Housing & Economic Development Committee

Housing & Economic MEMBERS Development Committee Meeting Councilor Pious Ali, Chair Tuesday, June 2, 2026 at 5:30 PM Councilor Regina Phillips Councilor Kate Sykes Councilor Sarah Michniewicz To submit written public comment on an agenda item, email edd@portlandmaine.gov. Submissions must be received by 12:00 pm the day before the Housing & Economic Development meeting to guarantee their inclusion in the agenda packet. All submissions must include the commenter's name and legal address. To help ensure your comment is submitted for the correct item, please include the name of the agenda item (see below). REMOTE ACCESS INFORMATION The Housing & Economic Development Committee will conduct this meeting remotely via Zoom pursuant to the Remote Meeting Policy adopted by the Portland City Council. Allow your computer to install the free Zoom app to get the best meeting experience. If you are not able to attend, a recording will be available in the Agenda Center following the meeting. For public comment via Zoom, you will need to use the "raise your hand" feature. To raise your hand via the telephone, please hit *9. You will be unmuted by the host when it is time for public comment. https://portlandmaine-gov.zoom.us/j/82957928649?pwd=EFxB1PkuKzKuok8UgsabGEc8qWnFQu.1 1. Review and vote to approve meeting Minutes from the April 21, 2026, meeting. a. See attached draft Minutes for review and approval Discussion: Community Feedback re: Preferred Use(s) for Midtown properties - Dena 2. Libner At the request of the City Council, staff launched a community engagement process to solicit feedback on the community’s preferred uses for the Midtown properties. At this meeting, findings from that process will be presented, after which the Committee may provide guidance to The Boulos Company regarding the development of marketing materials for the parcels. a. See attached Memo to HEDC Committee Review and vote on a recommendation to the City Council for Amendment to Hearts 3. of Pine Lease Agreement at Fitzpatrick Stadium - Ethan Hipple The Committee will consider a recommendation to amend the City’s agreement with the Portland Hearts of Pine, allowing a new women’s team additional access to Fitzpatrick Stadium for future seasons. a. See attached Memo to HEDC Committee b. Hearts of Pine Amended Agreement 1 Page 1  Communication: Communication from the Planning and Urban Development 4. Department regarding the final Inclusionary Zoning Study Report - Kevin Kraft and Charles Buki, CZB, LLC The Committee will be presented with findings from a recently completed study analyzing the impact of the City’s Inclusionary Zoning Ordinance. a. See attached Memo to HEDC Committee b. Inclusionary Zoning Study c. 2026 City Council Goals d. 2026 HEDC Workplan 5. Discussion: Proposed Amendment(s) to Inclusionary Zoning Ordinance - Chair Ali The Committee will discuss IZ amendments proposed by Councilor Grant; no action will be taken at this meeting so no public comment will be taken. At the June 30, 2026 HEDC meeting, the Committee is expected to consider recommending that staff submit proposed amendments to the Planning Board for consideration. Public comment will be taken at that June 30, 2026 meeting. a. See attached Memo from Councilor Grant to HEDC Committee b. Article 3 Inclusionary Zoning Grant Amendment c. Article 17 Inclusionary Zoning Grant Amendment d. See attached Memo from Councilor Sykes to HEDC Communication: Portland Housing Authority Overview and Development Pipeline - 6. Leah Bruns, Executive Director at PHA The Portland Housing Authority (PHA) will present an organizational overview, details on current and recently finished projects, and the hurdles faced in expanding the supply of affordable housing. No action is requested of the Committee. a. See attached Presentation 7. Communication: Update from the Social Housing Task Force - Councilor Sykes The Committee will receive an update on the progress of the Social Housing Task Force from Councilor Sykes, Task Force Co-Chair. a. See attached Interim Report of the Social Housing Task Force Next Meeting Date: June 30, 2026 2 Page 2  MINUTES HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE Date: April 21, 2026 at 5:30 pm NOTE: This meeting was held via Zoom and can be viewed at this link: https://portlandme.portal.civicclerk.com/event/8212/files/agenda/19761 These minutes provide a record of those in attendance, general discussions that took place and motions made. Attendance: Council and Committee Members: Councilor Pious Ali, Chair, and members Councilors Regina Phillips, Sarah Michniewicz, Kate Sykes and Mayor Mark Dion. Staff: Dena Libner, Assistant City Manager, Greg Jordan, Assistant City Manager, Michael Goldman, Corporation Counsel, Jessica Quattropani, Permitting & Inspections Director, Kevin Kraft, Planning Director, Ethan Hipple, Parks, Recreation and Facilities Director, Mary Davis, Housing and Community Development Division Director, Heidi McCarthy, Housing Program Manager, Lori Paulette, Principal Administrative Officer, Zach Powell, Senior Planner, Rob Kierstead, Director of Public Buildings 1. Review and vote to approve meeting Minutes from the March 31, 2026, meeting. Motion to approve: Councilor Sykes Second: Councilor Phillips Approved 4-0 2. Communication: Quarter 1 (1/1/2026-3/31/2026) Rent Control Report - Jessica Quattropani Director Quattropani gave a presentation on the Rent Control Quarter 1 Report. Councilor Sykes expressed appreciation for the report and asked how the tenant postcards were funded. Dir. Quattropani noted that it is in the budget and paid through long-term rental fees. Councilor Sykes also asked about the number of registered units as it relates to short-term rentals. There are currently 291 short-term rentals allowed based on the number of long-term rentals registered. 3. Discussion: Staff Presentation of the 2025 Annual Housing Report - Kevin Kraft 1 Page 3  Director Kraft provided an introduction and Zach Powell provided a brief presentation on the Planning section of the Housing Report. Heidi McCarthy provided a brief presentation on the Housing section of the Housing Report. Councilor Sykes asked for more detail on the number of units approved, completed, and monitored with a specific breakout of the number of Inclusionary Zoning (IZ) Units. Councilor Michniewicz asked about tracking for IZ units related to 89 Elm and the Reveler Master Development Plan (MDP). Dir. Kraft explained that staff detailed the expectations for the developer during the MDP approval process. 4. Discussion: Submitting Census Tract 6 for Potential Opportunity Zone Nomination by Governor Mills - Dena Libner Ms. Libner introduced the item noting that staff recommended to the Mayor that Census Tract 6 be shared with the Maine Department of Economic and Community Development (MDECD) to help inform the Governor to use that as a nominee to the Federal Government for the benefits described in her Memo included in the Agenda packet. For clarification, the City Council does not have a decision-making role. The Governor ultimately makes the decision on nominations to the Federal Government. After discussion and clarifying questions from the Committee, there was consensus not to recommend this to the Governor as there may be impacts/displacement to low-income communities and businesses. It was noted that reporting on these census tracts is not robust and tracked well. They needed more of an understanding how it may or may not benefit the neighborhood. The Committee discussed process for this, and Mayor Dion offered to call the State and let them know that the City is not interested in pursuing this at this time. He noted that all four Committee members feel this way as does he – so five members of the City Council agree on this. It was agreed that the call by the Mayor would be sufficient to let the State know, and perhaps a future Resolution could be on a Council Agenda. 5. Discussion: Concept Proposal -East End Beach Bath House Public-Private Partnership - Dena Libner/Ethan Hipple Assistant City Manager Libner introduced the topic and Ethan Hipple gave a presentation on the concept. 2 Page 4  Councilor Michniewicz appreciates the improvement and asked about matrix for RFP. Dir. Hipple stated that food and beverage, fitness, and recreation activities could be categories. Councilor Michniewicz also asked about site specific issues related to parking and traffic. Councilor Phillips asked for more specific information about location. Dir. Hipple clarified that it is near the lowermost parking lot near East End Beach. Assistant City Manager Libner stated that the next step would be to bring back the drafted RFP for committee feedback. Councilor Ali asked whether this model could work for the Deering Oaks castle. Dir. Hipple stated that some restaurants have activated that space in the past. Councilor Sykes is concerned about public access but excited to explore it. 6. Discussion: Review of draft Request for Proposals for James A. Banks, Sr., Exposition Building - Dena Libner/Ethan Hipple Assistant City Manager Libner gave an overview of the RFP process and public engagement, and requested committee feedback. Dir. Hipple introduced Rob Kierstead to answer any questions and provided additional context. Councilor Ali added that emails were received regarding this RFP. Councilor Phillips asked whether this building could be on the Historic registry. Dir. Hipple stated that it has not been designated yet, but it is an historic building. Councilor Phillips asked about keeping the building versus creating a new building but did not think the RFP clearly outlined both possibilities. Assistant City Manager Libner stated that it would take about $30 million to improve the building. Mayor Dion stated information from Portland Landmarks which makes a case for historic preservation. Councilor Sykes stated that cost sharing with tenants in the building should be considered. Councilor Michniewicz reiterated consideration of cost sharing and preservation if possible. It may be helpful to look at it in the context of city assets more broadly. Assistant City Manager Libner stated that staff would plan to pursue cost sharing depending on the path forward, and that adaptive reuse would be 3 Page 5  more clearly stated in the RFP. Parks, Recreation and Facilities is about to take on an assessment of city assets. An RFP has closed and applicants are being considered for that work. Dir. Hipple gave an overview of the work of Rob Kierstead’s department and staff. Councilor Phillips requested additional public input about the building in addition to what is already in the RFP. Councilor Phillips also questioned whether the evaluation committee could include more than City staff, and also noted that the RFP did not specifically call for preserving any of the history of the building and would like to know how this would happen. Councilor Michniewicz noted that the RFP is heavily focused on replacement and asked for more detailed information with various tiers of repair. Asst. City Manager Libner stated that the $30 million assessment received is the baseline repairs estimate and clarified that additional design work would be undertaken later. The public process would collect additional information to inform an RFP for design. At the end of the current RFP process, the council will be presented with the options and potential costs for each. Councilor Ali shared an idea for a space for senior citizens. 7. Public Comment: Review and Recommendations to the City Council for the FY 2027 Agreement and Development Plan for the Portland Tourism Development District- Mary Davis Ms. Libner introduced the item noting that this would renew the Portland Tourism Development District for FY2027. The District includes hotels with 40 or more rooms and associated assessments on each based on hotel class. The assessments are received and administered by the City with 90% of the funds going to Visit Portland, and 10% of the funds to the City for administering the program. The terms of the Agreement and Development Plan have not changed, and staff is recommending that the Committee vote to recommend to the City Council approval for FY2027. Ms. Libner noted that Lynn Tillotson, Executive Director of Visit Portland, is here today for a brief presentation and to answer any questions. Ms. Tillotson thanked all and noted that a full Annual Report for FY2026 will be coming out soon. She noted that all Board meeting Minutes are on the website and then shared a marketing video, followed by highlights of their work. This work included an expanded leisure campaign, sports and weddings outreach, winter destination outreach, and marketing at the Jetport. This work will continue, as well as workforce development work with other community organization, including Portland Adult Ed. 4 Page 6  Councilor Sykes appreciated the presentation, as well as workforce development issues and inquired about having on VP’s website public facing worksites to give links to services the workforce could use as the tourism industry uses those frontline workers. Ms. Tillotson appreciated that concern for this workforce and VP is in the process of buildout of the website for that, partnering the Maine Tourism Association, Hospitality Maine, and the Portland Chamber so as not to duplicate efforts. Councilor Phillips also thanked Ms. Tillotson for the presentation and highlights, and questioned if she worked with the City’s Office of Economic Opportunity, and Ms. Tillotson said that she has not but will contact Melissa Hue. Councilor Michniewicz thanked VP and looked forward with VP working with organizations, including Portland Adult Ed, for workforce development. Seeing no further comments/discussion, Chair Councilor Ali opened the meeting for public comment and there was none. On motion made by Councilor Sykes, seconded by Councilor Michniewicz, the Committee voted 4-0 to recommend to the City Council approval of the PTDD for FY2027. 8. Adjournment. Councilor Michniewicz motioned to adjourn. Councilor Sykes seconded the motion. Passed 4-0 at 7:45 pm 5 Page 7 City of Portland | Housing and Economic Development Dena Libner, Assistant City Manager To: Housing and Economic Development Committee Councilor Pious Ali, Chair From: Dena Libner, Assistant City Manager Date: May 14, 2026 Re: Community feedback on redevelopment priorities for the Midtown properties MEETING DATE May 19, 2026 AGENDA ITEM Community feedback on redevelopment priorities for the Midtown properties PURPOSE To inform the development of marketing materials based on community-preferred uses of the Midtown properties, as identified through a community engagement process. COMMITTEE WORK PLAN/CITY COUNCIL GOAL ALIGNMENT This item is related to several Council goals, including Accelerate Housing Production, Reduce Chronic Homelessness, Strengthen Economic Vitality, and Support Affordability for All Residents. BACKGROUND/ANALYSIS In 2016, the City of Portland sold four Bayside lots, totalling 3.45 acres, to the Federated Companies and related entities. When Federated’s project stalled, the company and the City became involved in several lawsuits. They later reached a settlement in which all claims were dropped, the property was returned to the City, and the City paid Federated $15 million. In response to guidance provided by the City Council in an executive session in November 2025, staff issued a Request for Proposals (RFP) for professional brokerage services aimed at achieving the highest and best use of each site. As a result of that competitive process, the Boulos Company was selected to assist the City in marketing the properties. At the request of the City Council, staff launched a community engagement process to solicit feedback on the uses most preferred by community members. This exercise included 1) a digital survey available in seven languages and 2) two in-person community feedback sessions. These opportunities were promoted through the City of Portland’s social media platforms and “Weekly Roundup” digital newsletter, as well as through flyers distributed at Council meetings, at a community meal hosted by the Equality Community Center, and by community partners including Avesta Housing, Portland Housing Authority, and Cultivating Community. 1 Page 8 Over 1,100 unique individuals completed the digital survey, and a total of 30 unique individuals attended the community feedback sessions. COMMUNITY ENGAGEMENT: RESULTS ​ See: Attachment A ​ COMMUNITY ENGAGEMENT: FINDINGS Results from the digital survey and feedback sessions indicate a clear priority among respondents for housing-oriented development on the Midtown properties. Specifically, mixed-use development that balanced living, working, and recreation was most often identified by respondents as their “vision” for the Midtown properties, outranking “an area focused primarily on multi-family housing.” While multi-unit housing emerged as the dominant top priority, the broader rankings suggest respondents also value complementary public amenities and community spaces. Recreation and open space consistently received strong support across second- and third-choice rankings, indicating broad interest in incorporating outdoor and community-oriented uses into future redevelopment plans. “Retail & dining” and “cultural spaces” generally appeared as mid-tier preferences, often receiving fourth- and fifth-choice rankings. Office space and parking were consistently ranked lowest overall, with parking receiving the highest number of seventh-choice rankings and office space receiving the highest number of sixth-choice rankings. Overall, the findings suggest respondents strongly prioritize increasing housing opportunities in Midtown, while also supporting recreational and open-space elements as part of a balanced redevelopment approach. FISCAL IMPACT​ There is no anticipated fiscal impact associated with this item. CONCLUSION(S) The community engagement process for the Midtown properties identified a clear vision centered on mixed-used development. Residents consistently prioritized multi-unit housing as the preferred primary land use across the parcels, reflecting a strong interest in additional residential development. This preference was accompanied by significant support for integrated open space and recreational areas that complement the existing trail network. Overall, the findings indicate broad support for a balanced approach to redevelopment that incorporates a diverse mix of residential, commercial, and community uses while maintaining housing affordability and sustainable design as key priorities. PRIOR COMMITTEE REVIEW​ City Council Executive Session - February 9, 2026 2 Page 9 PREPARED BY Dena Libner Kaela Gonzalez Assistant City Manager Program Coordinator Executive Department Housing and Economic Development Department ATTACHMENTS Attachment A - Community Engagement Results ​ 3 Page 10 City of Portland | Housing and Economic Development Dena Libner, Interim Director ATTACHMENT A Digital Survey Results This survey was conducted from March 26 to May 7, 2026 to collect community feedback on preferred uses for the Midtown properties. Over 1,100 unique individuals responded to the survey. Page 11 Attachment A | Midtown Survey Results​ May 14, 2026 Q2. Please prioritize how you would like the Midtown area to be utilized. Page 12 Attachment A | Midtown Survey Results​ May 14, 2026 Q2. Which of these descriptions best matches your vision for Midtown? Page 13 Attachment A | Midtown Survey Results​ May 14, 2026 Results from Community Feedback Sessions Staff hosted two community feedback sessions in April 2026. In total, 30 unique individuals attended these sessions, where they discussed the project with staff and indicated their preferences and feedback on maps. ​ Participants indicated their preference for specific uses on each of the vacant Midtown lots using colored dots, and left additional comments on sticky notes. Participants were not limited in the number of dots or notes they could use. Housing (black dots) was the preferred use selected most often during this exercise, accounting for 57% of the dots placed on maps. Participants selected lots 2 and 3 most often for housing development. Open space (light green dots) accounted for 18% of the dots placed on the maps, and recreation (orange dots) accounted for 10%. Page 14 Attachment A | Midtown Survey Results​ May 14, 2026 Participants were also invited to leave additional comments in writing. Staff analysis showed that “housing” was the most frequent theme mentioned here, with the second theme (“space”) being mentioned approximately half as often. This trend was observed in the digital survey as well: “housing” was mentioned in 283 individuals’ qualitative feedback, followed by “space” (123 individuals’ feedback) and “affordable” (110 individuals’ feedback). ​ Page 15 ​City of Portland | Parks, Recreation, and Facilities Department​ ​Ethan Hipple, Director​ ​To:​​Housing and Economic Development Committee​ ​Councilor Pious Ali, Chair​ ​CC:​​Danielle P. West, City Manager​ ​Dena Libner, Assistant City Manager​ ​From:​​Ethan Hipple, Director, Parks, Recreation, and​​Facilities​ ​Department​ ​Date:​​May 19, 2026​ ​Re:​ ​Amendment to Agreement for Hearts of Pine Women’s​ ​Team​ ​MEETING DATE​ ​5/19/2026​ ​AGENDA ITEM​ ​Amendment to Hearts of Pine Agreement​ ​PURPOSE​ ​The Hearts of Pine have proposed adding a women’s team to their organization, with women’s games​ ​played at Fitzpatrick Stadium. This proposed amendment outlines business terms for the addition of​ ​the women’s team.​ ​COMMITTEE WORK PLAN/CITY COUNCIL GOAL ALIGNMENT​ ​N/A​ ​BACKGROUND/ANALYSIS​ ​The Hearts of Pine has proposed to add a women’s team that would start playing at Fitzpatrick​ ​Stadium in the 2027 season.​ ​Under the current agreement, the Hearts of Pine organization is offered 40 dates, from which they can​ ​choose 25 dates for the men’s team games. Under the amended agreement, the organization would​ ​still be offered 40 dates, but they would choose 33 dates that would include games for both the men’s​ ​and women's teams. The organization would pay market rate for these eight additional games, as well​ ​as for any additional field time required for practices.