Resolution No. 19-27 CITY OF TIGARD, OREGON
TIGARD CITY COUNCIL
RESOLUTION NO. 19- „j -7
A RESOLUTION ADOPTING AN AFFORDABLE HOUSING PLAN FOR THE CITY OF TIGARD
WHEREAS,there exists a housing emergency in the City of Tigard and across the State of Oregon;and
WHEREAS, Goal 10 of Oregon's Statewide Planning Goals is "[t]o provide for the housing needs of citizens
of the state. Buildable lands for residential use shall be inventoried and plans shall encourage the availability of
adequate numbers of needed housing units at price ranges and rent levels which are commensurate with the
financial capabilities of Oregon households and allow for flexibility of housing location,type and density;"and
WHEREAS,Goal 10.1 of the Tigard Comprehensive Plan is to"[p]rovide opportunities to develop a variety of
housing types that meet the needs, preferences, and financial capabilities of Tigard's present and future
residents;" and
WHEREAS,in 2018, the Oregon Legislative Assembly passed House Bill 4006,which designated certain cities
as rent-burdened and provided funding through the Department of Land Conservation and Development for
technical assistance grants to address housing emergencies in those cities;and
WHEREAS,Tigard has been designated by the State of Oregon's Office of Housing and Community Services
as a rent-burdened city for the previous two years under the provisions of House Bill 4006;and
WHEREAS, the city received a grant from the state to prepare an Affordable Housing Plan under the
provisions of House Bill 4006;and
WHEREAS, the Council desires to formalize its commitment to addressing the issues of rent burden and the
housing emergency in the city through adoption of this Affordable Housing Plan and to have this Affordable
Housing Plan inform future policy direction,planning efforts,and amendments to city codes and standards.
NOW,THEREFORE,BE IT RESOLVED by the Tigard City Council that:
SECTION 1: The Tigard City Council adopts the Affordable Housing Plan ("Plan' attached hereto as
Exhibit A and made part of this Resolution.
SECTION 2: This Resolution is effective immediately upon passage.
PASSED: This I tS r day of , cL /1-11-12019.
v'
May6j;-<of Tigard
RESOLUTION NO. 19-
Page 1
ATTEST:
City Recorder-City of Tigard
RESOLUTION NO. 19-
Page 2
s
MEMORANDUM
Affordable Housing Plan (FINAL)
Tigard Housing Strategy Implementation Plan
DATE June 10,2019
'10 Tigard Housing Strategy Implementation Plan (THSIP) Project Management Team
FROM Matt Hastie, Kate Rogers, Emma Porricolo,APG
Brendan Buckley,Johnson Economics
CC Anne Debbaut,Oregon DLCD
Table of Contents
Tableof Contents.........................................................................................................................................1
Section1:Summary................................................................................................................................3
1.1 Introduction...........................................................................................................................................3
1.2 Overview of Housing Strategies............................................................................................................5
Section 2:Strategy Evaluation...............................................................................................................12
Section 3: Policy Options, Recommendations&Implementation Steps................................................14
3.1 Funding Sources...................................................................................................................................14
1. Construction Excise Tax.....................................................................................................................14
2. CDBG Entitlement..............................................................................................................................18
3.Tax Increment Financing (TIF) Set Aside...........................................................................................22
3.2 Tools/Programs that Remove Development Barriers........................................................................24
4. Reduced or Exempted SDCs..............................................................................................................24
5. Development Fee Reductions...........................................................................................................28
6.Tax Abatements.................................................................................................................................28
7. Addressing Restrictive CC&Rs...........................................................................................................33
3.3 Tools to Develop or Preserve Affordable Housing.............................................................................36
8. Inclusionary Zoning.......................................................... ..36
................................................................
9. Preservation of Low Cost Market Rate (LCMR) Housing.................................................................39
10.Tenant and Homeowner Protections.............................................................................................43
This project is funded by a grant from the Department of Land Conservation and Development
Affordable Housing Plan pg.2
11. Incentive Zoning ..............................................................................................................................48
12. Community Land Trusts ..................................................................................................................54
13. Land Banking&Acquisition.............................................................................................................56
14. Staff Allocation to Housing Program ..............................................................................................59
15. City Support for Resident Services and Supportive Housing Services ..........................................62
3.4 Overview of Housing Strategies..........................................................................................................65
Section 4:Summary of Recommendations............................................................................................66
Appendix A: Housing Strategy Summaries...............................................................................................1
Appendix B: Draft Evaluation Tables.......................................................................................................1
Appendix C:SDC Comparison for ADUs...................................................................................................1
Appendix D: Parking Regulations in Tigard—Assessment by DLCD..........................................................1
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.3
Section 1: Summary
1.1 Introduction
Project Background
The purpose of the Tigard Housing Strategy Implementation Plan (THSIP) is to identify strategies and
implementation steps needed to increase the supply and affordability of housing within the City of
Tigard.The outcome of the project will be recommendations for adoption of housing strategies and
policies, including amendments to municipal and development code,to implement an Affordable
Housing Plan.
Past Affordable Housing Efforts in Tigard
Several studies and reports related to affordable housing in Tigard have been completed in the past
several years.A Housing Needs Analysis (HNA) was completed in 2013, which examined the state of
housing supply, housing affordability issues and the City's ability to meet projected housing demand
going for the next 20 years.The HNA included a Housing Strategies Report summarizing the findings
and recommendations of the HNA. Strategies suggested in the 2013 report included comprehensive
plan and code amendments as well as administrative and funding strategies to achieve documented
housing needs and remove barriers to residential development in Tigard.
Following, a Tigard Affordable Housing Strategies Report (2016) evaluated the changes in needs and
effectiveness of the City's affordable housing programs from 2002—2016.The findings of the report
detailed that after 15 years, only three of the 12 program elements were still considered to be
effective: tax exemption, grant funding for public improvements, and Tigard's ongoing financial
support for the Good Neighbor Center. Additionally,the tax exemption program (the Nonprofit
Corporation Low Income Housing Tax Exemption) is the only one of these programs that results in
construction of new affordable units, according to the report.The report concluded that the City has
had individual victories for affordable housing but needs to strengthen its policies and services to
ensure more affordable housing needs are met.
Since 2016, steps have been taken to address some of the pitfalls of the historic programs and
address strategies suggested in the 2013 HNA findings. In the winter of 2018,the City adopted
amendments to the Community Development Code with new standards for "missing middle"
housing types, including ADUs, cottage clusters, courtyard units, quad units, and rowhouses. The
intent of those amendments is to increase the flexibility and ability to expand housing options within
single-family zoning districts. Other recent efforts include SDC exemptions for regulated affordable
housing and the Tigard Triangle Equitable Urban Renewal Implementation project.The
Implementation Plan will prioritize equitable urban renewal projects in the Triangle in 2018-2019
through the development of a set of criteria to rank projects, which is expected to include preserving
and expanding affordable housing as a criterion. For example, a proposed program for the district
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.4
such as Redevelopment Assistance, would prioritize affordable housing projects over market-rate
housing through the use of criteria for decision making.
The City also has partnered with Metro and the City of Portland to create a plan for equitable
housing along the Southwest (SW) Corridor to evaluate and pursue creative and lasting housing
options in efforts to reduce the gentrification and displacement historically seen with development
of transit.That study, the SW Corridor Equitable Housing Strategy Report, also involved close
collaboration with SW Corridor stakeholders, including tenant groups, developers, community-based
organizations, and funders.The report includes several affordable housing strategies for the
Southwest Corridor that are also described in this report for Tigard overall.These include public-
private partnerships, community land trusts, tenant protections, tools for preserving existing
affordable housing, and capitalizing the Oregon Housing Acquisition Fund.Tigard City Council
acknowledged the report in July 2018.
DLCD Grant Background
In 2018 the Oregon Legislature passed House Bill (HB) 4006 which allocated $1.73 million to the
Department of Land Conservation and Development (DLCD)for planning technical assistance to
jurisdictions working to make an impact on housing affordability in their communities. Cities with
populations greater than 10,000 and with at least 25% of renter households "severely rent-
burdened" were the top priorities for the grant.Tigard met both the population and housing need
thresholds,with 27%of the City's population severely rent-burdened.
There are four types of technical assistance programs provided through the grant: housing needs
analyses, code audits, code updates, and housing strategy implementation plans.Tigard has been
granted the funds to complete a Housing Strategy Implementation Plan to evaluate strategies that
provide and promote the accessibility and affordability of housing in the City.
Affordable Housing Plan
The Affordable Housing Plan (AHP) provides analysis and recommendations for a variety of strategies
to increase the supply of affordable housing in Tigard.The process for developing the AHP included
the following steps:
1. Develop a starting list of strategies—City of Tigard provided an initial list of strategies to
consider for the Affordable Housing Plan.The consultant team also suggested a few
additional strategies for the City to consider.
2. Provide background information on potential tools and strategies—The consultant team
researched the initial list of strategies and generated a Background Report that provided
general information for each strategy, including a description, legal basis, usage in Tigard and
other cities, opportunities and constraints, options and alternatives, and general
implementation needs.The Background Report is included as Appendix A. As a result of City
staff's review of the Background Report,the list of potential strategies was refined. A few
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.5
additional strategies were added to the list, and a few were determined not to be feasible or
appropriate for Tigard at this time.
3. Evaluate the potential tools— In initial drafts of the AHP,the consultant team evaluated the
refined list of strategies based on the following criteria: Administrative Burden (staff time and
resources required to establish and implement the tool), Feasibility (legal, political, and
practical considerations), Flexibility(ability to support multiple goals or change over time as
needs and market conditions evolve), and Impact (revenue potential or degree of benefit to
affordable housing production or preservation).The team's evaluations are summarized in
Tables 2—4.
4. Consult with the Affordable Housing Task Force—The consultants and staff discussed the
potential housing strategies with an advisory task force consisting of nonprofit housing
developers, housing finance experts, housing advocates, and Tigard residents.The Task Force
helped further refine the strategies that are recommended in the AHP.
5. Revise AHP and recommendations—Based on discussions with staff and the Affordable
Housing Task Force, the consultant team revised the initial drafts of the AHP and provided
revised recommendations and implementation measures. Based on additional staff and Task
Force review,the consultant team has provided final recommendations for each strategy,
summarized in Table 6.
In researching affordable housing strategies for the AHP and Background Report,the consultant
team relied on its own research conducted for other jurisdictions in Oregon, on other affordable
housing or anti-displacement strategy reports prepared for other communities, and on best practice
and case study research for housing policies and programs in Oregon and beyond.'
1.2 Overview of Housing Strategies
This section includes a brief description of each strategy discussed in the Affordable Housing Plan.
Section 3 provides more detailed descriptions of each strategy, and Appendix A provides additional
information.
(Note: the strategies for Tax Increment Financing (TIF)Set Aside and Addressing Restrictive CC&Rs
were not yet fleshed out in the Background Report, and are only briefly mentioned in Appendix A.
City Support for Resident Services was added after the Background Report was completed, and is not
included in Appendix A).
A key resource used for this report is the Beaverton Affordable Multifamily Housing Preservation and Development Study,
which was authored jointly by Angelo Planning Group and ECONorthwest.The final report from that study is dated May 29,
2018.
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Affordable Housing Plan pg.6
Strategy Summary Table
The full list of strategies that are included in the Draft AHP are summarized in Table 1.
Table 1:Summary of Housing Strategies
Tool Primary goal Potential City Role(s)
Funding Sources _
Establish permanent affordable Program lead
1. Construction Excise Tax housing funding source g
ton County
Establish permanent affordable Partnership with Washington 2. CDBG Entitlement housing funding source
3. TIF Set Aside Establish affordable housing Program lead
funding source
Tools that Remove Development Barriers
4. Reduced or Exempted SDCs Reduce development costs Develop and implement policy
5. Development Fee Reductions Reduce development costs Program lead
(not recommended)
6. Tax Abatements Reduce operating costs Program lead
7. Addressing Restrictive CC&Rs Reduce restrictions on properties Develop and implement policy
Programs to Develop or Preserve Affordable Housing
8. Inclusionary Zoning Promote construction of new Program lead
(not recommended) affordable housing units
9. Preservation of Low Cost Protect affordable housing units Program lead
Market Rate(LCMR)Housing and reduce displacement
--------------
10.Tenant and Homeowner Stabilize existing housing and Program lead or funding partner
Protections reduce displacement
11. Incentive Zoning Increase development flexibility/ Develop and implement standards
reduce housing costs
Reduce land costs/develop long- Partner with an existing nonprofit,
U. Community Land Trusts term affordable housing recruit new nonprofits,and/or provide
funding
13. Land Banking&Acquisition Reduce land costs Program lead or funding partner
14.Staff Allocation to Housing Increase administrative capacity to Program lead
Program implement housing strategies
15. City Support for Resident/ Stabilize existing housing and Funding partner
Supportive Services reduce displacement
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg. 7
Funding Sources
A robust set of housing preservation and development programs requires funding sources that are
stable and flexible. In addition to existing, available tools such as the general fund,the City should
pursue new funding sources that can help to fund its programs—both existing programs and new
programs recommended in this report.This section outlines the new funding sources considered for
Tigard's Affordable Housing Plan.
1. Construction Excise Tax
A construction excise tax (CET) is a tax on construction projects that can be used to fund affordable
housing. According to state statutes,the tax may be imposed on improvements to real property that
result in a new structure or additional square footage in an existing structure. Cities and counties
may levy a CET on residential construction for up to 1%of the permit value; or on commercial and
industrial construction, with no cap on the rate of the CET.The allowed uses for CET funding are
defined by state statutes, and include funding developer incentives, affordable housing programs,
supporting the Oregon Housing and Community Services' (OHCS) homeowner programs, and
covering administrative costs.
