Amid housing crisis, state to award $40 million to spur up to 1,243 new units
SALEM — Several developers of affordable housing say their desire to build hundreds of new units in Central Oregon and across the state rely on their receipt of some of the $40 million in state bond money that lawmakers approved last year.
But the number of developers looking for money far exceeds the money available.
In line are housing developers who’ve asked for $61 million in state funds and $52 million in federal tax credits to help build projects in every corner of the state, including La Pine and Sisters. The money is available from the Local Innovation and Fast Track Housing Program, or LIFT, run by Oregon Housing and Community Services.
Developers who applied for the money said it’s difficult to shore up financing for projects that will be rented at below-market rates for the next 20 to 30 years, and that the production of many of the roughly 1,000 units depends on the state money.
“It’s very difficult to pencil,” said Ron Hays, who’s working with the Salem-based Community Resource Trust, which is hoping to build 180 housing units in Salem. “If we don’t get those LIFT funds, the project won’t fly. It can’t pencil.”
Several representatives from the groups applying for the money said it would fill a much-needed gap in funding to build the homes that would be kept at below-market rent. It would also help fill a need for affordable housing amid near-zero vacancy rates in Central Oregon and a need for more low-cost housing statewide.
Many of the prospective projects are in the Portland Metro area. Two projects that would include up to 90 units are proposed for Deschutes County. Another 52 units would be built in Eastern Oregon, in Joseph, Ontario and Vale.
Tom Kemper, executive director with Housing Works in Redmond, which builds affordable housing in the region, is hoping to build 42 units in La Pine and 48 in Sisters in part with money from LIFT and the federal tax credit. Over half of the total costs would come from the bond money and tax credits available.
“La Pine really wants to see some affordable housing get built down there,” Kemper said, adding that without the state money, $38,000 per unit, neither project would be built. “$38,000 per unit is a huge amount of money. The gap would be huge without it.”
LIFT money from the $40 million pot would cover between 20 and 25 percent of the total costs for each unit of the Housing Works projects. The average cost per unit is just over $218,000 in Oregon.
Ariel Nelson, a spokeswoman for OHCS, said the agency was “definitely fully oversubscribed with that $40 million.” If the state had the full $61 million that the 17 applicants are hoping to receive, the money would build 1,243 units across the state.
That estimate also includes the $52 million from a 4 percent tax credit.
That number of units is far fewer than the number of units the agency hoped would be built if the Legislature approved $100 million in bonding.
State officials had hoped to build as many as 5,000 affordable housing units with $100 million.
The Housing Stability Council is set to approve the winning projects at its Jan. 6 meeting.
In her proposed budget released this month, Gov. Kate Brown called for an additional $60 million in bonding for the LIFT program.
— Reporter: 406-589-4347,