Affordable Housing, Part Two

By Gabe Frayne

The City of Portland continues to make measured progress in its mission to provide affordable housing to low and moderate income residents frozen out of the booming housing market during the past decade.

Nonetheless, the yawning gap between available and affordable housing and the number of residents in need speaks to a basic dilemma of housing equity: space is a finite commodity.

In 2018, Metro estimated the greater Portland area lacked 48,000 homes for very low-income residents (those making half or less of median family income).

Since then, the city has surpassed its goal of building 1,300 affordable units with funds from the Portland housing bond approved by voters in 2016, but the high cost of acquiring housing or building new housing continues to pose an obstacle to more rapid progress.

To cite one example, the city paid $47 million to acquire the 263-unit Ellington apartments at 1610 NE 66th Ave., or about $178,000 per unit, not including refurbishing.

Meanwhile, the city has pursued a policy of increasing densification by encouraging the demolition of older, cheaper homes to make way for newer, more expensive ones, a strategy that appears to be limiting the availability of affordable housing for residents at or near the median family income.

In a scene now familiar to many residents of inner NE and SE, a modest home with a duplex rental out back on NE 58th was demolished three years ago to make space for six new condos that have sold for nearly $600,000 each.

Home ownership itself is theoretically part of the city’s affordable housing vision. As noted in a paper published by Metro Housing Bond, one of Portland’s local implementation strategies calls for “allow[ing] funds to be used for home-ownership, with a focus on serving African American, Latinx and Native American households to address historic and current discrimination and inequities in home-ownership opportunities.”

However, at a February meeting of the Metro Bond Oversight Committee, Portland Housing director Shannon Callahan admitted that “we are not prioritizing home-ownership at this time.”

The passage of Measure 102 in 2018 clearly boosted the prospects of the Housing Bureau in its efforts to stretch its bond dollars as much as possible.

As a bureau spokesperson explains, “Measure 102 allowed more flexibility in the way bond funds can be used,” by giving public entities “new authority to seek out public-private partnerships and leverage other sources of financing to develop bond projects.”

Though non-profits make up the majority of these new investment partners, the measure does raise a few prickly questions: Who will be the actual owners of these new partnership projects? How will more conventional investors realize a profit from these investments and how will the city guarantee long-term affordability?

Molly Rogers, the Deputy Director of the Housing Bureau, declined to answer these and other questions for this article.

One ominous detour in Portland’s push to provide more affordable housing would be the Trump Administration’s proposed 2021 housing budget, if enacted.

According to The Hill, the budget calls for slashing $8.6 billion in overall funding and would cut 43 percent of public housing funds.

In a statement to the Congressional Progressive Caucus, Rep. Earl Blumenauer said, “The Administration’s proposal would require some low-income program participants to pay a higher percentage of their income toward rent while also calling for work requirements and other restrictions for certain housing assistance.”

In light of diminishing federal support – and given the severe strain that the current national health crisis will bring to bear on public budgets – the city will almost certainly be looking to other means of adding to its affordable housing stock.

A potentially promising avenue that has come to the fore over the past 18 months is working with faith communities to build affordable housing on under-utilized faith-based properties [see The Southeast Examiner’s Exploratory Affordable Housing Program,” May 2019].

One congregation that has heard the call is Saint Philip Neri Catholic Church on SE Division. The main church is located on a block-long property that includes an older church, a rectory, a school and a sizeable parking lot.

Working with Catholic Charities, and with guidance from the Bureau of Planning and Sustainability (BPS), the church recently held an open house to share preliminary concepts and get feedback from parishioners and neighbors. Though there are significant differences between the two preliminary proposals, they both call for a new residential building with approximately 57 units.

All of which is not to say that faith communities will have an easier time securing funding than city government.

“That’s the biggest hurdle,” says Nan Stark, a city planner with BPS who has worked with Saint Philip Neri. “It can take years to raise the money and it’s also important for the organization to know how much they are willing to borrow.

“Mission-based organizations don’t have a lot of rich people who can pay for that,” Stark concludes.

Affordable Housing, Part Two

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