of the committee, michael anderson with sightline institute. I cannot speak for the senator's office. I have been working with her and other advocates to talk about this. And I know that you extended an invitation to sara from habitat Portland. She couldn't make it because she's in new york city learning about limited equity co-ops, which are, incidentally, one of the mixed income affordability options that this legislation would explicitly allow in the bill. But anyway, she sends her regrets.
156 My regrets for saying that earlier, I forgot.
157 No. No problem.
158 So thanks so much to the folks at fbe for the presentation today. It highlights that the current city program is balanced at the program level, and advocates for lc five fully agree on this. In fact, what the numbers from the city's 2023 study that was mentioned do show is that the city more than fully funds its rental program right now. So that means that the city is currently meeting the key requirement of lc five. And I also want to call your attention to a few issues of disagreement here first. And I think most importantly, it's not and has never been the intent of this legislation to do a project by project analysis, as described by director buonocore in the last presentation. Literally no one involved wants this. And we've said this many times. I fully agree with director buonocore about all the reasons this would be a terrible idea if fb thinks, or if the city attorney's office thinks that's what the current draft says, then that's a drafting error, and we urge the city to send some line edits that would resolve this. This is something that both advocates and the senator's office have asked for many times over the last year and a half. The intent of the bill is to require a programmatic analysis exactly like the one the city did in 2023, though it doesn't require a study nearly as fancy as the one the city commissioned in 2023. But the city would still have the option to do that. Again. It's not to create a project by project requirement, and if that is directly or indirectly the result of that, nobody wants it. Let's get rid of that. Second, the presentation also said that the bill opens the city still to unreasonable liability. I'm not a lawyer. As senator pham said, the bill now requires any appeal of the study to happen within seven days. It gives great deference to the city on how it can make all these decisions, and it says that a losing applicant has to pay the legal fees for both sides. Nothing can completely eliminate all liability when there's any requirement on anybody. But if that's not satisfactory, protecting the city's interests, I honestly, I don't know what could be. No one loves any part or loves no one loves every part of this bill. And that's exactly why it has such a broad range of supporters. Habitat, Portland, proud ground Oregon smart growth, the community lines attendants, the Portland metro realtors, Portland metro chamber in addition to sightline institute. I've actually spoken to multiple economists as well to inform this bill. The intent of this legislation is to make things slightly better for all parties, both inside and outside of Portland. Based on what I heard, I think that we and fb agree that portland's program already meets the key intended requirements of the bill. So if this is simply a matter of fixing any unintended drafting errors in the bill, I and many other advocates will be delighted. I wish I understood why it's taken so long to hear this specific claim after a year and a half, but I'm eager to try and facilitate that conversation as best I can.
159 Thank you michael. So now we have an opportunity to ask michael some questions and I'll kick us off. I am curious, you know, it sounds like the city's big concern is a potential financial concern of making developers whole. This keeps coming up. And so I just want to give you an opportunity to give your response to that concern.
160 To make developers whole on the project by project level.
161 So that so your answer is about it not being project by project.
162 So that's yeah.
163 That is not the intent. I completely agree with that. That would be a bad idea. The developers don't want that either, because they don't want to have to do the math project by project. They don't want the appeal risk. Yeah.
164 Okay.
165 Thank you. And then, you know, as you've said, that you believe that our program is balanced. You said so are there components from our program that you could see being folded in. And this is pretty broad. I guess I'm just asking you to respond to like are there things that you see from that we're doing that could be folded into the lc to make it more palatable for Portland?