​ ​The addition of eight additional dates for a Women's team can be accommodated in the stadium​ ​schedule without adversely affecting other customers.​ ​The amendment also clarifies that practice times for the men’s team are provided without cost, in​ ​recognition of the $3M in capital improvements that the team invested into the stadium. This​ ​1​ Page 16 ​provision was included in the business terms that informed the original agreement, but the agreement​ ​itself was silent on this topic, so this is simply clarifying language.​ ​FISCAL IMPACT​ ​N/A​ ​CONCLUSION(S)​ ​Overall, the presence of the Hearts of Pine at Fitzpatrick Stadium has been very positive for the City​ ​and has resulted in close to $3M of capital improvements in the stadium, including new artificial turf​ ​field, new lights, press box improvements, new locker rooms, seating improvements, and a new sound​ ​system. The team has been a good faith partner in solving issues that have arisen.​ ​Based on the above, staff recommend the approval of this amendment that would allow for a women’s​ ​soccer team at Fitzpatrick Stadium.​ ​PRIOR COMMITTEE REVIEW​ ​N/A​ ​PREPARED BY​ ​Ethan Hipple​ ​Director​ ​Parks, Recreation, and Facilities Department​ ​ATTACHMENTS​ ​1.​ ​Amended agreement​ ​2​ Page 17  SECOND AMENDMENT TO STADIUM USE AGREEMENT FOR USE AND OCCUPANCY OF JAMES J. FITZPATRICK STADIUM This Second Amendment to Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium (this “Amendment”) is made as of [DATE], 2026 (the “Amendment Date”), by and between Hearts of Pine LLC, a Maine limited liability company (the "Club") and The City of Portland, Maine, a body politic and corporate (the "City"). The Club and the City are each a “Party” and collectively the “Parties.”. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Existing Agreement (as defined below). WHEREAS, Portland United, LLC, a Maine limited liability company (“PU”) and the City entered into that certain Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium, dated as of December 18, 2023, as amended by that certain First Amendment to Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium, dated as of October 30, 2024, in each case a copy of which is attached hereto as Exhibit A (collectively, the “Existing Agreement”); WHEREAS, PU assigned all of its right, title, and interest in the Existing Agreement to the Club under that certain Assignment and Assumption Agreement, by and between PU and the Club, and acknowledge and agreed to by the City, dated as of February 21, 2024, a copy of which is attached hereto as Exhibit B (the “Assignment Agreement”); and WHEREAS, the Parties wish to enter into this Amendment to amend the Existing Agreement as set forth herein. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: 1. Amendments. a) Recitals. i. Recital B of the Existing Agreement is hereby deleted in its entirety and replaced with the following: “B. The Club owns the rights to: (i) a men’s professional soccer franchise (the “Men’s Team”) in that certain professional soccer league known as “USL League One” within the professional soccer organization known as the United Soccer League (the “USL”), and (ii) a women’s elite amateur soccer franchise (the “Women’s Team”) in that certain league known as “USL W League” within the USL (together, with all other leagues and affiliate entities within the USL, collectively, and as applicable, the “League”). As of the Amendment Date, the Men’s Team competes in USL League One, and the Club anticipates that the Women’s Team will begin hosting USL W League soccer games during the 2027 USL W League season.” b) In section 1 of the Existing Agreement (“Definitions”): 1 of 53 Page 18  i. The defined term “Club” is hereby deleted in its entirety and replaced with the following: ““Club” shall have the meaning assigned thereto in the preamble hereof; for the avoidance of doubt “Club” shall mean the Men’s Team and/or the Women’s Team when used hereunder as applicable given the context.” ii. The defined term “Post-Season Game” is hereby deleted in its entirety and replaced with the following: ““Post-Season Game” shall mean any game played by the Club at the Stadium following the completion of the scheduled Regular Season as part of any Playoff competition format organized by the League, culminating with a League championship game.” c) Sections 5(a) and 5(b) of the Existing Agreement are each hereby deleted in their entirety and replaced with the following: “(a) Soccer Games and Other Club Events. Subject to the provisions of subsection 5(b) below, the Club shall have the exclusive right to play professional and pre-professional soccer games (and conduct pregame, half-time and post-game activities) at the Stadium Premises on each Club Scheduled Date on which a Home Game is to be played during the period commencing with the Pre-Season and including the Regular Season and, if Post-Season games are to be played as Home Games, the Club shall have the right to do so during the Post- Season, during each year of the Term covered by this Agreement. The Club shall exercise this exclusive right only on the dates (day or night) regularly scheduled for professional or pre-professional soccer games in accordance with the official League schedule pertaining to professional or pre-professional soccer games to be played and hosted within the Stadium Premises by the Club (as applicable). For all Club Events, the Club will have access to the Stadium and Stadium Premises in accordance with the terms hereof at least six (6) hours prior the scheduled start of time of the event. The City will work with the Club in good faith to provide the Club additional access to the Stadium (beyond the dates set forth above) for Club practices and other training for each of the Men’s Team and Women’s Team, in each case as reasonably requested by the Club but subject to other Stadium users’ events that are already scheduled. Notwithstanding anything to the contrary in this Agreement, the Club acknowledges and agrees that it may not be able to schedule a Post Season game at the Stadium if another Stadium user is already scheduled to use the Stadium on a given day during the Post Season. In the event of a schedule conflict, the Parties will work together in good faith to achieve a reasonable solution, but under no circumstances will the City be obligated to cancel another Stadium user’s scheduled event at the Stadium in order to accommodate the League’s Post Season schedule. (b) Exercise of Club’s Selection of Dates. On or before the 1st day of September of each calendar year during the Term, the City shall provide the Club with a list in writing of no less than forty (40) dates, including at least 30 weekend dates (with a preference, as available, for at least 16 Saturdays and 12 Sundays) and 10 weekday dates (with a preference, as available, for Wednesdays and Fridays) within the reasonably anticipated timeframes of the Regular Season 2 of 53 Page 19  schedules for each of the Men’s Team and the Women’s Team in the following calendar year for the Club to choose from for scheduling of Club Events (the “Offered Dates”). The City will make reasonable efforts to include in the Offered Dates, as available, 6 dates in each of May, June, and July, and at least 4 dates in each of April, August, September, and October). Upon the earlier of (x) the League’s release of the Women’s Team Regular Season schedule for the following calendar year, or (y) February 15th of the following calendar year, the Club will notify the City in writing of its selection of thirty-three (33) of the Offered Dates, including anticipated Post Season Game dates, and the City will reserve those dates for the Club’s use (the “Club Reserved Dates”). Such final selection of Club Reserved Dates shall be binding and not subject to change, except as set forth below or as otherwise agreed to in writing by the Parties. After Club Reserved Dates have been selected, and after the City reasonably determines that other potential Stadium users have had a reasonable opportunity to schedule dates for use of the Stadium, the Club may request additional dates for Club Events by following the City’s ordinary scheduling process utilized by other Stadium users. Once the League has confirmed the final schedule for the then-upcoming Regular Season for each of the Men’s Team and the Women’s Team, the Club will provide the City with a copy thereof and, to the extent that the Club determines in its sole discretion that any Club Reserved Dates are not needed for Home Games or scheduled Club Events, those Club Reserved Dates will be “released” back to the City for use through its ordinary scheduling process. All Club Reserved Dates that are not released back to the City and other dates scheduled by the City for the Club after the Club selects the Club Reserved Dates are referred to herein as “Club Scheduled Dates.” In the event that the Club does not advance to the League playoffs, the Club will release any Post Season Game Club Scheduled Dates to the City.” d) Section 7(b) of the Existing Agreement is hereby deleted in its entirety and replaced with the following: “(b) Payments to the City. For each Home Game played during the Term of this Agreement (as applicable depending on the Club’s exercise of the Club Extension Option), the Club shall pay the following, as consideration to the City for and on account of the Club's use and occupancy of the Stadium and Stadium Premises hereunder: (i) In consideration of the Improvements and the Club’s contribution to the New Playing Field, for each of the first ten (10) calendar years during the Term of this Agreement, the Club shall pay no rental fees for the Stadium for the first twenty-five (25) Club- Scheduled Dates in each such year or for Men’s Team practices, but Club shall be responsible for the fees and costs associated with permitted events at the Stadium, including fees and costs for public safety personnel, at the then-current rates. The Parties acknowledge that, as of the Amendment Date, the Improvements have been completed; During each year of the Term, if the Club utilizes the Stadium at any time other than the twenty- five (25) Club-Scheduled Dates referenced above in Section 7(b)(i) or for Men’s Team practices, 3 of 53 Page 20 the Club shall pay to the City \ all then-current applicable use and rental fees and other fees and charges charged by the City to other Stadium occupants/licensees. (ii) In the event that the Club exercises the second Club Extension Option, then, commencing upon the beginning of the second extension and thereafter throughout the Term of this Agreement, the Club shall pay the City all then-current applicable use and rental fees and other fees and charges charged by the City to other Stadium occupants/licensees for all of the Club’s use of the Stadium and Stadium Premises.” e) Section 9(b) of the Existing Agreement is hereby deleted in its entirety and replaced with the following: “(b) Not less than three months prior to the start of the 2027 Pre- Season, the Club shall submit a traffic management plan to the City that includes a comprehensive strategy for managing vehicle traffic, parking, and pedestrian flow before, during, and after games. The plan will outline strategies and practices to mitigate transportation impacts of large gatherings, ensuring safety and minimizing delays. The traffic management plan is subject to review and approval by the City, and must be in form and substance satisfactory to the City prior any 2027 Club Events. f) Section 24 of the Existing Agreement is hereby deleted in its entirety and replaced with the following: “24. Notices. Any notice, demand, request, consent, approval and any other communications (any of the foregoing, a "Notice") required, permitted, or desired, to be given hereunder shall be in writing sent by registered or certified mail, postage prepaid, return receipt requested or delivered by hand or reputable overnight courier addressed to the Party to be so notified at its address hereinafter set forth or to such other address as such party may hereafter specify in a Notice delivered in accordance with the provisions of this Section 30. Any such Notice shall be deemed to have been received three (3) Business Days after the date such Notice is mailed or on the date of delivery by hand or courier addressed to the parties as follows (provided that neither the City nor the Club shall be deemed to have received any Notice not actually received): If to the City: City of Portland Attn: City Manager 389 Congress Street Portland, Maine 04101 With a copy to: Office of the Corporation Counsel at the same address If to the Club: Hearts of Pine LLC Attn: Kevin Schohl 1 Union Wharf, 3rd Floor Portland, Maine 04101 kevin@heartsofpine.com 4 of 53 Page 21  With a copy to: Caleb E. Ginsberg, Esq. ginsberg.caleb@gmail.com” g) Section 31 of the Existing Agreement is hereby deleted in its entirety and replaced with the following: “31. League Rules. Notwithstanding anything to the contrary in this Agreement, the City acknowledges that the Club, in its operation of a professional and pre-professional soccer franchise in the applicable League, is obligated to comply with applicable League rules and restrictions (“League Rules”). In the event that any such League Rules require alterations or improvements to the Stadium or the Stadium Premises, the Club may request that the City make such alterations or improvements at the Club’s expense or allow the Club to do so at the Club’s expense. In such event, the City will engage in good faith discussions with the Club in order to identify a commercially reasonable solution, satisfactory to the City, that permits the Club, at its own expense, to continue to host Club Events in the Stadium through the remainder of the Term. In the event that the Club is unable to comply with the League Rules due to the condition of the Stadium or Stadium Premises, the Club may terminate this Agreement upon prior written notice to the City. In no event will the City be responsible for incurring any obligation or expense as a result of the League Rules except as specifically set forth in this Agreement.” 2. Other Provisions Remain in Full Force and Effect. This Amendment shall modify and amend the Existing Agreement to the extent, and only to the extent, expressly set forth herein and all of the terms and provisions of the Existing Agreement that are not expressly amended, modified, waived, or replaced hereunder shall be unaltered and shall remain in full force and effect. From and after the Amendment Date, all references in the Existing Agreement to this “Agreement”, “herein”, “hereunder”, and words of like import shall mean and refer to the Existing Agreement as amended by this Amendment. Unless otherwise defined in this Amendment, capitalized terms used in this Amendment have the same meaning that those terms have in the Existing Agreement. 3. Governing Law. This Amendment shall be exclusively governed by and construed in accordance with the laws of the State of Maine, without regard to or application of conflict of laws, rules or principles. 4. Miscellaneous. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. A signed copy of this Amendment delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Amendment. [Signature page to follow.] 5 of 53 Page 22  IN WITNESS WHEREOF, the Parties hereto have executed this Second Amendment to Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium, to be effective as of the Amendment Date. THE CITY OF PORTLAND By:_________________________ Name: Danielle P. West Title: City Manager HEARTS OF PINE LLC, a Maine limited liability company By: Portland United, LLC, a Maine limited liability company, It’s Sole Member By:_________________________________ Name: Gabe Hoffman-Johnson Title: Manager Approved as to form: _________________________________ City Corporation Counsel Approved as to funds: _________________________________ City Finance Director Signature Page to Second Amendment to Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium 6 of 53 Page 23  EXHIBIT A Existing Agreement [Attached] 7 of 53 Page 24 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 FIRST AMENDMENT TO STADIUM USE AGREEMENT FOR USE AND OCCUPANCY OF JAMES J. FITZPATRICK STADIUM This First Amendment to Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium (this “Amendment”) is made as of October ___,30th 2024 (the “Amendment Date”), by and between Hearts of Pine LLC, a Maine limited liability company (the "Club") and The City of Portland, Maine, a body politic and corporate (the "City"). The Club and the City are each a “Party” and collectively the “Parties.”. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Existing Agreement (as defined below). WHEREAS, Portland United, LLC, a Maine limited liability company (“PU”) and the City entered into that certain Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium, dated as of December 18, 2023, a copy of which is attached hereto as Exhibit A (the “Existing Agreement”); WHEREAS, PU assigned all of its right, title, and interest in the Existing Agreement to the Club under that certain Assignment and Assumption Agreement, by and between PU and the Club, and acknowledged and agreed to by the City, dated as of February 21, 2024, a copy of which is attached hereto as Exhibit B (the “Assignment Agreement”); and WHEREAS, in the time since the Existing Agreement was signed, the Club discovered that the turf field at the Stadium does not comply with applicable League Rules; and WHEREAS, the Parties wish to enter into this Amendment to amend the Existing Agreement to allow for the Club to install a new turf field at the Stadium as set forth herein. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: 1. Amendments. a) Section 1 (Definitions) of the Existing Agreement shall be amended as follows: The term “Club Line Painting” is added to Section 1 and defined as follows: ““Club Line Painting” shall have the meaning assigned thereto in Section 8(b) of the Agreement.” The term “Line Modification” is added to Section 1 and defined as follows: ““Line Modification” shall have the meaning assigned thereto in Section 8(b) of the Agreement.” The term “Standard Line Modification Cap” is added to Section 1 and defined as follows: ““Standard Line Modification Cap” shall have the meaning assigned thereto in Section 8(b) of the Agreement.” 8 of 53 Page 25 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 The term “New Playing Surface” is hereby modified to “New Playing Field”. The term “New Stadium Turf” is added to Section 1 and defined as follows: ““New Stadium Turf” shall have the meaning assigned thereto in Section 3(f) of the Agreement.” The term “Standard Line Painting” is added to Section 1 and defined as follows: ““Standard Line Painting” shall have the meaning assigned thereto in Section 8(b) of the Agreement.” b) The following is added to the Agreement as Section 3(f): (f) New Stadium Turf. Notwithstanding anything to the contrary in this Section 3, the parties acknowledge and agree that between December 1, 2024 and December 31, 2024, weather permitting, the Club shall, at its own expense, install a new plain green artificial turf surface at the stadium (the “New Stadium Turf”). The Club acknowledges and agrees that the New Stadium Turf will be in the same location as the existing turf and that under no circumstances will the Club remove any of the red rubberized surface at the Stadium that comprises the track and the areas between the track and the turf end zones. For the avoidance of doubt, the New Stadium Turf will be considered an Improvement as contemplated hereunder, and as generally described in Exhibit A. Upon request by the Club, the dates for such installation may be changed by the City Manager or their designee, provided that the parties acknowledge and agree that the installation shall be completed reasonably far in advance of the Club’s 2025 League season. The New Stadium Turf shall be installed in accordance with all applicable laws, rules, regulations, industry and professional standards, and the League Rules. The New Stadium Turf shall be painted in accordance with the provisions of Section 8(b) below. Because the New Stadium Turf will not include a painted “Bulldog” logo, the Club agrees to (i) maintain the existing Bulldog signage on the Stadium pressbox and scoreboard, and (ii) work together in good faith with the Superintendent of the Portland Public Schools (“PPS”) or their delegate to identify additional ways for the Club to ensure that the Bulldog logo, or other reasonably requested PPS imagery, is visibly displayed on the Stadium Premises. c) Section 8(b) of the Existing Agreement is hereby deleted in its entirety and replaced with the following: “(b) Field Painting and Removal; Escrow. . (1) The Club and City anticipate that all lines for soccer, football, lacrosse, and field hockey will need to be painted on the New Stadium Turf at least twice per applicable season (collectively, “Standard Line Painting”). During the Term of this Agreement, the City will be responsible for performing the Standard Line Painting. Solely during the Initial Term, the Club will be responsible for the cost of the Standard Line Painting, which shall be paid by the Club in accordance with subsection (4) below. (2) In connection with the Club’s use of the Stadium as permitted hereunder, in its reasonable discretion, the Club may, at the Club’s own expense, 9 of 53 Page 26 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 add and/or remove any painted lines or other markings (including Standard Line Painting) on the playing field at the Stadium in order to comply with League Rules (defined below) or to otherwise conform to the League’s or the US Soccer Federation’s guidelines (collectively, “Club Line Painting”) (Standard Line Painting and Club Line Painting are referred to herein collectively as “Line Modifications”). The Club acknowledges and