The Affordable Housing Thread

[maccoinnich]

Adjusting to inclusionary housing rules



More than 18 months after inclusionary housing took effect in Portland, the first project to bring affordable housing to market under the policy may offer only a single affordable three-bedroom apartment.

Affordable units have been slow to come to market in Portland as for-profit developers navigate the inclusionary housing process. Not one has been built yet, according to stakeholders and city documents.

Developments that include 362 inclusionary units have received permits or are close to receiving permits, according to a Portland Housing Bureau report dated Sept. 26. Since inclusionary housing took effect Feb. 1, 2017, 8,578 units in buildings of 20 or more units have entered the city’s permitting pipeline.

Yet the permitting data offers an incomplete picture – it does not reflect how many projects actually get built. Developers may withdraw or delay construction for any number of reasons, and commonly do so.

...continues at the DJC (temporarily unlocked).

[MarkDaMan]

Originally Posted by maccoinnich

...continues at the DJC (temporarily unlocked).

The FAR transfer to complete the Broadway Tower resulted in around 23 to 25 units of affordable housing (at 80% of Portland's MFI) in an adjacent project. Makes me wonder if offered a carrot to build higher with affordable housing components, it might yield more results than the current inclusionary policy.

[the urban politician]

Looks like Oregon is going to pass Statewide Rent Control.

Booooo!!!

[RED_PDXer]

Originally Posted by the urban politician

Looks like Oregon is going to pass Statewide Rent Control.

Booooo!!!

If it's still at a 7% rent increase cap, that's hard to care about one way or the other.

[2oh1]

Originally Posted by RED_PDXer

If it's still at a 7% rent increase cap, that's hard to care about one way or the other.

Seriously.

Let's break that down, yearly. Say you're paying $1,500 rent...
A 7% increase on that = $105
So, when it's time to renew your lease, it becomes $1,605/mo.
A 7% increase on that = $112
Year 2, your lease renews at $1,717/mo.
A 7% increase on that = $120
Year 3, your lease renews at $1,837/mo.
A 7% increase on that = $128
Year 4, your lease renews at $1,966/mo.
A 7% increase on that = $137
Year 5, your lease renews at $2,103/mo.

Obviously, with those increases, it isn't likely anyone would stay very long, but if they stayed for a decade, they'd be paying 2,950 for that same $1500/mo apartment even though a decade of inflation would mean something that used to cost $1500 would now cost 1,760 ish.

San Portlancisco, here we come.

[redbeard]

It is 7% plus inflation. With inflation around 2% that means rents can increase 9% a year

[pdxlexus]

Can't speak for the rest of the state but in Multnomah County you'll generally see a 3% annual increase in assessed value which, baring any new tax levies, will translate into a 3% increase in property taxes.

[babs]

Originally Posted by pdxlexus

Can't speak for the rest of the state but in Multnomah County you'll generally see a 3% annual increase in assessed value which, baring any new tax levies, will translate into a 3% increase in property taxes.

You do need to factor in new tax levies, those usually result in the largest tax increases. Also, there is an IRS regulation that says if you charge below market rent for a unit the you could lose the tax deductions that come with it. That could become a new factor here.

[RED_PDXer]

Originally Posted by 2oh1

Seriously.

Let's break that down, yearly. Say you're paying $1,500 rent...
A 7% increase on that = $105
So, when it's time to renew your lease, it becomes $1,605/mo.
A 7% increase on that = $112
Year 2, your lease renews at $1,717/mo.
A 7% increase on that = $120
Year 3, your lease renews at $1,837/mo.
A 7% increase on that = $128
Year 4, your lease renews at $1,966/mo.
A 7% increase on that = $137
Year 5, your lease renews at $2,103/mo.

Obviously, with those increases, it isn't likely anyone would stay very long, but if they stayed for a decade, they'd be paying 2,950 for that same $1500/mo apartment even though a decade of inflation would mean something that used to cost $1500 would now cost 1,760 ish.

