City-convened group cries foul on Portland housing data accuracy

By Jonathan Bach | Portland Business Journal on 12/15/22

One of the most crucial pieces of information used to judge Portland’s controversial inclusionary housing policy is the number of lower-income people it gets into market-rate buildings.

The policy, with few workarounds, requires developers to find room for affordable apartments inside their market-rate buildings if they’re of a certain size.

The Portland Housing Bureau in November put out a presentation for its new IH Calibration Study Work Group claiming an estimated 891 people were living in IH units, with 1,250 people lined up for IH units under construction.

As work group members would soon find out, the actual number of people in private developments — the main point of the program — was hundreds of people fewer.

In reality, 587 people were estimated to live in the private market projects that are open, with 576 going into those under construction, according to a copy of revised PHB data obtained by the Business Journal.

Group members, whose backgrounds cut across research, construction and development, harbored concerns that the original numbers were faulty. Trouble was, PHB combined private and affordable projects when showing how many people IH was helping.

That doesn’t square with one of inclusionary housing’s tenets: to tie the production of affordable units to market-rate developments.

Michael Andersen, a Sightline Institute researcher and member of the work group, said there was “a big, united front of pushback against some of the ways the data was being captured and described in the first meeting” on Nov. 3.

To assess the program, it’s important to only focus on privately financed, mixed-income buildings from market-rate developers who comply with the policy, Andersen said.

Group members raised the issue with Commissioner Dan Ryan, who oversees PHB, after their first meeting.

“We appreciate that the Portland Housing Bureau has committed to disaggregating program data by project owner and type by our second workgroup meeting,” work group members wrote in a Nov. 20 letter to Ryan.

“Specifically, to understand whether the policy is meeting its intended goals, we need to understand how many IH units are contained within projects that are privately owned and otherwise market-rate developments,” they told Ryan.

“It is also critical to understand whether the program impacted the number or affordability of units in 100% affordable projects funded by either city, state or federal funding that are considered IH projects.”

The numbers they got back from PHB confirmed far fewer people were living inside IH units within actual private developments.

Andersen said, “In the second work session (in December), the Housing Bureau staff had redone their thing, and for the first time in four years, we’re talking about those numbers and sharing those numbers and grappling with what they show, which is not a clear-cut picture, one way or the other.”

Echoing other critics, Paul Del Vecchio, the Ethos Development president who serves on the work group, acknowledged his preconceived notion that the policy is clogging up supply because it’s stopping projects from penciling out.

“If a project would have been 100% affordable anyway, e.g. a (Low-Income Housing Tax Credit) project, or a project built with nonprofit money, or some combination, it really doesn’t matter that there’s inclusionary housing in it, because that’s not doing anything to provide affordable housing,” he said.

“We asked them to strip that out, so there’s a sort of significant reduction in perceived efficacy as a result,” Del Vecchio said.

Andersen isn’t ready to write the entire policy off as a failure, though. Some parts are working, and others aren’t effective enough, he said.

“There have been a lot of people who’ve said, this program needs to be killed with fire, and there are other people who’ve said, this program is perfect (and) needs to be defended at all costs, and I am of neither of those opinions,” Andersen said.

Update: The Portland Housing Bureau responded after deadline to questions the Business Journal had submitted. Here’s how a PHB spokesperson explained its process:

“PHB tracks all projects subject to Inclusionary Housing, which includes any building in Portland adding 20 or more new units, since February 1, 2017. This includes all buildings, regardless of the funding source. Even regulated affordable housing projects are required to meet all relevant land-use/zoning requirements and must include and differentiate IH units. The overall IH counts are a reflection of those obligations. That said, we have always tracked the private market and subsidized units both ways: all together as well as disaggregated/separately.

“When reporting out on IH Program outcomes, PHB has always separated out any projects receiving City gap-financing, such as Metro Bond funding. These counts have also been part of the materials provided to our Portland Housing Advisory Commission for years. However, when projects come through permitting that are not funded by PHB, staff is unaware of the funding sources being used to finance them. Recently, PHB cross-referenced the IH lists with any projects receiving financing through Oregon Housing and Community Services to further disaggregate the data between private market projects and publicly subsidized projects. We reported this information out to the workgroup members of the IH Study.

“Moving forward, our Development Incentives Team will begin asking developers to note any public funding sources in their permit application, in order to formalize tracking and reporting of those distinct data sets.”

  1. Work group members expressed concerns to Commissioner Dan Ryan, who oversees the Portland Housing Bureau. (Jonathan Bach)