Should people who qualify for subsidized housing get to have home offices? And other odd questions.

On Wednesday, the Portland city auditor's office released an investigation of Portland's inclusionary housing program, the affordability mandate that applies to new buildings of 20 or more homes.

The audit makes some good arguments and some confusing arguments. It found one fairly glaring problem in the program: a two-year backlog in the city's work to check that landlords and tenants are in compliance. Then, to make things more confusing, The Oregonian decided to make a seemingly scandalous headline of something the auditors hadn't even recommended changing---the fact that the program has covered part of its own administrative costs using the relative trickle of money it collected directly.

Because Sightline has a long history of caring deeply about inclusionary zoning and wanting Cascadian governments to get it right, I decided to dedicate a throwback Thursday to a bloggy point by point response to some findings and recommendations of this audit.

I'm going to try to minimize technical language, but things may still get a little obscure. In classic blogger fashion, I'd be happy to talk more in the comments.

Okay, without further ado:

"Improve Program goals so they are specific to the Program, attainable based on who the Program is designed to serve, and measurable."

Sightline's take: yep.

Portland's inclusionary housing program ("IH") was put together in a hurry, in an environment of justifiable urgency that verged on panic. In 2014 and 2015, a construction collapse followed quickly by a migration boom had sent Portland rents and displacement soaring at the fastest rates in many years. In November 2016---the same day they funded the city's first local affordable housing bond---voters would take matters into their own hands by putting tenant advocate Chloe Eudaly, a thoughtful bookstore owner who barely campaigned but happened to be really upset about rising rents and really good at Facebook, on the incoming city council.

In the months leading up to that transfer of power, inclusionary housing, re-legalized by the state legislature one year prior, was Something the City Could Do. The unfortunate result of this enthusiasm was that the city essentially started with a set of desired program specs and retroactively filled in a rationale for them, without ever clearly defining the program's goals.

Yesterday, the auditors found that those original goals "were not effective performance measurement tools and did not accurately convey the Program's purpose."

It's a good point. Better defining success was one of our four recommendations last year for improving the program. New program language (approved this year, after the research for yesterday's audit had already been conducted) is a modest improvement, but the key language ("support the production of units") is still too vague to be a very useful test of whether or not the program is working as intended.

"Fees are intended to fund affordable housing development and preservation, but according to the Bureau, as of June 2023, this had not yet happened. Instead, the fees have gone solely towards Program operating costs."

Sightline's take: More transparency here would be good, but the existence of administrative costs isn't a scandal.

One of the so-called "sideboards" placed on local inclusionary housing programs by Oregon law is that they must offer a "fee-in-lieu option." Developers must have an option to pay cash to the city as an alternative to providing affordable housing themselves. The state doesn't restrict how cities can use this cash, and until this year the city didn't formally promise to use it in any specific way, though it was understood to be intended for affordable housing programs.

Instead, the city apparently used this money to fund its affordable housing program ... in other words, it used the trickle of cash revenue generated by inclusionary housing to cover the exp...