By Don MacGillivray
An estimation by federal housing and census report that the need for low-income housing is between 20,000 and 22,000 units. If people cannot afford housing they will be homeless.
What is affordable housing? In the 1950s, housing cost 25% of a families income. In the 1980s and ‘90s this increased to 30%. Today over half of the people are paying over 30% and it is not uncommon for rent to be 50% of a persons income.
It is very difficult to find an apartment for under $600 per month in Portland. Incomes have not kept up with the cost of living and unemployment remains high so many must go without housing here in Portland.
Costs for building an apartment or condominium is approximately $150,000 per unit. In addition to inflation, there are many added costs within the building industry.
Some housing advocates want a less demanding building code. The code requires minimum room sizes, electrical standards, bathrooms usable by the disabled, adequate exits, smoke detectors, etc. It should be possible to guarantee that all units are safe and livable while being built to a lesser standard.
Part of the problem may be the increase of a standard of modernity that drives the competitiveness of the housing market. To save money on less expensive construction only increases maintenance and operating costs in the long run.
There are other costs tied to public money often used to build affordable housing. Contractors often must hire union labor. Red tape is connected with obtaining these funds as is the cost of administration of the project.
Then there are the “green” building standards. Making units efficient with clean energy adds to the costs to any project. The system development fees can approach ten percent of the value of the project. There can be significant legal and accounting fees. Banks that loan the money often ask for a medium to upper scale project to insure that their loan is secure.
Housing owned and operated by CDC, Community Development Corporations, serves over 72,000 Oregonians. Approximately 40% of their residents are children.
The majority of people living in CDC housing receive services to help them move from poverty to self-sufficiency. These services include: case management, child care, educational programs, and access to asset building programs.
Housing needs often include various services that assist residents with their life situation. These may include health issues, finding employment, addressing substance abuse, or simplifying issues related to poverty. Non-profit built housing uses a combination of loans, philanthropic support, private investments, and government funds,
One of the largest and most effective organizations dedicated to affordable housing in Oregon is the Opportunity Network (ON, an organization that supports their member non-profits to build low income housing throughout the state. The activities of ON share information with these organizations, provide them with learning opportunities, and share best practices related to their work.
They have over 200 affiliated organizations including nineteen CDCs that serve the Portland metropolitan area and provide a unified voice for member organizations when working with government and philanthropic resources. As long as low-income housing remains problematic in Oregon, ON will be involved to improve the place making here.
The recently-completed East Portland Action Plan will help the area with housing development along with other challenges. Since no money is tied directly to this plan, the goals are about ensuring that what is built is what is needed and compatible with the area.
The goals include: 1) to improve the design, quality, and safety of new and existing housing, 2) to improve public notification of new developments, 4) to find out about incentives for housing development, 4) to improve City codes, and 5) to review the new plans for East Portland.
They have done a good job of defining the need for affordable housing in East Portland and it will focus attention on their need.
Possibly the most recent success in building affordable housing was completed recently at E. Burnside and 151st. Built by PHC Northwest and Home First Development, the Snowberry apartments are 27 one and two bedrooms built for $1.9 million. Another 80 unit building is planned at SE Division and 171st.
To do this it takes private money upfront to save the extra costs of public funding. The waiver of the cities system development charges that saved $13,000 a unit was the only public assistance. In return the property owner agreed to keep these apartments as affordable rent apartment for sixty years.
The City’s record in the south waterfront is a good example of the challenges of building affordable housing. In 2003, the City pledged to build 582 units of affordable housing in the South Waterfront Urban Renewal Districts (URD). To date Gray’s Landing with 209 units is the only project built with units affordable for those with low incomes.
Recently the developer for the North Macadam URD pulled out of a commitment to build affordable housing, but negotiations continue to build the promised affordable units .
The many commitments to build affordable housing in Portland exist, but how to do it is still unclear. Providing low-income people with higher incomes and housing they can afford is the only way it can be accomplished without significant participation by the public sector.