While Clackamas County is not the cultural equivalent of SE Portland YET, affordable housing is still available. And when culture is a simple MAX ride away, it's a good mix of both worlds. I have lived in Milwaukie for about seven years now. Portland is my home town, although I lived elsewhere for much of my adult life. D.C., L.A., Bay Area, etc.
I searched craigslist for many many months, and turned up an absolute dream of a dwelling. An apartment within a large expensive house, right on the river. Reasonable rent,everything included, and very nice neighbors. Million dollar view. I feel very lucky.
And those kinds of "irregular" housing opportunities are not uncommon. MIL apartments in nice homes, cottages, and so on. Downtown Milwaukie is quite charming and quaint, with coffee shops, excellent library, farmers market, and so on. Sellwood is a very quick bus ride away. Transit options are very good, and getting better when MAX opens. Plus there's the river front park, newly refurbished.
Keep on the search!