Legislators pitch plans to build more homes, help with down payments
March 2, 2022
By Julia Shumway
Oregon Capital Chronicle
Legislative Democrats and local elected leaders from around Oregon on Thursday pitched a $400 million plan to get more homeless people off the streets, build more affordable houses and help low-income families come up with down payments for homes.
The proposal, one of several plans worked out for the roughly $1.5 billion lawmakers can spend before going home in March, would allocate $215 million to building and preserving affordable housing, $165 million to programs to address homelessness and $20 million to help families buy homes.
It follows announcements about $150 million for summer learning, $100 million for rural infrastructure needs, $100 million to respond to drought and other climate issues and an as-yet-unspecified amount for child care assistance and one-time $600 payments to low-income Oregonians. Lawmakers are still negotiating other aspects of the budget and expect to introduce the full plan next week.
Most of the housing money will go to existing state programs, including one that converts hotels into homeless shelters and one that provides money directly to affordable housing developers for specific projects.
“We have programs right now that serve the unhoused, that help homeowners, that construct new affordable housing, that work and they just need more resources to scale up,” said House Majority Leader Julie Fahey, one of the architects of the plan.
Oregon is short about 111,000 homes, according to state economists, and competition drives up prices for people seeking to buy or rent. The Legislature has changed laws, including one three years ago that has not yet fully taken effect to allow multi-family buildings in what traditionally has been single-family neighborhoods. The shift was meant to encourage more market-rate housing and eventually drive down costs as supply catches up to demand.
The new spending proposed by House Democrats is intended to benefit renters and buyers at the lowest end of the income scale, who qualify for subsidized housing. Under the plan, the state would spend $215 million to help buy land, fund construction, acquire mobile home parks or rehabilitate existing homes.
The plan allows the state to take an active role in building more affordable housing, said Rep. Mark Meek, D-Gladstone.
“I’m particularly excited about the prospect of incoming investments for building and preserving affordable housing,” Meek said. “This includes sizable investments to keep affordable, current affordable housing units available and building new affordable homes to rent and buy.”
About $65 million will go toward preserving existing homes, $55 million for new affordable homes, $35 million for manufactured home parks, $10 million to buy land and $50 million to finish existing affordable housing projects where construction was disrupted because of supply chain issues caused by the pandemic, Fahey said.
Meek, a real estate agent who led a legislative task force focused on addressing racial disparities in homeownership, said owning a home helps families rise out of poverty.
“We know that homeownership is crucial to building wealth for Oregon families,” he said. “Expanding opportunities for homeownership means that we can help folks from all backgrounds build generational and intergenerational wealth for their families.”
The legislative plan would set aside $20 million to help with down payments. Many of the potential homeowners who contact Hacienda CDC, a Portland organization that assists homeowners and renters and builds affordable housing, struggle to put together a down payment, Hacienda CEO Ernesto Fonseca said.
“While families and individuals save for their down payment, housing prices continue to climb and frankly, the increasing cost of living makes it hard to make ends meet, let alone save for a house,” he said.
While there are options for mortgages with low down payments – sometimes as little as 3% – those loans often require mortgage insurance that increases the overall home cost. State aid with down payments will help Oregonians buy their homes without inflating costs, Fonseca said.
Projects ready to go
Local elected officials who joined House Democrats on their press call said they have projects ready to start in their communities – they just need the money.
Last spring, Eugene launched its “safe sleep sites” program to allow people to legally camp in their tents or cars in specified areas. Now, the city has managed camps for 55 cars at one site and an indoor camp space for 86 people or families, and others are in progress.
Additional funding would enable the city or nonprofit organizations to provide more services to people staying at those managed camps, Eugene Mayor Lucy Vinis said.
“The foundation is already set for these programs,” Vinis said. “They’re already established programs. We’ve learned a lot in the last couple of years on some of these innovations, so we look forward to being able to expand that and have more robust support for them.”
Salem residents contributed privately to buy more than 120 micro shelters – small portable buildings with room for two people to sleep and store belongings – but the city needs money to pay staff to serve people in those managed communities, said Sen. Deb Patterson, D-Salem.
“Certainly there are projects ready to go right this second, that could be operational tomorrow if and when we have the dollars,” she said.
The city of Bend set a goal last year of providing 500 shelter beds by 2023, and it’s 280 beds into that goal, City Councilor Anthony Broadman said. A previous round of state funding let the city buy an old motel last summer to convert into a homeless shelter, and the city is in the process of closing on a second motel.
“It feels sometimes like an unending need, but there are multiple projects that we can support that are already shovel-ready and expanding towards our goal of 500 beds,” Broadman said.