2. CDBG Entitlement
The Community Development Block Grant (CDBG) Entitlement Program is a federal program
administered by the Department of Housing and Urban Development (HUD).The program provides
annual grants to entitled cities and counties to "develop viable urban communities by providing
decent housing and a suitable living environment, and by expanding economic opportunities,
principally for low- and moderate-income persons."' CDBG funds can be used for activities that
support affordable housing, but they cannot be used to construct new housing. Eligible activities that
may support affordable housing include acquisition of real property, rehabilitation of residential
structures, and construction of public facilities and improvements (such as water, sewer, streets,
neighborhood centers) that might support a new affordable housing development.This plan
evaluates both individual CDBG entitlement for Tigard and joint entitlement with Washington
County. NOTE: Earlier drafts of the AHP and Background Report also explored the federal HOME
program, but participation in that program is not recommended at this time.
3. Tax Increment Financing(TIF)Set Aside
Tax Increment Finance (TIF) revenues are generated by the increase in total assessed value in
Tigard's urban renewal areas from the time the districts were first established. Tigard has two Urban
Renewal Areas (URAs): the City Center URA and Tigard Triangle URA.The City already uses TIF
funding to acquire real property, to construct public improvements that act as incentives for private
sector residential development, and to assist with the costs of selected residential development
projects that support urban renewal plan goals. By setting aside a portion of the URA funding
specifically for housing,the funds can be used to incentivize development of additional housing
and/or affordable housing in targeted areas.Tigard is already considering a potential TIF set aside for
market rate and affordable housing as part of the Tigard Triangle Equitable Urban Renewal
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.8
Implementation Strategy,which will prioritize urban renewal plan projects in the Triangle in 2018-19.
Also,the City has already approved development assistance funds for the Red Rock Commons
project in the Tigard Triangle,which is being developed by Community Partners for Affordable
Housing (CPAH).
Tools that Remove Development Barriers
Strategies in this category address some of the barriers to the production of housing—particularly
affordable housing. A primary strategy in removing barriers is making housing development more
financially viable by reducing fees or other costs (Strategies#4–#6). Restrictive legal requirements
are also addressed under Strategy#7.
4. Reduced or Exempted System Development Charges(SDCs)
This strategy describes various means of reducing System Development Charges (SDCs) for
affordable housing, or for smaller housing types, with the goal of reducing the cost of development.
This could involve reducing, waiving, exempting, deferring, financing, or subsidizing SDCs for certain
types of housing, or reconfiguring how SDCs are calculated. Many SDC methodologies are intended
to be commensurable with the cost or impact to the system. However, some missing middle housing
types, such as accessory dwelling units (ADUs) or other smaller units, do not match the impact levels
assumed in SDC methodologies.This is because the impact of these types of housing on the need for
water, sewer or transportation facilities is not equivalent to that of other housing units,given the
reduced average size and occupancy of smaller units.The City of Tigard has already adopted (in
March 2018) provisions that exempt regulated affordable housing from paying the City's
transportation and parks SDCs, and in 2019 is also working to exempt ADUs from paying City SDCs.
Additional strategies to reduce the barrier that SDCs impose on housing development are evaluated
in this plan.
5. Development Fee Reductions
Development fee reduction is a strategy to reduce, waive, or defer development fees, such as permit
fees, in order to promote the development of affordable housing. Permit fees add cost to a
development, so reducing these costs also reduces development barriers. Note: this strategy is not
recommended at this time.
6. Tax Abatements
Tax abatements are reductions in property taxes for affordable housing. Abatements may include full
or partial tax exemptions, or freezes on the assessed value of properties. Abatements may be
provided to non-profit corporations or to private developers in exchange for developing new
affordable housing or for rehabilitating and preserving affordability for existing low-cost housing.
Common tax abatement programs include vertical housing programs that provide property tax
exemptions for development that reaches a certain height, and multifamily housing tax exemptions.
The City already employs certain tax abatement programs, but additional abatements are evaluated
in this plan.
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Affordable Housing Plan pg.9
7.Addressing Restrictive CC&Rs
Many subdivisions and planned unit developments (PUDs) in the City of Tigard, and other cities
across the state, adopt private contractual agreements among homeowners that place certain
restrictions on uses, activities, and improvements in the development.These are generally referred
to as Covenants, Conditions and Restrictions (CC&Rs), and are typically administered by some type of
Homeowner Association (HOA). Some CC&Rs prohibit more than one dwelling unit on a single lot,
which has the effect of prohibiting development of ADUs and missing middle housing types (such as
duplex,triplex,townhomes,or clustered housing), which would otherwise provide more affordable
options in single-family zones.The strategy discussed in this report would prevent CC&Rs in future
housing developments from prohibiting these needed housing types.
Tools to Develop or Preserve Affordable Housing
Strategies in this category are geared toward increasing the number of affordable units—both
through new construction and preservation of existing affordable housing—and helping keep
residents in their homes. Strategies include a mix of programs for which the City could take the lead
role, partnerships with other organizations, and programs in which the City would play more of a
supporting role.
S. Inclusionary Zoning
Inclusionary zoning (IZ) (sometimes known as inclusionary housing) is a tool used to produce
affordable housing for low-to moderate- income households within new market-rate residential
developments. Typically, IZ is implemented through an ordinance with mandatory requirements that
a minimum percentage of a new development's total units be designated as affordable, and that
these units remain affordable for a set period of time, usually between 10 and 20 years. Often,this
ordinance applies only to developments with a minimum number of units. Oregon legislation
allowing IZ places restrictions on the size and types of development eligible for IZ and also requires
cities to administer a number of associated programs.These include a fee-in-lieu option and
establishment and on-going administration of the required "finance-based incentives" meant to
offset the costs to developers. Note: This strategy is not recommended at this time.
9. Preservation of Low Cost Market Rate (LCMR)Housing
Low cost market rate (LCMR) housing refers to housing with rents that fall below the average rents
for an area, but which are not income-restricted or regulated by or through an agreement with a
government agency. It can also be referred to as "naturally occurring affordable housing" or "filtered
housing."There are a number of reasons LCMR housing is affordable: properties may be poorly
maintained; located in areas with poor economic growth, aging infrastructure, or a lack of
investment; or simply located in less affluent neighborhoods. Many LCMR housing units are at risk of
losing their affordability as property values increase.There are several tools that are aimed at
preserving LCMR housing. Several different approaches to implementing this strategy are evaluated
in this report.
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Affordable Housing Plan pg. 10
10. Tenant and Homeowner Protections
Tenant protections include local regulations and enforcement programs that provide protections for
tenants of existing affordable housing and low cost market rate (LCMR) housing against evictions,
excessive rent increases, discrimination, and health and safety violations. Tenant protections can also
provide various types of assistance to renters. Homeowner protections could include education as
well as financial and technical assistance to stabilize and combat predation of low- and moderate-
income homeowners.The purpose of these protections is to help tenants and homeowners access
and retain housing. Evaluation of this strategy is described in terms of three types of activities: (1)
Rent stabilization or control; (2) Other city policies regarding tenant or homeowner protection; and
(3) Specific programs to implement the policies. Programs include registration and inspection, rental
relocation assistance, and landlord/tenant mediation programs for renters, as well as educational,
advocacy and financial assistance programs for homeowners.
11. Incentive Zoning
Incentive zoning is a tool implemented through the Community Development Code that creates
incentives to developers to provide a community benefit (such as affordable housing), in exchange
for the ability to build a project that would not otherwise be allowed by the code.The purpose of
incentive zoning is to encourage development of affordable housing and to increase its financial
feasibility. This pian evaluates the following types of incentives as part of this strategy: density and/or
height bonuses, reduced parking requirements, and relief from mixed-use requirements.The last
item refers specifically to the requirement to include a ground-floor retail or commercial use below
housing units in a commercial zone.
12. Community Land Trusts
A Community Land Trust (CLT) is a model wherein a community organization owns land and provides
long-term ground leases to low-income households to purchase the homes on the land, agreeing to
purchase prices, resale prices, equity capture, and other terms.This model allows low-income
households to become homeowners and capture some equity as the home appreciates but ensures
that the home remains affordable for future homebuyers. CLTs may also lease land to affordable
housing developers for the development of rental housing or may develop and manage rental
housing themselves.This plan evaluates various ways that the City of Tigard could provide support to
existing CLTs to increase their capacity and expand operations in the city.
13. Land Banking&Acquisition
Land acquisition is a tool to secure sites for affordable housing. Public agencies can identify locations
where land prices are increasing and acquire land before the market becomes too competitive, with
the intention to use the land for affordable housing.The ability to identify promising sites within
these locations and act quickly and efficiently in acquiring them can tip the scales to make an
affordable housing development financially feasible. Land banking is the acquisition and holding of
properties for extended periods without immediate plans for development, but with the intent that
properties will eventually be developed for affordable housing. Land banks are often are quasi-
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.11
governmental entities created by municipalities to effectively manage and repurpose an inventory of
underused, abandoned, or foreclosed property. Public agencies or larger nonprofits may be better
equipped than small community development corporations to do both land acquisition and land
banking.
14.Staff Allocation to Housing Program
As a strategy to increase the City's administrative capacity for addressing affordable housing issues
and provide more effective and efficient use of resources,the City could consider dedicating one or
more full or part-time staff members to these efforts.The dedicated staff member could oversee
affordable housing programs, develop housing policy, and serve as a liaison to the City's housing
partners, including non-profits,Washington County, Metro, and other local, regional, or state
partners.This plan explores a long-term plan for the City to develop its staffing capacity for housing-
related work.
15. City Support for Resident Services or Supportive Housing Services
This strategy involves the City extending support to existing providers of resident services and
supportive housing services,which are typically nonprofit agencies. Housing enriched with "resident
services" refers to permanent (regulated) rental housing that is focused on increased opportunity
and self-sufficiency for residents, with at least one person on-site providing the coordination of
services. "Supportive housing" is most often a strategy for addressing homelessness and is widely
believed to work well for those who face the most complex challenges—very low incomes, substance
abuse, mental health issues, chronic illness, diverse disabilities, or other serious challenges to stable
housing. Resident and supportive services are typically provided to those earning very low incomes
(30%AMI or less), and have been identified as a critical funding gap in the provision of housing for
these higher-need populations.This strategy explores ways that Tigard could help fill this gap in
order to reinforce local and regional affordable housing investments.
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Affordable Housing Plan pg. 12
Section 2: Strategy Evaluation
In order to assess the suitability of potential affordable housing strategies for the City of Tigard,the
consultant team evaluated each strategy based on a set evaluation criteria.The criteria, summarized
below,were developed with input from City staff.The criteria fall into four categories: Administrative
Investment, Feasibility, Flexibility, and Impact. Application of these criteria varies somewhat between
the different categories of tools (e.g. funding sources vs. tools that remove development barriers),
but generally address the following types of questions:
• Administrative Investment. How much staff time and resources (financial or otherwise) are
required to establish the tool? Is it difficult or costly to administer once it is in place? For
funding sources, the easier it is to administer the tax or fee, the more net revenue will be
available for housing production or preservation. For other tools, this criterion assesses the
costs to establish and administer a given tool.
• Feasibility. Will stakeholders accept or support the tool? Is the tool legal?Are there other
barriers to consider? Political acceptability considers whether elected officials and the public
at large are likely to support the funding source. If the tools are dependent on the action of
another organizational entity,the tool is likely to be less feasible than if the City controls all
aspects of tool implementation.
• Flexibility. Can the tool be flexibly used to achieve multiple outcomes? Does it have legal
limitations or other barriers that limit its utility for achieving housing affordability goals?This
category considers limitations on the types of projects that can be implemented with a given
tool. Given development market cycles, a funding source especially may be less useful to the
City if its use is limited to certain types of projects.
• Impact. How many units or dollars might be produced or preserved, relative to other tools?
For funding sources,this category considers revenue-generating capacity and stability. For all
tools,this criterion also considers whether the City can leverage resources from other
partners using this tool.
Table 1:Summary of Housing Strategies provides an evaluation of each potential housing strategy
against each of the four criteria. For each strategy,we provide a qualitative assessment relative to
each criterion that includes a short narrative and a score using the following color categories:
Good/ Few drawbacks
Okay/Some drawbacks
Difficult/ More drawbacks
? Unknown
Table 2:Evaluation of Strategies provides the summary of the evaluations for each potential housing
strategy (including those that are not recommended), based on the scoring depicted in Table 1.The
evaluations reflect the recommendations to this report.Versions of the evaluation tables in previous
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Affordable Housing Plan pg.13
drafts (see Appendix B) were used as a guide for recommendations and include discussions of
consistency with each evaluation criteria.
Table 2: Evaluation of Strategies
Administrative Feasibility Flexibility Impact
Investment
Funding Sources
Local Construction
Excise Tax(CET)
CDBG Entitlement
Tax Increment Financing(TIF)
Set Aside
Tools that Remove Development Barriers
Reduced or Exempted SDCs
Development Fee Reductions
(not recommended)
Tax Abatements
Addressing Restrictive CC&Rs
Tools to Develop of Preserve Affordable Housing
Inclusionary Zoning(IZ)(not
recommended)
Preservation of Low Cost
Market Rate(LCMR)Housing
Tenant and Homeowner
Protections
Incentive Zoning:
Density Bonus
Reduced Parking
Requirements
Relief from Mixed-Use
Requirements
Community Land Trusts
Land Banking&Acquisition
Staff Allocation to Housing
Program
City Support for Resident
Services
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Affordable Housing Plan pg•14
Section 3: Policy Options, Recommendations &
Implementation Steps
This section outlines policy options and provides guidance for the City of Tigard as it moves toward
implementing the recommended affordable housing strategies. Each section includes an overview of
how the strategy would work, what the City's options are, likely implementation steps, potential
funding sources and uses, potential partners, and additional considerations.
