Cupid Alexander, of the Portland Housing Bureau, presents on how local governments can generate housing resources at Neighborhood Partnerships' 2016 RE:Conference
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Cupid Alexander, Housing Program Specialist, Portland Housing Bureau, How We Create Housing Opportunity
1. Neighborhood Partnerships RE: Conference
How We Create Housing Opportunity: Local
Government Action to Generate Housing
Resources
Slide 1
2. 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
3. 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
4. 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
6. 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
7. 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
8. 2015 Policy Review Recommendations
Urban Renewal Area
Status Quo Policy
Set Aside %
2006-2015
Set Aside at 30%
2015-2025
Set 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
9. 2015 Policy Review Recommendations
Urban Renewal Area
Status 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
10. 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
11. 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
13. 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
14. 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
15. 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
18. 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
19. 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
20. 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
22. 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
24. 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
25. 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
27. 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
29. Zones with Base FAR below 5.0
Slide 29
Mandatory Inclusionary Requirement • 20% of Units at 80% Area Median Income
Incentives • Density Bonus of 3.0 FAR
• 10 Year Property Tax Exemption on Affordable Units
• CET Exemption on Affordable Units
Deeper Affordability Option • 10% of Units at 60% Area Median Income
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
30. Zones with Base FAR above 5.0
Slide 30
Mandatory Inclusionary Requirement • 20% of Units at 80% Area Median Income
Incentives • Density Bonus of 3.0 FAR
• 10 Year Property Tax Exemption on All Residential Units
• CET Exemption on Affordable Units
Deeper Affordability Option • 10% of Units at 60% Area Median Income
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
31. Build Off Site Option
Option #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
32. Build Off Site Option
Option #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
33. Fee-in-Lieu Calibration
Slide 33
1. Calculation of Maximum Justifiable Fee-in-Lieu
a) 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 Recommendation
a) 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
34. Fee-in-Lieu Option
Slide 34
Zone/FAR
Recommended 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
CM 2 at Base FAR $25.79
CM 2 with Bonus FAR $26.50
CM 3 at Base FAR $26.03
CM 3 with Bonus FAR $28.58
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
9.0 FAR $29.81
9.0 Base with Bonus FAR $29.42
12.0 FAR $29.42
12.0 Base with Bonus FAR $29.85
15.0 FAR $27.39
15.0 Base with Bonus FAR $28.57