I finally spoke with the Portland Development Commission, the body responsible for the Urban Renwal Area programs.  The good news is that there are two different tax breaks I could qualify for.  To do so, I have to create a lot first... no way around that anymore.

Today I went down to the Bureau of Development Services and dropped off my $385 check for an assistance consultation, just for help dividing the lot.  Since the zone doesn't permit a narrow street frontage ("flag lot") I have to petition for an exception, and I need all the help I can get in making them happy with the plans so I'll be approved.  I already know I have to make the lot super tiny to avoid being required to put 2 homes in, but there's even more factors, includiing how I set up the driveway and landscape the place.  My appointment is June 29th.

The last design plan made with two 40-foot containers is too big to fit on the proposed lot, so I had to start over on a layout.  Hybrid Seattle has a good design they're using for 2 different projects around Puget Sound, so I'll probably go with a variation on that.  The main living space is only 360 sqare feet, but I'll be adding a small shop space to it.  I hope all the essentials will fit!