166 The the lc is deliberately written for Portland program to fall as much as possible within the bounds of the state requirements. So we don't want to for the reasons discussed by llc, we don't want to put a requirement that every city has to do a study as fancy as Portland did. We just want to say cities should have the option to design their study how they want, but the math has to come out so that the cost and the balance, the benefits balance for the dude in connecticut is deciding whether to fund the building. Right. And the. The exception to that, if there is one, is on the the side of the condo side, the homeownership side of the program, the current program has never produced a below market condo. And since 2017, it has never been recalibrated since 2017. So this would require the city to do on the condo side, what it did on the rental side to run the numbers, to come up with a plan to make sure that the prototypical project has enough costs and benefits to balance itself, but not to put any obligation on the city to look down the numbers of every single project after that. So we think I worked with habitat to develop a proposal that we think would open a path for the city to do that by 2029, mostly, if not entirely by extending the sdc waiver past 2029 on these mixed income condo buildings, the. That is one of multiple options that this bill would open for complying on the homeownership side. But that's the one thing that the city is not doing every jot and tittle of right now that the bill, as intended anyway, would be trying to require.
167 Thank you. Michael, I'm going to go to councilor Dunphy.
168 Thank you. Michael, we've had this conversation in private. I'd like to have it in public a little bit. Why is this the tool? Why? Right now we have something like 1700 vacant units at 60%. And this really does peg this whole program at 60%. And according to the data I've seen, 60% of ami is roughly equivalent to a market rate apartment in my district. Why should we be caring about this program right now? Is this really where we should be putting our pressure in, or is this just a tool in the toolbox? Like how? I mean, selfishly, from the Portland perspective, we already have isaiah. Why do we why should we be caring about this if it's not necessarily delivering the deeply affordable units that we all sort of agree need to be delivered?
169 Well, you don't have the option under current law to simply require any level other than exactly 80% ami in your mandate. Portland has a more complicated system that it's designed on top of that, where we underfund the 80% and some of the city, but not all the city. For example, in east Portland, those 80% ami rents that the city would be required to subsidize are above market rate. And that has to be an option under the current program. So if somebody builds that, that is not a good use of tax dollars, in my personal opinion, for us to be required to subsidize. So that is one benefit that the city would have the it could target to a city program under lc5 could directly target 30%, 50%, 60%. It could. A range of incomes could be an option. None of that is allowed under current law as to whether inclusionary housing is a good idea in general. Like we don't want to presume that it's a good idea for every city, right? That's the whole point. That's the only political path for something like this anyway. So we're certainly not going to say you have to have inclusionary housing in every town, but we want to make sure that when cities do do it, it is effective. Portland has had better and worse versions of inclusionary housing over the years, and we want to learn from portland's successes. The current program on the rental side, I think has great promise. It seems to be working as well as can be expected. And the thing that inclusionary housing does, that no other way of subsidizing housing does, is it? It automatically and cost effectively steers below market homes into high demand areas. That doesn't require a bond vote. It doesn't require action other than giving that building a tax break for the first ten years of its life, the. We can debate the philosophy of that, but the outcomes, at least I think are pretty attractive.
170 That makes sense to me. Thank you.
171 Councilor Ryan.
172 Thank you.
173 Thank you, chair Avalos. Good to see you. Michael. Your work on the 2223 inclusionary housing recalibration was very impressive. Thank you for remaining in this work. It's a fascinating day to see so many different people who are involved in this sector having some different opinions on this issue. So I just want to cut to the chase on a couple of things. How could the condo provision in this bill promote new condo home ownership in Portland?
174 I think that there are many reasons that we haven't had a wave of condo production since 2007 or so. This is one of a bunch of problems that have been solved. I think we took a big crack at trying to solve some more of them in the legislature last year, when there were some changes to condo defect liability law, if that, and other work succeeds in opening a window for new condo production, I can imagine. I know sarah from habitat has spoken specifically about how she doesn't want to miss the opportunity to get the site, the montgomery park, albina lloyd, all these potential redevelopment opportunities. If we just got one building of condos that penciled in there, it would be really nice and we could have a crafted sort of set of different price points within those buildings that it would make financial sense for a private developer to finance. So the, the, the great downside of inclusionary zoning is that it only works if people in the private sector actually decide to do it right, and there's no way we can force somebody to you can lead a horse to water. You can't make them drink. There's no way that we can force somebody to spend their money on something they don't want to. The only thing we can do as a city is we design a program, is to say we're doing our best to hold this program harmless, to say we are going to be paying for the cost of it. And the happy news. The thing that personally persuaded me that this is worth putting money into is that it's actually pretty cost effective to do it. It is pretty good way on a unit by unit basis to for the public to create housing in these high demand areas.