The City and its partners are not expected to be able to advance all of the recommended programs
at once. Instead, the City will need to strategically work with partners to phase in tools over time,
beginning in some cases with a pilot program to gain experience and tailor programs for more
effective implementation. In other cases, more research is needed as a first step to design a program
that works for Tigard.
3.1 Funding Sources
A robust set of housing preservation and development programs requires funding sources that are
stable and flexible. In addition to existing, available funding tools,the City will need to pursue new
funding sources that can help to fund its programs.This section outlines the recommendations for
increasing funding for affordable housing.
1. Construction Excise Tax
HOW THE STRATEGY WORKS: In 2016,the Oregon Legislature passed Senate Bill 1533 which
permits cities to adopt a construction excise tax (CET) on the value of new construction projects to
raise funds for affordable housing projects. If the City were to adopt a CET,the tax would be up to 1%
of the permit value on residential construction and an uncapped rate on commercial and industrial
construction.
The allowed uses for CET funding are defined by the state statute.The City may retain 4%of funds to
cover administrative costs. If the City uses a residential CET,the funds remaining must be allocated
as follows:
• 50% must be used for developer incentives (e.g.fee and SDC waivers/exemptions, tax
abatements, etc.)
• 35% may be used flexibly for affordable housing programs, as defined by the jurisdiction.
• 15%flows to Oregon Housing and Community Services for homeowner programs.
If the City implements a CET on commercial or industrial uses, 50%of the funds must be used for
allowed developer incentives (for use in housing) and the remaining 50%are unrestricted.The rate
may exceed 1% if levied on commercial or industrial uses. For CET revenues generated from
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.15
commercial or industrial development, Oregon statute does not clearly define what type of housing
(affordable or market rate) receives the funds.
Since the uses of residential CET differ from that of commercial/industrial CET, per the minimum
requirements of the statute (ORS 320.195),the City may want to track these funds separately.
FUNDING SOURCES AND REVENUE POTENTIAL: Revenue comes from new development that is
subject to the CET at the time the building permit is issued. No additional new funding would be
needed for program administration, as CET allows 4%of the revenues generated through CET to be
retained to cover administrative costs.
Over the prior 10 fiscal years (2009-2018), residential construction has accounted for roughly 80%
of the new property value from construction, and 20% has been commercial. Over this period, a 1%
CET applied to all new construction would have generated an estimated average of$745,000 in
revenue per year. Since 2016,the estimated annual revenue would have been over$1 million
annually.2 (There can be significant fluctuation in annual construction due to development cycles.)
Because commercial construction has made up a smaller share of overall construction value over this
period, a doubling of the commercial CET rate to 2%would increase overall revenue by 21%. While
the commercial CET rate is technically open ended,the negative impact on project feasibility of each
increment should be considered.
The hypothetical estimated revenue from a CET over the prior ten-year period is shown in Table 3.
Table 3:Hypothetical Estimated CET Revenue, 2009 - 2018
YEAR Residential Cemmerci# CET CET Revenue
#Permits Value #Permits Value Rate Resid. Comm. ,7 Tit,F Comm.
2009 42 $9,324,154 4 $1,944,775 1% $93,242 $19,448 $112,689 $38,896 $132,137
2010 123 $27,972,462 4 $2,003,118 1% $279,725 $20,031 $299,756 $40,062 $319,787
2011 113 $28,150,102 5 $837,655 1% $281,501 $8,377 $289,878 $16,753 $298,254
2012 104 $27,794,839 5 $2,589,566 1% $277,948 $25,896 $303,844 $51,791 $329,740
2013 174 $41,954,242 8 $20,053,155 1% $419,542 $200,532 $620,074 $401,063 $820,606
2014 72 $21,410,225 9 $24,964,563 1% $214,102 $249,646 $463,748 $499,291 $713,394
2015 280 $45,546,665 10 $31,518,023 1% $455,467 $315,180 $770,647 $630,360 $1,085,827
2016 242 $81,847,774 5 $18,381,597 1% $818,478 $183,816 $1,002,294 $367,632 $1,186,110
2017 450 $156,457,972 7 $12,874,739 1% $1,564,580 $128,747 $1,693,327 $257,495 $1,822,075
2018 339 $147,036,484 12 $43,256,706 1% $1,470,365 $432,567 $1,902,932 $865,134 $2,335,499
Total: 1,939 $587,494,919 69 $158,423,897 1% $5,874,949 $1,584,239 $7,459,188 $3,168,478 $9,043,417
Average: 194 $58,749,492 7 $15,842,390 $587,495 $158,424 $745,919 $316,848 $904,343
Source: 2018CityofTigard Comprehensive Annual Financial Report
A CET program can provide significant annual revenue to pay for affordable housing programs and to
fund developer incentives. Table 4 shows a breakdown of annual revenue based on the average
annual revenue from a hypothetical CET over the past ten years in Tigard.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.16
Table 4: Breakdown of Estimated Annual Revenue from Hypothetical CET in Tigard,2009 - 2018
Category Residential Commercial Commercial Total Total
1% 1% 2% 1% 1%/2%
Annual CET Revenue(est.): $587,500 $158,400 $316,800 $745,900 - $904,300
Administration: 4% $23,500 $6,300 $12,700 $29,800 $36,200
Developerincentives: 50% $282,000 $76,100 $152,100 $358,100 $434,100
Aff.Housing Programs: 35% $197,400 $197,400 $197,400
OHCS Homeownership: 15% $84,600 $84,600 $84,600
Unrestricted: 50% $76,100 $152,100 $76,100 $152,100
Source: 2018 Cityof Tigard Comprehensive Annual Financial Report,Johnson Economics
The impact of a CET on development feasibility will vary depending on the land costs and other
market variables.The addition of 1%to project hard costs will negatively impact return for the
developer. For projects facing a viability gap, this will increase the size of the gap, generally at a
greater than one-to-one rate (i.e. a 1%CET may increase the gap by 3%). For market-rate projects,
the CET will generally reduce the developer/investors return,which provides a modest disincentive
to develop in Tigard, but more likely attempts to save costs elsewhere, or seek higher rents on
completion.
FUNDING USES: While the allowed uses for CET funding are defined by the state statute (see "How
the Strategy Works"), the City has discretion to determine the following: which developer incentives
are funded by the 50% set-aside for both residential and commercial/industrial CET;which programs
are funded by the 35%flexible funds for a residential CET; and how the remaining 50% of the
commercial/industrial CET is spent. Potential funding targets are described below.
• Developer Incentives:
o SDC reductions or waivers—CET revenues can be used to back-fill lost City revenue from
SDC reductions or waivers (described under Strategy#4). The Cities of Milwaukie and
Newport, both of which recently adopted CETs for affordable housing, are looking at
using CET funds to finance SDCs. Milwaukie plans to focus on incentives for "workforce
housing," which they are defining as housing that is affordable to those earning up to
120%AM1.3,4 Using CET to backfill the City's existing SDC exemptions for affordable
housing has already been identified as a high priority for Tigard's Finance Department.
o Tax exemptions—The City of Milwaukie is also looking into new tax exemptions for
affordable housing, and potentially using CET revenues to back-fill lost property tax
revenue.Tigard could consider doing the same for its existing or new tax exemption
programs.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg. 17
• Housing Programs–Flexible funds from CET revenues could be used to fund any of the
programs identified in this plan as needing funding.These could include loans or grants to
nonprofits to develop new housing or preserve low-cost market rate(LCMR) housing, grants
to support community land trusts, or funding for resident/supportive housing services.The
City of Newport intends to use its 35%flexible funds to provide annual supportive grants to
local nonprofit housing developers.
• Other options–The City of Milwaukie plans to use the 50%flexible funds from its
commercial/industrial CET to fund economic development programs in areas with
Community Plans or in urban renewal areas.
RECOMMENDATION: Adopt a 1%CET on both residential and commercial/industrial development.
Additional recommendations are detailed under "Implementation Steps." This strategy, once
implemented,can generate funds to provide a funding source for several other strategies explored in
this report, such as reduced and exempt SDCs, development fee reductions, incentive zoning, and
more.
Priority:High
IMPLEMENTATION STEPS:
• Immediate actions: Determine program parameters through financial and legal research and
discussion with key stakeholders.
o Explore program scenarios.To better understand and select among the options available
through the statutes,the City should evaluate a number of scenarios that are tailored to
the Tigard market and the specific program design, expanding on the preliminary analysis
summarized above. For each scenario, the City should consider legal implications to
ensure statutory compliance and engage developers in conversations about the
implications of a CET on the feasibility of their development.
o Discuss CETwith stakeholders.The City should consider holding focus groups or forming
an advisory committee to address concerns and discuss potential uses for CET funds.
Stakeholder groups could include developers (both for-profit and nonprofit),
Homebuilders Association, property owners, property managers, and real estate brokers.
Receiving early buy-in from these groups should help facilitate a smooth adoption
process for the CET.
o Develop budget projections. Because CET is dependent on new construction, revenue will
vary with market cycles.The City should consider reasonable assumptions for budgeting
purposes.
o Consider bundling CET with developer incentives.This is a strategy that worked well for
the City of Newport,which bundled their CET with a package of SDC reductions and
property tax exemptions.This helped assuage their City Council's concerns that a CET
might present a development barrier.
o Develop program structure.Some aspects of the CET will need to be determined prior to
adoption—these include:
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.18
■ Whether to apply a CET to commercial/industrial development and what percentage
tax to levy. We recommend a 1%CET on both residential and non-residential
development. This is in line with what most other Oregon cities have adopted since
the CET was passed by the state.
■ What development is exempt from the CET. ORS 320.173 already exempts affordable
housing for residents at or below 80%AMI, public or religious institution
improvements, private school improvements, and other types of quasi-public uses.
We recommend the City also exempt development valued at under$100,000 and
accessory dwelling units. The City could also consider exempting regulated
"workforce housing," for those earning up to 100%or 120%AMI.
o Develop priorities for funding allocation. Beyond the elements of program structure listed
in the previous bullet,the City can decide how fully-developed the CET's other
parameters and spending targets should be before it is adopted. See the "Funding Uses"
section above for a list of potential funding targets. Some level of flexibility may be
beneficial to the CET being passed by City Council, so that the program is not fully baked
in when it is adopted.
• Medium-and long-term actions:
o Implement CET, including development and refinement of revenue projections to tie to
the implementation of this strategy.
o Work with stakeholders to flesh out the plan for funding allocation.
o Revise funding priorities as the City's affordable housing needs evolve.
PARTNERS: Developers are key stakeholders for a CET. Consider coordinating with other
jurisdictions to avoid creating a disincentive to development in Tigard. Discussions with the City of
Beaverton, which is also considering adoption of a CET, could be useful as Tigard develops its own
policies.
2. CDBG Entitlement
HOW THE STRATEGY WORKS: The Community Development Block Grant(CDBG)Entitlement
Program is a federal program administered by the Department of Housing and Urban Development
(HUD).The program provides annual grants to entitled cities and counties to "develop viable urban
communities by providing decent housing and a suitable living environment, and by expanding
economic opportunities, principally for low- and moderate-income persons."' Currently,Tigard
receives federal CDBG funding indirectly through Washington County, which has been a CDBG
Entitlement Community since 1979 and receives a direct allocation of CDBG funds annually.
Washington County administers funds throughout the urbanized portions of the county—except in
the cities of Beaverton and Hillsboro—as part of the Washington County CDBG Consortium.This
consortium is made up of the cities of Tigard, Forest Grove, Cornelius, Durham, King City, and
unincorporated urban areas such as Metzger and Bethany.The City of Tigard currently participates
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.19
on the Policy Advisory Board (PAB)for CDBG consortium, making recommendations on policy and
competitive grant awards.
The City of Beaverton elected to become a standalone entitlement recipient in 1994. In 2000,
Hillsboro elected to become an entitlement community, but to remain in the consortium, an
arrangement known as joint entitlement. In 2018, Hillsboro became a fully independent entitlement
recipient.
Tigard's population recently surpassed 50,000, which makes the City eligible to become a CDBG
entitlement community. HUD determines the amount of each entitlement grantee's annual funding
allocation using U.S. Census data with a formula that takes into account several measures of
community needs, including the extent of poverty, population, housing overcrowding, age of housing
and population growth lag in relationship to other metropolitan areas.This formula is recalculated
annually.
Now that the City is eligible, it has the option to elect for individual entitlement or to remain part of
the County consortium.The opportunity to make this election occurs once every three years as part
of a process called the Urban County Qualification.The City elected to remain in the consortium in
2015 and 2018.The city will be notified again in April of 2020 of its CDBG entitlement eligibility, and
must take action within a few months of this notification to elect to become an entitlement city or
remain in the consortium.
Aside from remaining in the County consortium under the current arrangement,the City has two
options available when it comes to CDBG entitlement:
1. Become a full CDBG entitlement grantee and leave the consortium.This would mean that:
the City would receive a full, direct funding allocation from HUD; it would manage its
program independently; it would be directly responsible to HUD for programmatic
compliance; and would not participate in the County PAB. While this option would give the
City more flexibility in implementing and tailoring programs to its local housing goals and
priorities, it would also come with significant administrative costs, as evaluated in Table 2.
