Portland approves financing deal for housing at site of former Oxford St. shelter
The site of the former Oxford Street shelter, pictured here, is destined to become a 47-unit affordable housing development. (Staff photo by Ben McCanna/Staff Photographer)
Portland city councilors approved a tax increment financing deal this week that allows a 47-unit affordable housing project to move forward, but not without some arguing that the developers’ approach skirts the intended purpose of the city’s inclusionary zoning rules.
The council approved a deal that supporters believe takes a creative approach to getting more affordable housing built in Portland at a time when it’s desperately needed.
Others argued that it violates the spirit of the city’s inclusionary zoning policy — which requires developments to have at least 25% affordable units — by segregating affordable and market-rate housing.
The project at 197 Oxford St., the site of the former city-run Oxford Street shelter, is a partnership between Avesta Housing and Reveler Development, which owns the lot and has plans for market-rate projects at two adjacent parcels.
After several proposals were floated, the development groups filed a joint site plan application for 47 units — 12 of which would fulfill the requirements for Reveler when it develops nearby parcels on Cedar and Lancaster streets.
A staff memo to the council said the partnership allows the developers to exceed the city’s requirements because it will deliver “an additional 35 affordable units to the neighborhood” on Oxford Street, and with “a deeper level of affordability than otherwise would have been achieved.”
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The units in the Oxford Street building will be affordable for between 40%-60% of area median income. In Portland, 60% of the area median income is about $54,000 for a single person.
Construction is scheduled to begin in June of 2027 and be complete by the end of 2028.
Although the council supported the agreement, Councilors Kate Sykes and Sarah Michniewicz argued that it goes against the intended purpose of the inclusionary zoning policy by allowing a market-rate developer to place affordable units elsewhere.
Sykes, who supported Portland’s Green New Deal that ushered in the strengthened rules by referendum in 2020, said the plan runs counter to the idea that developments with inclusionary zoning units shouldn’t have a “poor door,” where people living in market-rate units are entering separately to those in the lower rent units.
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“We put that in specifically because we did not want to “ghetto-ize” the (inclusionary zoning) units,” she said. “To me, this violates the spirit of what we’re trying to do with IZ.”
Michniewicz said the project “takes the inclusionary out of inclusionary zoning.”
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Other councilors who supported the agreement said that the city is still in a housing crisis and that, in the end, the proposal is getting more affordable units built.
Councilor April Fournier argued that the project is a “creative way” to get housing built as market conditions and city ordinances have combined to make projects more challenging.
“Is it the way we exactly want it? No, but it will get these units in our city now,” she said.
Ryan Fecteau, senior advisor of development and planning at Avesta, told the council that the project is “a good example of IZ working well.”
“The market-rate developer was required to build 12 units of affordable housing, and the city is getting 47 units of affordable housing,” he said. “That’s 35 more homes for people who need them in this city.”
He also pointed out that the 197 Oxford St. project was submitted before ReCode was adopted in 2024, which eliminated the option for developers to place inclusionary zoning units off site.
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This week’s debate comes as the city is reviewing its inclusionary zoning rules, which some officials and developers have argued are too strict for today’s economic climate and are working against affordable housing production. A recent study appeared to validate those concerns.
Portland City Councilor Kate Sykes speaks at a protest in front of City Hall in Portland in August 2025. (Gregory Rec/Staff Photographer)
However, Sykes and other supporters of the Green New Deal have said that an inclusionary zoning policy is just one part of a broader housing development system that needs structural changes.
Sykes said Monday that while she supports efforts to make the inclusionary zoning policy better, the current system, which includes TIFs that “steal money from middle class people and give it back to developers,” has created the crisis conditions.
“I have the luxury of talking about this because I’m not running for reelection,” she said. “At some point, someone has to say no and we have to make such a stink out of this that the affordable housing providers who are part of this problem start lobbying for different solutions. Unless we make it uncomfortable for the businesses that rely on this system, it’s never going to change.”
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Laura Mitchell, executive director of the Maine Affordable Housing Coalition, said she’s not surprised that developers are looking at creative approaches to meeting the inclusionary zoning rules. She said because the current atmosphere has made more projects financially infeasible, developers are likely saying “we’re going to try to think of different ways to make it work.”
According to the council memo, the Oxford Street project will set aside four units for individuals or families residing in a Portland shelter.
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The details of the TIF agreement stipulate that roughly 56% of new taxes generated from the development, or about $45,000, will be returned to the developer annually, with the city retaining $35,600 in revenue annually.
A memo from city staff said the TIF was reasonable given the “crucial need for affordability at all income levels in Portland.”
The memo said Avesta Housing manages 700 income-restricted rental units in Portland, and there are 980 income-eligible households on waitlists for those apartments — 456 of which currently meet the definition of homeless.
In 2025, nearly 2,900 households applied to Avesta for housing but only 435 were moved in, which demonstrates the need for affordable options remains high.
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Tagged: affordable housing, portland maine
Andrew Rice is a staff writer at the Press Herald covering the city of Portland. He's been working in journalism since 2012, joining the Sun Journal in 2017, then the Press Herald in 2026. He lives in. More by Andrew Rice
