City Oks Housing Set-Aside

Working families who can barely stretch a paycheck to pay for rent or a mortgage may soon find help through a new policy the Portland City Council has approved for affordable housing.
The council recently adopted an ordinance that will set aside 30 percent of urban renewal funds for affordable housing. In the next five years, the city estimates the new policy will result in $125.5 million for housing for working families, people of color, seniors and those with disabilities or in recovery. The additional revenue represents more than a $10-million-a-year increase over past spending for affordable housing.
The 30 percent set-aside is the highest set-aside figure for affordable housing in the United States, said Portland City Commissioner Erik Sten, who oversees the city's Bureau of Housing and Community Development.
"We have been working a long time to increase resources for affordable housing," Sten said. "Housing is so expensive here that it's pushing people out."
About one-third of Portland households earn under $25,000 annually, according to the U.S. Census Bureau; of these, about 12 percent earn under $10,000. Yet the annual income required to afford a two-bedroom apartment in Multnomah County is $28,000, according to the census bureau.
With the median housing price in Portland hovering at $269,000, the dream of homeownership is quickly disappearing for many families. Only 38 percent of African American households in Portland own their homes, according to the census bureau, compared to 59 percent of White, 30 percent of Latino and 34 percent of Native American households.
The need will only increase, noted Sam Chase, executive director for the Community Development Network in Portland. On any given night, more than 2,000 homeless people are on the street or in shelters, and another 3,000 people are waiting on a Section 8 rental list maintained by the Housing Authority of Portland – and those are the people who "won" a housing authority lottery just to get their names on the list.
The Portland area will need another 90,000 affordable housing units by 2017, according to a study done by Metro, the area's regional land use and transportation agency.
Calling the city's new ordinance "incredibly historical," Chase said the set-aside funds will "make a significant difference in many thousands of people's lives."
Patterned after a similar set-aside policy in California, where 20 percent of urban renewal funds go to affordable housing, Portland's ordinance began as a proposal from 40 housing, social service and political activist organizations that created a coalition called "Affordable Housing NOW!"
The plan calls for the Portland Development Commission to budget 30 percent of the budgets for each of five urban renewal districts: Gateway, Lents, Interstate, North Macadam/South Waterfront and the River District.
Projects in older urban renewal districts, however, may have less than the 30-percent goal: The Oregon Convention Center, which includes projects along Martin Luther King Jr. Boulevard, will have a minimum of 26 percent; the Central Eastside will have 15 percent for projects already under way and 30 percent of any additional projects; and 22 percent will be set aside for the downtown waterfront project. However, the project proposed for the South Park Blocks will also have a 30-percent set-aside, according to Ian Slingerland, director of the Community Alliance of Tenants and spokesman for Affordable Housing NOW!
The money will be funneled by the city and Portland Development Commission to local organizations that build affordable housing in the community or offer low-interest or no-interest mortgages for new homes. An estimated 490 additional homes could be available for low-income residents in the next five years.
Slingerland credited Portland Mayor Tom Potter for playing a critical role in negotiating with the PDC on the percentages to be used for affordable housing, and he gave kudos to commissioners Sten and Randy Leonard, who originally had expressed concern about the proposal but who eventually supported it. The ordinance passed unanimously on Oct. 25.
"This creates an opportunity for a huge increase in addressing the city's homeownership needs," said Slingerland, who hears daily from those who struggle financially to pay for shelter.
"The price tag to meet everyone's needs is relatively astronomical," Slingerland admitted. "The set-aside won't meet all the needs, but it certainly positions the city better."
The next detail to be worked out, however, is how low someone's income must be before they can benefit from the money put aside for affordable housing. The City Council and PDC are working on a proposal to address that problem.
A proposal submitted to the council by Affordable Housing NOW! and several other organizations suggests that the money be broken down in four ways. They are:
• At least 50 percent spent on affordable housing for people with incomes below 30 percent of the federal median income level ($20,350 for a family of four).
• Between 15 and 20 percent spent on homeownership for individuals and families with incomes below 80 percent median family income ($54,300 for a family of four.) The proposal notes that this recommendation would increase current allocations for affordable homeownership by 500 to 700 percent.
"These resources are critical to addressing homeownership for people of color whose homeownership rates lag too far behind the general population in Portland," the proposal notes.
• Up to 5 percent allowed for "community facilities."
• The balance of the funds (between 25 and 30 percent) would be spent on rental housing serving households between 31 and 60 percent of median family income (up to $40,750 for a family of four).
Critics of the proposal say more money needs to be targeted specifically for minority homeowners.
"Minority homeownership is 70 percent of the problem," said Bernie Foster, publisher of The Skanner and executive director of the African American Alliance for Homeownership. The alliance helps minority residents qualify to buy their own homes.
"At least 50 percent of these funds need to be earmarked to address the minority homeownership problems in Portland," Foster added.
However the money is divvied up, the set-aside itself "shows that affordable housing is fundamental to the success of families, individuals and children," Sten said. The No. 1 indicator of a child's success is how often they move, he noted, and having an affordable place to live will mean the child can stay in school and become a member of the community.
"Without affordable housing, the city can't be strong," Sten added. "It's part of the infrastructure – almost like roads. You can't have a city without roads, and you can't have a city without places for people to live."