2. Pursue a joint entitlement agreement with Washington County. This arrangement would be
similar to Hillsboro's joint entitlement prior to becoming independently entitled.This would
mean that the City would remain in the County consortium, and would receive a funding
allocation set-aside from HUD via Washington County(not a direct allocation).Through an
Operating Agreement with the County,Tigard's allocation would be distributed according to
a set formula, which is likely to follow the formula used during Hillsboro's joint entitlement:
• 20%to the County for administrative support
• 15%to the County to support public services
• 15%to the County to be awarded competitively
• 50%to Tigard to be used for qualifying projects
The County would be responsible to HUD for all administrative work and programmatic
compliance, and the City would continue participating in the PAB decision making, including
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.20
grant awards. However,the City would not be able to compete for other County CDBG funds
outside of its own set-aside.This arrangement would provide less funding for projects in
Tigard, but may be more efficient from an administrative standpoint.6
Note:Previous drafts of the AHP also explored potential participation in the HOME Investment
Partnerships Program (HOME), a related HUD program with a specific focus on increasing the supply
of housing for low-and very low-income households. Washington County is currently a HOME Partner
Jurisdiction, and supports affordable housing throughout the county. Direct participation in the HOME
program is less common amongst Oregon cities than the CDBG entitlement program; the participants
ore larger cities—Portland, Salem, Eugene, and Corvallis. Further, cities must provide matching funds
to participate. Because of its limitations,participation in the HOME program is not recommended at
this time.
FUNDING SOURCES AND REVENUE POTENTIAL:Should the City pursue individual entitlement,
the CDBG entitlement allocations for Beaverton and Hillsboro provide some guidance for Tigard, in
terms of what the City could expect for annual funding. The City of Beaverton's estimated funding
allocation for the 2018/19 program year was $600,000. Hillsboro's estimated allocation was
$650,000.7 Based on U.S. Census 2017 population estimates for those cities, each received
approximately$6 per capita in CDBG funding. Assuming a similar allocation for Tigard,the City could
expect to receive approximately$320,000 annually, based on its estimated 2017 population of
53,148.8 However, as noted above, the actual allocation will be determined by HUD's formula taking
into account community needs.
Should the City pursue joint entitlement, it would likely receive approximately 50%of the funding
allocation for programs and projects in Tigard (based on Hillsboro's experience). Based on the per-
capita allocation estimated above,the City could potentially expect to receive roughly$160,000
annually (City staff estimate the annual allocation at$130,000).9 While this is not a substantial sum
on its own, it could be very beneficial in supporting the City's housing programs when pooled with
other funding sources such as CET.
FUNDING USES: CDBG entitlement funds can be used for activities that support affordable housing,
but they cannot be used to construct new housing. Eligible activities that may support affordable
housing include acquisition of real property, rehabilitation of residential structures, and construction
of public facilities and improvements (such as water, sewer, streets, neighborhood centers) that
might support a new affordable housing development. Several of the other strategies discussed in
the AHP could be funded through CDBG funds.These include down payment assistance programs for
low-income home buyers, low-income housing rehabilitation grants, and housing support services.
RECOMMENDATION: We recommend that the City pursue joint entitlement, in partnership with
Washington County.This is consistent with the recommendation made by City of Tigard Community
Development staff in a memorandum dated March 27, 2019.10 The lower administrative burden,
combined with continued County support and collaboration, make this a logical step in expanding
federal funding for the City's housing program.The City could potentially pursue full entitlement at a
later time, after some years of experience with joint entitlement.This strategy, once implemented,
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.21
can generate funds to provide a funding source for several other strategies explored in this report,
such as reduced and exempt SDCs, development fee reductions, incentive zoning, and more. In
addition, use of funding will be relatively flexible in comparison to revenues directed to projects in
Tigard which are generated by the CDBG program today.
Priority: High
IMPLEMENTATION STEPS:
• Immediate actions:
o Work with City Council to make a formal determination regarding joint entitlement
option to pursue joint entitlement with Washington County.
o Work closely with Washington County to establish—at least preliminarily—how the two
jurisdictions would collaborate in the joint entitlement partnership.
• Medium term actions:
o In response to the 2020 eligibility notification from HUD, elect to receive a joint
entitlement as part of the Urban County Qualification.
o Sign an intergovernmental agreement with Washington County to remain in the CDBG
consortium.
o Work with the County to develop an Operating Agreement that outlines terms under
which the City's allocation will be distributed.The County will remain the sole point of
contact for HUD.
o The City should continue to contribute to the Washington County Affordable Housing and
Community Development Consolidated Plan—a five-year strategic plan that determines
local needs and priorities for using public resources to assist low and moderate-income
residents using federal funds. If feasible, the City could also seek a more involved position
in preparation of the Plan.The next Consolidated Plan will cover the time period of 2020-
2024 and the plan update process is currently underway(as of April 2019).
o Develop a funding implementation strategy for spending CDBG funds. HUD requires that
each entitlement community prepare an Annual Action Plan in support of the
Consolidated Plan. While Tigard will not prepare its own action plan, it should be involved
in contributing to the County's Annual Action Plan.
• Longterm actions:
o Monitor and evaluate the program in the longer term, using metrics that will allow it to
evaluate its impact on affordable housing preservation and development.
o Periodically reevaluate the potential for full CDBG entitlement.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.22
3. Tax Increment Financing (TIF) Set Aside
HOW THE STRATEGY WORKS: Tax Increment Finance (TIF) revenues are generated by the increase
in total assessed value in Tigard's urban renewal areas from the time the districts were first
established.Tigard has two Urban Renewal Areas (URAs): the City Center URA and Tigard Triangle
URA. The City already uses TIF funding to acquire real property,to construct public improvements
that act as incentives for private sector residential development, and to augment the costs of
selected development projects.
One of the objectives under Goal 5 of the Tigard Triangle Urban Renewal Plan is to "Assist in the
development of affordable and workforce housing." As for the City Center URA,while its plan does
not identify affordable housing as a specific goal, it does indicate that TIF revenues generated by the
URA may be used to fund or support development of housing that meets Tigard's diverse housing
needs.Therefore,the development of a more targeted strategy for developing affordable housing
within its URAs is in line with the City's goals for those areas.To reach its housing goals, the City
could potentially create a TIF set aside that is more specifically targeted to affordable housing.
Potential uses for a set aside could include low interest loans, grants, or subsidize the costs of SDC's.
These strategies could help fund either acquisition and rehabilitation of existing affordable units or
new construction.
It should be noted that the City may consider a potential TIF set aside for market rate and affordable
housing as part of the Tigard Triangle Equitable Urban Renewal Implementation Strategy (A New
Tigard Triangle), which will prioritize urban renewal plan projects in 2019.The development of
criteria for prioritizing Urban Renewal projects has been developed, and the preservation and
expansion of affordable housing should be a priority consideration for decision-makers involved in
developing the strategy.
FUNDING SOURCES AND REVENUE POTENTIAL:TIF is funded by foregone revenue from
overlapping taxing districts' property tax revenues on properties within Tigard's Urban Renewal
Areas.The Town Center Development Agency(TCDA) is the body in charge of overseeing planning
and implementation for both of the City's URAs.
In 2016-2017,the TCDA reported approximately$440,500 in TIF revenues, and projected $536,700
for 2017-2018. In combination with other financing sources,the total TDCA budget for 2017-2018
was roughly$1.4 million.The capital outlay for the same fiscal year was expected to be $805,000.
Because the Tigard Triangle URA was only formed in 2017, all of that capital spending took place in
the City Center URA.The combined TIF revenue for both URAs in 2020 is projected to be
approximately$900,000.
To support Tigard's affordable housing goals,the TCDA could create a TIF set aside—either as an
absolute amount or as a percentage of each year's TIF revenues.This could be applied to one or both
of the City's URAs.
For local examples of similar TIF set asides,the City of Beaverton Urban Renewal Agency's (BURA)
budget allocates$300,000 to$400,000 per year in tax increment set aside for joint investment in
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.23
affordable housing. Over a five-year period,this amounts to approximately 3.4%of the City's URA
budget." In FY16-17, BURA applied $200,000 of the tax increment towards subsidized SDCs for the
development of 15 affordable, regulated housing units.12 The City of Portland sets aside 45%of TIF
revenue to be used for affordable housing programs and investments to support development of
new housing for households at or below 100%of AMI. Affordability targets and programmatic uses
vary by urban renewal area.13
FUNDING USES: TIF can be used to finance a wide range of activities or strategies for projects inside
the urban renewal areas, including land acquisition, predevelopment services, SDC relief,joint
development agreements,forgivable or low-interest loans,grants, and site prep or infrastructure
needs. TIF cannot be spent outside of the URA boundaries and can only be used for capital
investments.As such,the best use for TIF funds will be to support specific affordable housing
development projects inside of the URAs.TIF funds have already been dedicated to supporting a new
affordable housing project in the Tigard Triangle URA that is being developed by Community Partners
for Affordable Housing (CPAH).
TIF can be used proactively and reactively to support affordable housing:
• Proactive,property-specific.•In this approach,the City or the TCDA would identify specific
buildings (low-cost market rate units)to invest in (rehabilitate in exchange for long-term
affordability) or partner to acquire.The TCDA could also identify property it owns or acquire
land to develop jointly with non-profit developers.
• Reactive: If market-rate developers come forward,TIF can be used to incent affordable unit
production through paying SDC fees or other forms of subsidy. If affordable developers
control property in the URA and would like to develop,TIF could be used to support the
project or help create units that are affordable at a deeper level of subsidy.
RECOMMENDATION: Create a TIF set-aside for affordable housing development and programs in
both the Tigard Triangle and City Center URAs. Consider the difference in maturity and revenue
potential between the two URAs.The Tigard Triangle URA is a new urban renewal area, but due to its
size and development potential, is expected to have an overall greater capacity and revenue
potential than the City Center URA.The target for both URAs could be to begin setting aside funds
for affordable housing projects as a medium-term action, over the next 5 years or so.The City Center
URA already has funds allocated for the next two to three years, so an affordable housing set aside
would have to wait until there are more funds to allocate.The Tigard Triangle URA needs time to
accumulate TIF funds to allocate. Also,the City Center URA is nearing the end of its lifespan, but a
Council goal for 2019-2021 is to explore alternatives for renewing or reconfiguring the URA. Potential
recommended set-aside amounts range from 5%to 15% annually for both URAs.This strategy, once
implemented, can generate funds to provide a funding source for several other strategies explored in
this report.
Priority: High
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Pian pg.24
IMPLEMENTATION STEPS:
• Immediate actions:
o Coordinate efforts with the Tigard Triangle Equitable Urban Renewal Implementation
Strategy to develop urban renewal project criteria, and to encourage prioritization for
projects that are focused on affordable housing.
o Determine appropriate allocation amount for both URAs; discuss with key stakeholders.
o Coordinate with the Town Center Advisory Commission (TCAC)for recommendation to
the Board of the Town Center Development Agency.
o Board of the Town Center Development Agency consideration of adopting policy.
o Clarify priorities for TIF use, including identifying specific properties that are inside the
URAs that might be targets for investment.
o Consider amendments to Urban Renewal Plans to incorporate the dedicated allocation.
• Medium-and long-term actions: Implement projects in the URAs as described above.
PARTNERS: Market-rate and affordable housing developers,Town Center Development Agency
(TCDA),Town Center Advisory Commission (TCAC), overlapping taxing districts.
ADDITIONAL CONSIDERATIONS: In many cases, affordable housing projects are tax exempt, and
therefore do not contribute to the growth of tax increment revenues. Investments should be made
with this trade-off in mind. For some overlapping taxing districts (Tualatin Valley Fire and Rescue, in
particular), new residential development in an urban renewal area (whether affordable or market-
rate) adds service load without adding revenue. Including them in conversations about priorities for
affordable housing is therefore helpful for their planning purposes.
3.2 Tools/Programs that Remove Development Barriers
This section provides additional information for each of the recommended programs that remove
barriers to development of affordable housing.
4. Reduced or Exempted SDCs
HOW THE STRATEGY WORKS: Tigard collects System Development Charges (SDCs) for water,
sewer, transportation, and parks. Other agencies (including Washington County, Clean Water
Services, and Tigard-Tualatin School District) also charge SDCs or similar taxes and fees for
development in Tigard. As of March 2018,Tigard already exempts regulated affordable housing from
the City's Transportation and Park SDCs.14 At one point,Tigard also exempted ADUs from SDCs.
However,the City returned to charging SDCs for ADUs after determining that it was legally obligated
to collect SDCs until the exemption was reflected in the municipal code. The City is currently working
to make the needed code amendments that would legally allow the SDC exemptions for ADUs.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.25
Some jurisdictions offer full or partial SDC exemptions for affordable housing developments or
subsidize them with funding from another source (e.g., urban renewal/TIF or general fund).A related
type of program can allow developers of affordable housing and/or desired market-rate residential
development to defer or finance payment of SDCs, which can reduce up-front costs and financing
costs for the developer.As noted,Tigard already has these types of provisions for regulated
affordable housing.
In addition, because the City of Tigard controls only about 50%of the total SDC fees for multifamily
housing (see Table 5), and overlapping service providers have not expressed willingness to allow
exemptions without back-filling them up to this point,the City's ability to fully implement this type of
program or see a significant impact from it is limited.
