The City Council voted unanimously Tuesday, Dec. 3, to provide a workforce housing incentive to a developer from money generated from a new construction excise tax.

Last year, city councilors voted to apply a 1 percent tax on all building permits in an effort to raise money for workforce housing projects. So far, the council has seen the fund as a way to provide financial incentives to developers.

Mike Clark, of Coaster Properties, will be the first developer to receive the benefits to rebuild and expand the Sea Lark Apartments on Larch Street. The one-bedroom units, destroyed in a fire last February, were one of the few affordable living options in town. He plans to expand the former fourplex into eight units.

Clark will be reimbursed $19,000 for permit fees and systems development charges associated with the project, all based on the estimated $510,000 in construction costs.

In order to be eligible for the incentive, Clark agreed to include a deed restriction that bars the units from ever becoming vacation rentals or condos.

The agreement also requires that rent must not exceed 100 percent of the average median income for Clatsop County for the next 10 years. Based on U.S. Department of Housing and Urban Development projections, the city estimates rent will be between $950 to $1,100 a month.

The process is seen largely as a sign of progress by city councilors and staff, who have been struggling to move the needle on workforce housing for years.

Some on the council, however, have expressed concerns about the sustainability of the incentives. Only about $65,600 has been raised since the excise tax took effect in July 2017. The land-strapped city sees little development in comparison to neighboring communities, limiting the growth and utility of the tax.

But it’s a step in the right direction, Mayor Sam Steidel said.

“I think this project will be a good trial run to see how it works,” Steidel said at a November work session.

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