IT’S A TYPICALLY inauspicious evening at the intersection of NE 82nd Avenue and Oregon Street: The aroma of frying fat wafts from Pappy’s Drive-In, and a sign on Hawker’s Locker exhorts passersby to “Buy, sell, trade!” Yet the mood is slightly more expectant next door, where a festoon of white lights trails from the sidewalk to the open front door of Milepost 5, a gutted, three-story retirement home being reborn as the country’s largest affordable-condominium project built specifically for artists.

“We expected a line around the block,” confesses co-developer Brad Malsin, owner of BEAM development. But at this, Milepost 5’s third model-unit party, only about a dozen visitors roam between two lofts at any one time, partaking of free chicken kabobs, salads and beer. By night’s end, fewer than 50 people will have shown up.

The lukewarm response to Milepost 5 is surprising given the situation five years ago, when Mayor Vera Katz, in her desire to make Portland a hub for “the creative class,” asked the city’s young artists, designers and chefs what would make them happier here. Affordable places to live and work, they answered. And so Malsin and development partner Ted Gilbert, president of Portland Affordable Housing Preservation Trust, made it so—aided by city commissioner Sam Adams, who lobbied for zoning changes to make the project possible.

Despite the Hollywood truism, though, building it does not necessarily mean that they will come. In fact, only 19 of the 54 units have been reserved since they became available in July. So Malsin and Gilbert have widened their buying pool from artists to, well, anyone with a checkbook.

What went awry? Maybe the seedy surroundings scare off artsy types whose idea of romantic squalor leans more toward dilapidated Victorian squats than to strip malls. Or maybe the creative class has qualms about joining an artists’ commune where the carpet comes in three shades of gray (Midnight, Destiny and Dovetail). Or perhaps condos that range from $99,995 to $334,995 are still too costly for professionals customarily referred to as “starving.”

Whatever the case, people like LeeAnn Gauthier, a pert, thirtysomething legal assistant who moonlights as a photographer, are benefiting.

“What’s considered an ‘artist’?” Gauthier asks broker Alyssa Isenstein Krueger as she steps inside a loft decorated with IKEA furnishings. “Someone who makes a couple thousand bucks a year at it?”

“Or someone who makes nothing,” Krueger replies. A point, one suspects, that is beginning to dawn on Milepost 5’s developers.