The Portland City Council agreed to one final concession Wednesday to affordable housing advocates, clearing the way to grant final approval to Mayor Charlie Hales’ plan to reshape the city’s urban renewal program.

The council unanimously agreed to a resolution committing the city to break ground on an affordable housing project in the South Waterfront area by 2017 and to acquire a second affordable housing site in that area within the next eight years. Those two moves will help the city come closer to fulfilling a longstanding commitment to create ample affordable housing opportunities as it promotes redevelopment of the South Waterfront area. So far, the area along the river is dominated by mid-rise residential towers for affluent people, and housing advocates have taken the city to task for failing to meet its own targets there.

City Commissioner Nick Fish pushed for the new concessions, which require the city to build at least 200 units for people earning less than 60 percent of the city’s median income at 2095 S.W. River Parkway. The city also is negotiating with the Zidell family to acquire another site for low-income apartments in the South Waterfront area. The family owns some 30 acres north and south of the Ross Island Bridge.

“I guarantee you, we have the sites to do this,” Fish said. “We will acquire a second piece of dirt.”

The city will have $47 million in urban renewal funds, enough to build at least 270 affordable housing units in the South Waterfront area and acquire the second site, Fish said.

Hales’ plan calls for changes to six urban renewal areas, including expanding the North Macadam Urban Renewal Area that covers the South Waterfront area. Fish took advantage of his position as a swing vote on that part of the plan to insist on more affordable housing there.

But that didn’t quite satisfy a group of affordable housing advocates, including several former city employees, who said the city was forsaking its past commitments to create a mixed-income community along the South Waterfront.

“Unfortunately, the resolution doesn’t go far enough,” said Debbie Aiona, action chair of the League of Women Voters of Portland. Aiona and others pressed the council to delay approving Hales’ urban renewal redo until the affordable housing sites were fully secured.

Fish noted that the advocates’ efforts had succeeded in procuring more urban renewal funds — now estimated at $47 million — to subsidize low-income housing in the area.

“One year ago, we had no path forward and we had no money,” he said.

Fish evoked the memory of longtime low-income housing advocate Gretchen Kafoury, the former city commissioner, county commissioner and state lawmaker who recently passed away. Kafoury’s last public appearance came in recent testimony before the Portland City Council on the South Waterfront housing issue.

“As Gretchen would say, that’s not enough,” Fish said, “but it’s a hell of a start.”

For Hales, Wednesday’s vote was more of a finish than a start. It paved the way for final approval of his sweeping reorganization of urban renewal, which he called an effort to “right size” the program. For too long, Hales said, urban renewal was used as an “ATM” by the city, keeping property off the tax rolls to fund development projects. Indeed, the city was butting up against a state cap on how much land can be kept off the tax rolls.

His plan closes down fledgling urban renewal areas near Portland State University and the industrial waterfront, putting that property fully back on the tax rolls. It shrinks the boundaries of two highly successful urban renewal areas in the Pearl District and Airport Way, putting much of that property back on the tax rolls. And it expands urban renewal in the central eastside and South Waterfront, largely to take advantage of new development opportunities along the new Orange MAX line and near the Knight Cancer Research Center. Some of the land that was taken off the rolls near PSU was added to the North Macadam Urban Renewal Area.

Commissioner Amanda Fritz opposed expanding the central eastside district, but that was the lone dissenting vote on Wednesday.

Hales reorganization initiative also shifts urban renewal money from the Pearl District to Old Town/Chinatown for office, retail and middle-income housing projects.

The endeavor figures to be one of Hales’ signature achievements in his first term as mayor. It will shift an estimated $197 million in property taxes to the city, Oregon schools and other local governments in the next few decades, instead of spending that money on urban renewal. Next year, $6 million will go back to those taxing districts.

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