agrees that it will not allow Club Line Painting to interfere with previously scheduled use of the field by other Stadium users. For the avoidance of doubt, in the event that Club Line Painting includes removal of lines needed by other Stadium users, the Club shall repaint those lines in a timely manner such that the repainting will not interfere with previously scheduled use of the field by others. (3) If, during the Initial Term, the City reasonably determines that Standard Line Painting is reasonably necessary for the use of the field by Stadium users other than the Club, the City will provide reasonable advance notice to the Club (by email or text message designated by the Club’s President) of the need for such Standard Line Painting and the date and time by which such painting must be complete and the field ready for use. For the avoidance of doubt, the City will be responsible for coordinating all Standard Line Painting. If, during the Term, the Club reasonably determines that Club Line Painting is reasonably necessary for the use of the field by the Club, the Club will provide reasonable advance notice to the City (by email or text message designated by the City’s Director of Parks, Recreation, and Facilities) of the need for such Club Line Painting, and which notice will include either (i) a statement by the Club that it will coordinate such Line Modification itself; or (ii) a request by the Club for the City to coordinate such Club Line Painting at the Club’s expense. If the Club elects to coordinate the Club Line Painting itself, it agrees to complete, or cause its contractor to complete, such painting by the date and time reasonably requested by the City, and, in any event, in accordance with subsection (2) above. If the Club requests that the City coordinate the Club Line Painting, such painting will be subject to the payment provisions in subsection (4) below. In any event, all line painting and removal (including Club Line Painting) on the New Stadium Turf, whether performed by the City, the Club, or their contractors, will be done in a good and workmanlike manner in accordance with industry standards. For the avoidance of doubt, the provisions of this Section 8(b) are not intended to, and shall not, interfere in any way with the parties’ other rights and obligations under this Agreement, including the Club’s right to use and enjoyment of the Stadium as contemplated hereunder, or with the rights of other Stadium users who have previously scheduled use of the field. (4) For Standard Line Painting made during the Initial Term, the City will submit an invoice to the Club. Subject to the Standard Line Painting Cap (as defined below), during the Initial Term, the Club will pay the City for all undisputed amounts due on the applicable invoice, up to a maximum amount of (i) $25,000 per calendar year, and (ii) $125,000 in the aggregate (the “Standard Line Painting Cap”). Each year of the Initial Term, the Parties will evaluate the commercially reasonable quoted pricing for the Standard Line Painting and discuss in good faith whether it is reasonably necessary and equitable to increase the Standard Line Painting Cap; provided, however, that in the event that the Parties agree on such an increase, the Standard Line Painting Cap shall not exceed $30,000 in any calendar year and $150,000 in the aggregate during the Initial Term. The 10 of 53 Page 27 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 Club will pay each invoice submitted to it by the City for applicable Line Modification as set forth hereunder within 30 days after the date of the invoice. Any disputed amounts in any such invoice will be subject to the dispute resolution process set forth in Section 37 of this Agreement. For Club Line Painting made by the City during the Term, the City will submit an invoice to the Club. The Club will pay each invoice within 30 days after the date of the invoice. Any disputed amounts in any such invoice will be subject to the dispute resolution process set forth in Section 37 of this Agreement. (5) In order to ensure that there is sufficient funding (up to the Standard Line Painting Cap) available for the Standard Line Painting described in this subsection (b), the Club, prior to the first Line Modification, will deposit the sum of $25,000.00 into a City-held, non-interest bearing escrow account pursuant to an escrow agreement in form and substance reasonably satisfactory to both parties (the “Line Painting Escrow Agreement”). The Line Painting Escrow Agreement will provide that the City may draw upon the escrow account if the Club fails to pay the painting invoices submitted by the City in a timely manner, subject to a reasonable cure period not to exceed ten (10) days. If and to the extent applicable, on or about January 1 of each subsequent year during the Initial Term, the Club shall deposit such additional amounts into the escrow account as are needed to bring the balance of the account to $25,000.00. At the end of the Initial Term, and after all amounts due and payable to the City under this subsection (b) have been paid, the City will return the remaining balance of the escrow account to the Club. (6) Notwithstanding anything to the contrary in this subsection (b), but otherwise subject to the terms and conditions of this Agreement, if the term of the Agreement is extended beyond the Initial Term, the City will be responsible for all Standard Line Painting during such extension at the City’s cost and at times that the City reasonably determines such painting is reasonably necessary. (7) Paint removal. At any time during the Term, if paint removal is included in any Club Line Painting, the Club will be responsible for the cost of any such paint removal, and such paint removal will be subject to the procedures and payment provisions set forth in subsections 3 and 4 above. (8) Notwithstanding anything to the contrary in this Agreement, the City retains the right, but not the obligation, to temporarily paint and remove, at its own expense, the Portland Public School Department’s Bulldog logo or other markings on the New Stadium Turf from time to time. d) Exhibit A to the Existing Agreement is hereby deleted in its entirety and replaced with the following: EXHIBIT A DESCRIPTION OF IMPROVEMENTS Total expected capital expense: $2,500,000 - $3,000,000 New Artificial Turf Surface At The Stadium ● Install new plain green artificial turf surface (~10 year expected life) 11 of 53 Page 28 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 ● Repair subsurface and install safety pad underneath (20+ year expected life) ● Projected expense range: $650,000 - $700,000 Site Lighting ● Install and upgrade current MUSCO lighting to meet USL specifications ● Projected expense range: $325,000 - $600,000 Press Box ● Make cosmetic and operational improvements to Press Box ● Likely to include infrastructure to improve broadcast and streaming operations ● City will have ability to use on non-gameday ● Projected expense range: $140,000 - $170,000 Team Locker Rooms ● Other Stadium users will have ability to use Visitor locker room on non- gamedays if not in use by the Club. ● Projected expense range, including site work and utilities to enable: $1,150,000 - $1,300,000 Club Storage Area ● Club to add storage containers ● City to have use of space in containers if available. ● Projected expense range: $10,000 - $20,000 Ticketing Entrance ● Club to improve ticketing entrance and Stadium access points, if needed ● City will have ability to use on non-gameday ● Projected expense range, if needed: $10,000 - $20,000 Audio System ● Club to improve Speaker and Audio system, if needed ● City will have ability to use on non-gameday ● Projected expense range, if needed: $40,000 - $50,000 Miscellaneous ● New Field Goal Posts ● Other Electronics Allowance ● Seating upgrades ● Site Accessories and Landscaping ● Associated design, engineering, utility connection costs ● Additional Operational and Fan Experience Elements ● City will have ability to use on non-gameday ● Projected expense range: $150,000 - $300,000.” 2. Other Provisions Remain in Full Force and Effect. This Amendment shall modify and amend the Existing Agreement to the extent, and only to the extent, expressly set forth herein and all of the terms and provisions of the Existing Agreement that are not expressly amended, modified, waived, or replaced hereunder shall be unaltered and shall remain in full force and effect. From and after the Amendment Date, all references in the Existing Agreement to this “Agreement”, “herein”, “hereunder”, and words of like import shall mean and refer to the Existing Agreement as amended by this Amendment. Unless otherwise defined in this Amendment, capitalized terms used in this Amendment have the same meaning that those terms have in the Existing Agreement. 12 of 53 Page 29 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 3. Miscellaneous. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. A signed copy of this Amendment delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Amendment. [Signature page to follow.] 13 of 53 Page 30 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment to Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium, to be effective as of the Amendment Date. THE CITY OF PORTLAND By:_________________________ Name: Danielle P. West Title: City Manager HEARTS OF PINE LLC, a Maine limited liability company By: Portland United, LLC, a Maine limited liability company, It’s Sole Member By:_________________________________ Name: Gabe Hoffman-Johnson Title: Manager Approved as to form: _________________________________ City Corporation Counsel Approved as to funds: _________________________________ City Finance Director Signature Page to First Amendment to Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium 14 of 53 Page 31 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 EXHIBIT A Existing Agreement [Attached] 15 of 53 Page 32 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 16 of 53 BlueInk Bundle ID: oF6spXrkru Page 33 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 17 of 53 BlueInk Bundle ID: oF6spXrkru Page 34 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 18 of 53 BlueInk Bundle ID: oF6spXrkru Page 35 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 19 of 53 BlueInk Bundle ID: oF6spXrkru Page 36 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 20 of 53 BlueInk Bundle ID: oF6spXrkru Page 37 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 21 of 53 BlueInk Bundle ID: oF6spXrkru Page 38 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 22 of 53 BlueInk Bundle ID: oF6spXrkru Page 39 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 23 of 53 BlueInk Bundle ID: oF6spXrkru Page 40 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 24 of 53 BlueInk Bundle ID: oF6spXrkru Page 41 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 25 of 53 BlueInk Bundle ID: oF6spXrkru Page 42 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 26 of 53 BlueInk Bundle ID: oF6spXrkru Page 43 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 27 of 53 BlueInk Bundle ID: oF6spXrkru Page 44 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 28 of 53 BlueInk Bundle ID: oF6spXrkru Page 45 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 29 of 53 BlueInk Bundle ID: oF6spXrkru Page 46 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 30 of 53 BlueInk Bundle ID: oF6spXrkru Page 47 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 31 of 53 BlueInk Bundle ID: oF6spXrkru Page 48 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 32 of 53 BlueInk Bundle ID: oF6spXrkru Page 49 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 33 of 53 BlueInk Bundle ID: oF6spXrkru Page 50 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 34 of 53 BlueInk Bundle ID: oF6spXrkru Page 51 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 35 of 53 BlueInk Bundle ID: oF6spXrkru Page 52 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 36 of 53 BlueInk Bundle ID: oF6spXrkru Page 53 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 37 of 53 BlueInk Bundle ID: oF6spXrkru Page 54 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 38 of 53 BlueInk Bundle ID: oF6spXrkru Page 55 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 39 of 53 BlueInk Bundle ID: oF6spXrkru Page 56 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 40 of 53 BlueInk Bundle ID: oF6spXrkru Page 57 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 41 of 53 BlueInk Bundle ID: oF6spXrkru Page 58 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 42 of 53 BlueInk Bundle ID: oF6spXrkru Page 59 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 43 of 53 BlueInk Bundle ID: oF6spXrkru Page 60 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 44 of 53 BlueInk Bundle ID: oF6spXrkru Page 61 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 45 of 53 BlueInk Bundle ID: oF6spXrkru Page 62 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 46 of 53 BlueInk Bundle ID: oF6spXrkru Page 63 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 47 of 53 BlueInk Bundle ID: oF6spXrkru Page 64 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 48 of 53 BlueInk Bundle ID: oF6spXrkru Page 65 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 49 of 53 BlueInk Bundle ID: oF6spXrkru Page 66 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 50 of 53 BlueInk Bundle ID: oF6spXrkru Page 67 Docusign Envelope ID: EE65869D-AF5F-420E-9227-DBD000EDFEB5 EXHIBIT B Assignment Agreement [Attached] 51 of 53 Page 68 DocuSign Envelope Docusign Envelope ID: ID: 53864528-0B2D-4141-8309-EA5E48C47A94 EE65869D-AF5F-420E-9227-DBD000EDFEB5 ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement (this “Agreement”) is made as of February 21, 2024, by and among Portland United, LLC, a Maine limited liability company with a mailing address of 7 Stratton Place, Portland, Maine 04101 (“Assignor”), and Hearts of Pine LLC, a Maine limited liability company with a mailing address of 50 Romasco Lane, Portland, Maine 04101 (“Assignee”). Capitalized terms not otherwise defined in this Agreement will have the meanings given to them in the Stadium Use Agreement (as defined below). Recitals A. Assignor and the City of Portland (the “City”) are parties to that certain Stadium Use Agreement for Use and Occupancy of James J. Fitzpatrick Stadium, dated as of December 18, 2023, attached hereto as Exhibit A (the “Stadium Use Agreement”). B. Pursuant to Section 35 of the Stadium Use Agreement, Assignor is required to obtain the City’s written approval in order to assign its interest in the Stadium Use Agreement. C. Assignor wishes to transfer, assign, and deliver to Assignee all of Assignor’s right, title, and interest in the Stadium Use Agreement, and Assignee wishes to assume all of Assignor’s obligations under the Stadium Use Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignor hereby sells, transfers, assigns and delivers to Assignee all of Assignor’s right, title, and interest in and to the Stadium Use Agreement. 2. Assignee hereby assumes and agrees to discharge all of the obligations of Assignor under the Stadium Use Agreement from and after the date of this Agreement. 3. Except for all liabilities and obligations set forth in the Stadium Use Agreement, Assignee is not assuming any liability or obligation of Assignor hereunder. 4. Neither the representations and warranties of Assignor, nor the rights, remedies and obligations of any party, under the Stadium Use Agreement shall be deemed to be enlarged, limited, modified or altered in any way by this Agreement. 5. This Agreement will be binding upon and inure to the benefit of the parties and their respective successors and assigns. 6. Commencing June 1, 2024, Assignee’s mailing address for any notices provided under the Stadium Use Agreement will be 1 Union Wharf, Portland, Maine 04101. 7. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. A signature in a pdf or electronic document shall be considered the equivalent of an original signature. 1 52 of 53 Page 69 DocuSign Envelope Docusign Envelope ID: ID: 53864528-0B2D-4141-8309-EA5E48C47A94 EE65869D-AF5F-420E-9227-DBD000EDFEB5 IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption Agreement to be duly executed as of the date first written above. ASSIGNOR: Portland United, LLC, a Maine limited liability company By:____________________ Name: Gabe Hoffman-Johnson Title: Manager ASSIGNEE: Hearts of Pine LLC, a Maine limited liability company By:____________________ Name: Gabe Hoffman-Johnson Title: Authorized Officer Acknowledge and Agreed: The City of Portland By:___________________ Name: Danielle P. West Title: City Manager Approved as to form: _____________________ City Corporation Counsel Signature page to Assignment and Assumption Agreement (Stadium Use Agreement – Fitzpatrick Stadium) 53 of 53 Page 70 City of Portland | Planning & Urban Development Department Kevin D. Kraft, AICP Director Staff Memo To: Housing & Economic Development Committee Councilor Pious Ali, Chair MEETING DATE May 19, 2026 AGENDA ITEM Inclusionary Zoning Study Communication PURPOSE The purpose of this communication is to share the Inclusionary Zoning (IZ) Study (Attachment A), completed by CZB, LLC. The study provides a comprehensive analysis of the City’s Inclusionary Zoning Ordinance since its implementation a decade ago. The full report is attached, with background information and key highlights summarized below. COMMITTEE WORK PLAN/CITY COUNCIL GOAL ALIGNMENT This study directly supports the City Council’s 2026 goal (Attachment B) to accelerate housing production and strengthen affordability protections. As part of this goal, the Council identified potential updates to the IZ ordinance as a key action, which is also included in the Housing & Economic Development Committee’s (HEDC) 2026 Work Plan (Attachment C). Additionally, in its 2025 priorities, the Council highlighted “working to implement solutions to the housing crisis, including building more working-class housing.” Furthermore, increasing housing production and promoting housing affordability are central objectives of the City’s comprehensive plan, Portland’s Plan 2030. BACKGROUND/ANALYSIS In 2025, the Planning & Urban Development Department received a grant through the State of Maine’s Housing Opportunity Program to evaluate the City’s Inclusionary Zoning (IZ) ordinance. The City commissioned an independent study to assess the policy’s effectiveness, including the number of affordable units produced, its performance over time, and its impact under varying market conditions. The City of Portland adopted its IZ ordinance in 2015 (Order 82-15/16), requiring residential projects with 10 or more dwelling units to either include affordable units or pay an in-lieu fee to the Jill C. Duson Housing Trust Fund. This policy aimed to leverage the private market to support affordable housing creation. In 2020, a citizen referendum changed the policy by increasing the required percentage of affordable units from 10% to 25% and lowering income eligibility thresholds from 100% to 80% of Area Median Income (AMI) for rental units and from 120% to 1 Page 71 80% AMI for ownership units. Furthermore, the fee-in-lieu was increased from $100,000 per unit (adjusted annually) to $150,000 per unit (adjusted annually). The 2026 fee-in-lieu is $186,087.86 per unit. Inclusionary Zoning Study The IZ Study was completed by CZB, LLC. It is based on quantitative analysis of Planning Board approval records, building permit data, and economic indicators such as land costs, construction costs, and interest rates, as well as qualitative input from interviews with developers and housing and policy stakeholders familiar with Portland’s housing framework. Key Findings Major findings from the report include: ●​ Over the 2015–2025 study period, the Inclusionary Zoning ordinance applied to 58 projects, resulting in the creation of 161 IZ designated affordable housing units and $3.47 million in contributions deposited into the Jill C. Duson Housing Trust Fund. ●​ During the 2015 – 2020 period (IZ 1.0), 40 projects triggered compliance with IZ. o​ 2,065 total units approved | 1,436 total units constructed ▪​ 164 IZ units approved | 118 IZ units constructed ▪​ $6.07M fee-in-lieu earmarked for Trust Fund | $3.47M fee-in-lieu collected for Trust Fund ●​ During the (2020- 2025 period (IZ 2.0), 18 projects triggered compliance with IZ o​ 1,453 total units approved | 167 total units constructed ▪​ 326 IZ units approved | 43 IZ units constructed ▪​ $8.40M fee-in-lieu earmarked for Trust Fund | $0 fee-in-lieu collected for Trust Fund ●​ Overall housing approvals increased over the past five years under IZ 2.0 compared to both the prior IZ 1.0 period and the preceding five years. However, the number of projects triggering IZ requirements declined by 55%, from 40 projects under IZ 1.0 to 18 under IZ 2.0. ●​ Prevailing market conditions can influence the effectiveness of a policy. IZ 2.0 has coincided with challenging development conditions being experienced nationwide, including higher borrowing costs, rising interest rates, and increasing costs for construction, land, labor, and materials. Together, these pressures impact project feasibility and constrain a project’s ability to absorb additional costs, often pushing developments toward infeasibility. ●​ Projects have increasingly relied on external subsidies or complex, interdependent agreements in an effort to make projects financially feasible. 