The Mulnomah County Commission today gave the go ahead to a city program that should increase the number of affordable housing units developed in Portland by about 200 per year.

The program, called the Multiple-Unit Limited Tax Exemption (MULTE), is an existing program that is meant to encourage developers to include affordable units in new construction—which they are not required to do under current law—by allowing them a 10-year property tax exemption in exchange for reserving 20 percent of the units at 80 percent or below of area median family income.

Though the MULTE program mostly affects the city of Portland, the county commission has the final say because the lost tax revenue affects special districts, which are under county jurisdiction. City Council on Aug. 5 approved the changes.

In 2010, amid a recession, the city decided to cap the amount of foregone revenue lost via those tax exemptions at $1 million. This year, with tax revenue up, the city decided to increase the amount of foregone revenue to $3 million, allowing more developers to participate in the program.

In addition to the cap increase, the new rules around the MUTLE program increase tenant protections and provides more opportunities for minority participation.

The MULTE program was a competitive process for developers, meaning there were only a couple times a year they could apply. The new guidelines remove this process, hopefully encouraging more developers to participate.

Commissioner Judy Shiprack agreed encouraging developers to include affordable units is a good thing, but says it's too bad the state has so few tools available to produce more affordable housing.

"We are paying a high price to these developers," she says. "They're not required to participate and yet they are extorting a tremendous benefit for a relatively meager advantage that the public gets from this $3 million."