For the past year, Portland City Hall has repeatedly said it has no higher priority than addressing the city's housing crunch.

Yet city officials are also preparing this week to hear recommendations from city planners to place new restrictions on the height and density of new apartment buildings in an affluent westside neighborhood.

The zoning changes would block the development of 160 apartments for low-income senior citizens along Northwest 18th Avenue in the Alphabet District.

More importantly, the recommendations could limit future development along a street slated to receive a new bus line—the kind of corridor where Portland has pledged to welcome new development.

Northwest Housing Alternatives, one of the state's leading affordable-housing developers, has been working on plans for the 160-unit building for more than seven months. Its director says she's baffled why city leaders would consider blocking the kind of low-income housing they're asking voters to bankroll.

"We're concerned for the project," says Martha McLennan, executive director of Northwest Housing Alternatives. "We're also concerned at a more philosophical level that the city is reducing the apartments that can be built in a neighborhood that's walkable and has good access to transit and services." (The dispute was first reported Oct. 4 by the Portland Tribune.)

The City Council will begin Oct. 6 to consider a zoning change recommended by the Planning and Sustainability Commission. If passed, it would mean developers could build half as densely in a roughly 20-square-block area of the Alphabet District as well as in a few blocks of Northeast's Irvington neighborhood. The changes would also lower maximum building height by at least 10 feet, as part of an effort to preserve the historic character of two of Portland's wealthiest neighborhoods.

That would make projects like Northwest Housing Alternatives' building impossible to finance, the owner and the developer say. It also appears to protect the property values of handsome Victorian homes at the expense of senior citizens making less than $15,000 a year.

"If you say we have an affordability housing problem," says economist Joe Cortright, "and then you restrict the ability to build more housing in the places where people want to live, then you're not dealing with housing affordability."

A year ago Friday, City Hall officially declared a housing emergency, as upward of 1,800 people camped on city streets. The council passed new ordinances to protect renters and referred a housing bond to voters for the first time to build or restore 1,300 affordable apartments. But the zoning proposal is a new test of the city's commitment, given that it runs up against the opposition of neighborhood groups.

Officials with regional planning agency Metro publicly objected to the Alphabet District's downzoning in August.

"The affordable-housing crisis we currently face requires that an increasing supply of housing be developed in order to keep pace with demand," wrote Metro's chief operating officer, Martha Bennett. "Our region is depending on the city of Portland to accommodate a significant proportion of the region's growth in population and employment."

The neighborhood is also slated for a new bus line that would provide direct service from the central city to North Portland, traveling up Northwest 18th Avenue and over the Fremont Bridge when funding becomes available, according to TriMet.

But city planners who approved the downzoning recommendation last month say historic preservation trumps new buildings—especially in historic neighborhoods surrounded by construction cranes.

"I get the big picture: They want to have all the room they can have for more people," says Chris Smith, vice chairman of the planning commission, which officially approved the downzoning recommendations last month. "We've been fairly selective. They can relax and chill a little."

Historic preservationists say neighborhoods need more protections against developers as the city grows.

Neighborhood advocates argue the new zoning will make the city's historic requirements clearer, and avoid creating a perverse incentive to demolish existing apartment buildings with low rents.

"I don't think [affordable housing] trumps everything else," says Karen Karlsson, president of the Northwest District Association. "I think it should be compatible with everything else."

But McLennan notes the property owner had tried—and failed—to win approval to demolish a three-story 1919 building on the property two years ago, and instead adjusted plans to incorporate it into the new apartment project. She says that shows the current historic protections are working without new regulations.

"This is just a blanket prohibition," says McLennan.

The property owner, Mark O'Donnell, is furious.

"We are at a loss to understand," he says, "why the City Council would ask Portland voters to approve $258.4 million of general obligation bonds to provide approximately 1,300 affordable apartments and, at the same time, approve [a policy] that eliminates 160 units of affordable housing at no cost to the city of Portland."

Yet Hales and all four of his colleagues on the City Council say they haven't made up their minds.

Hales is "a little bit skeptical" of the new rules, says his policy adviser, Camille Trummer.

"We're in a housing crisis," she tells WW. "While each neighborhood did propose these changes, he's not sure if it's going to satisfy the needs of the housing supply in terms of long-term planning."

City Commissioner Dan Saltzman, who oversees the Housing Bureau, is also waiting to make a final decision, says his chief of staff, Brendan Finn.

"With demand outpacing supply and production, Commissioner Saltzman is seeking opportunities in the comprehensive plan to increase the production of affordable and market-rate housing," says Finn. "This proposal appears to run counter to that goal."