Table 5:Summary of SDCs for Multifamily Development in Tigard(estimated)
Percent of Total
Jurisdiction SDC Rate SDCs(estimate)
CWS Stormwater SDC $245 per unit 1%
CWS Sanitary Sewer SDC $5,650 per unit 20%
Tigard-Tualatin or
Beaverton SD School Excise Tax $1.30 per square foot 5%
0.12 percent of the
Metro Construction Excise Tax improvement value 1%
Washington County Transportation Development Tax $5,696 per unit 20%
City of Tigard Parks SDC $5,941 per unit 21%
City of Tigard Transportation SDC $3,672 per unit 13%
City of Tigard Water Meter (based on meter size) 20%
City of Tigard Subtotal 54%
Source:City of Tigard System Development Charges15;Sample SDCs for 12-unit apartment building(provided by City staff)
The combined SDCs charged for multifamily development in Tigard are high in comparison to many
competing markets. A recent SDC survey by the Homebuilders Association across the Metro area
found that Tigard's multifamily SDCs are well above average and roughly 165%of the median of the
42 cities and unincorporated areas studied.16 For the building modeled in this study,Tigard SDCs
ranked near the highest,trailing only the recent urban growth boundary (UGB) expansion areas.The
City charges for water, sewer,transportation and parks were among those components that are
higher on average.
For the hypothetical building modeled in this study,the average SDCs across the communities is 22%
of the estimated project value, while Tigard's SDCs are estimated at 38%of the value. Accordingly,
some reduction of these charges can be expected to create a significant incentive over the current
charges, but may only put Tigard on par with some other communities depending on the size of the
discount.
Regarding ADUs, City staff recently compiled a comparison of SDC fees charged for ADUs in cities and
counties across the Portland metro region (and a handful of cities outside the region).The study
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Affordable Housing Plan pg.26
revealed that the SDC fees that Tigard charges for ADUs in the River Terrace area ($31,498) are the
highest amongst the jurisdictions examined. (Staff noted that they do charge the lowest available
rate—that for townhouses). Several jurisdictions exempt ADUs from paying SDCs, but among those
that do not,the lowest rate is $4,886 for attached ADUs in Gresham.The median fee (for those that
charge fees) is $13,261.The full SDC comparison table is provided in Appendix B.
Tigard has several options to continue or to further reduce the cost of SDCs for specific types of
housing. The recommended approaches are described below.
RECOMMENDATIONS:
A. Offer deferral and financing ofSDCs ata low interest rate for desired housing types
As noted above,Tigard already exempts affordable housing from paying City-controlled SDCs. SDC
deferral and financing could be a tool for removing barriers to development of other (non-
subsidized) housing types that provide affordable options—such as missing middle housing (duplex,
triplex, townhomes, or clustered housing). SDC deferrals typically allow a development to delay
payment of the fees for a specified period of time (e.g., 6, 9 or 12 months)or until the certificate of
occupancy is issued, rather than at the time the building permit is issued. SDC deferral can be
combined with SDC financing so that payments begin after one year and continue for a certain
number of years (e.g., 10 years).The City could offer a lower interest rate (e.g., 0.25% above the
Oregon Prime rate) and/or allow the lien to be in second position for affordable housing
developments.The City could work with other service providers to such an SDC deferral and
financing program for certain types of housing developments.
With deferral or financing for SDCs,the fiscal impacts to the City and its partners is minimal because
charges are eventually paid.The period of repayment should not be a detriment to public agencies
that operate on indefinite timelines.A financing program can be more beneficial to the property
owner because SDCs are paid gradually, rather than in a lump sum soon after the completion of the
project. However, a financing program also brings additional administrative requirements and costs
to the City to track and collect payments over time.
Priority:Medium
B. Participate in a regional process with other Washington Countyservice providers to lowernon-City
SDCs
The discussion of reducing other non-City SDCs has arisen in a number of other housing studies for
jurisdictions in Washington County.Tigard, in collaboration with other local jurisdictions could
spearhead a comprehensive discussion with these other service providers about a regional approach
to SDC reductions in Washington County. Conversations on exemptions for the County's
Transportation Development Tax(TDT) have already started, but have stalled in recent months.The
adoption of Tigard's Affordable Housing Plan could be an opportunity to resume these discussions.
Priority: Medium
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Affordable Housing Plan pg.27
C. Update the City's SDC methodology to tie fees to dwelling size.
The City could also conduct a more comprehensive overhaul of its SDC methodologies and fees.The
methodology could be updated to charge a fee based on the size and category of residential units—
an approach recently adopted by the City of Newport. Newport now calculates residential SDCs for
water, wastewater,transportation on a per-square-foot basis, and provides lower per-unit storm
drainage and parks SDC rate for smaller homes.The methodology assesses a "small home" rate for
single-family dwellings under 1,700 SF. For example, under the water SDC methodology, small homes
such as duplexes, row-houses, and ADUs will be assessed the "small home" rate of$0.60/SF.
Meanwhile, larger homes will be charged $0.60/SF for the first 1,700 SF; $0.48/SF for 1,701 to 2,900
SF; and $0.39/SF for the area above 2,900 SF.17
This strategy provides a more equitable approach to SDC fees, and reduces barriers to construction
of more affordable, smaller-scale homes, including missing middle and other alternative housing
forms.This also could address concerns about exempting certain categories of housing. At the same
time, it likely would result in an increase in allowed SDCs for all other development to make up for
the reduction for affordable housing developments.
The City should consider a similar approach to Newport's when it next undertakes full reviews of its
SDC calculation methodologies.
This recommendation initially requires significant administrative impact to revise the methodology.
Other strategies to reduce or exempt SDCs recommended require a lower administrative investment
to implement and are more aligned with the City's recent efforts related to reducing SDCs for
affordable and desired housing.
Priority: Low(in the near-term)
NEW FUNDING SOURCES CONSIDERED IN THIS STRATEGY: Construction Excise Taxes can be
used to backfill SDC exemptions and would be a good match for an expanded SDC exemption
program.
EXISTING FUNDING SOURCES CONSIDERED IN THIS STRATEGY:The City can continue to use
TIF revenue for projects in urban renewal areas and could potentially allocate general fund revenue
to funding SDC exemptions for affordable housing more broadly.
IMPLEMENTATION STEPS:
• Immediate actions:
o Continue to provide SDC exemptions for affordable housing, and consider adopting an
exemption for ADUs.
o Adopt a CET to backfill lost SDC revenues.
o Work with other service providers to offer special SDC deferral, financing, and/or
exemptions for affordable housing.
• Medium term actions:
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Affordable Housing Plan pg•28
o Discuss whether or not to target other specific housing types for SDC exemptions or take
a broader look at City SDC methodologies.
o Reach out to Washington County, Metro and/or other local Washington County
jurisdictions regarding a regional discussion of SDC strategies for lower cost housing.
• Long term/Contingent actions:
o Begin the process of updating the City's SDC methodologies, if appropriate; incorporate
an explicit policy discussion about the basis for calculating future SDCs as it relates to
housing structure type, size and affordability.
PARTNERS: Tigard-Tualatin School District, Beaverton School District, Washington County (for
transportation), and Clean Water Services (for sewer).
5. Development Fee Reductions
HOW THE STRATEGY WORKS: The Tigard Community Development department collects permit
fees for planning, building, and engineering services. By reducing or waiving certain development
fees or permit fees for affordable housing, it can reduce the upfront cost of development.The
program can be designed as a complete fee waiver, or a reduced fee based on a set metric(e.g.
reduced fee is 50%of original permit fee).
Permit fees generally represent a lower share of overall cost to the developer than SDCs, sometimes
by a factor of five or more, and therefore fee reductions will tend to have a proportionately lower
impact than SDC reductions. For a modest multifamily building of 12 units, it is estimated that fees
might amount to 15%to 20%of total SDC fees, depending on the range of land use approvals
needed.
RECOMMENDATION: Because the potential impact of this strategy would be small, development fee
reductions are not recommended at this time.The City should instead focus its efforts on other more
impactful programs and policies, such as SDC reductions and tax abatements.
6. Tax Abatements
HOW THE STRATEGY WORKS: Tax abatements (exemptions or reductions) alleviate property taxes
on certain types of development, often for a set period of time. Abatements can be a very strong
tool to incentivize affordable housing and make proposed projects more viable, depending on how
the exemptions are structured. A large new apartment complex might have a taxable assessed value
(TAV) of many millions of dollars. Currently, such a development contributes an estimated
$17,200/year in property taxes per$1 million in TAV.The City can expect to see roughly
$2,500/year/$1m TAV (not including city bond levy).The annual benefit to the property owner from
a city tax exemption can amount to tens of thousands of dollars, making this a strong financial
incentive.
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Affordable Housing Plan pg.29
The state currently authorizes tax abatements for various types of housing and affordable housing
through several programs outlined in the Oregon Revised Statutes (ORS).These include: Nonprofit
Low-Income Housing (ORS 307.540 to 307.548), Low-Income Rental Housing (ORS 307.515—
307.523),Vertical Housing(ORS 307.841 to 307.867),Transit-Oriented Multi-Unit Development (ORS
307.600—307.637), Homebuyer Opportunity Limited Tax Exemption (ORS 307.651 to 307.687), and
Residential Rehabilitation Tax Freeze (ORS 308.450 to 308.481).
Tigard has several options to continue, update, and/or create new tax abatement programs.The
program options are as follows:
A. Update Existing Nonprofit Low-Income Housing Program(ORS 307.540—307.548)
Tigard's Nonprofit Corporation Low Income Housing Tax Exemption was first adopted in 1996, and
the City was an early program adopter.The program provides tax exemptions for regulated
affordable housing owned by non-profit organizations that is rented to persons at or below 60%AMI.
The program is not limited to new construction, but can apply to acquisition (with or without
rehabilitation) of existing units. As such,this tax exemption program could be considered a tool for
preservation of low cost market rate (LCMR) housing, which is discussed as Strategy 9 of the AHP.
Tigard's program provisions have not been updated to reflect more recent changes to the state's
provisions.Two provisions the City can add to its program include:
1. Termination of the tax exemption if the eligibility criteria are no longer met (ORS 307.548). If
eligibility has been revoked, the owner must back pay the additional taxes "one of each year
that has elapsed since the year the property was last granted exemption."
2. Tax exemptions for land banking(ORS 307.541).This provision allows exemptions for
properties "held for the purpose of developing low income housing." Tigard's current
program requires that eligible property be developed and occupied by low income persons in
order to qualify for the exemption.This could enhance the feasibility of land banking
(Strategy#13) as an affordable housing strategy.
B.Adopt Low-Income Rental Housing Exemption(ORS 307.515—307.537)
These ORS provisions allow tax exemptions for any entity that provides regulated affordable housing,
including nonprofits and for-profit developers.Tigard can potentially use these provisions to extend
its existing Nonprofit Low-Income Housing Program to all developers, making it much more widely
applicable.The statutes outline similar eligibility requirements, in that eligible properties must be
offered for rent to low income persons (at or below 60%AMI), or held for the purpose of developing
low-income rental housing. However, unlike the Non-profit Low Income Housing exemption,the
exemption that is available to for-profit developers is limited to new construction, and not
acquisition of existing housing.
Because for-profit affordable housing developers often partner with nonprofit entities in developing
and/or operating affordable housing,these developments are typically eligible for the City's existing
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Affordable Housing Plan pg.30
non-profit housing tax exemption.Therefore,the need to extend exemptions to for-profit entities is
relatively low, and this program is likely to have a low impact.
C. Expand Vertical Housing DevelopmentZone(ORS 307.841 —307.867)
The City of Tigard already administers a tax abatement program within the City's designated "Vertical
Housing Development Zones' (VHDZ), which is intended to incentivize multi-story development and
affordable housing in targeted areas.This program allows a partial tax exemption of 20% per floor
(and up to 80%total) for residential developments within the City-designated VHDZ.The exemption
is only allowed for the improvements to the property (not the land itself), unless the development
provides low income housing; in that case, the land can also be exempted from property taxes at the
same rate as the improvements (on a per-floor basis). The tax exemption is available for both new
construction and rehabilitation projects,for the first ten years of the project. All multi-story
residential development in the VHDZ is eligible for the tax exemption.
Tigard could consider expanding the VHDZ program into other parts of the city where development
of multi-story and affordable housing is appropriate and needed, such as the Washington Square
area.The number of VHDZs that Tigard can establish is not limited by statute.The City currently has
two distinct established zones in the Downtown and Tigard Triangle areas.The decision to extend or
create a new VHDZ in the city should be based upon the priority placed on achieving the program's
goal of mixed-use, multi-story development in other parts of the city, weighed against forgoing
partial tax revenue from these projects for ten years.Any extended or new zone should incorporate
area(s) where such development is not occurring on its own or is very rare.
This incentive has experienced limited use thus far in the existing VHDZs and has had limited impact
to City revenues. In the last fiscal year,this program represented just over 2%of the fiscal impact of
the City's three abatement programs, and only$1,000 in foregone revenue.
The graduated structure of this program (providing increasingly larger partial exemptions based on
the number of residential floors) is designed to ensure that the impact to the taxing jurisdictions is
commensurate with the benefit being provided in the form of new housing units.The drawback to
the limited impact on tax revenue is that the incentive benefit to the developer may be similarly
limited, depending on the project.The incentive will be stronger if other taxing jurisdictions in the
area also agree to participate.Tigard's tax levy represents roughly 14%to 15%of the total levy
(depending on the tax code area.) A decision to extend this program should be combined with
ongoing assessment of the existing zones and their effectiveness.
