A panel of housing researchers and developers told the Senate Interim Committee that inclusionary zoning can produce mixed‑income housing only when the mandate is aligned with predictable and sufficient incentives.

Michael Anderson of the Sightline Institute summarized ten years of Portland’s experience and research showing an underfunded mandate reduced permitting and produced a shortfall of below‑market homes. "If you add cost...and if you require some of the homes to be provided below market rent...the building won't be built," Anderson said, describing developers deliberately building under the 20‑unit threshold to avoid the requirement during a period when the mandate was not fully funded.

Anderson said Portland’s 2024 recalibration — which used a 10‑year tax abatement to better offset lost rents and prioritized 60% AMI units in higher‑priced neighborhoods — resulted in multiple projects opting into the program within months and an uptick in pipeline participation. He and other panelists underscored two lessons: mandates should be optional for jurisdictions, and where they are used, they require funding or incentives calibrated to offset costs.

Developer and Oregon Smart Growth president Sarah Zahn described practical barriers for financing. She highlighted a misalignment in Portland where a 10‑year tax exemption was exchanged for a 99‑year affordability obligation and argued such mismatches create underwriting uncertainty that can scuttle projects. Zahn urged flexibility such as a usable fee‑in‑lieu calibrated to market conditions so developers and lenders can underwrite projects.

Sarah Radcliffe of Habitat for Humanity Portland Region focused on homeownership. She said Portland’s inclusionary rules produced few affordable condos because subsidy mechanisms for ownership were not present; she noted HB 3746 reformed condo defect liability and might enable more condo production, but stressed inclusionary rules must be designed to let affordable homeownership be feasible.

Panelists suggested state guidance could help jurisdictions adopt locally tailored programs with predictable incentives, routine check‑ins to recalibrate funding, and options (on‑site units or fee‑in‑lieu) that fit local markets. The committee indicated interest in drafting a committee bill to explore these reforms.