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Cupid Alexander, Housing Program Specialist, Portland Housing Bureau, How We Create Housing Opportunity

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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. 1. Neighborhood Partnerships RE: Conference How We Create Housing Opportunity: Local Government Action to Generate Housing Resources Slide 1
  2. 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. 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. 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
  5. 5. Tax Increment Financing Affordable Housing Set Aside 2015 Policy Review Slide 5
  6. 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. 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. 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. 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. 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. 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
  12. 12. Affordable Housing General Obligation Bond for Portland June 30, 2016 Slide 12
  13. 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. 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. 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
  16. 16. Slide 16
  17. 17. Affordable Housing Construction Excise Tax Recommendation Slide 17
  18. 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. 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. 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
  21. 21. Annual Revenue – Historic Estimates Slide 21
  22. 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
  23. 23. Inclusionary Housing Updated Program Recommendations Slide 23
  24. 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. 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
  26. 26. Program Recommendations Mixed Use Zones Slide 26
  27. 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
  28. 28. Program Recommendations Central City Slide 28
  29. 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. 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. 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. 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. 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. 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

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