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Huge land sale will shape villas future

Housing authority will give private developers a shot at 200 lots

The Housing Authority of Portland plans to sell part of its 82-acre Columbia Villa site in North Portland Ñ soon to become the largest buildable parcel of land within the city limits Ñ to developers to build 200 market-rate, single-family homes.

The homes will be part of an 850-unit, mixed-income development that will replace Columbia Villa, the site's existing all-public housing project.

The housing authority currently is relocating the villa's residents. It plans to demolish the villa in October to make way for the development, which has been dubbed New Columbia.

The housing authority plans to sell 200 lots, or approximately one-fifth of the property, for houses that it expects to be marketed at between $160,000 and $175,000.

The rest of the development will include 30 single-family homes for limited-income purchasers, priced at $100,000 to $120,000; a mix of public and private rental housing; and retail and public facilities.

But North Portland real estate agent Sharon Nasset thinks that the housing authority would do better to sell the whole 82-acre site for higher-end homes, using the profits to house its clients throughout the city.

The villa site 'should be aimed at the market that pays the most taxes,' says Nasset, who grew up in North Portland and had childhood friends in Columbia Villa. 'It would be far better to build $200,000 to $300,000 houses: 'Five minutes from downtown Portland, last chance to build your dream home' houses.

'The housing authority could (then) take the money from selling that site and buy several sites, not necessarily in a clump. That would spread the financial challenge out.' This also would help public housing clients establish themselves by seeing how nonpublic housing residents get established, she said.

But Barry Messer, a professor of urban planning at Portland State University, says Nasset's plan would raise property values throughout the villa's Portsmouth neighborhood, forcing out residents who can't afford higher-end housing and resulting in gentrification.

'There's a lot of concern'

In Messer's view, the housing authority, also known as HAP, needs to sell its property at prices that will entice developers of houses that are priced to match the existing neighborhood.

The average sales price for homes in North Portland in March was $151,300, compared with $172,400 in Southeast Portland, $195,500 in Northeast Portland and $315,000 on the city's west side.

'I know there's a lot of concern about how the trading of the public assets (the villa's lots) is being done,' says Messer, who has talked to housing authority officials about the project. 'But there's no reason to be suspicious of a wholesale loss of public investment. HAP is trading the value of the land for the other investments it's looking to get (from developers of lower-end housing).'

The housing authority is budgeting for lot sales at an average price of $30,000 per 2,400- to 3,200-square-foot lot. Portland's average lot size is 5,000 square feet.

Mike Andrews, New Columbia's finance manager, says the housing authority will solicit developers for the lots in three phases, beginning in late summer, and hopes to have the first houses sold and occupied by August 2005.

The entire development is scheduled for completion in December 2006.

According to Messer, the housing authority's plan to sell land to finance mixed-income developments is not unprecedented. 'It's the wave of the future for public housing,' he says. 'Philadelphia has been doing it for several years.'

But, on the other hand, there's nothing like the housing authority's 82-acre site in Philadelphia.

The housing authority's plan 'is very definitely ambitious, in terms of its size and its sheer scale,' Messer says. 'Conceptually, it makes good sense. Whether they'll be able to pull it off is the question.'

City cash is crucial

While the housing authority's prospective land sale may be the most publicly debated aspect of New Columbia's financing, it is expected to generate only $6 million of a total project cost of $146.5 million.

The agency is more dependent Ñ especially right now Ñ on a $20 million commitment that the city made to the project in 2001.

The housing authority needs cash from the city to finance the site's planned demolition in October. But the city doesn't have the full $20 million at this time.

City financial planner Mike Johnson, who says the shortfall is partially attributable to the housing authority's decision to accelerate the demolition timetable, says the city may need to borrow as much as $10 million to get the housing authority its money by this fall.

The actual amount of the loan request, which needs to be approved by the City Council, should be available after Mayor Vera Katz's proposed budget is released May 8.

Key provisions of the loan Ñ including its duration and who pays the interest Ñ have yet to be worked out between the parties and approved by the council. But Johnson says his Office of Management and Finance is taking the position that the loan's costs should come off the top of the city's obligation.

'The city should pay a net amount to HAP of $20 million,' he says. 'That's been our office's position.'

Contact Janine Robben at This email address is being protected from spambots. You need JavaScript enabled to view it. .