Comments to the Portland Housing Bureau by the Interfaith Alliance on Poverty Re: Affordable Housing Bond Draft Policy Framework

September 23, 2017 Thank you for the opportunity to observe the stakeholder process and comment on the draft policy framework. We will not comment on all that we agree with except to say that the values expressed in the populations to serve and the locations for affordable housing are appropriate. We look forward to the housing bureau achieving both the construction goals and the public policy objectives expressed in the draft framework.

We have four areas of concern, all focused on costs. Portlanders provided the city with a strong vote of confidence and a lot of money. The affordable housing constructed with the bond proceeds needs to repay Portlanders for their trust.

Site specific cost analysis and cost control:

The policy framework doesn’t address this issue. There is reference to the city performing a due diligence review that could be presumed to include a cost analysis. That’s it. We believe strongly that the construction goals need to be front and center in the analysis of each project as it is proposed. City staff has many projects ‘on the desk’ right now according to banter during the stakeholder meetings. This framework should include a description of how the costs of these projects will be compared just as it addresses location, development processes and target populations.

In short, bringing a good mix of residents in the right locations following an equitable development process but only constructing 1000 units will be seen as a failure in the eyes of a good many Portlanders.

The stakeholders haven’t spent time on this topic and need to before the final policy is completed. The policy needs to address site-specific costs.

Administrative space in full service buildings:

The policy doesn’t address whether the bond proceeds can be used to construct the administrative space needed for permanent supportive housing or resident services. Given the tight construction cost environment, the costs being spread over the affordable units could be important in deciding which projects to pursue.

Use of rents: Presumably the construction costs for the housing will be paid for with bond proceeds. Those costs will then be paid off by property taxes levied on Portland property owners. Rents will not be used to pay for the construction costs and related bond financing and interest. Thus, rents will be set to cover other costs. However, the framework doesn’t address those costs nor does it provide information on how those costs will be controlled. In short, how will rents be set and what is there intended use? These costs should be included in the regular reporting from the housing bureau.

Land purchases: The policy framework does not address the topic of using the bond to purchase land. Other funds or funding strategies would be used to fund construction of affordable housing with the city maintaining ownership of the land and requiring affordable housing pricing for all units on that land. This suggestion came up at several stakeholder meetings but wasn’t addressed in discussion or in the policy framework draft. It should be assessed and explicitly dismissed if it is a flawed strategy for stretching bond proceeds.

Creating such a store of land would give the city a valuable resource. It would be important to specify that the land not be traded for another ‘project of value.’ It is intended for affordable housing. Any promise to build affordable housing in exchange for one of these land parcels should require that the affordable housing be occupied before any development on the land is occupied.

Again, thank you for the opportunity to comment on this important policy framework.

John Elizalde, Interfaith Alliance on Poverty, Advocacy work group