2 Page 72 Options for Consideration The study presents several options for policymakers to consider. ●​ Option 1: Maintain Current Requirements. This approach relies on changes in external market conditions, such as a drop in interest rates or construction costs, that are beyond the municipality’s control. It assumes that the 25% requirement at the 80% AMI threshold would eventually become feasible as the broader economy stabilizes, effectively waiting for the market to catch up or relying on external subsidies to support projects. ●​ Option 2: Recalibrate the Requirement. Rather than relying on market shifts, the City could modify the requirement to align with current economic conditions. This would involve analyzing what percentage and AMI thresholds may be more likely to generate more housing projects. ●​ Option 3: Leverage City Assets. The City already leverages opportunities to create housing on publicly owned land. Of the 18 affordable housing projects exempt from IZ during the IZ 2.0 period, six are associated with the disposition of City-owned land. Leveraging publicly owned land allows for greater control over project outcomes and affordability levels, and this tool should be utilized whenever practicable. Another opportunity is to leverage City funding resources to support the creation of IZ units within projects, helping to close funding gaps and provide the subsidy needed to incorporate affordable units into market-rate developments. ●​ Option 4: Community-Provided Capital. Explore alternative approaches that shift the burden from individual projects to the broader community by leveraging opportunities created through rising property values and land-value increases. NEXT STEPS: No action from the Committee is needed. Any changes to the IZ ordinance would need to be reviewed and recommended by the Planning Board, with the City Council retaining final authority to approve and implement any amendments. FISCAL IMPACT On April 14, 2025, the City Council unanimously approved the acceptance and appropriation of a $50,000 grant (8–0; Councilor Fournier absent) from the State of Maine’s Housing Opportunity Program to support a housing policy evaluation (Order 150-24/25). This grant funding was supplemented with $15,000 from the Planning & Urban Development Department’s FY26 operating budget for contractual services. CONCLUSION(S) This item is for discussion only. PRIOR COMMITTEE REVIEW February 17, 2026 - Housing & Economic Development Committee 3 Page 73 PREPARED BY Kevin Kraft, AICP Nell Donaldson Director Director of Special Projects Planning & Urban Development Planning & Urban Development ATTACHMENTS Attachment A – Inclusionary Zoning Study Attachment B - 2026 City Council Goals Attachment C - 2026 HEDC Workplan 4 Page 74  Inclusionary Zoning Analysis for the City of Portland, Maine inclusionary zoning analysis For the City of Portland, Maine 1 Page 75 FORWARD Forward: From the City This study was commissioned by the City of Portland, Maine to better understand the efficacy of its inclusionary zoning policy. It was intended to answer basic questions about the policy – how many affordable housing units it has produced, how it has worked over time, and how effective it might be under market conditions. This type of analysis is essential to good policy-making. It is a practice suggested not only as a fundamental goal of the city’s comprehensive plan, which encourages the City to identify metrics, collect data, and adapt policies, but also during the original inclu- sionary zoning adoption process in 2015. The inclusionary zoning policy is frequently cited as the primary barrier to housing construction in Portland and is commonly raised as a locally controlled obstacle. However, it is important to note that this study is not the result of preconceived notions about the inclusionary zoning policy itself, or of the value of one form of the policy over another. The City of Portland has made a fundamental commitment to affordable housing going back decades, one that is embedded in the City’s long-range planning, land use code, and core programs. It is codified in policies like affordable hous- ing density and height bonuses, expedited review, and housing replacement requirements. The goal of the inclusionary zoning study is to provide analytical findings that can help policy-makers determine how inclusionary zoning best fits into the City’s array of affordable housing policies and programs moving forward. 2 Page 76  Inclusionary Zoning Analysis for the City of Portland, Maine 2 FORWARD PART 1 5 What is Inclusionary Zoning? Policy Specifics Metrics and Methodology What Must Be True for Inclusionary Zoning to Work? PART 2 11 Production Prevailing Conditions With Which The Current Policy Has Interacted Development Activity 2011-2025 Underlying Mechanics It Wasn’t Always This Way PART 3 IZ 2.0 23 Apples to Apples How Market Strength Dictates Everything Fixed Weight of IZ Large Projects Can Have Outsize Impacts Complex Projects Can Tell Multiple Stories at Once 39 PART 4 Going Forward 3 Page 77 PART 1 | This is the subhead typeface at 18pt 4 Page 78  Inclusionary Zoning Analysis for the City of Portland, Maine Part 1 5 Page 79 PART 1 | What is Inclusionary Zoning? What is Inclusionary Zoning? Policy Specifics The current policy (referred to in this study as IZ 2.0), has been in place since Inclusionary zoning (IZ) is a policy tool that conditions market-rate passage by referendum in late 2020. It requires that either 25% of all housing development permissions on affordable housing contributions. It has units built in projects with ten or more units be affordable to households at 80% two primary aims and two working assumptions. The goals of an of the area median income (AMI), or, in lieu of meeting that requirement on site, inclusionary policy are: a fee of $182,000 ($150,000 in 2020, adjusted annually) per inclusionary unit be paid into the city’s housing trust fund.1 This is a change from the city’s original policy, adopted in 2015 (IZ 1.0), which required that 10% of all housing units built in projects with ten or more units be affordable to households at 100% AMI for 1 2 rentals or 120% for ownership units, or, in lieu of meeting that requirement on To obtain either To ensure future site, a base fee of $100,000 per inclusionary unit (adjusted annually) be paid into affordable housing development is the city’s housing trust fund.2 units or a cash integrated equivalency Portland’s IZ 1.0 Portland’s IZ 2.0 ADOPTED IN 2015 ADOPTED IN 2020 IZ policies are built on the expectation that the cost of compliance - that is, the cost of delivering affordable housing that by definition DEVELOPMENT INCOME DEVELOPMENT INCOME cannot be paid for by the rents (or sales prices) received for those THRESHOLD TARGET THRESHOLD TARGET 10 10 80% units - can and will be internally subsidized, and (but) that if such internal ‘cross subsidy’ can’t be feasibly generated, third-party gap 100%/120% UNITS AREA MEDIAN INCOME UNITS AREA MEDIAN INCOME financing will have to be found, or else the project will collapse. PROPORTIONAL PAYMENT PROPORTIONAL PAYMENT REQUIREMENT IN-LIEU REQUIREMENT IN-LIEU $100,000 $150,000 10% PER UNIT 25% PER UNIT 6 Page 80  Inclusionary Zoning Analysis for the City of Portland, Maine Snapshot Comparison, IZ 1.0 vs IZ 2.0 Policies 2016-2020 Policy (IZ 1.0) 2021-2025 Policy (IZ 2.0) Total Project Size (Illustration) Units 100 Total Project Size (Illustration) Units 100 Inclusionary Requirement 10% 10 Inclusionary Requirement 25% 25 $100,000 (base) $150,000 (base) Fee in Lieu/IZ Unit Fee in Lieu/IZ Unit $108,786 (2020 adjusted $182,830 (2025 adjusted) Fee in Lieu/IZ Project $1,000,000 Fee in Lieu/IZ Project $4,550,000 Effective Regulatory Cost/All Units $10,000 Effective Regulatory Cost/All Units $45,500 Effective Regulatory Cost/Market Units $11,111 Effective Regulatory Cost/Market Units $60,667 Income for IZ Units (AMI) Rental ≥ 100% Income for IZ Units (AMI) Rental ≥ 80% Income for IZ Units (AMI) Ownership ≥ 120% Income for IZ Units (AMI) Ownership ≥ 80% EFFECTIVE COST ON ALL UNITS EFFECTIVE COST ON ALL UNITS IN COMPLIANT DEVELOPMENTS IN COMPLIANT DEVELOPMENTS $10,000 $45,500 1 Historically, off-site units were permitted, and flexibility has been granted for master planned and phased developments. This flexibility has allowed a multi-phased project comprised of multiple addresses to ‘send’ its affordable inclusionary zoning units from one address within the development to another ‘receiving’ address, thereby satisfying the policy to the letter of percentages, but not the spirit of inclusion. 2 There are times when it will make more financial sense for a non-exempt, market rate housing development to comply with the requirement on site than to pay the fee in lieu of doing so. This will be the case when to comply inclusively, that is, to deliver and then responsibly own and manage deed-restricted, affordable units on site, within the same project, is less costly than to pay the in-lieu fee, and vice versa. The minimum cost of complying with the current requirement therefore, is $182,000 per inclusionary unit. This works out to approximately $45,500 in additional costs on a per-unit basis. 7 Page 81 PART 1 | Metrics and Methodology This study is the result of a combination of quantitative and qualitative methods used to arrive at conclusions regarding the effects of the city’s inclusionary zoning Metrics and Methodology policy. Qualitative methods included interviews with stakeholders familiar with the development framework in Portland There are two main benchmarks for determining if an Inclusionary Zoning (IZ) policy is working: outputs and elasticity. 1. Inventory: Analyzed 188 projects3 that received site plan approval from 2010–2025, categorizing projects as exempt (i.e. otherwise deed-restricted affordable housing projects or market rate projects <10 units) or non- exempt 1 Outputs Raw: The count of affordable 2 Elasticity The policy’s impact on total 2. Project Lifecycle: Tracked each project from approval to final disposition (Under Construction, Completed, or Expired) to determine the typical duration from entitlement to delivery. 3. Modeling: Established a year-by-year baseline (2010–2025) of the units or fee-in-lieu revenue housing volume. Because the economic conditions shaping development. produced by the inclusionary current IZ policy relies on zoning requirement. For market-rate development to • Supply: Land prices, density configurations, construction methods, some, any number above zero cross-subsidize affordable labor/material costs, soft costs (planning and design, marketing) and means success. For others, units, policy success depends infrastructure expenses (per acre, per unit). this output lacks meaning on market rate production. • Constraints: Interest rates, inflation, tax credit pricing, Loan-to-Value until weighed against the (LTV) ratios, and required Internal Rate of Return (IRR). costs of unit or fee generation and the opportunity costs of • Demand: Household incomes and corresponding affordability creating them. thresholds. Qualitative: The subset of 4. Policy Context: Reverse-engineered models to understand development metrics defining the “how” margins across three distinct eras: the Post-2008 Recovery, Pre-COVID and “where” of IZ units Stability, and the Post-COVID period, as situated in three also distinct and fees including physical inclusionary zoning policy periods: 2010-2015 (pre-IZ), 2016-2020 (IZ on-site integration, unit size/ 1.0), and 2021-2025 (IZ 2.0) configuration, and the efficacy 3 This includes all projects that received minor (administrative) or major (Planning Board) site plan ap- of Housing Trust Fund expen- proval with three or more units between 2010 and 2025. Projects only subject to subdivision review are not ditures. included in this analysis. 8 Page 82  Inclusionary Zoning Analysis for the City of Portland, Maine What Must Be True for Inclusionary Zoning to Work? When inclusionary policies work well - that is, when the policy is causing the delivery of an otherwise unattainable volume of affordable housing units, and causing those units to be delivered in an inclu- sive manner - the expense of doing so (complying) 1 For an inclusionary policy to work, the requirement cannot be so significant that it exceeds a project’s capacity to is either paid for by the revenue the project gener- offset policy impacts - costs - through ates, a process known as cross-subsidizing, or by adjustments to project density, unit external subsidy, or by a marriage of the two. size, quality, location, timing, project design, and other variables The gap between the cost to deliver and responsibly manage housing and the ability of a project to cover those costs is driven by dozens of 2 variables—some within a developer’s control, such as unit size, and others not, like interest rates. Because these factors are dynamically When these adjustments prove linked, “effective or ineffective” categorizations of inclusionary insufficient, there must be a third- zoning rarely paint a complete or accurate picture. party subsidy that is sufficient enough to balance the books. When these The true measure of inclusionary zoning starts with a clear under- conditions are not met, development standing of a community’s goals, identification of the specific condi- tends not to proceed. tions required for success, a determination of when those conditions have or have not been present, and, most importantly, the resulting rate at which approved projects actually get built. 9 Page 83 PART 1 | This is the subhead typeface at 18pt 10 Page 84  Inclusionary Zoning Analysis for the City of Portland, Maine Part 2 11 Page 85  PART 2 | What Has IZ Produced In Terms of Affordable Units? What Has IZ Produced In Terms of Affordable Units? Over the course of its ten-year history (2015-2025), the City of Portland’s inclusionary zoning ordinance has applied to 58 “inclusionary zoning In terms of pipeline, there are 250 IZ units approved but not yet under projects,” thus far producing 161 affordable housing units. In addition, construction, and $6.5 million in fee-in-lieu contributions in the approved $3.47 million has been contributed to the Jill C. Duson Housing Trust but not yet under-construction category. A total of 71 IZ units and $3.9 million Fund through in-lieu fee contributions. At the current time, another eight in contributions are in projects that have either expired or been cancelled. affordable units are under construction, to go along with an additional $577,067 in pending fee-in-lieu payments. Looking just at these IZ units and fees, there are clear trends in terms APPROVED IZ 1.0 PROJECTS of how and where units are built. The vast majority of constructed and in-construction IZ units (88%) are integrated within mixed-income build- 2015-2020 40 PROJECTS ings. 2,065 TOTAL UNITS These units are generally clustered in downtown, the West End, Bayside, 1,901 MARKET RATE UNITS India Street, and Munjoy Hill. Most of the constructed and in-construction Over the IZ 1.0 period, 40 projects 164 IZ UNITS triggered compliance with the IZ policy, IZ units are rental units (95%), and these units come in a range of sizes, resulting in 2,065 total approved units, 29 • OFF-SITE though they generally trend small (85% one-bedroom or studio). of which 164 were designated as IZ units 135 • ON-SITE to meet the requirement. Of the projects On the fee side, since IZ contributions aren’t technically “earmarked,” that triggered compliance, 19 opted to $6,068,995 FEE-IN-LIEU CONTRIBUTIONS pay the fee-in-lieu, while 21 elected to there is no way to definitively say which City-subsidized affordable construct the required IZ units either projects they have, in turn, helped come to fruition, but over the life of the COMPLETED IZ 1.0 PROJECTS on-site or off-site. policy the City has supported numerous affordable projects through trust fund contributions, including $2.5 million to Lambert Woods North and 26 PROJECTS South, for example, in 2025 alone. 1,436 TOTAL UNITS 1,306 MARKET RATE UNITS 118 IZ UNITS 16 • OFF-SITE 102 • ON-SITE $3,467,237 FEE-IN-LIEU CONTRIBUTIONS 12 Page 86  Inclusionary Zoning Analysis for the City of Portland, Maine 2021-2025 APPROVED IZ 2.0 PROJECTS 18 PROJECTS 1,453 TOTAL UNITS Over the IZ 2.0 period, 18 projects triggered compliance with 1,155 MARKET RATE UNITS the IZ policy, resulting in 1,453 total units, of which 326 326 IZ UNITS were designated as IZ units to meet the requirement. Of the projects that triggered compliance, 5 opted to pay the fee- 67 • OFF-SITE in-lieu, while 13 elected to construct the required IZ units 259 • ON-SITE either on-site or off-site. $8,398,276 FEE-IN-LIEU CONTRIBUTIONS COMPLETED IZ 2.0 PROJECTS 3 PROJECTS 167 TOTAL UNITS 124 MARKET RATE UNITS There was a 55% percent 43 IZ UNITS reduction in projects that triggered compliance with 0 • OFF-SITE IZ between IZ 1.0 and IZ 2.0. 43 • ON-SITE $0 FEE-IN-LIEU CONTRIBUTIONS 13 Page 87  PART 2 | Prevailing Conditions With Which The Current Policy Has Interacted Prevailing Conditions With Which The Current Policy Has Interacted 2016-2020 Mortgage rates for the five year period from 2016-2020 averaged $100,000 over 30 years starting in 2021 was to incur a monthly Borrowing Costs 3.85% down from an five year average of 4.02% the previous five obligation of $419. To borrow the same amount at 2025 rates is to years. Notably, borrowing costs fell by 31% from 2018 to 2020, so have a monthly payment of $612. by the end of the five year period, two important factors were con- 2016- 3.85% verging: demand to live in Portland was steadily increasing, creating Since development is realized by borrowing the money to buy and 2020 a bankable market to build for and borrowing costs were falling, hold land, to design a project, and construct units, increases of this making development costs/unit more workable. magnitude have the downstream effect of raising the cost of devel- 2020- 3.03% opment considerably. 2021 During this period land prices per acre averaged nearly $800,000, fully twice the average the previous five years. All else being equal, Meanwhile, construction costs per square foot rose from $248/SF a project in this period had to be twice as dense to keep land costs/ in 2021 to $392/SF in 2025. To have constructed 1,000 SF in 2021 2022-2025 unit constant. would cost $248,000. That same $248,000 in 2025 was enough to purchase just 632 SF. 6.22% Meanwhile construction costs in this five year period were 33% higher than in the previous five years. Buying and holding land has become more costly over the last five years as well, and now averages nearly $2M/acre. Cost of Land 2021-Present The average mortgage rate during the two year period 2020-2021 2020 $502,040 was 3.03 percent. By contrast, the average rate during the period 2022-2025 was 6.22 percent. As the era under the previous policy 2021 $712,202 (IZ 1.0) was concluding and the era under the new policy (IZ 2.0) was beginning, the cost of borrowing was about to increase sig- 2022 $858,651 nificantly. To have borrowed $100,000 in 2021 was to have had 45% more borrowing power than today. In other words, to repay 2022-2025 $981,488 / acre 14 Page 88  Inclusionary Zoning Analysis for the City of Portland, Maine 400,000 Development Conditions / Environment PRE IZ 1.0 TO 2.0 2011-2015 2016-2020 2021- 300,000 Required Inclusionary Units NA 10% 25% $ Required Affordability for Inclusionary Units NA 100% AMI 80% AMI Max Affordability for 100% Median Income HH In Lieu Fee Option/Inclusionary Unit NA $100,000 $182,000 200,000 IZ EXACTION Net Effective Not-Less-Than Cost of Compliance with Inclusionary Policy NA $10,000 $45,500 AVG FINANCING Average Interest Rates 4.02% 3.85% 5.57% 44.7% Average Construction Costs/SqFt $159 $213 $322 51.2% AVG CONSTRUCTION 100,000 Average Land Price/Acre $393,317 COSTS $783,055 $981,488 25.3% Est. Total Break Even Development Cost/500 SqFt Unit @ 30 dwelling units per acre (excl. IZ) $135,560 $188,637 $293,975 55.8% Est. Break-Even Rent/500 SqFt Unit @ 30 dwelling units per acre (excl IZ) $1,040 $1,410 $2,753 95.2% AVE LAND PRICE 0 Est. Break-Even Rent/500 SqFt Unit @ 30 dwelling units per acre (including IZ requirement) $1,040 $1,498 $3,113 107.8% 2010 2012 2014 2016 2018 2020 2022 2024 2019/2020 20/21 21/22 22/23 23/24 2024/2025 Monthly Rent Increase Needed Break-Even to Cross Subsidize Inclusionary Units NA $88 $360 309.1% Est. IZ Household Income Matched to 500 SqFt Unit Living Space (5 year avg.) NA $61,840 $77,950 26.1% Maximum Affordable Rent for Households/IZ Unit NA $1,701 $2,144 Est. 5-year Average Margin/Mo Per Unit NA $203 -$969 Pre IZ (2011-2015) IZ 1.0 (2016-2020) IZ 2.0 (2021-2025) $1,000,000 $340 6.0% $300,000 MAX SUPPORTABLE TDC/IZ INCOME $750,000 $255 4.5% $225,000 $981,488 MAX SUPPORTABLE TDC/IZ INCOME $293,975 5.57% $500,000 $170 $322 3.0% $150,000 $783,055 $188,637 $213 3.85% $250,000 $85 1.5% $75,000 $393,317 $159 4.02% $135,560 $0 $0 0.0% $0 Land Sales Price AVG/Acre Construction Costs/SqFt AVG Interest Rate AVG Estimated average break-even total development cost for a 500-square-foot residential unit (excluding common areas), based on a density of 30 dwelling units per acre. 15 Page 89 PART 2 | Development Activity 2011-2025 Development Activity 2011-2025 This analysis is partly based on a reconstruction of 15 years of Port- land’s housing development activity. When an approved project is completed and receives a certificate of occupancy, it has converted from an Tracking the life of 7,610 units across three distinct regulatory eras approved project to a completed project placed into shows robust housing approvals overall. In the five-year Pre-IZ service. The rate of conversion is the number of projects period, 51 projects totaling 1,873 units were approved. 82 projects completed and placed into service, divided by the number totaling 2,820 units were approved during IZ 1.0 and 55 projects of approved projects for a given period. For example, if totaling 2,917 units were approved during IZ 2.0.4 two projects were completed of five approved during a given period, the conversation rate equal two divided by However, over this same period, there is evidence of falling conver- five, or 2/5, or 40% sion rates of projects moving from approval to completion. Approval volume has remained robust, but the delivery of actual housing has dropped from an average of greater than 80% from 2011-2020 to under 10% over the last five years. City data shows that Portland’s housing pipeline has bottlenecked. While projects continue to receive approval, they are taking longer to break ground, longer to reach completion, and are expiring at higher rates than in years past. There is also a trend towards fewer, larger projects with smaller units, a growing need for external subsidy, and off-site, often complex and costly arrangements being made to satisfy inclusionary zoning requirements. In addition, there was a 55% decline in proj- ects triggering compliance with inclusionary zoning from the first policy (1.0) to the current policy (2.0). 