Legislature may ask voters to approve Constitutional amendment to open new avenues for housing

Metro is hoping that Oregon voters will revise the Oregon Constitution before money can be spent on a potential $500 million affordable housing measure it is considering.PAMPLIN MEDIA GROUP FILE PHOTO - Metro has supported market-rate housing like the Third Central apartments in Gresham in the past. The regional government is now focusing on affordable housing.

The idea: Ease restrictions on spending so the money can go farther, such as by relying more on nonprofits and the private sector to build housing.

Metro has not yet begun drafting the bond measure being considered for the November 2018 ballot. Although Metro President Tom Hughes announced the regional government will pursue a likely $500 million measure last month, the elected regional government is not expected to appoint an advisory committee to help until after the first of the year.

But the possible outlines of such a measure can be seen in documents presented to the Metro Council during a Sept. 7 work session on such a measure. They also reveal the council hopes the 2018 Oregon Legislature will ask voters to ease restrictions in the state Constitution before the money is spent.

State Rep. Alissa Keny-Guyer, D-Portland, told the Oregon Leadership Summit that the Legislature will consider asking voters to approve a constitutional amendment to allow local governments to partner with private businesses on affordable housing projects funded by general obligation bonds.

The state constitution currently prohibits such partnerships. That is why the city of Portland has to finance, own and operate the projects to be created by the $285.4 million affordable housing bond approved by city voters at the November 2016 election.

"We want to give jurisdictions more flexibility," Keny-Guyer said during a breakout session on housing at the Dec. 4 gathering of business and elected leaders at the Oregon Convention Center.

Both measures could appear on the same ballot. The Legislature will meet for a 35-day session in February, something that happens every even-numbered year. The November 2018 general election would be the first opportunity to refer the proposed constitutional amendment to voters.

If Metro sticks to its announced schedule, the regional government will not know whether the Constitution will be eased before it finishes writing its measure. That will likely force Metro to include different options for spending the funds in the measure's official explanation. Because Metro has no experience building, owning or operating affordable housing projects, it will likely consider passing the funds to the governmental housing authorities in all three counties if the restrictions are not eased.

Even though the Metro work session on the bond measure was held more than two months before Hughes announced the agency is pursuing it, documents distributed at the meeting show how much thought had already gone into it. And they underscore how much Metro is hoping to take a different approach than Portland.

The documents clearly show that a bond measure — like the one approved by Portland voters — would raise the most money of available options for affordable housing. An Aug. 28 memo written by Metro Planning and Development Director Elissa Gertler says a reasonable construction excise tax would only raise around $11 million a year, compared to $500 million or more from a property tax-funded bond.

And the documents show how Metro is hoping to share much of its money if voters approve the measure. Among other things, the documents talk about the council acquiring land in transit corridors for affordable housing projects, providing "gap financing" to support traditional public-private affordable housing projects and offering financial incentives to private developers to include affordable units in otherwise market-rate projects located in areas that are well-served by transit.

For that to happen, Gertler says, Oregon voters would have to ease the restrictions in the Constitution.

"However, discussions are underway to pursue a constitutional amendment in 2018 that would modify those requirements to create greater flexibility," she wrote.

The Portland Housing Bureau is trying to determine whether the measure's passage would ease restrictions on any of the city's unspent affordable housing bond funds.

The bureau has already spent about $60 million of the bond funds. Most went to purchase the 263-unit Ellington Apartments in Northeast Portland when it was put up for sale in early 2017. The bureau also plans to build its first new project on the site of the former Safari Club at 3000 S.E. Powell Blvd. that the city bought in September with lodging taxes paid on short-term rentals like Airbnb.

The housing bureau has received 65 proposals for the remaining bond funds so far. A committee appointed to oversee the bond spending was told last Tuesday that only 12 of the proposals meet all of the requirements of the policy framework approved by the City Council in October. Half are for the purchase of existing apartment buildings and half are for the purchase of vacant properties, where the bureau would then be responsible for building new affordable housing projects.

The 12 proposals are still being screened by another review committee. The first ones are not expected to be submitted to the council for approval until March.

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