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Council puts affordable housing measure on November ballot

Portland voters will be asked to approve a $258.4 million bond measure to fund up to 1,300 units of affordable housing at the Nov. 8 general election.

The City Council unanimously voted to put the measure on the ballot Thursday. It is the council’s latest effort to increase the affordable housing supply since declaring a housing state of emergency last October.

"Let's pass this," Mayor Charlie Hales said when voting to place the measure on the ballot after a hearing dominated by supporters who testified in favor it.

If approved by the voters, the measure would increase property taxes 42 cents for every $1,000 of assessed value. The funds would be spent by the Portland Housing Bureau, the city agency that is helping to fund the most affordable housing projects in the region.

All of the units will cost households earning up to 60 percent of the Median Family Income no more than 30 percent of their income. Because of the Oregon Constitution's limits on bond funds, the city cannot partner with private partners on the projects. That means the average cost to the city will be almost $200,000 per unit, compared to much less for the city when it partners with private and non-profit agencies on such projects.

The measure was first proposed and is supported by a coalition of affordable housing advocates, social service organizations, and equity activists. The campaign to pass it will be led by a new political action committee called Yes for Affordable Homes. It is co-chaired by Multnomah County Chair Deborah Kafoury and Portland Housing Commissioner Dan Saltzman.

"We need this bond, because we have to build more affordable housing, Kafoury testified in support of the measure.

Commissioner Nick Fish attributed the passage in large part to lobbying by its advocates.

Ironically, the proposed measure is also the latest in a series of council actions that will actually increase the cost of new home construction — most done in the name of creating more affordable housing.

Last Wednesday the council approved a 1 percent construction excise tax on all new construction, including residential construction, to help fund new affordable housing projects. It is expected to raise more than $12 million a year. The tax was authorized by the 2016 Oregon Legislature as part of a package of bills intended to create more affordable housing.

The vote took place while the council while the council was discussing a requirement that all homes built before 1916 to be torn down are deconstructed instead of demolished by large machines. Although considered to be better for the environment, deconstruction — which involves the hand removal of construction materials — is more expensive than demolition. The requirement could add thousands of dollars to replacement homes.

And on July 1, a new schedule for system development charged to fund future parks projects is scheduled to take effect. Most of the system development charges assessed against new construction projects that fund Portland Parks & Recreation projects are expected to increase.

Most of the votes have occurred as the council has dedicated hundreds of millions of dollar to new affordable housing projects. Among other things, the council has increase the amount of urban renewal money dedicated to affordable housing from 30 to 45 percent.