4 This number includes some approvals that were subject to 10% IZ or in the case of Thompson’s Point, no IZ requirement). 16 Page 90  Inclusionary Zoning Analysis for the City of Portland, Maine Year Over Year Conversion Rate and Feasibility Margin Conversion Rate Gap Between Break Even Rent/Mo and Max Affordable Rent/Mo for Households at 80% Area Median Income 100.000% $1,800 $1,350 Completions/Approvals 75.000% Monthly Cost Gap EST $900 50.000% $450 25.000% $0 0.000% $-450 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Based on CZB reviews of City of Portland Project Data 2009-2026 B/E = Estimated break/even rent needed for project viability. In this chart, the difference between each year’s estimated break even rent/mo and the rent affordable to a 2 person household at 80% AMI (area median income). See Y2 axis. Concurrently, the rate at which projects were converting from approved to complete is shown on the Y1 axis. 17 Page 91 PART 2 | Underlying Mechanics Underlying Mechanics The underlying mechanics of feasibility explain what has been hap- • As Portland’s desirability has grown, land costs have risen. While pening. Development is not a linear process. It is a margin-driven increased density can mitigate these costs, it is often insufficient system in which small shifts in cost or revenue determine whether in cities where land costs, while high, are, paradoxically, not high a project moves forward as planned, moves forward though more enough, thus creating further upward pressure on market-rate slowly, stalls for a period then restarts, or fails altogether. rents. • Costs are compounded by building codes (HVAC, fire safety, When feasibility margins are positive - that is when the rents or efficiency standards), administrative delays, and regulatory sales prices obtained are greater than the rents or sales prices that requirements. need to be charged - developers have room to absorb regulatory burdens, market fluctuations, and financing uncertainties. When • For example, during the period 2011-2021, local incomes rose margins turn negative, even temporarily, projects become fragile, 30.6%, but development costs increased 3.52 times that amount. delays become costly, and the likelihood of completion diminishes. Income growth throughout the last 20 years, regardless of the When negative margins become sizable and persistent, the rate at period chosen within the last two decades to analyze, has not which approvals convert to construction and completion declines. kept pace with the cost of building. Increasingly negative margins in Portland have been driven by four converging factors: inflation, land appreciation, regulatory costs, While the current falloff in actual production (approvals converted and income gaps. to units) coincides with worsening market conditions that cities nationwide have contended with over the last five years - specifi- • Rising costs for labor, materials, and interest rates increase per- cally interest rates and construction costs - analysis shows that the unit expenses. While developers typically offset these through current inclusionary requirement has functioned as a marginal cost smaller units or higher rents, inclusionary zoning restricts rent that works to push projects from narrowly feasible to more than revenue, forcing unit sizes down and quality lower. If the market narrowly infeasible. cannot absorb the necessary rent hikes to cover the gap, projects stall. 18 Page 92  Inclusionary Zoning Analysis for the City of Portland, Maine Break Even Rent and Maximum Affordable Rent at 80% AMI Break Even Rent/Mo (500+ Common) (2011-2025) with Interest Rate Fluctuations 80% Area Median Income Max Affordable Rent Mortgage Rate 7.00% 4,000 5.25% 3,000 3.50% 2,000 1.75% 1,000 0.00% 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Based on CZB estimates of break even development costs (sources MLS, RS Means, CoStar) 19 Page 93 PART 2 | It Wasn’t Always This Way It Wasn’t Always This Way In the Pre-IZ era analyzed for this project (2010-2015), the market Today, IZ 2.0’s $45,500/unit burden ($182,000/IZ unit in-lieu operated in relative balance. Only three projects approved during spread across all units at a 25% requirement) has reduced whatever this period expired and 94% of projects were eventually completed. slack remains. Under the 10% requirement of IZ 1.0 (2016-2020), the conversion The average break-even rent that needed to be charged over the last rate remained resilient, ultimately delivering 2,102 units. This was five years to cover the costs of putting a 500 square foot apartment because the not-less-than $10,000 compliance cost/unit ($100,000/ into service had risen to an estimated $2,753/mo exclusive of the IZ unit in- lieu spread across all units at a 10% requirement) still costs of complying with the current inclusionary policy. Portland left enough “slack” in the project to absorb the combination of not being a market that will bear this cost - $5.50/SF - the only market shifts (interest rate changes, rising construction costs, way to absorb the cost of the inclusionary requirement is to shrink rising land costs) in relation to purchasing power (incomes). The units to the 250-350 square foot range. It is worth reiterating here lost revenue and diminished long-term market value of every one that all models for this report were calculated on a break-even only deed-restricted unit affordable to a household at 100% AMI needed basis. That is all numbers referenced are based on a zero-profit/fee to be offset by the revenue and long-term value of nine other assumption. non-deed-restricted units. In IZ 2.0, three market-rate units have to subsidize one inclusionary unit, and the inclusionary unit needs to be affordable to a household at 80% AMI. Further, projects need to meet these terms both when market conditions are not favorable and when incomes, while rising, are not rising fast enough. 20 Page 94  Inclusionary Zoning Analysis for the City of Portland, Maine Non Exempt (10+) Units Year Over Year and Cumulative Approval/Completion Accumulated Backlog Units Approved (Market Rate 10+) Units Completed (Market Rate 10+) 1,100 2,500 INCREASES HOUSING PIPELINE SIZE 825 1,875 550 1,250 275 625 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Exempt (Affordable, Not IZ) Units Year Over Year and Cumulative Approval/Completion Accumulated Backlog Units Approved (Affordable Non IZ) Units Completed (Affordable Non IZ) REDUCES HOUSING PIPELINE SIZE 1,100 2,500 825 1,875 550 1,250 275 625 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 21 Page 95 PART 1 | This is the subhead typeface at 18pt 22 Page 96  Inclusionary Zoning Analysis for the City of Portland, Maine Part 3 23 Page 97 PART 3 | IZ 2.0 IZ 2.0 More housing has been approved in the last five years (under IZ 2.0) than either the five years prior under the first policy (IZ 1.0) or the five years before that. However, there was a 55% decline in projects triggering IZ compliance, decreasing from 40 projects under IZ 1.0 to 18 projects under IZ 2.0. Emphasizing the volume of approvals but not the rate at which those approvals are turned into constructed housing implies a flow of production that is not actually occurring, however. This is notewor- thy first because an approval is a statement of potential and not a guarantee of production. Second and conversely, just because an approval has not progressed to completion does not mean it won’t. Moreover, and deserving special note, because developers with access to flexible equity and strong balance sheets have the ability to wait things out, it is not impossible that some projects that have not progressed may have, or now be “stalled” not because of prohibitive market conditions, or because of the city’s inclusionary policy, but because of developer decisions to pause and wait. 24 Page 98  Inclusionary Zoning Analysis for the City of Portland, Maine 2,820 units approved during IZ 1.0 2,917 units approved during IZ 2.0 25 Page 99  PART 3 | Apples to Apples Apples to Apples This report evaluated data through the end of February 2026. Any activity since has not been taken into consideration. There are many ways to approach a large data set such as the lifespans of 188 proj- ects approved since 2009. The primary window used for this analysis was to break the span into three equal five year blocks of time, as noted throughout - 2011-2015, 2016-2020, and 2021-2025. Each block is a period in which new approvals are granted and season, and entitlements JAN 1, 2016-FEB 28, 2021 JAN 1, 2021-FEB 28, 2026 from previous years mature. But by reviewing project activity only 62 through these convenient 60 month windows, activities occurring in January and February 2026 would be missed. For those reasons after months analysis also looked at mirroring 62 month periods - IZ 1.0 spanning January 1, 2016-February 28, 2021, and IZ 2.0 spanning January 1, BETTER MARKET WORSE MARKET 2021-February 28, 2026. CONDITIONS CONDITIONS At the same 62 month mark, both the IZ 1.0 and current IZ 2.0 periods have similar rates of units in projects not yet started, 73.1% and 69.2% respectively. But, also at the 62 month mark, the current 17.8% 8.6% CONVERSION RATE CONVERSION RATE 25% IZ policy has co-mingled with worse market conditions to deliver a conversion rate of 8.6% (251/2,917), whereas the previous 10% policy mixed with better market conditions to deliver a conver- sation rate of 17.8% (501/2,820). 26 Page 100  Inclusionary Zoning Analysis for the City of Portland, Maine Where the two periods most dramatically diverge is the sheer volume of ‘Not Yet Started’ inventory. Under IZ 1.0, 77.6% of units pending at month 62 eventually reached the finish line. For IZ 2.0 to achieve that same ultimate rate of production, 95.2% of the currently stalled 2,020 units would have to convert—and they would have to do so under far more restrictive financing and regulatory conditions than existed during the previous decade. In other words, under far more favorable conditions, and a far less costly inclusionary policy than exists today, the previous era converted 77.6% of its not-yet-started-by-month-62 units. To reach the same production rate, 95.2% of today’s not-yet-started IZ 2.0 units would JAN 1, 2016-FEB 28, 2021 JAN 1, 2021-FEB 28, 2026 have to convert and do so under far worse conditions. after 62 months 77.6% 95.2% OF NOT YET STARTED PROJECTS CONVERSION RATE WILL NEED TO CONVERT UNDER WORSE MARKET CONDITIONS 27 Page 101 PART 3 | Apples to Apples Detailed Comparison Apples to Apples Detailed Comparison IZ 1.0 MARKET RATE, AFFORDABLE, CONSTRUCTED, AND EXPIRED MARKET RATE (76%) TOTAL APPROVALS AFFORDABLE (24%) 2,137 2,820 683 TOTAL UNITS IN IN LIEU FEES IZ UNITS IZ PROJECTS IZ 1.0 PROJECTS 2,065 $6,068,995 164 82 PROJECTS MARKET RATE (72%) TOTAL COMPLETIONS AFFORDABLE (28%) 40 IZ PROJECTS 1,510 2,102 592 29 < 10 UNIT OR OTHERWISE EXEMPT PROJECTS 13 AFFORDABLE HOUSING SUBSIDIZED PROJECTS TOTAL UNITS IN IN LIEU FEES IZ UNITS IZ PROJECTS 1,436 $3,467,237 118 MARKET RATE (89%) PRESENTLY UNDER CONSTRUCTION AFFORDABLE (11%) MARKET RATE (82%) CANCELED/EXPIRED AFFORDABLE (18%) 74 83 9 119 174 55 217 TOTAL UNITS IN TOTAL UNITS IN IN LIEU FEES IZ UNITS IN LIEU FEES IZ UNITS IZ PROJECTS IZ PROJECTS 75 $0 8 93 $571,835 4 MARKET RATE (94%) NOT YET STARTED AFFORDABLE (6%) 434 461 27 TOTAL UNITS IN IN LIEU FEES IZ UNITS IZ PROJECTS 461 $2,029,923 34 28 Page 102  Inclusionary Zoning Analysis for the City of Portland, Maine IZ 2.0 MARKET RATE, AFFORDABLE, CONSTRUCTED, AND EXPIRED MARKET RATE (53%) TOTAL APPROVALS AFFORDABLE (47%) 1,549 2,917 1,368 TOTAL UNITS IN IN LIEU FEES IZ UNITS IZ PROJECTS IZ 2.0 PROJECTS 1,453 $8,398,276 326 55 PROJECTS MARKET RATE (58%) TOTAL COMPLETIONS AFFORDABLE (42%) 18 IZ PROJECTS 145 251 106 19 < 10 UNIT OR OTHERWISE EXEMPT PROJECTS 18 AFFORDABLE HOUSING SUBSIDIZED PROJECTS TOTAL UNITS IN IN LIEU FEES IZ UNITS IZ PROJECTS 167 $0 43 MARKET RATE (35%) PRESENTLY UNDER CONSTRUCTION AFFORDABLE (65%) MARKET RATE (81%) CANCELED/EXPIRED AFFORDABLE (19%) 296 840 544 291 358 67 TOTAL UNITS IN TOTAL UNITS IN IN LIEU FEES IZ UNITS IN LIEU FEES IZ UNITS IZ PROJECTS IZ PROJECTS 13 $577,067 0 324 $3,365,995 67 MARKET RATE (56%) NOT YET STARTED AFFORDABLE (44%) 817 1,468 651 TOTAL UNITS IN IN LIEU FEES IZ UNITS IZ PROJECTS 949 $4,455,214 216 29 Page 103  PART 3 | How Market Strength Dictates Everything How Market Strength Dictates Everything While there may be a tendency to compare local policy solutions This is crucial because Portland and Boston have similar construc- to those in markets like Boston or San Francisco, this approach tion labor and material cost variables (Boston’s is about 21% higher), overlooks a fundamental economic reality. While Portland is itself but Boston has market strength to absorb those costs that Portland a strong market, it lacks the sheer volume of high-income house- lacks. holds found in larger metropolitan areas. In those cities, a vast pool of renters and buyers can absorb the premium rents or sales Portland’s lower land costs cannot bridge the gap created by high prices necessary to generate the internal subsidy required to carry regional construction and financing expenses. In high-cost markets, a 25% inclusionary load. Portland’s market does not have the same land typically represents only 15% of a budget; the remaining 85% is height. Without that specific density of high-earning households dictated by labor and material costs. While Portland’s land is cheaper to cross-subsidize the cost of deed-restricted units, the financial than Boston’s, its revenue potential is 40% lower, making it impos- burden of the requirement quickly outpaces the revenue potential sible to cross-subsidize high regulatory exactions. of the market-rate units. Density provides economies of scale, but it cannot fix a market In Boston, more than 18,000 units renting above $4,000/mo, and where construction costs ($350–$400/SF) consistently exceed the an estimated more than 8,400 units renting above the estimated IZ capitalized value of the resulting rents. break-even rate of $4,400/mo reflects the fact that Boston has a far higher number and percentage of households than does Portland with the incomes needed to pay rents high enough to cross subsidize rent losses from inclusionary units. More specifically, whereas an estimated 1.1% of Portland’s mul- tifamily inventory obtains rents at the level needed to be feasible under the combination of current market conditions and the present requirement, in Boston’s case it’s 8.65%, or 7.8 times as large. As of late 2024 and through 2026, the City of Boston’s Inclusionary Development Policy (IDP), now codified as Article 79 of the Zoning Code, has moved beyond previous 13% baseline. The precise requirements depend on the project’s size and whether it is rental or homeownership. The policy now applies to all residential projects of 7 or more units (down from the previous 10-unit threshold). For rental developments, the re- quirement is a tiered percentage based on project size: Small Projects (7–25 units): 17% of units/square footage must be income-restricted at an average of 60% AMI. Large Projects (26+ units): 20% total. This is typically structured as: 17% at an average of 60% AMI. 3% set aside specifically for households with mobile housing vouchers. Alternative for Large Projects: Developers can opt for 18% total if they deepen the affordability to an average of 50% AMI (plus the 3% voucher set-aside). For condo/ownership developments, the requirement is also scaled: Small Projects (7–25 units): 17% of units/square footage at an average of 90% AMI (units split between 80% and 100% AMI). Large Projects (26+ units): 20% of units/square footage at an average of 90% AMI. If not building on-site, the “cash-out” formula is now tied to geographic zones: Zone A (High value): $380,000 per unit or $675/sq ft. Zone B (Medium value): $300,000 per unit or $460/sq ft. Zone C (Low value): $200,000 per unit or $365/sq ft. 30 Page 104  Inclusionary Zoning Inclusionary Analysis Zoning for the Analysis City of for the Portland, City of Maine | czb Portland, LLC Maine Portland Lacks the Revenue “Slack” to Cross-Subsidize Inclusionary Zoning Portland Boston 8,250 8,000 7,750 7,500 7,250 7,000 6,750 6,500 6,250 6,000 5,750 5,500 5,250 5,000 4,750 Rent/Mo 4,500 4,250 4,000 3,750 3,500 3,250 3,000 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0.00% 7.50% 15.00% 22.50% 30.0% Distribution of Households Paying How Much/Mo for Rent in Portland (Blue) and Boston (Green) 31 Page 105  PART 3 | Fixed Weight of IZ Fixed Weight of IZ Housing production relies on mobile private equity that requires significantly less pressure on rental units from high earners priced a competitive internal rate of return. This return depends on two out of homeownership. inputs—cash flow and future sale value—both of which are reduced by regulatory requirements such as inclusionary zoning.5 When this investment capital disappears, bank debt cannot be secured, and the Large Projects Can Have Outsize Impacts project simply does not happen. Fewer projects ultimately lead to a smaller overall pool of housing, which paradoxically results in fewer Because Portland is a relatively small market, its data affordable units being built. The current inclusionary zoning re- can also be easily distorted; a single outlier project quirement imposes an additional $300 to $500 per month in rent on succeeding or failing can mask the broader reality facing market-rate units just to reach a break-even point. While a city like most developments. Boston might have a rent ceiling of $5,000 to absorb such a burden, Portland’s market effectively collapses at $3,000. With a correlation between the policy and rising costs at 0.913, the requirement acts as an immovable weight that closes the narrow window of project During IZ 1.0, the 2,820 units that were approved were spread across feasibility. 82 projects, with the gross average project size being 34 units. During IZ 2.0, 2,917 approved units are contained in 55 projects, A comparison with Boston further illustrates why Portland cannot with an average size of 53 units. While a valuable metric is a easily absorb these costs. In Boston, households earning over housing “unit”, units do not stall or get into the end zone as units, $150,000 face a high home-price-to-income ratio of 8:1, with less “projects” do. than 2% of for-sale inventory being affordable to them. This creates sustained demand for luxury rentals even at rates above $4,000. In The statistical narrative of Portland’s development landscape is contrast, Portland households earning $100,000—the benchmark often skewed by individual, high-impact projects that do not reflect needed to support impacted rents—find nearly 19% of the city’s broader market realities. A single sizable development swinging in for-sale inventory within their price range. This means Portland has either direction can fundamentally alter the data, creating a “story” 5 It is beyond the scope of this project to evaluate the impacts of Portland’s rent control policy. But any policy that curtails future value/unit will invariably impact internal rate of return, and since the city’s IZ policy will interact not only with market conditions but other regulatory requirements, the city is encouraged to evaluate the relationship between IZ and rent control. 