cupid alexander, housing program specialist, portland housing bureau, how we create housing...

Neighborhood Partnerships RE: ConferenceHow We Create Housing Opportunity: Local Government Action to Generate Housing Resources

Slide 1

Overview of Portland Affordable Housing Actions in the Last 18 Months

• Tripling the size of the city’s affordable housing tax exemption program

• A 50% increase to the amount of urban renewal funding dedicated to affordable housing

• Dedicating short-term rental tax revenue to affordable housing

• Renter protections that extend no cause eviction notice to 90 days and notice for increasing rent/housing cost by more than 5% set at 90 days

Slide 2

Overview of Portland Affordable Housing Actions in the Last 18 Months

• Creation and funding of a Joint Office of Homeless Services with Multnomah County

• Adoption of a construction excise tax

• Development of recommendations for a mandatory inclusionary housing program to be considered by City Council in December

• Referred an affordable housing bond to voters, which was passed on December 8

Slide 3

Closer Look at Select Portland Actions

• Increased Urban Renewal Funding

• Affordable Housing Bond Referral

• Construction Excise Tax for Affordable Housing

• Mandatory Inclusionary Housing

Slide 4

Tax Increment Financing Affordable Housing Set Aside 2015 Policy Review

Slide 5

2015 Policy Review Findings

• PHAC Key Recommendations:•Minimum 50% set-aside in aggregate across URAs

•Retain current income target guidelines

• PDC Board Preliminary Key Recommendations:•Hold URA-by-URA discussion

•Any increased investment should be accompanied by broader funding strategy

•Consider financial sustainability of PDC

Slide 6

2015 Policy Review Recommendations

• Increase aggregate minimum TIF Set Aside for Affordable Housing from 30% to 45%

• Increase in aggregate minimum TIF Set Aside should apply to active URAs beginning July 1, 2015

• Calculation in the River District includes some combination of TIF debt proceeds and ownership interest in the Broadway Corridor/USPS acquisition equal to $20 million

• Retain existing income guidelines

Slide 7

2015 Policy Review RecommendationsUrban Renewal Area

Status Quo Policy Set Aside %

2006-2015Set Aside at 30%

2015-2025Set Aside at 45%

Downtown Waterfront 21% 19% No New Debt

Oregon Convention Center 26% 11% No New Debt

South Park Blocks 52% 52% No New Debt

Lents Town Center 30% 33% 42%

Gateway 30% 42% 33%

Interstate 30% 34% 70%

Central Eastside 18% 14% 32%

North Macadam 36% 40% 46%

River District 30% 41% 31%

Total 30% 32% 45%

Slide 8

2015 Policy Review Recommendations

Urban Renewal AreaStatus Quo Policy

Set Aside $Targeted 45%

Set Aside $Resulting 2015-2025

Set Aside $

Lents Town Center $31,637,259 +$7,500,000 $39,137,259

Gateway $10,644,013 +$2,000,000 $12,644,013

Interstate $63,653,046 +$32,000,000 $95,653,046

Central Eastside $9,840,270 +$0 $9,840,270

North Macadam $60,000,000 +$5,000,000 $65,000,000

River District $26,507,340 +$20,000,000 $46,507,340

Total $202,281,928 $66,500,000 $268,781,928

Slide 9

Impact of Recommendations

• Interstate Corridor, +$32 M• Funds to affordable housing will provide resources to support general urban renewal area

production targets as well as the N/NE Housing Investment Strategy and will not affect any project commitments in Interstate

• Lents Town Center, +$7.5 M• Funds to affordable housing will not affect the funding commitment to the Lents Action Plan

• Increase in funds for affordable housing could be offset by extending the life of the district by two years to allow it to achieve maximum indebtedness

• Gateway Regional Center, +$2 M• Funds to affordable housing will not affect any project commitments in Gateway

Slide 10

Impact of Recommendations

• River District, +$20 M• PHB will receive a combination of debt proceeds and ownership interest in the Broadway

Corridor/USPS acquisition equal to $20 million. If the acquisition has not been executed prior to June 30, 2020, the option of $20 million in TIF debt proceeds will be executed.

• Allocation of these funds will maintain project commitments in the River District and provides sufficient funding to deliver on the Old Town/Chinatown Action Plan

• North Macadam, +$5 M• Allocation of funds to affordable housing will not affect any commitments in North Macadam

• With full build out of Zidell Yards, leaves $20M+ available for South Portal

Slide 11

Affordable Housing General Obligation Bond for PortlandJune 30, 2016

Slide 12

Bond Authorization

• $258.4 Million• $.4208 per $1,000 of assessed value

• Estimated $75 per single family home

• 20-year repayment term

• 5 - 7 year bond issuance

Slide 13

Impact of Bond

• 1,300 units of affordable housing (0-60% MFI)• 600 units at 0-30% MFI

• 50% of units family-sized (2&3 bedrooms)

• 2,900 Portlanders a year in bond-funded housing• 50,000 - 58,000 Portlanders over 60 years

Slide 14

Impact on Portfolio

• Current 0-60% MFI portfolio: ~ 11,634 units• Production pipeline: ~1,500 new units

• Impact of Bond• +1,300 units

• 11% increase to 0-60% MFI units

• 25% increase in 0-30% MFI units

Slide 15

Affordable HousingConstruction Excise Tax Recommendation

Slide 17

Construction Excise Tax Recommendation

• Residential tax of 1% of permit valuation on new residential development

• Commercial tax of 1% of permit valuation on new commercial development

Slide 18

Construction Excise Tax Recommendation

• Residential Tax Revenue*:• 15% to State for homeownership

• 50% for inclusionary zoning incentives

• 35% for affordable housing at or below 60% MFI

• Commercial Tax Revenue*:• 100% for affordable housing at or below 60% MFI

Slide 19

*4% of revenue for administration

Construction Excise Tax Exemptions• Required State Exemptions:• Affordable Housing at or Below 80% MFI