175 The other question is thank you. Is do you think this state bill would help level the development donut around Portland if other jurisdictions fund an inclusionary zoning program?
176 I think that the. So portland's program on the rental side is, I think pretty productive. We don't have a ton of investment flowing in. But during the 2017 to 23 period, it was just under half of all projects were in that 12 to 19 unit range and projects of 12 or more, which was double the previous rate. And since the reforms in 2024, since the city fully funded its program in more of those neighborhoods, that's returned to just under a quarter of buildings, which is exactly the rate it was prior to the program. So that's the best evidence that I think we have to show that the current program is working. And to the extent that we have a development donut, it's not is programs. It's not the program's fault. If in the future, a lake oswego wanted to respond to state mandates and say, you say you have to allow a bunch of apartment buildings, but we're going to put every requirement we can find on them to make sure that they don't get built. And I don't want to say that lake oswego would do that today, but they could in the future. There's nothing in statute preventing that from happening. And I think that that's something that motivates the senator, from what I understand is that as we are pursuing state level reforms that require every city to carry its share of housing growth, that we should be not only ensuring that cities are not using this tool in bad faith as Portland is not, but also to ensure that we can get mixed income developments in those cities.
177 Thank you.
178 I think I am struck by this interesting thing about you all are saying that it's not project by based and that the city is saying it is. Help me unpack that.
179 Yeah.
180 And I would be happy to have some back and forth here or some other place about that. One thing I heard, I think, from director brokaw, was that it's not a direct, but an indirect requirement that there's some language in the bill that opens city to liability through the back door. If it doesn't turn out to be in balance. I we have done our best. We have worked with the professional legislative counsel at the state to draft it. So that does not happen. But it's possible that he made a mistake and we can fix that. So I guess I want to make sure that that's not. The technical hurdle that tanks this whole thing. Because if that is truly the main area of concern, we can definitely, in my view, find a way to address that.
181 Thank you. Counselor Morillo are you.
182 Know, you asked my question.
183 Okay. Are you back in the queue, counselor Ryan.
184 Not at the moment.
185 Okay. Colleagues, further questions, thoughts? Reflections.
186 Yeah, I.
187 Think mike was trying to get at I think you got there with your example, but it seems like there's some merit in evening the playing field beyond Portland. And having the state provide some guidelines and some codes. But I want to put words in your mouth.
188 I think I had this conversation with the staff for a year ago, when we were talking about the last version of this bill, and I said, there are a lot of cities in Oregon that don't want more housing. Portland is an exception. We have an unusually pro-housing politics on both sides of your aisle, and I'm glad about that. But it's not the case that every city will be motivated to have a good faith version of inclusionary zoning.