32 Page 106  Inclusionary Zoning Analysis for the City of Portland, Maine for a given period that is defined more by atypical developments all incurred costs eventually be settled. Ultimately, subsidized de- than by systemic trends. These outliers are frequently characterized velopments fail to represent the scalable, market-driven production by unique metrics or complex financial structures that differentiate necessary for inclusionary zoning policies to be effective, as their them from the standard local pipeline. success is based on external variables with no predictive quality for the wider industry. The Bayside Master Development Plan serves as a prime example, relying as it does on a patchwork quilt of external subsidies ranging from one-off ARPA funds to highly competitive Low-Income Housing Tax Credits (LIHTC). While these projects are vital to the city’s housing goals, they are poor indicators of the private market’s functional health. Because their viability is tethered to contingent, application-dependent equity, their success provides no evidence that non-subsidized projects can operate under the existing regu- latory conditions. In fact, such projects, and the inclusion of such subsidies in non-exempt projects is a de facto admission that they would be financially infeasible without enhancement. To this point, the presence of tax credit projects reveals little about the market beyond the obvious gap between construction costs and what low-to-moderate-income households can afford. To the extent the projects may be said to “work”, they do precisely because they are insulated from market pressures by public capital. Their internal financing and development cost structures are unique, sharing only one commonality with market-rate projects: the requirement that 33 Page 107  PART 3 | Complex Projects Can Tell Multiple Stories at Once Complex Projects Can Tell Multiple Stories at Once The Bayside Master Development Plan illustrates the inherent on Preble, Oxford, and Lancaster Streets, those market-rate units volatility of projects with deeply interdependent parts, where are not financially carrying the burden. Instead, 89 Elm functions the true statistical impact remains unclear until every phase is through a heavy reliance on external public capital. Its feasibility complete. Based on Portland’s Planning Board approvals, the project is bridged by tax credit equity, $54 million in MaineHousing encompasses 804 total units spread across seven buildings. The plan construction financing, and an additional $23.72 million in various utilizes a complex “sender-receiver” model where the 201 affordable MaineHousing subsidies—much of which consists of one-time- units consolidated at 89 Elm Street satisfy the 25% inclusionary only allocations. If completed, this project will prove a vital point zoning requirement for the entire multi-phase master plan. This regarding the current regulatory climate: For the project to meet the consolidation creates a domino effect where the viability of the requirement, significant external subsidy was needed, illustrating market-rate phases is inextricably linked to the successful delivery that for IZ to work when conditions are unfavorable, tandem exter- of the subsidized component at 89 Elm Street, itself dependent on nal funding must exist. unreliable sources of funding. Beyond the Bayside Master Development Plan (a partnership This complexity serves as a cautionary tale. Because the project between Reveler and Avesta), phased site plans, such as 197 Oxford could not deliver these affordable units without external subsidies— Street, also highlight the inherent complexity of these policies. The including $35.5 million in LIHTC equity and MaineHousing loans— countless permutations that occur when multiple sites, variables, the entire development had to be reimagined to qualify for specific and construction phases interact to create a dataset that is as sug- public funding streams. This triggered a cyclical escalation: the gestive as one wants it to be while being (and because it is) struc- pursuit of subsidy required an intricate design for 89 Elm Street to turally opaque. Because the public record highlights the eventual maximize tax credit efficiency, which in turn increased complexity. delivery of units while concealing underlying financial pressures, it functions as a statistical Rorschach test: proponents can view the Importantly, none of the 603 market-rate units within the Bayside outputs as a narrative of success, while critics can use the exact Master Development Plan provide a cross-subsidy to support the same data to document a fundamental policy failure. deed-restricted units at 89 Elm Street. While the construction of 89 Elm Street is a legal necessity to unlock the later market-rate phases 34 Page 108  Inclusionary Zoning Analysis for the City of Portland, Maine Bayside Master Development Plan ? 804 Open Space UNITS (Residential) 7 BUILDINGS Major Publicly Accessible Open Space 603 MARKET RATE UNITS 89 Elm 201 “AFFORDABLE” IZ COMPLIANT UNITS $54M MAINEHOUSING 75 Preble 235 Oxford St. CONSTRUCTION FINANCING (Existing) $23.72M Open Space Open Space (Residential) OTHER MAINEHOUSING (Residential) SUBSIDIES 61 Preble St. If completed, this project will prove a vital point The viability of the market-rate regarding the current regulatory climate: For the phases is inextricably linked to the project to meet the requirement, significant external successful delivery of the subsidized subsidy was needed, illustrating that for IZ to work component at 89 Elm Street, itself when conditions are unfavorable, tandem external dependent on unreliable sources of funding. funding must exist. June 2, 2023 Revised September 10, 35 2025 Page 109 PART 1 | This is the subhead typeface at 18pt 36 Page 110  Inclusionary Zoning Analysis for the City of Portland, Maine Part 4 37 Page 111  PART 3 | Going Forward Going Forward There are a few paths forward the city may Current market drivers—specifically construction costs and interest wish to consider, among them one that holds rates—are entirely external to municipal influence and currently steady with current policy, a second that operate at levels that push project viability to a critical threshold. recalibrates the requirements, and a third When a city layers locally controlled policy requirements at the that bridge gaps using public resources. far upper limit of market capacity on top of prohibitive external conditions, the result is a structural misalignment. The data sug- gests that the current slowdown in conversion is not a temporary anomaly, but a predictable result of this misalignment. Developers 1 have increasingly turned to specific coping mechanisms—including off-site “send and receive” transfers, historic preservation tax Maintain Current credits, and reduced unit sizes—to bridge the widening gap. While Requirements these strategies show that developers are doing everything possible to keep projects moving, they also highlight a hard truth: under current market conditions, the city’s affordability rules have reached This approach relies on a shift in a breaking point where only high-end, market-rate housing is external market conditions—such as financially possible to build. At its core, the issue is that the current a significant drop in interest rates or policy requires a level of cross-subsidy that the Portland market is construction costs—to restore project presently unable to generate. This creates a high risk of prolonged margins. It assumes the current 25% stagnation in the development pipeline, as projects remain in an requirement at the 80% AMI thresh- approved but unfinanceable state. old will eventually become feasible as the broader economy stabilizes, effectively waiting for the market to catch up to the program specifics. 38 Page 112  Inclusionary Zoning Analysis for the City of Portland, Maine 2 Recalibrate the Requirement Itself 3 Bridge Gaps Using Publicly-Owned Assets and by Providing Community-Generated Capital Rather than waiting for market shifts, Leverage City Assets Community-Generated Capital the city could proactively modify the requirement to align with current The City already leverages opportunities to This path shifts the burden from the economic realities. This would involve create housing on publicly owned land. Of individual project to the community at additional analysis of the margins the 18 affordable housing projects exempt large. If an economically integrated city is a recorded over the last fifteen years, from IZ during the IZ 2.0 period, six are Portland community priority, this approach specifically contrasting the higher associated with the disposition of City- distributes the cost across the wider public production of 2016–2020 with the owned land, including Dougherty Commons, rather than extracting it solely from the stagnation of the post-2021 era. By Lambert Woods, and 1125 Brighton Avenue. housing production sector. It challenges the acknowledging the vastly different Together, these projects account for 337 city to tap into the rising property values conversion rates between these approved affordable units, of which 197 have and land-value increments enjoyed by all periods, the city could scale its re- been constructed or are currently under property owners - those who benefit from quirements to a level the market can construction. Leveraging publicly owned Portland’s desirability but currently bear actually deliver. land allows for greater control over project none of the financial burden for achieving outcomes and affordability levels, and this its inclusionary goals. It challenges elected tool should be utilized whenever practicable. representatives to duly acknowledge constit- uent calls for more affordable housing with a Another opportunity is to leverage City response that properly locates the source of funding resources to support the creation the problem and the means of addressing it of IZ units within projects, helping to with the community at large. close funding gaps and provide the subsidy needed to incorporate affordable units into market-rate developments. Exploring the City’s existing resources to provide financial support for IZ projects is encouraged. 39 Page 113 PART 1 | This is the subhead typeface at 18pt 40 Page 114 City of Portland I Executive Department Danielle West, City Manager Portland Common Council Coals 2026 to Committee Workplans Through the 2026 goal-setting process, the Portland City Council has identified six Common Council Goals that will guide the Council's collective work this year. These goals represent areas where councilors expressed shared commitment to advancing meaningful change. During the goal-setting workshops, councilors also identified concrete actions the Council could consider to translate these high-level goals into tangible policy work. The attached chart demonstrates how these priority themes, specific goals, and proposed actions connect to create an integrated approach to Portland's most pressing challenges. As committees develop their detailed 2026 workplans, this framework provides a roadmap for ensuring individual committee work contributes to Council-wide progress. The specific actions identified by councilors serve as starting points for committee deliberations, with the understanding that committees may refine, prioritize, or sequence these actions based on capacity, timing, and emerging opportunities. The 2026 Common Council Goals represent an ambitious agenda that seeks to make progress on Portland's most critical needs while building toward long-term community resilience. The connection between these goals and proposed committee actions provides a clear pathway from aspiration to implementation, ensuring that the Council's collective vision translates into meaningful policy change for Portland residents 389 Congress Street, Portland, Maine 04101 I 207-874-8300 I info@portlandmaine.gov 1 Page 115  2026 Common Council Goals Mapped to Council Committees with Potential Actions for Consideration in Committee Workplans Consider adjustments to inclusionary zoning ordinance to promote housing production. Address Portland's housing challenges by Consider policy amendments to streamline building permit application review and approval. Accelerate Housing Housing & encouraging the development of more Production and Economic Review Social Housing Task Force recommendations and consider council action on next steps. homes and protecting affordability, so Strengthen Affordability Development current and future residents can live and Consider amendment to Duson Trust Fund ordinance to support housing assistance for residents Protections Committee thrive in our community. (e.g., eviction prevention, security deposit assistance). Consider amendment to the rent control ordinance to strengthen enforcement. Consider council action to support reduction in chronic homelessness by 50% (currently 120 Decrease the number of people Health & people experiencing chronic homelessness) by end of 2026 (e.g., consideration on day shelter, experiencing chronic homelessness by Human adjustments to charitable food distribution license, regional and state partnerships). Reduce Chronic advancing policy to enhance support Services & Homelessness systems and address the underlying causes Review missions of city shelter facilities (i.e., Family Shelter, Warming Center). Public Safety that lead to housing instability in our Committee Consider amending the rate of exchange for the needle exchange program with a public health community. perspective. Support Vision Zero plan roll-out with council leadership. Create safer streets for all users by Express public support for Franklin Street Arterial plan and implementation. Sustainability & Reduce Pedestrian and advancing policy to prevent traffic deaths Transportation Consider development of Vision Zero ordinance, focused on complete streets, pedestrian safety, Bicyclist Fatalities and injuries while improving accessibility for walkability, and community engagement. Committee pedestrians, cyclists, and transit users. Develop legislative proposal for intersection camera pilot to improve safety to be introduced in the 2027 State Legislature session. Support Affordability for Ease the tax burden for Portland residents Consider a policy amendment to expand tax affordability programs such as Portland Senior Tax All Residents Through by finding new ways to fund city services Finance Equity Program (P-STEP). New Revenue Policies and providing direct tax relief to households Committee Consider a policy amendment to div ersify city revenue streams to offset taxpayer burden (e.g, and Targeted Tax Relief who need it most. fiscal impact of cruise ships, Payment in Lieu of Taxes). Address climate change by cutting carbon emissions, expanding clean energy and Sustainability & Advance the Goals of Consider policy to further advance One Cl imate Future goals are met (e.g., environmental impacts energy-efficient buildings, supporting Transportation One Climate Future of cruise ships, viability of solar on municipal buildings). sustainable transportation, and preparing Committee Portland for a resilient, low-carbon future. Foster a thriving local economy by Housing & Explore ordinance regulating parking lot advertising and pricing disclosure requirements. Strengthen Economic increasing support for businesses and Economic Vitality and Support Local Close out council action on Live Nation venue proposal. strengthening conditions that help Portland's Development Businesses business community grow. Committee Consider policy to enhance public support for the arts. 2 Page 116 ​City of Portland | City Council​ ​Mark Dion,​​Mayor​ ​The Portland City Council established its 2026 Common Goals (included below) on February 2,​ ​2026, formally communicating its policy priorities for the coming year and setting a foundation​ ​for the development of Council committee work plans.​ ​The 2026 Council schedule currently includes approximately 10 meetings for each committee. For​ ​planning purposes, the development of a single, original policy initiative typically requires two​ ​committee meetings. This process generally includes initial conceptual discussion, review of a​ ​draft ordinance or other policy document, and a public hearing at which the committee votes on​ ​whether to recommend adoption by the full City Council.​ ​In addition to developing and considering original policy initiatives, committee work will also​ ​include items referred by the Council, matters brought forward by staff, and panels or​ ​presentations, as needed.​ ​2026 City Council Common Goals​ ​Accelerate Housing Production and Strengthen Affordability Protections - Address Portland’s​ ​housing challenges by encouraging the development of more homes and protecting affordability,​ ​so current and future residents can live and thrive in our community.​ ​Reduce Chronic Homelessness - Decrease the number of people experiencing chronic​ ​homelessness by advancing policy to enhance support systems and address the underlying​ ​causes that lead to housing instability in our community.​ ​Reduce Pedestrian and Bicyclist Fatalities - Create safer streets for all users by advancing policy​ ​to prevent traffic deaths and injuries while improving accessibility for pedestrians, cyclists, and​ ​transit users.​ ​Support Affordability for All Residents Through New Revenue Policies and Targeted Tax Relief -​ ​E ase the tax burden for Portland residents by finding new ways to fund city services and​ ​providing direct tax relief to households who need it most.​ ​Advance the Goals of One Climate Future - Address climate change by cutting carbon emissions,​ ​expanding clean energy and energy-efficient buildings, supporting sustainable transportation,​ ​and preparing Portland for a resilient, low-carbon future.​ ​1​ Page 117 ​Strengthen Economic Vitality and Support Local Businesses - Foster a thriving local economy by​ ​increasing support for businesses and strengthening conditions that help Portland’s business​ ​community grow.​ ​Housing and Economic Development Committee​ ​2026 Work Plan​ ​Policy Initiative​ ​Related Council Goal​ ​Priority Ranking​ ​Consider adjustments to the​ ​Accelerate housing​ ​inclusionary zoning​ ​production and strengthen​ ​ordinance to promote​ ​affordability protections.​ ​housing production.​ ​Consider policy amendments​ ​Accelerate housing​ ​to streamline building permit​ ​production and strengthen​ ​application review and​ ​affordability protections.​ ​approval.​ ​Review Social Housing Task​ ​Accelerate housing​ ​Force recommendations and​ ​production and strengthen​ ​consider Council action on​ ​affordability protections.​ ​next steps.​ ​Consider amendment to​ ​Accelerate housing​ ​Duson Trust Fund ordinance​ ​production and strengthen​ ​to support housing assistance​ ​affordability protections.​ ​for residents (e.g., eviction​ ​prevention, security deposit​ ​assistance).​ ​Consider amendment to the​ ​Accelerate housing​ ​Rent Control Ordinance to​ ​production and strengthen​ ​strengthen enforcement.​ ​affordability protections.​ ​Explore Ordinance regulating​ ​Strengthen economic vitality​ ​parking lot advertising and​ ​and support local businesses.​ ​pricing disclosure​ ​requirements.​ ​Close out Council action on​ ​Strengthen economic vitality​ ​Live Nation venue proposal.​ ​and support local businesses.​ ​Consider policy to enhance​ ​Strengthen economic vitality​ ​public support for the arts.​ ​and support local businesses.​ ​2​ Page 118 City Council Office Benjamin Grant City Councilor-At-Large MEMORANDUM TO: Chair and Members of the Housing and Economic Development Committee FROM: Councilor Ben Grant DATE: May 15, 2026 SUBJECT: Proposed Amendments to Inclusionary Zoning Ordinance I am pleased to present to you a starting point for the discussion around revising the Inclusionary Zoning ordinance. After 5+ years in effect, I think it has become clear that the policy must be reformed. The recent consultant report, in addition to the evidence presented by staff and the anecdotal evidence conveyed to us by interested parties, have pushed us to begin this work. To my eye, the most sensible place to begin the discussion is a simple reversion back to the IZ requirement immediately pre-dating the referendum: what we call 10/100. I want to stress in this Memo that I am not wedded to a specific outcome at this time - I am merely committed to ensuring that this discussion begins in earnest now. I am sure that discussion will involve a range of proposals, and I would be interested in the Committee and the Planning Board also discussing a mix of 5/125. Lastly, I want to remind everyone that this debate is not happening in isolation. The Social Housing Task Force is due to report back soon, and early indications are that they will seek Council consideration of a more aggressive approach to direct housing supply. I believe it is our charge from our constituents to accelerate housing production, and the combination of the work on IZ with the Task Force is the best way to think about answering that call. Thank you for your consideration and I look forward to contributing in any way I can to a positive result. Attachments – Proposed Amendments Redlined 389 Congress Street, Portland, ME 04101 – www.portlandmaine.gov – (207) 874-8683 Page 119 Page 120 Page 121 Page 122 City of Portland | Office of the Mayor and City Council Kate Sykes, Councilor (District 5) To: Housing and Economic Development Committee; Planning Board From: Kate Sykes, Councilor Dist. 5 Date: June 2, 2026 Re: Policy Considerations Regarding Inclusionary Zoning and Mixed-Income Housing As the City begins considering potential changes to Portland's Inclusionary Zoning ordinance, I would encourage both the Planning Board and City Council to focus on several core principles. 1. Inclusionary Zoning is primarily a housing integration tool. Inclusionary Zoning plays an important role in ensuring that affordable housing is incorporated into market-rate developments and high-opportunity neighborhoods. Its greatest value is creating mixed-income communities and preventing economic segregation as the city grows. 2. Inclusionary Zoning is not Portland's primary affordable housing production tool. The majority of deeply affordable housing produced in Portland relies on public subsidy, including federal tax credits, state housing programs, municipal investment, nonprofit development partnerships, and other financing tools. These public investments remain essential to solving the housing crisis. 3. Portland should preserve affordability in its designated growth areas. Through ReCode, Portland made a deliberate policy choice to direct future housing growth toward transit corridors, neighborhood centers, and transit-oriented development areas. These are the places where the City has signaled it wants additional density, housing investment, and population growth. They are also the places where residents can most easily access jobs, schools, services, and public transportation without relying on automobile ownership. As market-rate development accelerates in these areas, Portland should take care not to -5764lose opportunities for mixed-income housing. Inclusionary Zoning can help ensure that working people are not priced out of the very neighborhoods the City has identified as most suitable for future development. 389 Congress Street, Portland, Maine 04101 | 207-558-5764 | ksykes@portlandmaine.gov 1 Page 123 For this reason, affordability requirements may be especially important within designated growth areas and transit-oriented development districts. 4. Affordability requirements should be paired with public subsidy. The recent Inclusionary Zoning study demonstrates that housing production can be challenged by high construction costs, elevated interest rates, and difficult financing conditions. Other cities are increasingly pairing affordability requirements with targeted subsidy tools, including tax abatements and financing assistance, to improve project feasibility while preserving affordability goals. Portland should explore similar approaches. 5. Fee-in-lieu deserves further examination. Fee-in-lieu payments generate resources for affordable housing initiatives and have become an important source of funding for affordable housing production. However, they may also reduce the social and economic benefits of citing a number of affordable units within market-rate developments. As the City evaluates potential reforms, it should carefully consider the tradeoffs between generating resources for affordable housing and promoting mixed-income development patterns. 