• Public Improvements Under Public Contracting Code

• Schools, Hospitals, Worship, Agriculture, Non-Profit Care

• Additional Portland Exemptions:• Affordable For-sale Housing

• Accessory Dwelling Units for 2 years

• Improvements when value is less than $100,000

Slide 20

Annual Revenue – Historic Estimates

Slide 21

Annual Revenue – Historic Estimates

Slide 22

5 Year Average

Residential Revenue 5,404,087

15% for State 778,188

50% for IZ Incentives 2,593,962

35% for Affordable Housing Programs 1,815,773

Commercial Revenue 2,681,298

100% for Affordable Housing Programs 2,574,046

Total Revenue 8,085,385

Inclusionary Housing Updated Program Recommendations

Slide 23

Policy Framework• Citywide program, calibrating the inclusion rate and incentives by geography

• Set mandatory program at 80% AMI, and develop supplemental incentives to reach below 60% AMI

• Prioritize units on site over fee-in-lieu revenue or units off-site

Slide 24DRAFT DOCUMENT

Policy Framework Continued• Inclusionary housing requirement for all buildings with 20 or more units

• Inclusionary units maintain market comparable quality, size, bedroom composition, and unit distribution in the building

• Maintain affordable units for 99 years

Slide 25DRAFT DOCUMENT

Program RecommendationsMixed Use Zones

Slide 26

Mixed Use Zones

Slide 27

Mandatory Inclusionary Requirement • 20% of Units at 80% Area Median Income

Incentives • Density Bonus• 10 Year Property Tax Exemption on Affordable Units• CET Exemption on Affordable Units• Density Bonus Units Exempt from Parking Requirements

Deeper Affordability Option • 10% of Units at 60% Area Median Income

Incentives • Density Bonus• 10 Year Property Tax Exemption on Affordable Units• CET Exemption on Affordable Units• Density Bonus Units Exempt from Parking Requirements• SDC Waivers on Affordable Units

Program RecommendationsCentral City

Slide 28

Zones with Base FAR below 5.0

Slide 29


Incentives • Density Bonus of 3.0 FAR• 10 Year Property Tax Exemption on Affordable Units• CET Exemption on Affordable Units


Incentives • Density Bonus of 3.0 FAR• 10 Year Property Tax Exemption on Affordable Units• CET Exemption on Affordable Units• SDC Waivers on Affordable Units

Zones with Base FAR above 5.0

Slide 30


Incentives • Density Bonus of 3.0 FAR• 10 Year Property Tax Exemption on All Residential Units• CET Exemption on Affordable Units


Incentives • Density Bonus of 3.0 FAR• 10 Year Property Tax Exemption on All Residential Units• CET Exemption on Affordable Units• SDC Waivers on Affordable Units

Build Off Site OptionOption #1: Off-site Construction of New Units

Slide 31

• # of Affordable Units Required Off-Site• Either, 20% of the total units in sending site at 60% AMI

• Or, 10% of the total units in sending site at 30% AMI

• Comparable size, quality, and bedroom count as the units in sending site

• Sending site retains FAR bonus, no other incentives

• Receiving site affordable units receive CET exemption, and SDC waivers on units at and below 60% AMI

• Receiving site must fulfill its own inclusionary housing requirement

• Affordable units must be under construction, or have CO, prior to approval of use as off-site option

• Affordable units must be no more than 1/2 mile from sending site, or in an area with an equal or better opportunity mapping score

• Housing Bureau must approve off-site plan

• No supplemental city subsidy can support the off-site units themselves

Build Off Site OptionOption #2: Off-site Dedication of Existing Units

Slide 32

• # of Affordable Units Required Off-Site• Either, 25% of the total units in sending site at 60% AMI

• Or, 15% of the total units in sending site at 30% AMI

• Comparable size, quality, and bedroom count as the units in sending site

• Sending site retains FAR bonus, no other incentives

• Affordable units must be available prior to approval of use as off-site option

• Affordable units must be no more than 1/2 mile from sending site, or in an area with an equal or better opportunity mapping score

• Housing Bureau must approve off-site plan

• No supplemental city subsidy can support the off-site units themselves

Fee-in-Lieu Calibration

Slide 33

1. Calculation of Maximum Justifiable Fee-in-Lieua) Difference in the capitalized market value between 100% market rate building and a 20% at 80%

AMI building with units on site

b) Calculate on a $ per gross square foot of building

2. Calculation of Portland Fee-in-Lieu Recommendationa) Opting out of affordable units on site requires City to build units

b) Current city subsidy per affordable unit is $100,000

c) Impute the fee per gross square foot based on number of affordable units required

d) Compare with maximum justifiable fee-in-lieu to ensure no fees exceeds the cap

Fee-in-Lieu Option

Slide 34

Zone/FARRecommended Fee-in-Lieu per GSF Residential

Based on City Cost to Build Affordable Units

CM 1 at Base FAR $23.83 CM 1 with Bonus FAR $25.79



3.0/4.0 FAR $27.39 3.0/4.0 Base with Bonus FAR $28.57

5.0/6.0 FAR $28.57 5.0/6.0 Base with Bonus FAR $28.99

8.0 FAR $28.99 8.0 Base with Bonus FAR $29.81




cupid alexander, housing program specialist, portland housing bureau, how we create housing...

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