The City Council approved a study of how to increase affordable housing in the urban core Wednesday morning.

The study was proposed by Commissioner Dan Saltzman, who is in charge of the Portland Housing Bureau. It directs the Portland Housing Bureau to review and assess the city's policies for encouraging affordable housing in the urban core, and to return to the council with recommendations for new incentives.

One goal is to determine whether market-based incentives could increase the amount of housing available to both low and moderate income families.

"We are at a tipping point. Rents increased 11 percent last year but incomes remained flat," Saltzman said during the council discussion on the proposed study.

Commissioner Nike Fish, who was in charge of the housing bureau until Mayor Charlie Hales transferred it to Saltzman last year, praised Saltzman for proposing the study.

"You are asking useful questions about whether market-based systems can get us additional resources," Fish told Saltzman.

According to the study request submitted by Saltzman, the city is expecting the creation of 30,000 new households in the urban core — formally called the Central City — by 2035. But 33 percent of those households are expected to pay more than 30 percent of their income for housing, far more than the previous forecast of between 17 and 23 percent.

The resolution also says that although the city already offers a number of incentives to developers for the construction of affordable housing, few are taking advantage of them. State law currently prohibits cities from requiring that affordable housing be included in new residential or mixed use developments.

City policies currently prioritize public resources for the construction of low income housing over housing for those earning high incomes —including moderate incomes, sometimes referred to as working or middle class. Saltzman has previously said the council needs to consider subsidizing a broader range of housing.

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