6. Inclusionary Zoning and social housing are complementary tools. These policies serve different purposes. Social housing and public investment can function as engines of affordable housing production. Inclusionary Zoning helps ensure that private development contributes to mixed-income neighborhoods and housing equity. Portland needs both. Conclusion I do not believe this discussion should be framed as a choice between preserving the ordinance exactly as it exists today or returning to the pre-2020 framework. Nor do I believe Portland must choose between affordability requirements and public subsidy. The most effective policy may ultimately draw from multiple approaches. The City now has the benefit of additional data, market experience, and lessons from peer communities. We should use that information to build a more effective system; one that supports 389 Congress Street, Portland, Maine 04101 | 207-558-5764| ksykes@portlandmaine.gov 2 Page 124 housing production, preserves mixed-income neighborhoods, leverages public investment, and responds to changing market conditions over time. As the Planning Board undertakes this work, I would encourage consideration of solutions that combine affordability requirements, targeted public subsidy, and geographic strategies that align with Portland's long-term housing and transportation goals. Our objective should be a housing system that produces more homes, preserves affordability, and ensures that ordinary working people can continue to live in the communities they help build. Respectfully submitted, Kate Sykes​ City Councilor, District 5 389 Congress Street, Portland, Maine 04101 | 207-558-5764| ksykes@portlandmaine.gov 3 Page 125 Update To the Housing and Economic Development Committee of the City Council Stewardship, stability, and opportunity for a more affordable Portland June, 2026 Page 126 1  Why PHA matters Portland needs a strong PHA to meet its housing goals PHA is part of Portland’s essential civic infrastructure. It preserves deeply affordable homes, administers rental assistance, and helps residents stay connected to schools, work, services, and community. Kennedy Park, East Bayside PHA operates and preserves public and affordable housing communities Administers Housing Choice Vouchers and specialized voucher programs Supports project-based voucher partnerships and resident services Leverages public and private investment into Portland neighborhoods Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 127 2  PHA by the numbers A large public asset serving thousands of Portland residents 5,055 2,570 1,300+ 2,100+ residents housed across the households supported through affordable housing units Housing Choice Vouchers portfolio PHA homes operated or managed administered 21% 37% $21,260 of residents are elderly of residents are people with average household gross individuals disabilities income The scale is significant, but the story is also deeply human: PHA serves seniors, families, children, workers, veterans, and people with disabilities. Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 128 3  Housing need The need for rental assistance is far greater than the supply 22,318 3,343 local applicants connected to Portland and nearby statewide Section 8 / HCV waitlist applicants communities Nearly 88% are extremely low income Nearly 78% are extremely low income Vouchers matter, but vouchers alone cannot solve the crisis when affordable, accessible homes are scarce. Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 129 4  Who PHA serves PHA serves Portlanders across every stage of life 1,600+ 1,068 1,877 elderly residents. Affordable housing residents are age 20 or younger. Stable residents with disabilities. Accessible helps residents age in place near housing supports school attendance, housing and supportive partnerships are healthcare, transportation, and health, safety, and family well-being. central to stability. community. PHA is not serving one single population. It is serving the full range of people affected by Portland’s housing crisis. Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 130 5  PHA communities PHA properties are rooted in Portland neighborhoods Front Street East • East Deering Harbor Terrace • West End Kennedy Park • East Bayside Riverton Park • Riverton Family housing Elderly & disabled housing Mixed-income + PBVs Kennedy Park, Riverton Park, Sagamore Village, Front Franklin Towers, Harbor Terrace, Washington Gardens, Partnerships with nonprofit, supportive housing, and Street East, Bayside communities, and scattered sites Front Street West, and 100 State Street affordable housing providers Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 131 6  Preservation and modernization Modernization protects public housing as a long-term public asset Reinvest in aging housing,Improve safety, accessibility, energy performance, and resident quality of life Use LIHTC, PBVs, capital funds, City support, and private financing together Preserve long-term affordability while improving neighborhood assets Front Street East: rebuilt affordable family housing in East Deering Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 132 7  Redevelopment pipeline PHA is advancing one of Maine’s largest affordable housing pipelines 319 330 569 new affordable units planned units currently under construction units under renovation Major efforts underway or in planning Riverton Park • Harbor Terrace • Sagamore Village • Front Street • Washington Gardens • COMB Block / East Bayside planning The goal is straightforward: keep housing affordable, improve quality, and protect public stewardship for the next generation. Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 133 8  Resident services Housing is the foundation. Services help residents stay stable. Clear communication Food access Plain-language notices, newsletters, Food shares, mobile pantries, and and resident information that practical supports that reduce people can use. household stress. Employment pathways Community life FSS, training connections, and Resident services, partner referrals, opportunities that support long- and activities that strengthen term mobility. connection. Harbor Terrace, West End Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 134 9  Partnership with the City City partnership helps turn housing plans into homes Local support helps leverage millions in State, Federal, and private investment Coordination improves infrastructure planning, permitting, and project delivery Affordable housing production requires sustained public partnership PHA and the City share priorities around housing stability, homelessness response, and neighborhood revitalization Bayside Anchor, East Bayside The more aligned the City and PHA are, the more housing Portland can preserve, modernize, and create. Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 135 10  Looking ahead PHA’s next chapter: preserve, modernize, expand, and communicate Preserve existing affordable housing Improve housing quality Expand opportunities Protect long-term affordability and public Strengthen maintenance, inspections, Use vouchers, PBVs, LIHTC, Faircloth stewardship. capital planning, and unit turns. authority, and partnerships. Strengthen resident communication Support staff and systems Build public trust Communicate transparently with residents, the Make information clear, timely, translated, Rebuild finance, HR, compliance, technology, City, HUD, partners, neighborhoods, and the and useful. and cross-department coordination. Board. Sources: PHA 2026 Annual Report draft and PHA website property pages Portland Housing Authority • 2026 Page 136 11  Portland Housing Development Corporation (PHDC) At a Glance 501(c)4 non-profit development entity for PHA Development Activity 2014 -2026 300 new construction units 338 renovated affd. units 334 current public housing units 169 Section 8 Program housing 226 Non-LIHTC/Non-PH units 1,367 TOTAL Owned/Managed units New units in Pipeline: 319 Renovation Units in Pipeline: 569 Units under construction: 437 Front Street Ph 1 Sagamore Village Page 137  Recently Completed Highlights of Work: • New airtight insulated exterior panels and windows • New energy-efficient, all-in-one heating/cooling/ventilation system in each Harbor Terrace apartment 120 renovated • Improve accessibility homes for seniors • Refinished unit interiors • Indoor bike storage, a craft room, and exercise completed room September 2025 • New pedestrian plaza in front of the building • New smoker shelter, bus shelter, and electric vehicle (EV) chargers 120 Project Based Vouchers • Improved landscaping and exterior lighting 1 person max. income = 58,440 0BR rent - $1,056 1BR rent - $1,110 Residents pay max. 30% of income Page 138  Under Construction COMB Block Riverton Park 174 new homes, Sagamore Village many dedicated to 118 under renovation seniors and families and where 40 public 64 new homes under Historic renovations to improve 200 housing units stood construction for families homes for families 0BR – 3BR apartments 0BR – 6BR apartments 1BR - 4BR duplexes Rents from $491 - $1,945 Rents from $1,280 - $2,522 Rents from $1,653 - $2,913 PBVs 25 Ph1 / 40 Ph2 / 6 Ph3 140 Project Based Vouchers 200 Project Based Vouchers Utilities not included Most paying 30% of income Most paying 30% of income All utilities included All utilities Included 4-person max. income at 60% AMI – $69,550 Page 139 Projects in Pre-Construction Planning 100 State Street – 169 units of senior housing planning moderate renovation 14 Baxter Blvd (former PHA offices) – Potential for 60-90 new apartment homes Congress Street (optioned parcel) – Potential for 54 1BR apartment homes 47-49 Boyd Street Block – Potential for replacing 24 public housing units with up to 120 apartment homes Page 140 Thank you Portland Housing Authority is preserving housing, strengthening communities, and building a more affordable future for Portland. 970 Baxter Boulevard, 3rd Floor Portland, Maine 04103 207-773-4753 • www.porthouse.org Photos from Portland Housing Authority property pages Page 141 16  City of Portland, Maine Social Housing Task Force Interim Report Presented to the Housing and Economic Development Committee May 19th, 2026 1. Executive Summary Over the first several months of its charge, the Portland Social Housing Task Force conducted technical modeling, comparative research, and expert interviews to determine how the public sector can most effectively intervene in the local housing market. The Task Force also converged on a definition of social housing: a model where the public sector maintains an active financial and ownership stake, ensuring that investments are preserved and reinvested over time rather than serving as one-time subsidies. Financial research has confirmed that the economics of production, specifically the rising costs of financing and construction, represent the primary barriers to new development in Portland. While the use of public land is a valuable tool, modeling demonstrates that land alone is insufficient to drive production without significant financial intervention. This finding establishes the cost of capital as a key domain where the City possesses the capacity to yield a meaningful impact on social housing production. The emerging strategic direction positions the City as a financing partner rather than a direct developer, allowing the municipality to provide favorable capital terms while leveraging the expertise of existing organizations. Bond financing is currently under evaluation as the primary mechanism to scale this effort and support the recapitalization of public funds. A central component of this strategy is a partnership with the Portland Housing Authority, which offers a unique opportunity to combine municipal investment with established development and management capacity. 1 Page 142 In the final phase of its work, the Task Force will focus on defining specific bond structures, establishing governance protocols for institutional partnerships, and identifying sites for initial pilot projects. These efforts aim to create a durable system that addresses critical housing gaps for workforce and middle-income households. The ultimate goal is an implementable roadmap and detailed pilot project proposal that balances programmatic ambition with technical and fiscal responsibility. 2 Page 143 2. Charge of the Task Force The Portland Social Housing Task Force was established by order of the City Council in March 2025 to study and develop a framework for government-led social housing in Portland. The Council’s intent in forming the Task Force was to respond to a widening gap between housing demand and housing production, and to explore the role that public entities might play in directly shaping the housing market to achieve long-term affordability and stability. As articulated in the resolution, the Task Force was charged with developing “a strategic framework for a social housing program… prioritizing permanent affordability, environmental sustainability, and inclusivity.” At its core, the Task Force’s work is guided by three interrelated goals: ●​ Affordability: advancing models that ensure housing remains accessible to a broad range of Portland residents over the long term; ●​ Sustainability: designing systems that are financially and operationally durable over time; ●​ Mixed-Income Communities: promoting development patterns that integrate a range of income levels and avoid concentrations of poverty. The Council further directed the Task Force to undertake a comprehensive scope of work, including identifying key leverage points in housing production, evaluating public financing strategies such as bonding, coordinating existing funding programs, assessing local barriers such as land and permitting constraints, and exploring models of public development and ownership, including partnerships with entities such as the Portland Housing Authority. The Task Force was convened for a one-year period, beginning in August 2025, with a final report and recommendations due to the City Council within that timeframe. Structurally, the Task Force consists of appointed members representing municipal leadership, housing practitioners, finance and development professionals, nonprofit leaders, and community members with lived experience navigating Portland’s housing system. The group elected two co-chairs to guide its work and coordinate agendas. City staff from the Housing and Economic Development Department and the Housing and Community Development Division provide ongoing support, alongside facilitation and technical assistance from the Greater Portland Council of Governments (GPCOG). To carry out its charge, the Task Force adopted a dual-track meeting structure. Regular business meetings are held to deliberate and advance the work plan, while separate educational sessions 3 Page 144 are used to deepen the group’s understanding of housing finance, development models, and policy tools. Task Force Members The Task Force brings together a multidisciplinary group with expertise spanning housing development, municipal finance, public policy, nonprofit management, and lived experience in Portland’s housing market. Members include: ●​ Catherine Buxton: Policy professional and housing advocate with experience in cooperative development and legislative engagement. ●​ Wendy Cherubini: Affordable housing policy and program management professional with extensive experience in community development and evaluation. ●​ Jonathan Culley: Local developer with experience in housing production, including mixed-use and multifamily development in Portland. ●​ Jon Fetherston (Co-Chair): Veterans Housing Services Liaison at Preble Street, with extensive experience in public sector leadership and housing systems. ●​ Kristin Leffler: Public school educator and Portland resident bringing lived experience navigating housing affordability challenges. ●​ Councilor Sarah Michniewicz: Portland City Councilor with experience in municipal governance and housing policy. ●​ Matt Peters: Housing development and finance professional with experience in real estate investment and project feasibility analysis. ●​ Cullen Ryan: Executive Director of Community Housing of Maine, with deep experience in supportive housing development and operations. ●​ Jason Spector: Strategic planning and public sector consultant with experience in program evaluation and cross-sector systems design. ●​ Bill Stauffer: Property owner and business operator with experience in real estate management and local economic conditions. ●​ Paul Styslinger: Natural Hazards Planner at the State of Maine with experience in infrastructure design, residential codes, and public program sustainability. ●​ Councilor Kate Sykes (Co-Chair): Portland City Councilor with a focus on housing policy and public investment strategies. ●​ Tim Wells: Real estate and development professional with experience in construction, finance, and land use. As reflected in the membership, the Task Force was intentionally constituted to combine technical expertise with on-the-ground experience, ensuring that its recommendations are both analytically rigorous and grounded in the lived realities of Portland residents. 4 Page 145 3. Approach and Methodology The Task Force structured its work to move from broad exploration to focused analysis, pairing foundational learning with applied evaluation of how social housing could function within Portland’s specific economic and institutional context. From the outset, the group recognized that social housing is not a single model, but a set of tools and strategies that must be adapted to local conditions. As a result, the Task Force adopted an approach that combined comparative research, technical analysis, and iterative discussion with an emphasis on testing ideas against real-world constraints. 3.1 Meeting Structure and Work Plan To support this approach, the Task Force established a dual-track meeting structure consisting of regular business meetings and supplemental educational sessions. Business meetings were used to deliberate on findings, review materials, and identify priorities and next steps. Educational sessions were designed to build a shared understanding of complex topics, such as housing finance, development economics, and public policy tools. To date, the Task Force: ●​ Engaged external expertise and case studies from other jurisdictions, including mixed-income public production models in localities such as Chattanooga, Atlanta, Seattle, and Montgomery County, MD to understand how social housing models have been implemented elsewhere. ●​ Developed and tested financial models. Leveraging technical modeling from GPCOG to evaluate how variables such as financing costs, income mix, land value, and subsidy levels affect project feasibility. ●​ Reviewed local data and project conditions, including city-owned land inventories and the status of approved but unbuilt or stalled housing developments. ●​ Refined areas of focus, moving from a broad survey of possible approaches toward a more targeted examination of the most viable pathways for Portland. As the work has progressed, the Task Force has begun to organize itself into more defined areas of inquiry with the intention of forming working groups to deepen analysis during the second half of its charge. 3.2 Areas of Study The Task Force’s work to date has focused on several core areas of study, each of which corresponds to a key dimension of the Council’s charge. 5 Page 146  ●​ Social Housing Models (Comparative): The Task Force reviewed a range of national and international social housing approaches from other municipalities, including publicly owned, mixed-income developments, as well as hybrid models involving public financing and private or nonprofit delivery. Early discussions focused on defining what “social housing” should mean in Portland’s context and how it could complement, rather than compete with, existing programs. ●​ Financial Modeling and Feasibility: A central component of the work has been the analysis of financial models to understand the feasibility of different housing scenarios. These models tested the impact of variables including interest rates, hard and soft construction costs, and income targeting. This revealed the significant challenges associated with bringing new projects to viability under current market conditions, specifically where construction and financing cost escalation has outpaced traditional subsidy models. ●​ Public Land Analysis: The Task Force reviewed inventories of City-owned land to assess potential development opportunities, while also examining site-specific constraints such as environmental limitations, existing uses, and regulatory considerations. This analysis helped clarify both the opportunities and limitations of relying on public land as a primary strategy for housing production. ●​ Existing Project Pipeline (Stalled Projects): Recognizing that a number of approved developments have not moved forward, the Task Force examined the local project pipeline. Particular attention was paid to projects that may be delayed or infeasible under current financing conditions, raising the possibility that targeted public intervention acting as gap financing could unlock projects otherwise stalled by recent shifts in the private lending market. ●​ Partnership Pathways (Including Portland Housing Authority): The Task Force explored potential partnerships with existing housing institutions, most notably the Portland Housing Authority (PHA). Discussions focused on how the City might leverage PHA’s development experience, operational capacity, and existing project pipeline while contributing financing to enable mixed-income, publicly influenced housing development. Taken together, these areas of study reflect an approach that is exploratory but also grounded in Portland’s financial, regulatory, and institutional landscape. 