(February 5, 2016) – A new partnership between the City of Portland and the Network for Oregon Affordable Housing (NOAH) is giving the City and its partners greater flexibility to respond to the affordable housing crisis.
The Portland Housing Bureau (PHB) announced today that it has invested $1 million in the Oregon Housing Acquisition Fund (OHAF), a revolving fund administered by NOAH, a statewide nonprofit corporation that provides financing and technical assistance for affordable housing development. This fund, which is available immediately, allows for developers and PHB partners to move quickly to acquire land for affordable housing development when opportunities become available.
In an escalating market such as Portland’s, acquiring parcels for future affordable housing development is a proactive strategy to secure land before market forces drive up the purchase price. Land banking has garnered widespread community support and was identified by PHB as a key anti-displacement measure last year in its N/NE Neighborhood Housing Strategy.
“We needed a new tool – a flexible source of funding to allow our community affordable housing partners to act nimbly in this dynamic market to acquire new sites for affordable housing development,” stated Commissioner Dan Saltzman. The City’s new investment to enhance OHAF leverages public and private resources for land banking, making funding accessible to nonprofit and for-profit borrowers, for both rental and homeownership development projects citywide.
OHAF provides short-term financing in the form a four-year loan for the purchase of land or market-rate projects with the intention of developing or repurposing them for affordable housing. The fund includes capital from trust organizations, as well as Oregon Housing and Community Services, and private banks. The City’s additional investment allows for flexible loan terms with minimal equity, bringing the down payment required from 20% down to 5%. It also lowers the interest rate from 5% to 2%.
“Innovative public/private partnerships are key to a comprehensive approach to our city’s housing needs,” said Portland Housing Bureau Director Kurt Creager. “This is a smart investment that allows us as a community to respond where there is need and opportunity now — and it supports a strategy that is going to continue to be effective in a down market as well.”