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Affordable Housing Plan pg.31
C.Adopt Multi-unit Tax Exemption in Downtowns and TransitAreas(ORS 307.600—307.637)
The transit-oriented tax exemption is an abatement for multiple-unit housing in corridors and
centers that support transit. Eligible development must be located in transit-oriented areas" and
have multiple units, but may include ground floor commercial space.The exemption can be provided
for up to 10 years.The City has broad discretion as to how to structure the program and define
affordability requirements, allowing it to act relatively independently (though it must get other taxing
districts onboard in order to provide an exemption that goes beyond the City's portion of the tax
bill).The exemption program does not have to be provided only for affordable housing but can be
used in combination with other tax abatement programs.
The SW Corridor Plan Steering Committee Recommendations suggest that jurisdictions adopt a
transit-oriented development tax exemption (Portland already has a program) with 100% property
tax exemption for 10 years. The recommendations state that immediate relief from a significant tax
increase makes it more feasible for developers to provide the amenities,form and high-quality
design of the development envisioned in these areas.18
D.Adopt Homebuyer Opportunity Limited Tax Exemption(0 RS 307.651 to 307.687)
The purpose of this program is to encourage homeownership among low and moderate income
families and to stimulate the purchase, rehabilitation and construction of residences in "distressed
urban areas" as a form of infill development.The tax exemption can be granted for up to 10
successive years, and only applies to the value associated with property improvements, not the land
value. Single-family housing units, multifamily homeownership units (e.g. condos and townhomes),
and manufactured housing are eligible for the exemption.The housing must be in a distressed area,
which would be defined and designated by the City.The City also would create criteria and required
design elements or public benefits that would be applied to properties using the exemption.The City
of Portland employs this limited tax exemption, providing a ten-year exemption for structural
improvements to single-and double-unit homes. Eligibility requirements prohibit rental of the unit
receiving the exemption.19
E.Adopt Tax Freeze for Residential Rehabilitation(ORS 308.450 to 308.481)
This program provides a freeze on the assessed value of residential properties to encourage
rehabilitation of existing "substandard" structures (in violation of state or local code). If the
rehabilitated units are renter-occupied, they may be located anywhere in the city; if owner-occupied,
they must be located in a "distressed area," as defined by the City. This can be applied to single-
family or multifamily housing, but can also apply to the conversion of "transient" units and non-
residential structures to permanent residential units. Eligible properties are exempt from the
ii According to ORS 307.603,a transit-oriented area must be an"area defined in regional or local transportation plans to be
within one-quarter mile of a fixed route transit service."
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Affordable Housing Plan Pg.32
increased assessed value resulting from the rehabilitation for a period of 10 years. While this
program does not specifically target affordable housing, it allows local jurisdictions to establish
requirements for affordability controls while the freeze is in place.The City of Portland employed this
program for many years (starting in 1975), but discontinued it in 2012. Eugene also formerly
employed this program.20 While this has not been the most popular incentive among Oregon cities,
and may have a limited impact, it could be a useful tool for encouraging rehabilitation and rent
stabilization of substandard LCMR housing.
Clarification forAUAbatementPrograms
Recent legislation, House Bill 2377, Chapter 624 (2017) offers the City much less control over
eligibility and requires the support of other taxing jurisdictions.The eligibility requirements can range
from 120%AMI or less. All of the abatement programs described above require an exemption of 51%
or more of the total combined rate of taxation on the eligible property.The City's taxes account for
approximately 14.5%of local taxes,therefore the City must partner with other taxing jurisdictions in
order to implement the exemption programs. While this makes the abatements more powerful as
incentives, it also makes them more challenging to implement.
FUNDING SOURCES: Tax abatement programs do not require new direct investments, as they rely
on foregone tax revenue from the general fund, but the City could use other funding sources, such as
a CET,to replace the lost revenue.
The revenue foregone by the City is the inverse of the benefit to the developer, currently estimated
at$2,500/year/$1m in TAV,or$25,000 over ten years per$1 million in TAV (in current dollars).
Generally,this loss is anticipated to be significantly less than losses from a full SDC exemption for a
similar project. Because of the trade-off in revenue,the City should carefully consider which tax
abatement programs to use, and what the desired outcomes are. In general, market-rate developers
will use the program that maximizes benefits while requiring the fewest changes to their
development plans. For instance, the Multi-Unit Housing exemption can encourage housing closer to
market-rate levels (up to 120%of AMI) but this might discourage use of the Low-Income Housing
programs unless the benefits are calibrated.
FUNDING USES: Funds are used to subsidize developer operating expenses to make developing and
operating affordable housing more cost effective. If the City can get other taxing districts to
participate, it can require a larger percentage of the units to be affordable and/or provide deeper
affordability, because the value of the tax exemption will be significantly greater.
RECOMMENDATION: In the near-or medium-term we recommend that the City pursue the
following tax abatement policies:
• Update the City's existing Nonprofit Low-income Housing program to terminate the tax
exemption if the eligibility criteria are no longer met and to apply it to land held for
development of affordable housing. Priority: Medium
• Adopt a tax freeze for residential rehabilitation and apply controls for rental rates during the
period of the abatement. Priority: Medium
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Affordable Housing Plan pg.33
Implementation of the other tax abatements mentioned here are considered lower-priority, either
due to their anticipated impact or to the extent to which they support the City's affordable housing
goals.
IMPLEMENTATION STEPS:
Implementation of tax abatement programs requires adoption by local officials and establishment of
program goals and policies.
• Immediate actions:
o Assess which tax abatement program(s)to implement and/or update. Create evaluation
criteria to decide which types of housing would be eligible for certain types of exemption
programs in Tigard.
o Begin work to update and/or establish the tax exemption program(s). Steps include:
■ Discuss with key stakeholders, including other City departments, overlapping taxing
districts, and developers.
■ Conduct further analysis to value the tax abatement(s) relative to the required rent
reduction.
■ Seek Council direction on any eligibility criteria that should be incorporated into the
program(s).
• Medium term actions: If the program is determined to be feasible and approved by the other
taxing districts,the City should:
o Develop a program framework based on the research and analysis.
o Establish a program application process based on the recommended criteria.
o Identify staff capacity and roles for assisting developers during the application process
and monitoring the compliance during operations.
• Long term actions:The City will need to monitor and evaluate the program in the longer
term, using metrics that will allow it to evaluate its impact on affordable housing
development.
PARTNERS: For-profit developers active in Tigard, lenders, and overlapping taxing districts, including
Washington County and Tualatin Valley Fire& Rescue.
7. Addressing Restrictive CC&Rs
HOW THE STRATEGY WORKS: Many subdivisions and planned unit developments (PUDs) in the City
of Tigard, and other cities across the state, adopt private contractual agreements among
homeowners that place certain restrictions on uses, activities, and improvements in the
development.These are generally referred to as Covenants, Conditions and Restrictions (CC&Rs), and
are typically administered by some type of Homeowner Association (HOA). Some CC&Rs associated
with new developments prohibit more than one dwelling unit on one lot.These restrictions can
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Affordable Housing Pian pg.34
effectively prohibit the development of ADUs and missing middle housing types (such as duplex,
triplex,townhomes, or clustered housing), which would otherwise provide more affordable options
in single-family zones and are allowed under current Development Code provisions.There are legal
limitations to mitigating the restrictions in current CC&Rs—since they cannot be overridden by the
Development Code. However, new policy could potentially be developed to limit future CC&R
restrictions on missing middle housing in subdivisions and PUDs.The policy could regulate common
topics of CC&Rs, including restrictions on use, land division, leasing requirement, and architectural
review.A summary of specific restrictions embedded in a number of HOAs in the City of Beaverton
provides further examples, which are expected to be present in a number of areas in Tigard as well.21
For the cities whose urban growth boundary expansions were approved by Metro in 2018
(Beaverton, Hillsboro, Wilsonville, and King City), Metro will require as a condition of approval that
they amend their development codes to prohibit future homeowner associations from adopting
CC&Rs that would have the effect of"prohibiting or limiting the type or density of housing that
would otherwise be allowable under city zoning' or"require owner occupancy of homes that have
accessory dwelling units".ZZ Tigard should track these cities as they update their codes to comply
with Metro's conditions.
Note: Proposed House Bill 2001 includes draft language that would suggest a state-level ban on
CC&Rs that restrict middle housing for planned communities.23 If HB 2001 is adopted with this or
similar language, the City likely would not need to implement its own policies prohibiting restrictive
CC&Rs, unless further prohibitions are desired, such as limitations on off-street parking requirements
within developments.
FUNDING: No funding sources are needed to implement or administer the policy.The City may be
able to use existing staff resources and programs to generate and implement policy that limits
restrictive CC&Rs. If consultants are needed,the costs could be accommodated within the
department's annual budgeting process.
RECOMMENDATION: Pending the adoption of HB 2001, adopt policies in the Tigard Municipal Code
that prohibit a private contract from including provisions that restrict middle housing. Include
conditions of approval in land use decisions that require CC&Rs to be submitted to the City for
review prior to recording.The Code language should also specify that amendments to CC&Rs that
violate this regulation be deemed invalid and legally unenforceable.This strategy requires low
administrative investment to implement and administer yet can significantly reduce barriers to
providing needed or desired forms of housing.
Priority: High
IMPLEMENTATION STEPS:
• Immediate actions:
o Analyze existing CC&Rs in Tigard to determine the extent to which they prohibit missing
middle housing types, and actually pose barriers to affordable housing.
o Track HB 2001 for its inclusion of language prohibiting restrictive CC&Rs.
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Affordable Housing Plan pg.35
o Follow the code update processes in Beaverton, Hillsboro, Wilsonville, and King City to
see how they address Metro's conditions of approval regarding CC&Rs. While the City of
Wilsonville has developed draft policy language, as of April 2019, none of the jurisdictions
have formally adopted the required provisions.
• Medium term actions:
o Should state-level regulations not be adopted, work with the City's legal counsel to
develop Municipal Code language to prohibit restrictive CC&Rs.
o Engage with stakeholders (HOAs, developers, etc.), provide opportunities for public
comment, and bring forward code amendments for hearings.
o Monitor future legal cases to assess whether existing CC&Rs can be mitigated in the
future.
• Long term actions:
o Implement the amended code and monitor compliance through development review.
o Create criteria for evaluation of effectiveness of the policy and revise policy as needed
based on evaluations.
PARTNERS: Homeowner Associations; Cities of Beaverton, Hillsboro, Wilsonville, and King City.
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Affordable Housing Plan pg.36
3.3 Tools to Develop or Preserve Affordable Housing
8. Inclusionary Zoning
HOW THE STRATEGY WORKS: Inclusionary zoning (IZ) (sometimes known as inclusionary housing)
is a tool used to produce affordable housing for low-to moderate- income households within new
market-rate residential developments.Typically, IZ is implemented through an ordinance with
mandatory requirements that a minimum percentage of a new development's total units be
designated as affordable, and that these units remain affordable for a set period of time, usually
between 10 and 20 years. Often,this ordinance applies only to developments with a minimum
number of units.
To compensate for the cost of the affordability mandates—whether that's subsidized units or an in-
lieu fee—effective IZ policies are sometimes balanced with incentives or "offsets" for developers.
Typical incentives include expedited permitting,fee waivers,tax abatements, modified development
standards, density bonuses, height increases, and reduced parking requirements. As described
below, incentives are required by Oregon state law to be incorporated into local IZ programs. Instead
of mandating IZ, cities also may establish a voluntary inclusionary zoning program. With this option
the city can use incentives to reduce the land costs for developers in exchange for providing
affordable units. This strategy is often referred to as "incentive zoning" and is discussed as a separate
strategy (see Strategy#11).
A key advantage of inclusionary zoning is that it integrates buildings and neighborhoods by income
level. By providing housing for lower-income households in opportunity-rich areas that would
otherwise be unaffordable,families with fewer means may have better access to good public
schools,jobs, high levels of public safety, and public amenities such as parks and libraries.
Inclusionary zoning also leverages private dollars to pay fund affordable units, rather than using
scarce public funds.24
Inclusionary zoning was prohibited in Oregon between 1999 and 2016, until legislation was passed in
2016 by Senate Bill 1533,which allowed jurisdictions to adopt IZ. However,this legislation came with
a number of limitations that are being regarded by affordable housing providers and advocates as
making the strategy challenging to implement in most small- and medium-sized jurisdictions in the
state. Per state statute,the requirements may only be applied to multifamily housing developments
of 20 units or more. In addition,jurisdictions must provide developer incentives (e.g., property tax
exemptions,fee waivers, development bonuses) to offset the cost of providing affordable units, but
in an undetermined amount. Cities must also provide developers with the option to pay a fee in lieu.
These provisions required by the legislature are expected to limit the applicability and extent of the
application of IZ programs and result in administrative and financial hurdles to implementation,
particularly for smaller communities. Relatively few communities are expected to have the financial
and administrative resources to establish IZ programs.
ANALYSIS: Mandatory inclusionary zoning can affect development feasibility and land values.
Incentives and requirements must be carefully balanced so as not to inhibit housing production.
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Affordable Housing Plan pg.37
Market Response
The most likely market response to IZ is to slow new development, at least in the early years, as
market-rate developers seek opportunities in other communities that don't carry the same
requirements.The main deterrent may be the long-term management and reporting of the
affordable units, as separate from the market-rate management with which they are familiar.
Another market response is likely to be a marginal increase in rents in the remainder of the market-
rate units in the building,to offset the loss of revenue from affordable units. If the affordable units
are a percentage of the total units in the building,the rent increase for market-rate units is likely to
be fairly consistent regardless of building size.
