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Portland City Council voted today to approve a real estate deal between the Portland Housing Bureau (PHB) and private developer Hoyt Street Properties (HSP) for more affordable housing in the Pearl District. HSP will sell the quarter-block site on NW Raleigh Street to the City at the below-market price of $1.3 million. PHB hopes to develop the property for very low-income family housing.
"We know that people thrive when they live in areas with opportunities," said Housing Commissioner Dan Saltzman. "We are glad to be moving forward to create more housing options for vulnerable families in such a key location. "
The deal was 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.
Last fall, HSP and PHB jointly determined that HSP would fall just short of a 1999 goal to maintain 35% affordability in the housing developed on its 34 acres of land in the Pearl District. Despite having recently closed on the Abigail Apartments to build 142 units of affordable family housing, 30% of nearly the 2,000 units across 14 projects were affordable as of September 2014. Factoring in other housing projects in the design, permitting, or construction stage brought that figure to 28%.
The remedy, according to an agreement with the City, provided the opportunity for the City to acquire land from HSP for affordable housing at a below-market price. The City and HSP engaged three appraisers to arrive at a reduced purchase price—HSP agreed to reduce the price another $500,000 below that, bringing the final purchase price to $1.3 million —13% below the market value of $1.5 million.
"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 thankful to Hoyt Street Properties for the concessions they have made in this process to ensure that this area provides adequate housing options for all Portlanders."
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.
The deal is set to close on Friday. PHB expects to acquire the site before the end of April and begin soliciting a developer this summer.