City to assist private developer until next application cycle

A state agency’s denial of low-income housing tax credits puts the brakes — for now, at least — on a plan to develop an affordable housing project at Southwest First Street and Lombard Avenue.

The Oregon Department of Housing and Community Services did not approve the non-profit Community Partners for Affordable Housing’s application for federal tax credits. The agency was counting on approximately $7.3 million in federal tax credits as an incentive to develop a 48-unit complex on the city-owned property.

The denial will possibly delay by a year the affordable-housing aspect of a partnership among the city, Community Partners and the private sector Central Bethany Development. Sharing infrastructure development with Community Partners, Central Beaverton plans to build 55 market-rate units as part of the medium-density, multiple-use development.

“The tax credit the applied for — low-income housing tax credits for the affordable-housing project at First and Lombard proposed by the Community Partners for Affordable Housing — was not approved by the state,” said Don Mazziotti, the city’s Community and Economic Development director. “Because they didn’t get the allocation, they cannot go forward with the project until the next round.”

Mazziotti said he and his staff plan to meet in the next couple of weeks with Roy Kim, managing partner of Central Beaverton Development, to determine how the delay of the affordable housing aspect will affect construction of the market-rate units. That complex would include around 7,200 square feet of ground-floor commercial space.

The Portland-based Community Partners for Affordable Housing, which provides affordable homes for low-income families and individuals, plans to include approximately 1,700 square feet of community space to complement its 48-unit development.

Mazziotti said the Housing and Community Services Agency gave no reason for denying Community Partners’ tax credit application. The agency will have to wait for the next application cycle before it tries again.

The federal Low Income Housing Tax Credit Program allocates tax credits administered through state agencies. Entering a highly competitive process, lenders and institutions apply for the credits. Using a variety of supporting materials, state and county officials determine which project in a given application cycle will qualify.

“This delays the project by a year, unless there were to be tax credits turned back to the agency that we could obtain,” Mazziotti said. “If projects that were given an allocation do not go forward, then the state would take those credits back and award them to another project. There is the opportunity that could happen between now and the next allocation round, which is May of next year.”

The city acquired the five-lot, .84-acre parcel — comprising about 40,000 square feet on a full city block — in June 2011 for a total of $1.07 million. The lot’s vacant buildings were cleared later in the year.

The purchase is part of the city’s goal — established through the 2011 Civic Plan — to establish workforce-oriented developments that cater to professionals working both above and below the city’s $66,900 median annual income level.

“It doesn’t benefit us to not have the project financed,” Mazziotti said. “We want affordable housing built. We have a lot already in Beaverton, and we want to sustain that progress.”