189 Councilor Dunphy.
190 Yeah, I just want to say out loud that I. I really appreciate where you and councilor Pham are trying to get this the state to go and try to get this program to be rightsized. I just have some really deep concerns about the program. Broadly. I fully agree that it is a an opportunity for us to continually get units dispersed throughout the neighborhoods in ways that the city never would if we were the issuer of the bonds to go out and build these things, and that if we're going to do it, it's going to cost hundreds of millions of dollars. It's going to take 6 to 10 years before we can see a single door open. And this keeps us in the affordability game. I just worry that we are putting I don't know, we we're we're 20 years into the ten year plan to end homelessness, right. Housing affordability is worse than it's ever been and I don't. And we have a ton of vacancies at this price point already. And I don't see us as a city, even if we had the additional power of a city, of a statewide bill choosing to invest and say, we're going to buy all these units down to 30%, because that comes with a whole other slew of problems. I just I worry that in a, in a moment of crisis, as a community and with a zero sum budget that we have, I just don't know that this is the juice worth squeezing. And I and I just I continue to worry about that broadly. I don't have a question. I just wanted to say that that we are putting a lot of energy into this conversation in the city and the conversation between the city, between Portland and Salem. And I just don't know that this is the right place for us to be if we truly are in a moment of emergency, if we are in a housing emergency, this isn't I mean, it's the same with stc waivers and, you know, permit reform. We're never going to solve homelessness by making public works permits easier. Like that's not it. But so I just I that is a nag in the back of my brain and has been for the last year that like this sounds like a really great program to debate when we aren't seeing 16,000 people homeless right now. And so I'm struggling with that, and I'm also struggling to. I have the highest respect for city employees and their analysis of the work. And I fully believe what you have said, and I'm having a hard time saying no to the most bizarre coalition of supporters that I've ever seen. The most cross the board coalition in ways that also make me feel like I'm missing something. So I'm struggling with a lot of different feelings up here. So that's all I'll say for now.
191 If you'd permit me to offer a comment on the first part, I don't think that lqt5. Prohibits any city, including Portland, from like getting rid of or suspending inclusionary zoning if that was what you wanted to do. I don't think you should do that. I will happily debate you on that. But. And I expect to be there was mentioned in the county. I expect to be at the personally at the county in 2027 saying, yes, this is a great program and a great use of your ten year tax abatement allowance. Let's keep this funded. If the program continues to exist. Right. And I'll be happily saying that whatever the city does as well. But the. Yeah, but but like I said, this is not written in a way that would constrain the city. And so if that's your concern, I guess I would urge you that lqt5 is compatible with that concern.
192 Councilor.
193 Ryan.
194 Yeah. Thank you. Chair. Michael, you're a thoughtful bridge builder. And so when I was in the hot seat for a while in this space, I always recall you being somebody I could go to to get reflections that would help me bridge the different dialogs I was having with, say, developers and with housing activists and providers. So when I saw that that coalition that usually doesn't come together came together to support this bill, why do you think they came together to support this bill? Because many of them have.
195 Yeah, I think that. Every single one was holding their nose to some extent. Right. But every single one decided that there was something that was a little bit better than the status quo for them. So the I can't speak for all of our partners, but I can or the coalition members. But. I think. The common people are coming in for different reasons. We disagree on a bunch of things, and I'm glad that we've been able to put aside the things we disagree about. To say this is a stepwise improvement on this. One thing that I guess I fear that. Isn't a high priority for anybody else to solve.
196 Thank you. That kind of sounded like a summary of the recalibration study of 2023. I appreciate it.
197 Okay, colleagues, any further comments or questions? Well, it sounds like we have more work to do in continuing to explore this and try to get to the root of it, but I think what you're hearing, or at least what I'm hearing, is that we want to be partners. We want to figure it out. Obviously, we have to, you know, be responsive to what the city is telling us and trying to take that into account, as well as seeing that broad coalition. And yeah, it gives us pause, right. Of like, well, okay, well, if everyone else is on board, why are we not? So I think that's what we're grappling with as leaders up here. But we'll continue to work with government relations with our staff to unpack the problems. And you have my commitment to continue trying to figuring out how we can get to. Yes, because I, I hear that and I understand that. And I don't think that our staff don't want that either necessarily. But obviously they have to, you know, give us what their perspective is and we have to take that seriously. But it's definitely my intention to get us closer to that, because I think as the coalition shows and as we all know, we all agree that we need more housing. We all agree that there is an urgent need to, like, get on the same page about it. And this really feels like one of those like important issues that we need to figure out. So you have my commitment to keep working towards that.
198 Thank you so much. And thanks to the staff as well.
199 Thank you. All right. Well that is it for today, folks. Our next meeting is January 27th and we have the affordable housing opportunity zones project that day. Very exciting. So we'll see you there. I will close it out at 151.
200 Truly astounding. The rain.
201 Councilor Ryan, do you still intend to take advice from Ryan anderson?