City expects to increase goal for housing bond
Mayor Ted Wheeler is expected to announce a higher goal by late January for the number of homes to be built or preserved with Portland's affordable housing bond funds.
City officials originally promised to create or save 1,300 affordable housing units with the $258 million measure approved by Portland voters at the November 2016 general election. Two years later, Oregon voters approved an amendment to the state Constitution allowing the city to partner with private businesses and nonprofits on such projects, potentially increasing the number of units the bond can help finance.
"We have asked legal counsel and bond counsel to clarify some things about such partnerships, and when we have the answers to those questions, the mayor will be announcing a new, higher goal. We don't want to promise a number now that we can't meet, however," says Cupid Alexander, an assistant to Wheeler assigned to housing issues.
Because Measure 102 was approved by Oregon voters, Metro also expects to produce and save more units with its $653 million affordable housing bond, which also passed at the November 2018 general election. Because Metro knew that both measures were going to be on the same ballot, it was able to promise the goal would increase from 2,400 to 3,700 units if the amendment was approved.
The city's affordable housing bond funds are being administered by the Portland Housing Bureau. Director Shannon Callahan says passage of the amendment allows the bureau to use the bond funds in the traditional manner for supporting affordable housing developments. The city historically has partnered with private businesses and nonprofit organizations on such projects it supports with urban renewal funds and other revenue.
"That allows the money to go farther, but it also means we have less control over the projects. Before the constitutional amendment passed, the city was required to finance and own the bond fund projects. Now it's likely we will put projects out for bid and someone else will own and operate them," Callahan says.
But, no matter how much Wheeler increases the goal in January, the percentage of the most affordable units in the projects is not likely to increase as much, Callahan warns. Homeless and affordable housing experts agree that the greatest need is for units that rent for 30 percent or less of the area's median family income.
Those tenants are at the greatest risk of homelessness, and usually must have their rents subsidized by vouchers and other tenants paying higher rents. City officials promised that 600 of the 1,300 bond-funded units would rent for 30 percent or less of the median. But the subsidies for such units are so high, Callahan says, it will be hard to produce many more of them, even with private businesses partnering on future projects.
"Depending on how the projects pencil out, there might not be any increase," Callahan says.
The Metro Council, City Council and Multnomah County Commission recently agreed to direct $5.25 million in tourism funds each year to the city-county Joint Office on Homeless Services, to help support the lowest-income tenants in Portland.
The City Council so far has approved spending only $37 million in bond funds to buy the existing Ellington Apartments in Northeast Portland. The council has borrowed an additional $14.8 million for other projects, most of which will likely be repaid with bond funds. They include $14.3 million for the purchase of a recently completed market-rate apartment building at 105th Avenue and East Burnside Street that was converted to affordable housing, and $500,000 for a lot at 5827 N.E. Prescott St. where a future project will be built.
Future projects approved by the council include housing at Southeast 30th Avenue and Powell Boulevard, where a strip club was purchased with other funds and demolished, and the replacement of the Westwind Apartments at Northwest Sixth Avenue and Flanders Street, which was purchased with other funds and will remain open while the current tenants are relocated. Those projects are still in the planning stage and do not yet have cost estimates.
Meanwhile, Callahan says her bureau is continuing to talk with Metro about how it should spend its share of the regional goverment's affordable housing bond funds.
Metro plans to distribute the money based on the respective shares of assessed value of Multnomah, Clackamas and Washington properties, including the four cities within those counties that qualify for U.S. Housing and Urban Development block grants: Portland, Beaverton, Gresham and Hillsboro. Portland has 37.81 percent of the assessed value in Metro's jurisdiction and so is entitled to receive about $211 million.