Here is the exhibit related to the ordinance approving the tax exemption for Sky3. I would agree that $870 for a studio is not particularly impressive - it's below market for new construction, but there are plenty of studios available in NW Portland for less than that, which don't receive any government subsidy. However the price for the 10 subsidized two bedroom apartments is set at $1,118, which is dramatically below the $2,250 price they'll be charging for the non-subsidized units.
I do think building lots of market rate apartments is part of the solution. We should want market rate housing to be affordable to as many people as possible, thereby minimizing the number of people requiring subsidized housing. Rents in Portland remain a lot cheaper than other coastal cities, and there's no reason that can't continue. Indeed, there are signs that the sheer volume of construction going on right is actually reducing rents slightly. From a
recent Oregonian article - "Northwest Portland, which has seen rapid apartment development in recent years, actually saw average rents fall over the six-month period."
However, the market simply can't produce new housing affordable to low income people, and the current funding mechanisms are not producing enough subsidized units to meet the demand. Ultimately it's a revenue issue. The Portland Housing Bureau and/or PDC owns land that they can't afford to build anything on. The PDC already sets aside 30% of Urban Renewal Area revenues to build affordable housing. That could perhaps be increased, but it wouldn't be a very good idea as subsidized housing doesn't generate property tax revenue. If property taxes in Oregon reset on sale there would be a large increase in revenues, but I can't see voters approving that.