San Portlancisco, here we come.

That's not really the problem, is it? Once a place reaches market rent, the market doesn't support a 7% increase every year in sequence. Maybe that happens in places like SF where they don't build enough housing. The $1500 apartment from 3 years ago appears to still be about $1500 from what I've seen, as I have been looking for some time.

The problem this legislation is trying to address is gentrification of low-rent apartment buildings where rents are maybe $700 or $800 today (yes, they do exist) where the buildings lack new systems or upgraded finishes, for example. Seeing your rent go from $700 to $1100 would be catastrophic because there are very few options at those lower price points. Instead, going from $700 to $749 one year and $802 the following year would at least provide a little bit of stability while options are considered.

[maccoinnich]

Inclusionary housing production lags goals



Portland has a long ways to go to meet the goals set for the city’s inclusionary housing program, which has been championed by Mayor Ted Wheeler and other commissioners.

The city has received permit applications for 66 projects that would bring 422 rent-restricted inclusionary housing units to market, according to a Housing Bureau report dated March 27. Of those, 349 units are from private developers and 73 units come from Housing Bureau projects.

That’s a far cry from the 23,000 units serving low- and moderate-income households the city says are needed.

Portland developers say inclusionary housing rules have made it more difficult, if not impossible, to raise capital for multifamily projects in the city, particularly from out-of-state institutional investors.

“Inclusionary housing pushes the return on costs below a level that is really acceptable to capital markets,” said Brian Wilson, a partner with Mainland NW. “It is very difficult to underwrite them even in the best of circumstances.”

...continues at the DJC (temporarily unlocked).

[maccoinnich]

Portland Housing Bureau Announces Nine Projects for Metro Funding

The Portland Housing Bureau (PHB) has submitted nine affordable housing projects for approval to receive funding from Metro’s Regional Affordable Housing Bond. When awarded, these projects will join four others already in development, representing more than 1,200 units of affordable housing—or 83% of Portland’s housing goal under the Metro Bond.

“Thank you to the Portland Housing Bureau, Metro, and the voters who supported this vital investment in affordable housing,” said Housing Commissioner Dan Ryan. “Families, Communities of Color, and Portlanders exiting houselessness will all benefit from these new housing options supported by the Metro Bond—I can’t wait to see how each and every resident adds their unique life experience to build a healthier, more resilient community.”

In 2018, voters approved the Metro Affordable Housing Bond, dedicating $652.8 million to the development of 3,900 units of affordable housing throughout the Portland Metro region. The City of Portland was granted $211 million from those funds with the goal of creating 1,475 units of affordable housing, including 605 deeply affordable units at 30% of Area Median Income (AMI) and 737 family-sized units. Additionally, the City established a goal of creating 300 units of Permanent Supportive Housing (PSH) through Metro Housing Bond funds.

Earlier this year, the Portland Housing Bureau issued a request for proposals from developers and community partners. Seven developments were selected from the solicitation, which are being recommended to Metro to receive $88.6 million in capital funding from Metro Bonds. Altogether, these seven new projects will create a total of 687 new units of affordable housing, including:

• 297 units that are deeply affordable for households who make 30% or less of the area median income (AMI);
• 376 family-sized units; and
• 122 new Supportive Housing units for chronically homeless individuals, couples, or families.

The Housing Bureau has also recommended two additional projects from its development pipeline to receive Metro funds, which will add another 38 deeply affordable units and another 25 Supportive Housing units for families and people experiencing homelessness.

“With additional funding from Metro’s Supportive Housing Services Measure, nearly 150 of our neighbors who face the steepest barriers to housing will have a real chance to find stability and safety, heal and move forward thanks to critical wraparound services,” said Multnomah County Chair Deborah Kafoury. “We know we can provide a lot of affordable and Supportive Housing just by paying down rents in market-rate apartments. But we also need developments like these to meet our affordable housing needs. I’m encouraged that these projects will soon become actual homes for individuals and families.

