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The Portland Housing Bureau (PHB) has concluded a real estate negotiation to purchase land for affordable housing in the Pearl District from private developer Hoyt Street Properties (HSP). On April 22, Portland City Council will vote to on whether to approve the purchase of the quarter-block site on NW Raleigh Street at the below-market price of $1.3 million.
"We are excited to be bringing more affordable housing to the Pearl District," said Housing Commissioner Dan Saltzman. "We know that people thrive when they live in areas with opportunities and this is a part of the city with substantial amenities and opportunity."
The deal is part of an ongoing effort undertaken cooperatively by HSP and the City to ensure that private development in the Pearl District includes housing options for Portlanders of all income levels.
Per a 1999 agreement with the City of Portland, 35% of housing units built on HSP’s 34 acres in the Pearl District would need to be meet affordability standards. In the event the target wasn't reached by specified dates, the agreement provided an opportunity for the City to acquire land for affordable housing at a below-market price.
Last fall, HSP and PHB jointly determined that HSP would fall just short of the goal, despite having recently closed on the Abigail Apartments to build 142 units of affordable family housing. Of nearly 2,000 units across 14 projects, 601 (or 30%) were affordable. Factoring in other housing planned for the area—including projects in the design, permitting, or construction stage as of September 2014—brought that figure to 28%.
"It can be a real challenge to match the pace of the private market in a boom like what we have seen in the Pearl District and throughout the River District," said PHB Director Traci Manning. "We are proud of the thousands of affordable homes throughout the River District—and the families who have been able to live there—thanks to successful collaborations such as this. We also know we still have work to do."
The remedy, according to the agreement, entailed a six-month process whereby the City and HSP would identify a parcel and arrive at a purchase price using a calculation that factors in the value of HSP's improvements in the area as well as the City's infrastructure investments over time. The City and HSP followed the prescribed steps and engaged three appraisers to determine the final purchase price, which is 13% below the market value of $1.5 million.
"It takes the efforts of many stakeholders working together to ensure that our neighborhoods are vibrant, successful, and provide adequate housing options for all Portlanders," said Commissioner Saltzman. "Private developers like Hoyt Street Properties are an important part of that work. We are glad to be moving forward on affordable housing in such a key location."
The 10,000-square-foot site on NW Raleigh Street, between 13th and 14th avenues, is conveniently located near public transit and is the only one of HSP’s available parcels on paved streets.
If approved by City Council on Wednesday, PHB expects to acquire the site before the end of April and begin soliciting a developer this summer.