In-depth Look at the Metro Housing Bonds

By Don MacGillivray

The Metro bond measure on the November ballot will authorize $653 million in general obligation bonds to fund affordable housing in Washington, Clackamas, and Multnomah counties. It is Measure 26-199, titled Metro Housing Bonds.

Property owners in these counties will pay an estimated tax of $0.24 per $1,000 of assessed value annually. For the homeowner in the Metro area with an assessed value of $240,000, the tax will be $57.60 per year.

If the voters approve, Metro will issue bonds to finance the building of affordable housing through purchase, rehabilitation, preservation of affordable housing, purchase of land for affordable housing, and preventing the displacement of low-income housing.

A no vote would defeat the Metro bond measure and there would not be any additional funding for affordable housing from Metro, thus keeping property taxes unchanged.

The significant reduction of housing construction during the Great Recession and a rapid increase in new residents has worsened a severe shortage of housing for low-income residents in Portland.

Between 2010 and 2016, the median income for a renter increased 19 percent, while the average rent increased 52 percent. Demand for affordable housing continues to outpace supply, especially for those on limited incomes, working families, seniors, and the disabled.

Metro reports that more than 67,000 renters in the region pay more than 50 percent of their income for housing. For purposes of this bond, Metro defines affordable housing as land and improvements for residential units occupied by households making 80% or less of the area’s median income. This was $65,120 per year for a family of four in 2018.

The strategy for the 2016 Regional Framework Plan was for public investment that would create and preserve affordable homes for low-income people.

The plan includes the goal of making housing available to all income levels, by creating a regionwide housing fund to assist local governments in providing for affordable housing needs in their communities.

In 2015, Metro launched its Equitable Housing Initiative, to ensure “diverse, quality, physically accessible, affordable housing choices with access to opportunities, services, and amenities.”

After study, the Metro Council passed the resolution in June of 2018 to place the 26-199 bond measure on the ballot.

Metro’s current investments in affordable housing are the Transit-Oriented Development (TOD) program and Equitable Development Planning (EDP) grants in the amount of about $3 million per year.

TOD funds have existed since 1998, but since 2016 they have been focused on supporting affordable housing development in areas served by public transportation. Almost all of it is from federal transportation funding, usually combined with funds from cities, counties and private developers.

EDP grant funds come from a 0.12% regional excise tax on construction projects valued at more than $100,000 with affordable housing projects exempt from the tax. EDP grants fund planning, not construction, but this is an important part of the effort to increase affordable housing.

On the November election ballot too is Oregon Measure 102, important to the Metro bond measure because it increases the capacity of its funding for affordable housing.

It is a legislatively referred constitutional amendment that would allow counties, and cities to build affordable housing in cooperation with private and non-profit organizations.

If Oregon Measure 102 fails and measure 26-199 passes, the bonds will provide enough funding to create 2,400 units, but if Measures 102 and 26-199 pass the bonds will provide for 3,900 affordable homes.

Provisions are included in the measure for community oversight and independent financial auditing. The local and regional administrative costs cannot exceed 5 percent of the bond proceeds.

Those in favor of the Metro housing bond measure believe it is necessary due to the affordable housing crisis that exists throughout the region. As long as there is a housing shortage, affordable housing will not be built unless government plays a significant role.

The price of this bond measure is not high. With these added resources, Metro working with the regions local governments and the private sector will be able to have a significant impact in providing housing that is not available today.

Those against the measure will say that government regulations, permit fees, construction related charges, bureaucratic delay, and infrastructure funding challenges add to the cost of privately-developed housing making affordable housing too costly to build.

Affordable Oregon estimates these charges are on average about $60,000 on the cost of a $425,000 home, depending on its location in the Metro region. Critics say this new bond will increase the property taxes of existing property owners living on fixed incomes and therefore it is a counterproductive way to fund affordable housing.

If Metro would relax the restrictions on expanding the urban growth boundary more land would be available and more affordable housing might be built.

In-depth Look at the Metro Housing Bonds

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