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About Portland observer. (Portland, Or.) 1970-current | View Entire Issue (April 5, 2000)
glorila nò (Ohsevner April 5, 2000 Focus Page 3 Fair Housing Subsidizing the “hot m arket” by J ohn P ow ell Portland’s housing market is fitting the national trend and the west coast trend, more specifically, with its soaring housing and land costs. This indicates that it is not the Urban Growth Boundary that is responsible for the rise in housing costs, but rather a supply and demand dynamic. Increased housing costs alone do not provide the w hole picture, how ever, and it is necessary to compare the rise in housing costs to the region’s income. The Median Family Income for the Portland Region has remained relatively stable around $35,000 while housing costs have soared. Dangers o f “hot market” include: Increased scarcity o f affordable housing, leading to homelessness, displacement o f low and middle-income people from the region, and unstable, unsafe housing conditions for those who are priced out o f the rental and ownership market altogether. Community/regional instability as low and middle-income residents face huge housing challenges w ith w ork fo rce threatened because housing is unaffordable. More localized displacement as affordable housing is eaten up through gentrification, displacing large numbers o f low-income residents from their homes and communities. The communities these low-income and high- need residents are relocating to have fewer resources with which to address their needs. A ffo rd ab le h o u sin g p re se rv a tio n and development are required to subsidize the “hot market.” Affordability Mechanisms-Preservation and Development o f Affordable Housing. There are a num ber o f ways to create affordable housing in the Portland region. The Com m unity Development Network and the Coalition for a Livable Future have compiled a useful review ofFair Share strategies, called “Fair Share Housing Allocation Strategies: A Review o f Methods and Approaches.” (Oct. 1998) The provision o f affordable housing is an issue that requires the input and guidance from governmental resources as well as private sources. Government must play an important role in creating and preserving affordable housing through legislative mandates and guidelines, and by providing resources (money, land, tax subsidies) that encourage the development, replacement, and the preservation o f affordable housing in a region. Funding sources must come from a wide variety o f existing sources and by lobbying for more public and private investment in affordable housing. Some o f the funding sources that should be used include: Regional, County, and City resources coordinated under a regional plan. Affordable housing trust funds may be set up We turn renters into homebuyers. at a local or regional level. Funding sources for the trust fund may come from land sale tax, or speculation tax for those who are reaping a huge financial gain from sale o f property during the hot market (strategies to slow the hot market). State Resources: some states have set up Advantages affordable housing trust funds. ■ 1 % down payment...no Private Mortgage Insurance required* Federal Resources: tax incentives, including ■ Most closing costs and pre-paid costs may be paid by seller the Low Incom e T ax C redit and the or other interested party Rehabilitation Tax Credit these are important ■ Flexible debt-to-income ratios: maximum 40% sources to link private investm ent and a ffo rd a b le h o u sin g d e v e lo p m e n t or Features preservation. ■ Fixed-rate financing The vagaries o f the rental housing market and ■ Cash reserves after closing are not required the importance ofhome ownership in building equity for American families are destabi lizing Properties forces for individuals, communities, and ■ Owner-occupied single family residences regions. Permanent affordability mechanisms ■ Condominiums with at least 30% owner-occupied ensure that the subsidy that is invested in Program Requirements affordable housing is not completely lost in ■ Must complete approved Home Buyer Education the future. If public or private investment in affordable housing is lost by rent increases or ■ Income can not exceed 80% of area median property sale, then there is the risk that new ■ Borrower must pay the 1 % down payment subsidies will be needed in the future to address affordable housing crises in the future. Some proposed mechanisms unvw. usbdnk. co m Your needs. O ur tools’ to ensure the permanency of affordable housing include: Public ownership P riv a te n o n -p ro fit ownership Community land trusts- p u b lic ly or p riv a te ly administered • Covenants on the land that require affordability M andates by lo c a l/ regional government that require a certain amount of a ffo rd a b le h o u sin g p re se rv a tio n or development, often linked to o th e r h o u sin g development or industrial/ com m ercial developm ent (p ro v id in g a ffo rd a b le housing for com m ercial development’s workers). They don’t come in XL. An important factor to be So fix your roof instead. considered when proposing PDC offers loans for home repairs p e rm a n e n t a ffo rd a b le and improvements. housing mechanisms is that one o f the primary methods o f accumulating wealth in this country is through home ownership. Although it is important to preserve the investm ent in affordable housing, and this should be a priority, it should not leave out all opportunities for a c c u m u la tin g w ealth through the equity gained in hom e o w n e rsh ip . U.S. Bank" Home Partners Loans !bank NEEDA BTGGER/ UMBRELLA FOR YoUR r, LIVING ROOMf For details, call 823-3400.