Portland will make another round of Metro Bond funds available in 2022, along with a parcel donated by the Kaiser Foundation Health Plan of the Northwest for new affordable housing adjacent to the Kaiser campus on N. Interstate Avenue. The location is in the Housing Bureau’s N/NE Neighborhood Housing Strategy area where a legacy of racist housing policies and harmful urban renewal practices resulted in the ongoing displacement of longtime residents. Site plans will likely include at least 30 affordable rental units that will prioritize applicants who were displaced, at risk of displacement, or descendants of families displaced from N/NE Portland through the N/NE Preference Policy.

...continues at the Portland Housing Bureau website, with details on the nine projects selected.

[MarkDaMan]

https://www.oregonlive.com/politics/...dog-finds.html

Portland officials used millions earmarked for affordable housing to cover own costs, city watchdog finds
Updated: May. 15, 2024, 8:31 a.m.|Published: May. 15, 2024, 8:30 a.m.
By Shane Dixon Kavanaugh | The Oregonian/OregonLive

Portland officials have taken millions of dollars intended to spur creation of affordable housing and instead used the money to cover bureaucratic costs, according to the city’s elected watchdog.

That is among the findings in a city audit of Portland’s inclusionary housing initiative released Wednesday.

The program requires new apartment buildings with 20 units or more to make some of them affordable to low-income tenants for 99 years after they open. Developers can opt out of the program by paying a fee to the Portland Housing Bureau.

City Auditor Simone Rede’s office found city housing officials collected more than $5 million from developers who opted not to set aside affordable units between July 2017, when the program launched, and April 2023. As of last June, however, none of that money had been used to create more housing for low-income tenants as it’s intended to do.

“Instead, the fees have gone solely towards program operating costs,” city auditors wrote. “Bureau managers said they plan in the future to use the fees to also fill affordable housing finance gaps.”

....(several paragraphs omitted by me to stay within sharing guidelines)

Some managers, for instance, failed to market affordable housing units created through the program, resulting in vacancies.

Auditors found that 23% of the 52 three-bedroom apartments constructed through the program as of April 2023 were vacant for more than a year after their buildings opened. Other managers rented units above the rates set by the program, while others rented units without screening applicants for income eligibility.

...(paragraph omitted by me to stay within sharing guidelines)

In response to the audit, Housing Commissioner Carmen Rubio and Housing Bureau Director Helmi Hisserich largely defended the program’s work to date.

The pair claimed that the program is ill-suited to provide housing to those who are drastically below 60% of the region’s median income and that lower-income households were best served by permanent supportive housing initiatives.

They also pushed back on the suggestion that the city should monitor how well property owners or managers implement the program once the buildings are constructed.

“Marketing and leasing (are) ultimately a property owner responsibility,” Rubio and Hisserich wrote.

...(entire article)

[uncommon.name]

Originally Posted by MarkDaMan

https://www.oregonlive.com/politics/...dog-finds.html



...(entire article)

Wow...

[RED_PDXer]

Originally Posted by MarkDaMan

https://www.oregonlive.com/politics/...dog-finds.html



...(entire article)

My takeaway from the article is that the Portland Housing Bureau thinks inclusionary zoning isn't working and is too difficult and costly to enforce over time.

[urbanlife]

Originally Posted by RED_PDXer

My takeaway from the article is that the Portland Housing Bureau thinks inclusionary zoning isn't working and is too difficult and costly to enforce over time.

Which is disturbing because it was created to make their jobs easier to fund affordable housing projects and work with developers and landlords to create more affordable units.

[aquaticko]

Originally Posted by RED_PDXer

My takeaway from the article is that the Portland Housing Bureau thinks inclusionary zoning isn't working and is too difficult and costly to enforce over time.

Sure seems like they're committed to making sure it doesn't work. How do they still have their jobs?