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TRIBUNE FILE PHOTO  - Affordable housing advocates successfully pressed the city to expand construction of units for low-income residents in the Zidell property near the Ross Island Bridge, part of the North Macadam urban renewal area. Now advocates want the city to devote half its urban renewal money to affordable housing. Housing advocates’ proposal to dedicate half the city’s urban renewal funds to affordable housing — enough to house 830 more low-income families — is getting serious attention from city officials.

The Portland Development Commission will discuss the plan Wednesday and the City Council is slated to make a final decision in October.

Urban renewal funds can be used only in urban renewal areas — less than 15 percent of the city — but that’s been the city’s biggest pot of money available for affordable housing in recent years. The Oregon Legislature, bowing to pressure from the home building industry, bars Oregon cities from adopting affordable housing strategies used elsewhere, such as rent control, inclusionary zoning and fees on real estate sales.

In 2006, the Portland City Council agreed to “set aside” at least 30 percent of urban renewal funds for affordable housing. With Portland facing a growing affordable housing crisis, the Portland Housing Advisory Commission voted unanimously last month to urge the city to bump that up to 50 percent.

PDC Executive Director Patrick Quinton told the housing commission last week that would mean spending an additional $82.7 million over the next decade on affordable housing, a 62 percent bump. Quinton said it might mean sidelining some of the PDC’s other priorities for redevelopment, including projects supported by city councilors. However, Quinton and new Portland Housing Bureau Director Kurt Creager vowed to present a unified recommendation on the idea to the City Council. Quinton said he’ll present potential ideas to the PDC this week about reallocating spending.

Historically, the PDC has been far more keen to spend money on redevelopment that boosts jobs and property tax collections than on affordable housing. But PDC Chairman Tom Kelly said affordable housing is a high priority for the urban renewal agency.

“I don’t think we have a member of the commission who’s not interested in this subject in a very deep way,” Kelly told members of the Portland Housing Advisory Commission last week.

City Commissioner Dan Saltzman, who oversees the Portland Housing Bureau, called the 50 percent set-aside idea “very thought-provoking.” Saltzman said he likes the idea “in the abstract,” but it would detract from some other City Council priorities for economic development or public infrastructure.

Saltzman said in some of the city’s urban renewal areas, boosting spending on affordable housing to 50 percent doesn’t make sense. But it does make sense in the Interstate and Lents urban renewal areas, he said.

Interstate covers nearly 4,000 acres in North and Northeast Portland, the area hit hardest by gentrification and displacement of the African-American community the past two decades. Lents includes 2,800 acres in East Portland, an area exhibiting early signs of gentrification.

While Saltzman suggested housing advocates might not get the full amount they requested, he didn’t see the overall dollar amount as being unrealistic.

“Eighty two million dollars doesn’t seem to be an unreasonable amount to shift into the housing ledger,” he said.

Tuesday’s Portland Housing Advisory Commission meeting attracted an unusual standing-room-only crowd, mobilized by the Metropolitan Alliance for the Common Good, which includes leaders in the faith community and other groups.

“The heart of the city is changing. Let’s make sure Portland’s heart stays true,” alliance member LaVeta Gilmore Jones testified at the meeting.

Jeff Riddle, a father of six who works as a housing case manager for a local nonprofit, testified that now his own family is facing a no-cause eviction.

Leah Greenwood, a former PDC housing staffer who helped write the 2006 housing set-aside policy, said she scoured PDC budgets and found $55 million designated for contingencies five years from now.

“These contingency funds are unprogrammed money,” Greenwood said, so that means the money can be redirected without gutting any of the agency’s already-budgeted projects.

Greenwood also identified five PDC-held properties that could be made available for affordable housing developments. “I know of sites sitting vacant they’ve owned over eight years,” she said.

Quinton noted the PDC’s main source of funding, known as tax-increment financing, is slated to dry up in several years, as the city winds down activity in its existing urban renewal areas. He encouraged housing advocates to press for continued resources to the agency as a way to keep money flowing to affordable housing. That would mean creation of new urban renewal districts.

Quinton said it would be unwise to dedicate 50 percent of urban renewal funding to affordable housing in each of the city’s urban renewal areas. The North Macadam Urban Renewal Area, which includes the Zidell development in the South Waterfront, needs private development to occur to generate the necessary tax-increment funding to pay for affordable housing and other projects, Quinton pointed out. The Central Eastside Urban Renewal Area has been the city’s chief growth area for jobs, he said, and needs to retain that as a priority.

Urban renewal areas take property off the tax rolls, diverting incremental property taxes to the PDC. But that means local governments and schools forego some of their property taxes until urban renewal areas are discontinued. Mayor Charlie Hales recently reduced the amount of land tied up in urban renewal areas so that local governments can collect more property taxes.

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