Our View: Bond money can save existing units
When a proposed new apartment building pencils out to $285,000 per unit, it's hard not to wince at its description as "affordable housing."
And yet, as Portland Tribune reporter Jim Redden reports, the Portland City Council has unanimously agreed to pony up $7 million for just such a development.
Mayor Ted Wheeler, who oversees the Portland Housing Bureau, stresses that the city's share is less than 10 percent of the cost. But Commissioner Chloe Eudaly rightly questioned why it costs so much to build new apartment units.
The query is particularly pertinent as the city fields proposals to be funded by the $285 million affordable housing bond voters approved last year, and Metro considers a $500 million measure of its own.
There are some peculiarities that drove up the cost of the high-rise apartment building proposed for Northeast Grand and Hassalo. But the council could apply the same standards to projects funded by the housing bond, too. Those include requiring developers to pay construction workers prevailing wage rates, meet high energy standards and build units designed to last a century. Even cheaper new apartments funded by the bond will likely cost more than $215,000 per unit.
Luckily there are other options. Thousands of them, in fact.
A new study commissioned by the city shows that more than 11,000 affordable rental units exist in the Southwest Corridor between downtown Portland and Tigard.
But these privately built units, which are affordable without any public subsidies, may be imperiled.
That's because they are clustered along the corridor that will be served by the region's next light-rail line, making them an attractive target for developers who want to upgrade or replace them and jack up the rents.
Indeed, the PSU study showed that rents in lower-end units in the Southwest Corridor are rising faster than rents of similar units elsewhere in Portland.
"This housing is precarious — in that its conversion would displace tenants who are likely to have a difficult time finding units in the current rental market," according to the study's authors, PSU's Seyoung Sung and Lisa Bates.
Their report serves as a timely reminder of a few key points in the conversation about affordable housing.
First, we're in a building boom and it's appropriate to use public funds to ensure that affordable housing units are part of the mix, and that workers have housing options near their jobs and mass transit. But it's easy to overlook existing affordable housing, built by the private sector, that may not be affordable much longer in this hot real estate market. There's some money in the Portland bond for buying existing apartment buildings, and we'd like to see as much attention paid to those projects as the fancy new buildings that get everyone excited.
One strategy used elsewhere is to help nonprofits buy affordable housing units, either with cash or financing, when they come on the market, so they can keep the rents low. Buying an older apartment building has its risks, so it's important that philanthropic organizations are also involved, as they often have more flexibility with their funds than do public agencies or financial institutions.
Second, despite lofty goals for ensuring affordable housing along light rail lines, the Portland area has a pretty lousy track record of doing so. With some exceptions, there's been more talk than action. The planned line to Tigard offers another chance — particularly given all the affordable housing that already exists.
Ideally, regional leaders would have come up with a plan to protect the Southwest Corridor rental units before picking the light rail route to Tigard. TriMet's decision to hold off on a bond measure for a year, and hand off the effort to Metro, offers an opportunity to do that.
The regional planning agency is well-positioned to ensure that any new light rail line, unlike previous ones, includes a plan to develop affordable rental housing and protect what's already nearby.
Finally, while Portland and Multnomah County have taken the lead on affordable housing initiatives, it's time for officials in Washington County, home to many of the Southwest Corridor units, to step up its game. The preservation of the existing affordable housing units in that corridor is a good place to start.