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Compromise increases housing setaside to 45 percent

The city of Portland will boost future urban renewal funds for affordable housing by 50 percent, under a compromise announced Friday by Mayor Charlie Hales.

The deal provides an additional $66.7 million in the next decade, enough to subsidize some 650 to 670 additional apartment units for low-income residents.

Hales negotiated the compromise with City Commissioners Dan Saltzman and Nick Fish, the current and former commissioners overseeing housing for the city. That assures majority support when it comes up for City Council approval Wednesday, Oct. 28.

“We’re trying to do our best to address what right now is the most pressing issue in the city,” said Patrick Quinton, executive director of the Portland Development Commission, the city urban renewal agency.

Housing advocates, led by the Metropolitan Alliance for the Common Good, have been lobbying the city to increase the share of tax-increment financing dollars — the main source of urban renewal funds — that are “set aside” for affordable housing. Currently, the city’s housing setaside policy calls for dedicating 30 percent of tax-increment funds to the Portland Housing Bureau to use on affordable housing. Housing advocates want that boosted to 50 percent, a campaign they call “TIF to 50.”

The Portland Development Commission uses the remaining tax-increment funds for transportation, parks, land purchases, developer subsidies and other programs to spur redevelopment in urban renewal areas.

The housing setaside policy is coming up for renewal next week, prompting the campaign by housing advocates to increase the amount.

The compromise sets the housing setaside policy at 45 percent, which amounts to a 50 percent boost in funding, said Jillian Detweiler, Hales’ policy director who helped broker the deal.

Leah Greenwood, a former PDC housing manager serving as an unpaid consultant to the Metropolitan Alliance for the Common Good, praised the compromise agreement.

“I think 50 would have been great, but I think people recognized that it was an aggressive ask,” Greenwood said.

The Portland Housing Bureau figures that its average subsidies for affordable housing have been around $100,000 per unit; hence the 650- to 670-unit estimate for the $66.7 million in new funds. However, the money must be spent in the city’s urban renewal areas, and the needs are different in each area, Detweiler said.

In Lents, for example, where there is ample affordable housing, the money might be better spent acquiring existing apartments to assure that supply isn’t depleted in coming years, she said.

Hales and PDC leaders had been concerned that bumping the housing setaside to 50 percent, now estimated to translate into $91 million in added money, would force the agency to scrap or scale back previous commitments to urban renewal projects that have been supported by Hales and other city commissioners.

“We have great projects in various stages of planning, in each district,” Hales said in a news release. “But we are in a housing crisis.”

At Hales’ direction, the PDC “scrubbed” its budget and found that $66.7 million in unprogrammed money could be made available for housing, Detweiler said. A 45 percent housing setaside won’t require the agency to dump or significantly shrink any of its big projects, she said, though it might require some “jiggering of the timing.”

Quinton said his agency hasn’t budgeted for much of that money because it’s not in hand, and is only anticipated in future years.

“A big chunk of the money will be available in the next five years,” Quinton said, but some might not be available for eight to 10 years.

City Commissioners Amanda Fritz and Steve Novick, who oversee the parks and transportation functions, have expressed concerns about losing urban renewal money dedicated to those services, if more money is directed to affordable housing.

PDC should still have adequate money to pay for parks and transportation in the city urban renewal areas, Detweiler said, “and I think we can make that case to them.”

Greenwood said the added money for affordable housing is welcome, but not nearly enough to solve Portland’s crisis.

“The need is 23,000 units, so obviously this is a drop in the bucket to the overall need.”

The compromise specifies the money must be spent in five different urban renewal areas: Gateway, Interstate, Lents, North Macadam and River District. Combined, those constitute less than 15 percent of the city’s land base.

Housing advocates pushed hard to get more money spent in those areas, in part because urban renewal areas are blessed with more money than other parts of town, and partly because they tend to have better access to transit, roads, parks, jobs and other amenities.

“You’re putting it in areas where people have the greatest opportunity to thrive,” Greenwood said, as opposed to providing more affordable housing in outlaying, often poorer communities.

The 45 percent housing setaside formula will become the new city policy for the next five years. It could be altered by future City Council action.

State Treasurer Ted Wheeler, who is making the city’s housing crisis a major focus in his election campaign to unseat Hales next year, recently endorsed a 50 percent housing setaside policy in an appearance before the Portland Tribune editorial board. However, he issued a statement Friday supporting the Hales compromise.

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