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December 9, 2015 - Three new private developments in Portland will include 81 affordable apartments with the approval of Portland City Council this morning. The City of Portland and Multnomah County recently revamped a tax exemption program aimed at creating more affordable housing in private market developments by offering developers a tax incentive. These three projects are the first to proceed under the new program.
“It’s going to take all of us working together to solve our city’s housing emergency,” said Commissioner Dan Saltzman, who oversees the Portland Housing Bureau. “We’re glad to have private market partners using this program and joining us at the table to be part of the solution to our city’s most pressing need.”
Two projects planned for the Boise neighborhood were put forward by local developer Marathon Acquisition & Development. A third project planned for Goose Hollow is a partnership between the Nevada-based Molasky Group and local developer Liam Thornton of Trinity 3 Investment. In total, 54 of the units in these projects will be reserved for tenants earning no more than 80% of the Median Family Income—a maximum of $41,200 a year for an individual. Another 27 units, all in Marathon’s forthcoming Vancouver Avenue project, will lease to lower-income tenants earning up to 60% of the median ($30,900 for an individual) with monthly rents capped between $772 for a studio and $993 for a two-bedroom. The total tax exemption for all three projects is $1.2 million annually for 10 years.
“This program allows us to provide affordable housing in the Portland Central City, and in particular in the Goose Hollow submarket, while maintaining a high quality standard of the built product,” said Thornton. “The structure of the program provides lower-income tenants the access to a high quality location and building and allows the developer to still achieve the economics necessary to obtain financing, without any compromise to the design, construction, and operations of the project. As these types of programs are utilized by more developers in Portland, it will create access to a greater number and variety of Portland neighborhoods that were previously unattainable by lower-income residents.”
The Portland Housing Bureau began accepting project proposals for the Multiple-Unit Limited Tax Exemption Program (MULTE) this fall under new guidelines designed to increase utilization.
“We’re extremely pleased to have three projects moving forward, and more being considered, in just three months,” said Housing Bureau Director Kurt Creager. “This tells us that the changes we’ve made have produced the kind of nimble, streamlined tool needed to attract developers in a market boom and respond quickly to the current need.”
The changes put in place this year increased the annual cap from $1 million to $3 million, eliminated the competitive application in favor of a rolling process to better align with construction and financing timelines, and clarified compliance requirements to create greater predictability for investors. In exchange for 10 years of tax relief, developers commit to restricting rents on 20% of their new residential units. The bureau expects to add roughly 200 - 300 new affordable housing units per year in the private market through increased participation in the program.
The Housing Bureau will continue accepting applications for 2015 through December 31 and expects to reach the $3 million cap by the end of the year. Interested applicants should contact Dory Van Bockel, MULTE Program Coordinator, at 503-823-4469 or email@example.com, to schedule a pre-application meeting.