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Street roots
Nov. 11, 2011
City weighs affordable housing funds in urban renewal
BY JOANNE ZUHL
t’s been six years since Portland voted to
dedicate 30 percent of the city’s urban
renewal funds toward affordable housing.
It was a controversial decision at a time
when the city’s housing concerns were
divided between City Council and the
Portland Development Commission, with
business, neighborhood and affordable
housing interests each weighing in on how
the money should be divvied up.
Since its creation in 2006, the policy has
generated more than $152 million for
housing affordable to low-income and
workforce residents, accounting for one-
third of tax increment financing
expenditures in the city’s nine neighborhood
urban renewal areas, or URAs. The money
has helped fund the Bud Clark Commons,
veterans housing in the South Waterfront
district, the Blanchet House reconstruction,
and preservation efforts in existing low-
income housing buildings.
On Wednesday, the City Council held a
h e a r in g s an updated policy
implementation plan for the city’s 30
percent set aside with a few modifications. It
sets a course for another five years of
affordable housing funding through tax
increment financing within URAs and
establishes, for the first time in writing, that
the 30 percent figure is a minimum, not a
maximum.
“I think any fair appraisal of thefirst five
years under the set aside is that it has been
a big success,” says City Commissioner Nick
Fish, who oversees the Portland Housing
Bureau. “Over $150 million has been
invested in housing for people that the
market doesn?t serve.”
Tax increment financing, or TIF, is a
aggregate.”
Of the nine applicable URAs, Central
Eastside, Downtown Waterfront and the
Oregon Convention Center areas are set at
less than a 30 percent goal for affordable
housing. Two areas, North Macadam and
the South Park Blocks, actually exceed the
30 percent goal. (There are 11 urban
renewal areas, however, the Airport Way and
Willamette Industrial urban renewal areas
are not suitable residential districts and
have no requirement for affordable housing.)
In addition to affirming 30 percent as a
minimum, the new recommendations
change the formula for determining the
percentage. Thé revised policy will budget
the 30 percent figure based on a district’s
TIF revenue, rather than expenditures as it
has been in the past It also redirects any
income from the housing programs back to
the Portland Housing Bureau, as opposed to
going to the overall TIF pool of funds.
Jesse Beason is the executive director of
Proud Ground, a Portland-based nonprofit
that helps families buy affordable first
homes. Éeason was also a member of the
housing subcommittee that made
recommendations on the policy. Beason
says the change to direct housing program
income back to the bureau — rather than
the TIF pool — is a positive improvement
“It makes it so there’s no disincentive
between a loan and a grant,” Beason says.
“In the end it gives the housing bureau
much more autonomy to focus on its goals.”
Beason was also satisfied with the 30
percent minimum being applied citywide,
which by the numbers really means a fairly
equitable goal in each of the city’s nine
neighborhood URAs, he says.
“For us, what it really ensures is that in
the push to revitalize areas, it is not
m g s h a n is m f o r r a is i n g m o n e y i o r
f o r g o t t e n t h a t th<gre a r e w in n e r s a n d lo s e r s
development within designated areas called
urban renewal districts. In a nutshell, it is a
formula for using tomorrow’s tax revenue on
development or improvements to finance
today’s development The increased value of
the district increases tax revenue, and that
“increment” is collected and used to pay off
the debt of the original investment in the
district
In 2006, the Portland Development
Commission and the City Council agreed,
for the most p art to dedicate 30 percent of
the URA revenue for affordable housing.
Language between the two bodies was
eventually reconciled to state that the 30
percent was a citywide goal, with individual
district goals.
“It was never a one size fits all,” Fish
says. “The goal was overall. So we’ve kept
the targets, but reaffirmed the notion that
you’ve got to get to 30 percent in the
in? that process, and that we need to invest
in ensuring that as property values rise and
we make more attractive neighborhoods that
we don’t price anyone out, whether they are
renters or homeowners,” says Beason.
Low-income housing advocates say
preserving the set aside is critical for
ensuring affordable housing options in the
future.
“It’s made a big difference in that now we
actually have a somewhat reliable source of
funding that we can count on,” says John
Miller, executive director for the Oregon
Opportunity Network, a coalition of
affordable housing providers across the
state. “We know at least we have a resource.
That’s made a lot of our members think
more creatively. That’s been a good thing
because it gives our folks a tool so they can
actually look ahead a little b it”
By the nature of tax increment financing,
STAFF W R IT E R
I
M ir . ador .
COMMUNITY
Amount Available
over 10 Years (2006-2015)
% of Total URA
TIF Budget
Central Eastside
$8,370,877
18%
Downtown Waterfront
Gateway
Interstate
$20,364,829
$9,621,360
21%
30%
30%
Lents Town Center
North Macadam
Oregon Convention Center
$32,331,491
$31,872,273
$33,057,009
River district
South Park Blocks
$90,586,515
30%
36%
26%
30%
$32,956,202
52%
Total
$277,370,990
$18,210,435
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I
30% -
Source: Portland H ousing B ureau
"For ns, what it really
ensures is that In the push to
revitalize areas, it is not
forgotten that there are
winners and lexers in that
process, and that we need to
invest in ensuring that as
property values rise and we
make more attractive
neighborhoods that we don't
price anyone out whether
they are renters or
homeowners/'
— JESSE BEASON
PROUD GROUND
the income generated in; the URAs will *
decline as an area’s development is
completed. Looking ahead to the hext five
years, the amount generated for the set
aside is expected to decline as well, with a
total of $277 million anticipated through
2015, including tlie $150 million already
raised since 2006.
Beyond 2015, the so-called TIF cliff
looms, as do more immediate federal budget
cuts to nationwide housing programs that
are on the chopping block now.
“Sometimes we focus a lot on local
policies and local issues, and what’s going
on in Washington right now is frankly pretty
scary, ” says Miller. “We need to be looking
way up stream at where the funding is
coming from. We really should be focusing a
lot of our attention right now on Congress
because that’s where some really significant
things are happening.”
Fish suggested that discussions around
long-term funding options will begin soon at
the local level.
“What you’re going to see soon is us
pulling together a group to see what those
options are going forward,” says Fish.
“There’s a TIF cliff, there are draconian
cuts at the federal level, which will trigger a
number of domino effects at the state and
local level. And we’re going to have to come
up with a dedicated source of housing in the
future.”
Mayor Sam Adams has proposed creating
more URAs, most recently “mini” districts
that would generate about $1 million in
revenue for improvements but that would
probably be exempt from the set aside
because the revenue is so small.
/Any creation of an urban renewal district
m ean sra shift in r e v e n u e s fr o m M u ltn o m a h
County to the city because the* revenue
captured in TIF is tax dollars diverted from
the county. David Austin, Communications
director for Multnomah County, said the
county supports the set aside plan for the
housing assistance to the county’s most
vulnerable citizens. The county also had a
representative on the housing subcommittee
that reviewed the plan.
“The county’s position is, when it comes
to urban renewal, all those decisions are
best made when all the partners are around
the table, making sure to take into
consideration what might help and what
might hurt different locales — school
districts, county districts, city government,
et cetera,” Austin says.
Beason agrees that the city has to plan
for the near future when the set aside
begins to dry up.
“There’s a larger discussion to come over
the next couple of years,” Beason says.
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10-year summary of URA income for the 30 percent set aside
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