6 Page 147 4. Defining Social Housing One of the earliest and most important areas of discussion for the Task Force was the question of definition: what should “social housing” look like in the context of Portland? While the Council’s resolution provides a general framework, describing social housing as a model in which public entities take an active role in the development and ownership of housing, it does not prescribe a single structure or implementation strategy. As a result, Task Force members began their work with differing perspectives on what social housing should entail in practice. These differences were surfaced and explored through early discussions and a structured survey of members, which sought to clarify assumptions about public ownership, financial participation, and the role of the City. 4.1 Areas of Convergence and Clarification Early in its work, the Task Force sought to clarify how members understood the concept of social housing, including the role of public ownership, financing, and long-term stewardship. This was explored through group discussion and a structured survey designed to test assumptions and surface areas of agreement. While there were differences in emphasis, the survey results indicated a strong underlying alignment among members on several core principles. Across the Task Force, there was broad agreement that social housing should: ●​ Involve a meaningful public role in shaping housing outcomes, rather than relying solely on private market delivery ●​ Prioritize long-term and perpetual affordability, rather than time-limited restrictions ●​ Support mixed-income communities, rather than narrowly targeted or isolated developments; and ●​ Be structured in a way that is financially sustainable over time, rather than dependent on one-time interventions. Where differences emerged, they were less about whether the public should play a role, and more about how that role should be structured and operationalized. In particular, members explored the extent to which the City should: ●​ Retain an ongoing ownership or equity stake in projects ●​ Act as a financial partner versus a direct developer ●​ Intervene in existing projects versus initiate new development 7 Page 148 These discussions helped clarify that the Task Force was not divided on purpose or direction, but interested in working through the practical design of a model that could balance ambition with feasibility. 4.2 Public Investment as a Lasting Public Asset As the Task Force worked through these questions, a key point of alignment emerged around the nature of public investment in housing: if the City is to deploy public resources at scale, those investments should be structured to create lasting public value, rather than functioning solely as one-time subsidies. This principle distinguishes social housing, as understood by the Task Force, from more traditional approaches in which public funds are used to close financing gaps without retaining an ongoing public stake in the resulting asset. Instead, the Task Force has increasingly coalesced around a model in which public investment is designed to: ●​ Retain an ownership or equity position, even if partial; ●​ Support repayment and recapitalization, particularly in the context of bond financing; and ●​ Enable reinvestment into future housing production, creating a cycle of sustained public impact. In this framework, the City’s role is not to fully assume the responsibilities of a developer or property manager, but to act as a long-term financial and strategic partner, ensuring that public contributions continue to generate public benefit over time. This approach reflects a practical synthesis of the Task Force’s discussions: it avoids both the limitations of one-time subsidy models and the complexity of building a fully municipal development apparatus, while preserving the central principle that public investment should result in ongoing public ownership, influence, and return. 4.3 Emerging Definition Based on these discussions, the Task Force has begun to converge around a working definition of social housing for Portland: Social housing is housing in which the public sector plays an active financial and ownership role, ensuring long-term affordability and allowing public investment to be preserved and reinvested over time. This definition reflects several key principles: 8 Page 149  ●​ Public Investment with Retained Value:​ Public dollars are not treated solely as subsidy, but as investment structured in a way that allows the City to retain equity, repay capital (such as through bond financing), and redeploy resources into future projects. ●​ Shared Ownership, Not Full Municipalization:​ Social housing does not require the City to fully stand up and operate a comprehensive development and property management entity. Instead, it may involve partial ownership or equity stakes, often in partnership with experienced developers or public housing authorities. ●​ Flexibility in Delivery:​ The model allows for multiple pathways, including new construction, acquisition and rehabilitation, or participation in existing projects, so long as the core principle of ongoing public benefit and ownership is maintained. ●​ Distinction from Traditional Subsidy Models:​ Unlike conventional approaches that rely on one-time subsidies or tax incentives without long-term public return, this model emphasizes recapture, recapitalization, and continuity. 4.4 Implications for the Task Force’s Work This emerging definition has shaped the Task Force’s subsequent analysis in several important ways: ●​ It has focused attention on financing structures, particularly those that allow the City to act as an investor rather than a grant-maker; ●​ It has elevated the importance of equity participation and long-term stewardship in project design; and ●​ It has informed ongoing discussions about partnership models, especially with institutions such as the Portland Housing Authority, where ownership and operational responsibilities can be shared. At the same time, the Task Force recognizes that this definition is still being refined. The second phase of its work will further test how these principles can be translated into specific, implementable models within Portland’s legal, financial, and institutional constraints. 9 Page 150 5. What We Have Learned So Far Through its first several months of work, the Task Force has moved from broad exploration to a more grounded understanding of how housing is produced in Portland, and where meaningful intervention may be possible. The findings below reflect recurring themes across financial modeling, case study review, and local analysis. 5.1 The Economics of Housing Production Are the Primary Constraint The most consistent and consequential finding of the Task Force’s work to date is that the economics of housing production, in particular the costs of financing and construction, represent the central barriers to new development. Through financial modeling exercises, the Task Force examined how variables such as construction costs, income targeting, land value, and financing terms interact to determine project feasibility. These exercises demonstrated that even under highly favorable conditions, including scenarios with reduced or no land cost, limited or no property tax burden, and additional subsidy, projects often fail to “pencil out.” 5.2 Public Land Alone Is Not Sufficient to Drive Housing Production The Task Force examined the potential role of City-owned land as a catalyst for housing development. While public land can reduce project costs and create opportunities for strategic intervention, the analysis made clear that land is only one component of a much larger financial equation. In many modeled scenarios, even the provision of free land was not sufficient to make a project viable without additional financial intervention. Furthermore, site-specific constraints, including environmental limitations, existing uses, and regulatory considerations, reduce the number of parcels that are realistically available for development. As a result, while public land remains an important tool, the Task Force finds that it cannot, on its own, address the scale of Portland’s housing challenges. 5.3 Financing Represents the Most Effective Municipal Lever Given the constraints identified above, the Task Force has increasingly focused on financing as the most powerful and scalable lever available to the City. Unlike land use alone, financing tools have the potential to directly influence project feasibility by lowering the cost of capital, reducing risk, or enabling projects that would otherwise not proceed. Mechanisms such as bond 10 Page 151 financing, low-interest loans, or other forms of public investment can materially shift the financial structure of a project. This insight has shaped the Task Force’s emerging direction: that the City’s most effective role may be as a financial partner, rather than solely as a regulator or land provider. In this framing, the City is positioned to unlock housing production at scale, while structuring its participation in a way that preserves long-term public value. 5.4 The Current Housing System Leaves Critical Gaps The Task Force’s work has also reinforced that Portland’s existing housing development system, while producing important outcomes, does not fully meet the needs of the community. In particular, there is a persistent gap in housing options for middle-income and workforce households, who often earn too much to qualify for traditional affordable housing programs, but not enough to access market-rate housing comfortably. Existing financing tools, including federal and state programs, tend to be structured around specific income thresholds, leaving limited flexibility to address this “missing middle.” As a result, the Task Force finds that new models are needed to complement, rather than compete with, existing programs. 5.5 Mixed-Income Development Is Preferred for Long-Term Sustainability Across its discussions, the Task Force has consistently expressed a preference for mixed-income housing models. From both a social and financial perspective, mixed-income developments offer several advantages: ●​ They avoid the concentration of poverty associated with single-income developments; ●​ They create more stable and resilient communities; and ●​ They can support more sustainable financial structures by balancing different rent levels within a single project. While deeper affordability remains an important long-term goal, the Task Force has recognized that mixed-income models may represent the most viable and scalable approach for initial implementation, particularly in a high-cost environment. 5.6 Multiple Intervention Pathways Are Viable 11 Page 152 Finally, the Task Force has identified that there is no single pathway for public involvement in housing development. Instead, several potential entry points exist, each with distinct opportunities and challenges. These include: ●​ Ground-up development, where the City participates in the creation of new housing on vacant or underutilized land; ●​ Acquisition and rehabilitation, including the purchase and improvement of existing buildings; ●​ Intervention in stalled or delayed projects, where targeted financial support could enable projects that are otherwise unlikely to proceed; and ●​ Acquisition of existing housing assets, potentially removing units from speculative markets and stabilizing them over time. This range of options suggests that a successful social housing strategy will likely require flexibility in approach, allowing the City to respond to different opportunities as they arise. Taken together, these findings point toward a consistent conclusion: the City’s most effective role in addressing the housing crisis may lie in strategically deployed financial intervention, structured to produce both immediate housing outcomes and long-term public value. 12 Page 153 6. Emerging Strategic Direction Building on the findings outlined above, the Task Force has begun to coalesce around a strategic direction for how the City of Portland might most effectively participate in the development of social housing. This direction is not yet a final recommendation. Rather, it reflects a set of interrelated concepts that have emerged consistently through the Task Force’s analysis and discussions, and which will be further tested and refined during its remaining work. 6.1 Role of the City: Financer vs. Developer A central question for the Task Force has been the appropriate role of the City in housing development and operations. While some models of social housing involve the creation of a fully public development entity (responsible for land acquisition, construction, and long-term property management), the Task Force has recognized that establishing such an apparatus in Portland would present significant challenges in terms of capacity, cost, and time. At the same time, the Task Force’s analysis suggests that the City already possesses a powerful, and currently underutilized, tool: its ability to finance and structure capital for housing projects. As a result, the Task Force is increasingly exploring a model in which the City acts primarily as a financial partner, rather than a direct developer. In this role, the City could: ●​ Provide capital at more favorable terms than private markets; ●​ Influence project design, including income mix and long-term affordability; and ●​ Retain an ownership or equity position that preserves public value over time. This approach allows the City to intervene at the point of greatest constraint - project financing - while leveraging the expertise of existing development and management entities. 6.2 Bonding as a Primary Tool (Under Evaluation) Within this emerging framework, bond financing has surfaced as a potentially central mechanism for enabling City participation at scale. Bonding offers several potential advantages: ●​ It allows the City to raise significant capital upfront, enabling multiple projects to move forward within a relatively short timeframe; ●​ It can provide lower-cost financing than is typically available through private lending markets; and ●​ It aligns with a model in which public investment is repaid over time, supporting recapitalization and reinvestment. 13 Page 154 At the same time, the use of bonds introduces important questions related to risk, repayment structures, and long-term fiscal impact. The Task Force has begun exploring these issues, but additional analysis will be required to determine: ●​ Appropriate bond structures and terms; ●​ Risk mitigation strategies; and ●​ The relationship between bond financing and existing City funding mechanisms. As such, bonding should be understood at this stage as a promising but still evolving tool, central to the Task Force’s inquiry but not yet fully defined. 6.3 Partnership with the Portland Housing Authority (PHA) The Task Force has identified a significant opportunity to advance social housing through partnership with the Portland Housing Authority (PHA). Unlike many housing authorities nationally, PHA has demonstrated a willingness to explore collaborative models with the City. This presents a unique opportunity to combine PHA’s strengths (including development experience, access to federal programs, and long-term property management capacity) and the City’s potential role as a source of flexible capital, strategic direction, and public investment. Through this partnership, it may be possible to: ●​ Expand or adapt existing PHA projects to include mixed-income components; ●​ Accelerate redevelopment efforts, including those associated with RAD conversions and other capital improvements; and ●​ Pilot new models of shared ownership and financing that align with the Task Force’s emerging definition of social housing. The Task Force also recognizes that such a partnership will require careful attention to governance and accountability, particularly where City capital is involved. As a result, further work will be needed to define appropriate structures that ensure alignment between the City and PHA while respecting their distinct roles and authorities. 6.4 Pilot Project Approach Consistent with guidance from peer jurisdictions and practitioners, the Task Force is increasingly oriented toward a pilot project approach that would: ●​ Focus on a limited number of initial projects; ●​ Test key elements of the model, including financing, partnership structures, and income mix; and ●​ Generate practical experience that can inform future expansion. 14 Page 155 This strategy reflects an understanding that social housing is not a single policy decision, but a system that must be built iteratively. Early projects can demonstrate feasibility, build institutional knowledge, and establish public confidence. At the same time, the Task Force recognizes that even pilot projects must be designed with long-term scalability in mind, ensuring that lessons learned can be translated into a broader, sustainable program. Taken together, these elements point toward a strategic direction in which the City leverages its financial capacity, partners with existing institutions, and proceeds through targeted implementation, building a model of social housing that is both ambitious and grounded in Portland’s realities. 15 Page 156 7. Work Remaining While the Task Force has developed a clearer understanding of the challenges and opportunities associated with social housing in Portland, significant work remains to translate these insights into a fully defined and implementable framework. The second part of the Task Force’s work will focus on deepening analysis in several key areas, with the goal of producing actionable recommendations that are financially sound, legally viable, and operationally feasible. 7.1 Financing and Capital Strategy Further work is needed to define the structure and implications of potential financing tools, particularly bond financing. This will include: ●​ Evaluating different bond structures, including general obligation and revenue bonds; ●​ Assessing risk exposure and mitigation strategies, including how projects perform under varying market conditions; ●​ Exploring mechanisms for repayment and recapitalization, ensuring that public investment can be sustained and redeployed over time; and ●​ Clarifying how new financing tools would interact with existing resources, including the Jill C. Duson Housing Trust Fund and other local or federal programs. This analysis will be central to determining the scale at which the City can responsibly participate in housing development. 7.2 Development Pathways The Task Force has identified multiple potential pathways for public involvement in housing production. The next phase of work will further evaluate these options to determine where intervention is most effective. This will include: ●​ Comparing the feasibility and impact of new construction, acquisition and rehabilitation, and intervention in stalled projects; ●​ Identifying the conditions under which each pathway is most appropriate; and ●​ Developing criteria for prioritizing opportunities as they arise. The goal is to establish a flexible but disciplined framework for how the City engages with different types of projects. 7.3 Partnership Models 16 Page 157 Building on early discussions, the Task Force will further define how partnerships - particularly with the Portland Housing Authority - can be structured to support social housing. This work will include: ●​ Clarifying roles and responsibilities across partner organizations; ●​ Identifying opportunities for regional collaboration with other public or quasi-public entities; and ●​ Developing models for shared ownership and financial participation that align with the Task Force’s principles. Particular attention will be given to ensuring that partnership structures preserve both operational effectiveness and long-term public value. 7.4 Land and Site Strategy Although land alone is not sufficient to drive housing production, it remains an important component of a broader strategy. The Task Force will: ●​ Refine the list of viable City-owned parcels, taking into account physical, regulatory, and financial constraints; ●​ Develop criteria for site selection, including alignment with transit, services, and neighborhood context; and ●​ Evaluate opportunities for strategic acquisition or repurposing of additional sites, where appropriate. This work will help ensure that land resources are deployed strategically in support of broader financing and development goals. 7.5 Legal and Institutional Capacity The implementation of a social housing strategy will require careful evaluation of the City’s legal authority and institutional structure. Key areas of focus include: ●​ Confirming the City’s authority to finance and participate in development, including any constraints under state law or municipal charter; ●​ Clarifying the role of existing entities, such as the Portland Housing Authority and other quasi-public organizations; and ●​ Developing a governance and partnership structure (“bridge”) to support joint City–PHA projects. In particular, the Task Force will examine how to establish a formal mechanism—such as board representation, intergovernmental agreements, or other governance tools—that ensures: 17 Page 158  ●​ Appropriate oversight of public investment; ●​ Alignment of project goals and outcomes; and ●​ Clear decision-making authority and accountability across institutions. This work is essential to ensuring that any future program is both effective and publicly accountable. 7.6 Community Engagement Finally, the Task Force will continue to engage with the community to better understand housing needs, priorities, and concerns. This will include: ●​ Communicating clearly about the concept of social housing and how it differs from existing models; ●​ Gathering input from residents, stakeholders, and community organizations; and ●​ Assessing the political and social viability of proposed approaches. A successful social housing strategy will require not only technical feasibility, but also broad public understanding and support. 18 Page 159