Instead of the Alexan subsidy, how about this?

Outside of the haut monde areas of the moment, the apartment market for rentals is a tenant’s market.  Landlords are offering free rent, givebacks, appliances, and other goodies to entice tenants to choose their buildings instead of others, and instead of buying a house.  Some attractive apartments are available for rent for $700 to $900 per month, with two or three bedrooms, suitable for families.

The $7.5 million property tax break proposed for the Alexan tower at Portland’s South Waterfront is to allow the developer to designate 48 studio (i.e., garage-sized) apartments as lower-income housing and is good for ten years.  This equals $156,000 of forgiven taxes per unit, spread over 10 years, which is $15,600 per unit per year, or about $1300 per unit per month.

Let’s suppose that our local governments are willing to commit about $7.5 million over ten years to provide affordable housing.  They could get more bang for the same buck by leasing 80 units at $800 per month, for a total outlay of $64,000 per month, or $768,000 per year, or $7.68 million over ten years.  Then the government could offer the units for rent to qualifying lower-income households at a subsidized rate.  A household making $30,000 per year might reasonably be expected to pay 20% ($6,000) per year for rent, or $500 per month, which would cover 62.5% of the government’s cost to rent the unit from its owner. 

Hmmm.  I think I’ve described Section 8 housing.  Perhaps I should stop here.