If the affordable rent level is kept constant across the jurisdiction,then one possible market response
will be to build new multifamily apartment properties in areas that already have lower rents.This is
because the restricted affordable rent levels will be closer to the market rents in these areas, and in
some cases might be fairly close to the market rents.Therefore,the affordable rents represent less
of a cost to the developer, while they still take advantage of financial incentives of the IZ program.
(For example,there has been more new IZ development activity in lower-rent East Portland than in
higher-rent central Portland.)
Finally, an increase in development of smaller rental properties of less than the 20-unit threshold
should be expected.
Impact
Inclusionary zoning programs typically create a fraction of the needed affordable housing units, and
their efficacy at producing affordable housing units fluctuates over extended periods of time.This
can be particularly true if IZ is limited in its application to developments of a certain size.
At the same time,these programs do ensure the creation of some affordable units that remain
affordable for the long-term.This supply is unlikely to replace the need for dedicated affordable
housing properties with subsidized rents in the community, especially those properties aimed at
households with very- or extremely-low incomes. Nonprofit agencies are still likely to best serve
these lower-income segments,while IZ units are more likely to serve lower-middle, and working class
households, depending on program rules.
NEW FUNDING SOURCES CONSIDERED IN THIS STRATEGY:The enabling legislation for
inclusionary zoning—SB 1533—also enabled local jurisdictions to establish a Construction Excise Tax
(CET) to fund affordable housing. (Note: CET is explored as Strategy#1). If a CET is enacted, a
percentage of the revenues must be used to fund developer incentives. This includes incentives that
must be included in an IZ program to offset the cost of providing affordable units(e.g., property tax
exemptions,fee waivers, or other "finance-based incentives").
EXISTING FUNDING SOURCES CONSIDERED IN THIS STRATEGY: In lieu of CET adoption,other
funding sources would need to be used to cover the required developer incentives—such as general
funds or Tax Increment Financing (TIF)funds.
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Affordable Housing Plan Pg•38
RECOMMENDATION: Implementation of inclusionary zoning is not recommended at this time. If
state provisions for administering IZ programs were revised to remove some of the barriers to
implementation discussed above, future implementation in Tigard may be more feasible.Tigard
should track the progress of Portland's IZ program, and any other Metro-area cities that adopt IZ,to
assess feasibility for local adoption down the line. Priority:Low
STEPS FOR LONG-TERM IMPLEMENTATION:
Note: the following implementation steps should be considered long-term actions contingent upon
state adoption of revisions to Os enabling legislation.
Implementation of IZ requires time to develop the program and policies. It is suggested that IZ be
implemented through a phased approach to reduce associated impacts on property values.
• Initial actions:The following actions are recommended to assess the feasibility of an
inclusionary zoning program:
o Identify the approximate benefits of establishing a set of IZ provisions based on the
expected number of developments that would be subject to the standards and the
approximate number of resulting new units.
o Estimate the cost of establishing and administering the non-code-based elements of an IZ
program, including a fee-in-lieu program and other developer incentives.
o Determine if the expected benefits outweigh the costs of establishing IZ program.
o Consult with City Council, stakeholders, and the Tigard community to determine if the
community supports the adoption of mandatory inclusionary zoning.
• Intermediate actions: If the benefits outweigh the costs and the City decides to move forward
with the program,then the following actions are recommended:
o Draft IZ policies and implement Community Development Code amendments.
o Determine which developer incentives would apply, and what funding is needed to offset
the costs.
o Establish administrative and financial procedures and protocols needed to administer IZ.
Determine how fee-in-lieu funds would be administered and where they would be
distributed.
o Establish a program to monitor compliance.
o Find partner organizations to connect people to IZ units and distribute fee-in-lieu funds.
• Later actions:
o Track outcomes of IZ program (number of affordable units built).
o Adjust the program as needed.
PARTNERS: Community based nonprofits, private developers.
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Affordable Housing Plan pg.39
9. Preservation of Low Cost Market Rate (LCMR) Housing
HOW THE STRATEGY WORKS: Low cost market rate (LCMR) housing refers to housing with rents
that fall below the average rents for an area, but which are not income-restricted or regulated by or
through an agreement with a government agency. It can also be referred to as "naturally occurring
affordable housing" or "filtered housing."There are a number of reasons LCMR housing is affordable:
properties may be poorly maintained; located in areas with poor economic growth, aging
infrastructure, or a lack of investment; or simply located in less affluent neighborhoods.
Many LCMR housing units are at risk of losing their affordability as property values increase.The goal
in preservation of LCMR housing is to maintain its availability for low- and moderate-income
households.This is particularly critical in areas where gentrification and displacement are
anticipated, such as areas planned for major public investments like the Southwest Corridor Light Rail
project. Preservation of LCMR housing can be a cost-effective affordable housing strategy, because
investing in existing properties is dramatically less expensive than building new units and can be
done much more quickly.
Several tools aimed at preserving LCMR housing are discussed in this report.These include:
A. Dedicating City funds to LCMR preservation;
B. Providing grants or loans to LCMR owners for maintenance or repairs in exchange for
maintaining the units at an affordable price point;
C. Acquiring LCMR buildings and converting them to regulated housing; and
D. Providing property tax abatements in exchange for converting LCMR housing to regulated
affordable housing.
LCMR housing is a form of unregulated affordable housing. All programs to preserve LCMR housing
require a shift to some type of regulation, often for a set period of time,to ensure that funds are
properly spent on preserving affordable housing. Each of these tools is described below.
A.Dedicate Funding to LCMR Preservation
LCMR preservation will rely on dedication of City and/or partner funds to address the needs of(1)
regulated affordable housing properties at risk of conversion to market rate units, (2) repairs and
upgrades to low cost market rate properties to reduce the need for rent increases, or (3) entities
interested in acquiring a property that could become regulated affordable housing.The City should
consider LCMR preservation as a high priority for the use of the three funding strategies
recommended in this plan: CET, CDBG, and TIF. Each of these funding sources could be used to
support the other LCMR preservation strategies (especially grants/loans and backfilling tax
exemptions) discussed below.
One financial tool that can be used to dedicate funds to LCMR preservation is a Housing Preservation
Fund (HPF).The ultimate goal for an HPF would be to set up a flexible pool of funds that could be
deployed quickly in a tight housing market,to aid in the preservation of affordable housing. Potential
roles for the City of Tigard include seeding and supporting a fund with a partner organization, acting
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Affordable Housing Plan pg.40
as a guarantor on loans to reduce borrowing costs, or actively managing and administering a fund
(like Portland Housing Bureau's). HPFs could be used to fund one or more of the other LCMR
preservation tools,to pay for staff time to monitor affordable properties that are listed for sale, or as
down payments to hold a property while searching for a mission-based buyer.
An example of a city-led HPF is Washington, D.C.'s public-private preservation fund, which the City
established in 2017 with $10 million in seed funding.The fund is intended to quickly provide short-
term bridge acquisition and pre-development financing to eligible borrowers, and is managed by two
local Certified Community Development Financial Institutions (CDFIs): Capital Impact Partners and
LISC-DC.
Providing initial capital for this type of fund can be challenging with the limited resources available to
most public agencies. Some potential funding sources are discussed below.Tigard should consider
partnering whenever possible with other community development agencies with the experience and
capacity to run some of these programs, so that the City does not need to duplicate administrative
structure.
B. Grants/Loans for Capital Repairs or Maintenance
This program would help LCMR properties pay for necessary capital repairs or maintenance so that
owners can avoid selling their properties or raising rents. Assistance could include grants, low-
interest loans, or deferred payment or interest-only loans.The grants or loans could provide bridge
funding for acquisition and rehabilitation projects, or to help cover the cost of capital repairs or
maintenance. Loans or grants to LCMR building owners would be made in exchange for agreements
to rent units below market rate for a specified period of time. The program would result in some or
all units in a LCMR property becoming regulated affordable housing for a period of time while
remaining in private ownership. A grant or loan program could be funded by a housing preservation
fund, or directly from CET flexible funds or CDBG entitlement funds.
Washington County already makes loans geared toward preservation and acquisition rehabilitation
projects, usually through its federal allocation of HOME funds.This program began in 1992 and has
since invested more than $19 million in 49 projects across the county.Tigard could consider a similar
program using CDBG funds, should it pursue joint or independent entitlement.
As another local example,the Portland Housing Bureau (PHB) makes low-interest loans on favorable
terms to developers of rent-regulated affordable housing.These loans are most often used in
conjunction with other large funding sources as bridge loans or to fund new development or
acquisition rehab projects. Funding is awarded through annual Notice of Funding Availability
(NOFAs), or in specific requests for proposals for Urban Renewal Areas. PHB has a list of underwriting
requirements for project development and operations on its website.
C.Acquire LCMR Housing and Convert to Regulated Affordable Housing
This program would promote the acquisition and conversion of LCMR housing to regulated
affordable housing. Acquisition could be led by the City itself,through grants or loans to nonprofit
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Affordable Housing Plan pg.41
partners, or in partnership with Washington County. For the City to be able to acquire LCMR housing,
it would need an intermediary that could act quickly to purchase and operate properties in the
interim until transferred to a nonprofit or to the County, because the City does not have the ability to
manage rental housing. Funds from an HPF could be used for this purpose. Using the HPF funds to
target property acquisition would also be more powerful if it could be linked with debt funding that
could be quickly deployed, because the cost of acquiring and managing an existing developed
property tends to be greater than the cost of obtaining vacant land with no existing improvements.
The City of Chicago has a program that acquires vacant or abandoned structures and transforms
them to affordable housing.The program began in 2004 with a focus on troubled multifamily rental
properties,and has expanded to one-to four- unit properties and condominiums. Since the program
began,it has preserved more than 16,000 rental and for-sale units across Chicago."
D. Tax Abatement for LCMR Housing
Property tax exemptions or assessment freezes could be provided to LCMR properties in exchange
for converting to regulated affordable housing.This would not only provide an incentive for
stabilizing and regulating unit affordability, it would also make ownership and maintenance of
properties with below-market rents more financially feasible.Tax abatements for affordable housing
are discussed more generally under Strategy#6.Some of the state-enabled exemption programs
have restrictions that exclude rehabilitation or acquisition of existing housing. However, the
Nonprofit Corporation Low Income Housing exemption (ORS 307.540–307.548)—which the City
already implements—can apply to either new construction or acquisition (with or without
rehabilitation) of existing units.Therefore, LCMR preservation is already a potential use of the City's
existing tax abatement, although it has most often been used for new construction. Similarly,the
Low-income Rental Housing exemption (ORS 307.515–307.537)can be used for acquisition of
existing units if the units are owned or leased by a nonprofit.The Tax Freeze for Residential
Rehabilitation (ORS 308.450–308.481) is specifically geared toward housing rehabilitation, and if
applied to rental housing,the City has the option to negotiate rent levels for qualified properties
during the period of the assessment freeze.
NEW FUNDING SOURCES CONSIDERED IN THIS STRATEGY: New funding for LCMR preservation
programs could come from CET or CDBG funds. Funding for a housing preservation fund could also
come from public sector partners, philanthropic partners, banks, and community development
financial institutions (CDFIs). Capitalizing a new fund can be one of the administrative challenges to
this type of program.The scale and impact of the program will depend on the amount of revenue
available.
The need to keep a preservation fund capitalized is one reason that a loan program may be more
sustainable than a grant program, if paired with an HPF. Loan payments help to renew the fund over
time and allow for additional loans to be made. However, loan programs may also require an
additional level of borrower vetting, underwriting, and compliance monitoring.
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Affordable Housing Plan pg.42
Terms that would need to be defined for these programs include: underwriting standards, length of
loan, interest rates, loan-to-value ratio, debt-service coverage ratio, and loan position. Potential
partner agencies familiar with preservation can provide expertise on these procedures.
The potential impact will be dependent on the amount of funding available to be disbursed, and
attractiveness of the terms. Grants will be more attractive than loans, and loans with generous terms
will be more attractive than conventional loans. In general, loan qualifications and terms should be
marginally more lenient than from commercial lenders, otherwise owners will seek market loans
without affordability requirements.
EXISTING FUNDING SOURCES CONSIDERED IN THIS STRATEGY: The City could use general fund
revenue and tax increment financing (TIF) revenue for one-off projects, a pilot program, and/or to
capitalize a fund. Use of TIF would limit the program to Urban Renewal Areas.Tigard has strong
relationships with Community Housing Fund, a nonprofit CDFI that operates a preservation fund.The
City could also partner with the Network for Oregon Affordable Housing (NOAH), whose preservation
programs include the Oregon Housing Acquisition Fund (OHAF) and preservation loans for affordable
housing.
FUNDING USES: Funding would be used to distribute grants and/or loans to LCMR property owners
or nonprofits, to partner with organizations in acquiring LCMR properties, or to backfill tax
exemptions for LCMR properties.
RECOMMENDATIONS:
• Develop a low-interest loan program for rehabilitation of LCMR in exchange for regulating
rents to preserve affordability (e.g., making them affordable at or below 80%AMI). Priority:
Medium
• Continue exploring the option of a Housing Preservation Fund. Collaborate with the
Community Housing Fund on a potential partnership for LCMR preservation. Priority: Medium
• Discuss with Washington County the potential for partnerships in acquiring LCMR housing
and converting to regulated affordable housing. Priority: Low
• Promote the use of the City's Nonprofit Low-income Housing program for use in acquisition
and rehabilitation projects. Priority: High
• Adopt a tax freeze for residential rehabilitation and apply controls for rental rates during the
period of the abatement. Priority: Medium
IMPLEMENTATION STEPS:
• Immediate actions:
o Inventory existing low cost market rate properties in Tigard.
o Determine which LCMR programs to implement. Analyze the greatest threats to LCMR
housing and determine which LCMR preservation tools best target those threats.Also,
determine if a Housing Preservation Fund is a viable option to provide funding for LCMR
preservation tools.
