Portland city commissioners weigh options as 800 affordable apartments near expiration dates

Portland commissioners weighing a strategy to bulk up the city’s affordable housing stock are also wondering how to handle a wave of more than 800 apartments that will soon lose existing affordable housing protections.

As commissioners consider an early-stage, and as yet unfunded, plan to build 20,000 new units of affordable housing within the next decade, they’re also grappling with what city housing bureau staff called a “perfect storm” of challenging housing conditions — among them a shortage of more than 25,000 affordable housing units, an impending rent cap increase to 14.6%, and the sunsetting of pandemic-era renter protections.

“We’re deeply concerned that these factors combined could lead us to a wave of evictions that could push more of our residents into homelessness,” said Molly Rogers, the interim director of the Portland Housing Bureau.

But the city could also see a jump in evictions tied to the 802 affordable housing units that will age out of the city’s Multiple-Unit Limited Tax Exemption program. The program offers tax breaks for developers who make some or all of their housing units affordable, requiring them to keep the units affordable for low- or mid-income earners for 10 years.

The City Council’s conversation was prompted by a proposed rent increase at one such building in the MULTE program, North Portland’s Prescott apartment building. Tenants there last week won a delay from their landlord, who had planned to raise their rents by as much as 50% — though still keeping rates under the affordability cap allowed under the program.

Residents of the Prescott are among those who could lose their protections in June of 2024.

Rogers, the interim housing director, the city could align the remaining MULTE buildings with the city’s inclusionary housing policy, which requires builders to make 20 or more of their housing units affordable to those who make 80% or less of the median family income. Under that policy, those housing units must remain affordable for 99 years.

Mayor Ted Wheeler said he was hesitant to require developers to extend affordability protections, saying it could hinder private construction of affordable housing in the long run.

“If you want capital invested in the city of Portland for the purpose of housing, you cannot change the rules midway,” he said, suggesting instead creating a voluntary program that developers could tap for additional tax incentives. “As an option, I bet a lot of people who work with us under those terms would gladly extend their rent protections in exchange for a tax abatement.”

But Commissioner Jo Ann Hardesty said the MULTE tax breaks alone are not a strong enough incentive for developers to make and keep housing affordable.

“We know this from the Prescott,” she said. “The owners sold the building, and the new owners immediately started trying to raise the rent by 50%. We don’t have those kinds of landlords or builders here who are going to do it out of the kindness of their heart without regulations to make sure they do it.”

She said the city needs to focus on making existing units more affordable by fixing programs like the MULTE, and revising the city’s relocation assistance program so that it’s tied to cost of living, as well as setting stricter requirements for developers who receive subsidies for building affordable housing.

Commissioner Dan Ryan, who oversees the city’s housing bureau, said his office facilitated an agreement with Green Cities Company, the owner of the Prescott building. The company agreed not to raise rents for the next 18 months.

Tenants at the building said they weren’t sure of the extent of Ryan’s involvement, but said they were happy that their protests and letters to the landlord company yielded results.

“The agreement they gave us was very reasonable, and there were no catches like in the last two,” said Kelsey Schreiner, one of the leaders of the Prescott MULTE Tenants Union.

But she said it was concerning that the city created an affordable housing program that ends after 10 years without a plan to help tenants once it expires.

“It’s a desperate matter, and we need the city council to step in right away,” she said.

The discussion continues Thursday morning as the city council considers a slate of strategies for future affordable housing development. They include identifying vacant or unused city property that could host affordable housing developments, seeking private property that could do the same and pressing the Oregon Legislature for more funds to build them.

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