Willamette Week and Oregonlive both reported recently on the tall timber building proposed in downtown Portland. The building will be a demonstration of the viability and a showcase for medium rise cross laminated timber structures, and will provide 60 modest income apartments.
Much of the concern and debate has been over the cost of the affordable housing. At $651 per square foot to construct, it’s well over the target cost of new affordable housing. As Mayor Wheeler points out however, the City of Portland’s contribution comes to just $100,000/unit.
But remember, it’s not like this is City or government owned housing. They public owns nothing after making that $100,000 contribution. The owners will be the private developers. And in fact, the private developers will put up, at most less than 12% of the cost for this building that they will own 100%. (They may put up as little as 4% if – as the developers claim- they will also received another $2 million from the Governors office)
Here is what Willamette Week says about the funding.
“The city will chip in $6 million in urban renewal funds toward the nearly $29 million project. Another $19.5 million will come from other government sources—Home Forward and the federal low-income housing tax credit program—and $1.5 million from private investment and other public grants.”
Here is another option for this deal. Hire the developers, pay then $5 million and have the City and Home Forward (The Portland area government Housing authority) own the building 100%.
Putting aside for a while the wisdom of using so much public money for high cost housing, the real question here is, how on earth can the public be paying 88%-95% of the cost of this project, and end up with no ownership? When did incentive programs and grants meant to leverage larger private investments for affordable housing turn into private gifts to the well connected and well off?