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Affordable Housing Plan pg.43
o Consider a pilot program to test LCMR preservation tools. For example, the City of
Beaverton has undertaken a pilot program aimed at assisting properties in need of
repairs and upgrades.The City plans to offer subsidized funding for rehabilitation in
exchange for 10 years of reduced rents. It is targeting rents appropriate for households
making 60%-80%of the area median income.
o Analyze examples to refine criteria: Conduct additional analysis using example LCMR
properties to determine the appropriate investment amount and affordability
requirements for an on-going program.
o Clarify partners and roles:The program will benefit from active partnerships with housing
developers and operators.These relationships should be explored and solidified as the
City advances its pilot project.
• Medium term actions:
o Expand funding and refine program: Beyond a potential pilot program, an important step
would be to find more stable, reliable funding and to make any necessary adjustments to
the program structure to ensure it can operate for a longer term.The City should also
continue to reach out to other potential implementation partners to learn best practices
and hear important considerations to streamline and improve the program.
o Adopt a permanent preservation program: Once the pilot program ends, the City can
establish a full preservation program with stable funding, using best practices and lessons
learned from the pilot.
• Long term actions:
o Track success of program through program success metrics.
o Ensure sustainable funding sources for programs.
PARTNERS: Flexible funding could come from Oregon Housing and Community Services, or the
Housing Authority of Washington County. Program structure,guidance, and collaboration could
come from the Community Housing Fund or the Network for Oregon Affordable Housing.
10. Tenant and Homeowner Protections
HOW THE STRATEGY WORKS: Tenant protections include local regulations and enforcement
programs that provide protections for tenants of existing affordable housing and low cost market
rate (LCMR) housing against evictions, excessive rent increases, discrimination, and health and safety
violations.Tenant protections can also provide various types of assistance to renters. The purpose of
these protections is to help low-income families and individuals to access housing, and tenants of
affordable units to retain their housing.Tenant protections can be implemented through policies
and/or programs. The Oregon State Legislature recently passed Senate Bill 608, which regulates
some tenant protection policies statewide (as further described below). With the exception of rent
regulation, local jurisdictions have the ability to create tenant protection regulations that go beyond
state requirements as long as they do not conflict with them. Homeowner protection programs could
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Affordable Housing Plan pg.44
include education as well as financial and technical assistance to stabilize and combat predation of
low- and moderate-income homeowners.
A. Tenant Protection Policies
A.1. Rent Regulation
Rent regulation (often referred to as rent control or rent stabilization) is a price control that limits
how much a landlord can charge for renting out a unit or the rent increase allowed upon lease
renewal.Though the terms "rent control" and "rent stabilization" are sometimes used
interchangeably,they have different meanings:
• Rent Stabilization. Most programs in the United States fall into this category.A landlord may
set the base rent at the free market value, but may only raise the rent by a set percentage
each time a tenant renews a lease.These laws generally require the landlord to notify
tenants at least 30 days in advance of a rent increase at renewal.These policies protect
tenants in privately-owned residential properties from excessive rent increases, while at the
same time ensuring that landlords receive a return on their investment that is deemed fair by
the controlling authority.
• Rent Control. Rent control acts as a price ceiling by preventing rents from being charged
above a certain level.
Rent regulation has been prohibited by Oregon state law since the passage of House Bill 2505 in
1985. ORS 91.225 prohibits cities and counties from enacting"any ordinance or resolution which
controls the rent that may be charged for the rental of any dwelling unit." While this law still applies,
a new state law establishes statewide rent regulation. On February 28, 2019, Oregon Governor Kate
Brown signed Senate Bill (SB) 608, which establishes statewide rent stabilization measures. SB 608
caps rent increases at seven percent plus an inflation factor annually for any tenancy other than
week-to-week.The bill also includes a range of other tenant protections, including a prohibition on
no-cause evictions for tenants who have lived in their building for at least one year, and a statewide
requirement for a 90-day notice for no-cause evictions.16 SB 608 does not reverse the current
prohibition on local jurisdictions enacting their own rent regulation measures; however, there may
be future legislation that does this.
Note: Previous drafts of the AHP explored possible market responses to rent regulation. However,
those drafts were written while SB 608 was still under review. Because of the new state law, and
because more stringent local rent control is still prohibited, additional rent regulation policies are
not discussed further in the AHP.
A.2. Rental Application Reform
Rental application reform policies are intended to remove barriers to attaining rental housing.
Potential reforms could regulate application fees, screening criteria, and security deposits.The
Southwest Corridor Equitable Housing Strategy recommends the following reforms to rental policies:
(1) Application fee reform policies—require landlords to return application fees when applications
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Affordable Housing Plan pg.45
are not processed; (2) Screening criteria reform –eliminate the practice of landlords requiring 3:1
income-to-rent ratios; and (3) Security deposit reform –cap security deposits and protect them from
being taken unfairly. In 2018, Portland City Council considered reforms to tenant screening policies
related to credit, criminal, and housing history;the policy would require landlords to score a
prospective tenant on standardized metrics if they planned to deny housing.27 As of April 2019,these
policy reforms have not been adopted.
Another potential policy is a housing focused "Ban the Box" policy. "Ban the Box" is a civil rights
campaign focused on removing job and housing discrimination against individuals who have criminal
histories. Initially the "Ban the Box" campaign was focused on hiring processes but has recently
shifted to include housing processes as well. In February 2019 The City of Detroit passed "Ban the
Box" policies focused on housing. Detroit's Fair Chance Ordinance requires landlords with five or
more rental units to eliminate inquires about criminal history from their housing applications until
the candidate has been determined to be qualified to rent under all other phases of the application
process. At that point, if the applicant has a criminal record, they may be denied housing only for
crimes relevant to the safety of other people or property, and they must have the opportunity to
provide evidence of rehabilitation.28 Washington D.C. and Newark are two cities that have also
passed housing-related "Ban the Box" policies.
An important statewide policy for rental screening criteria is the prohibition on rejecting applications
from renters using Section 8 vouchers, which has been in effect since July 2014. Recently cities
around the Country, including several cities in California, have adopted similar policies.
A.3. Rental Relocation Assistance
Renter relocation assistance programs require landlords to pay a set amount to assist tenants when
lease conditions change—such as no-cause eviction, substantial rent increase, or not receiving the
option to renew a lease.The City of Portland implemented a mandatory renter relocation assistance
program in 2017 that requires relocation assistance within a range of$2,900 to$4,500 depending on
various conditions (e.g. number of bedrooms).There are some exceptions to this policy including for
tenants that occupy the same dwelling unit as the landlord, for dwellings where the landlord is
terminating the rental agreement so that an immediate family member to occupy the dwelling unit,
and others.2'The City of Vancouver, B.C. requires that owners or developers provide a tenant
relocation plan or tenant impact statement when they apply for rezoning or development permits.
The plans detail how landlords will relocate tenants who must move. Rental relocation assistance
programs can be targeted to certain segments of the population, such as senior citizens.
B. Tenant and Homeowner Protection Programs
B.1. Programs for Rental Tenants
An alternative or complement to tenant protection policies are programs that monitor rental
housing and protect tenants and conditions of rental properties. Programs can target specific
issues for rental properties in the city and the City has flexibility in terms of how it can create and
administer the programs. Examples of tenant protection programs include the following:
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Affordable Housing Plan pg.46
• Rental Registration Program –Registration programs allow jurisdictions to keep an accurate
inventory of residential rentals. A rental property inventory can help improve notification of
changes to local landlord-tenant laws. Also, the program helps monitor and protect tenants
while requiring more responsibility and accountability from landlords.
An example program is the City of Portland's Residential Rental Registration Program.
Portland requires all owners of residential rental properties to register,there is no fee for
the program.The program has been active as of July 2018.The registration allows the City to
maintain and update a reliable inventory to provide information on landlord-tenant policies.
The program applies to all residential rentals, regardless of number of units.
0 Rental Inspection Program–Rental inspection programs monitor rentals to protect tenants
and require more accountability from landlords. Inspection programs can be combined with
a registration program or can be stand-alone.Also,the types of housing or dwellings that are
required to register for the program can vary to all housing, affordable housing, multi-family
housing,or other criteria.Several Oregon jurisdictions have rental inspection programs.
Examples include the following:
o City of Salem Rental Inspection Program: Salem requires all multifamily dwelling
units to sign up for an annual license. Also, all properties are required to be
inspected at least once every five years to ensure they meet Salem Housing Code.
o City of Gresham Inspection Program: A similar program in Gresham conducts
random mandatory inspections of rental properties in the city to ensure the
properties meet minimum fire, health, and life safety standards. Inspections occur
approximately once every three years.There are also complaint-based inspections
that can be more frequent.
• Landlord/Tenant Mediation– Landlord/tenant mediation programs are an approach to
addressing disputes over rental housing that create unfavorable living conditions or
relationships between tenant and landlords. Mediation can help resolve disputes that would
otherwise not be resolved, or for which enduring the time and cost of legal battles is
unrealistic. Common issues for landlord/tenant mediation include late rent payments,
evictions, deposits, repairs, damages, rental agreement violations, pets, noise, and neighbor
relations.The City of Tigard offers this program as a part of Washington County consortium.
The City should leverage the program by publicizing it more widely—especially to the rental
community. A rental registration program (discussed above) would be beneficial, as it would
provide contact information for rental units. Nonprofit housing partners may be another
source to assist in publicizing the program.
8.2. Programs for Homeowners
Programs to protect homeowners vulnerable to losing their homes include education to combat
predatory practices and financial and technical assistance to stabilize homeownership.The
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Affordable Housing Plan pg•47
complexity of information about regulations,financing, and the development process has allowed for
predation of vulnerable homeowners in the past.The City could consult with nonprofits currently
offering services to at-risk homeowners and potentially collaborate on a variety of anti-predation
education efforts. For example,the City could develop a public awareness campaign aimed at helping
low-income homeowners resist real estate practices such as predatory speculation.The City of
Portland is exploring similar programs as part of the Residential Infill Project."
Washington County Community Development also offers a variety of financial assistance to low- and
moderate-income residents for housing rehabilitation. Programs include Home Repair Loans
Deferred/Interest Bearing Loans (DIBL), Home Access & Repair for the Disabled and Elderly (HARDE),
and Veterans Home Improvement Program (VHIP).The City could continue to work with Washington
County to better connect Tigard residents to these existing resources.
FUNDING SOURCES: Delivery of new tenant or homeowner protection programs would require the
commitment of additional resources from the City of Tigard and potential partnerships with
nonprofit organizations or other public agencies that serve low-income communities. Potential
funding mechanisms include general fund or CET flexible funds.
RECOMMENDATIONS:
• Adopt rental application reform policies—potentially including application fee reform;
criminal screening and egregious income screening criteria reform; and security deposit
reform. Continue connecting with Portland to track their work on implementing rental
reform policies related to the Southwest Corridor Equitable Housing Strategy. Priority:
Medium
• Develop rental registration and inspection programs. Rental inspection could follow
approximately two years after onset of a registration program.These would present
relatively low barriers to compliance and would have low implementation costs, but could be
very beneficial to the City in terms of data tracking and compliance. Priority: High
• Consider other programs and policies in the long-term to determine if they can provide
sufficient impact in meeting tenant and homeowner protection needs. Priority: Low
IMPLEMENTATION STEPS:
• Immediate actions:
o Conduct further analysis to determine which programs and/or policies would be most
effective and would best meet the affordable housing needs in Tigard.
• identify the approximate benefits of establishing recommended policies or programs.
■ Estimate the cost of establishing and administering policies and/or programs.
■ Determine a sustainable funding source for tenant and/or homeowner protection
programs.
■ Consult with City Council,stakeholders, and the Tigard community to determine if
the community supports tenant and/or homeowner protection policies and/or
programs.
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Affordable Housing Plan pg.48
• Track local and national policies adopted related to tenant protections and
application reform.
• Medium term actions:
o Policies
■ Adopt ordinance(s)to enact tenant protection policies.
■ Determine the method of policy enforcement (complaint-based vs. active
enforcement).
o Programs
■ Work with community-based organizations and Washington County organizations to
learn more about existing tenant/homeowner protection programs.
■ Determine which new programs are feasible to implement.
■ Identify funding source(s) for programs.
■ Collaborate with partners to develop or support programs that rely on partnerships
for implementation.
• Long term actions:
o Monitor outcomes of policies and programs and make adjustments as needed.
PARTNERS: Community based nonprofits and Washington County
11. Incentive Zoning
HOW THE STRATEGY WORKS: The City can adopt a package of amendments to the Community
Development Code (CDC) targeted at lowering costs and making it easier to build new affordable
housing (including both projects consisting of all affordable units and mixed-income projects).This
tool—often referred to as incentive zoning—creates incentives to developers to provide affordable
housing in exchange for the ability to build a project that would not otherwise be allowed by the
CDC, or would be less financially feasible without the incentives. Local jurisdictions have used a range
of incentive zoning strategies to encourage desired outcomes (described further in Appendix A).The
strategies best suited to incenting affordable housing in Tigard include the following:
• Density bonus
• Reduced parking requirements
• Relief from mixed-use requirements
Each of these is described in more detail below.
A.Density Bonus
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Affordable Housing Plan pg.49
This incentive would allow a housing development to exceed the maximum dwelling units per acre or
maximum height allowed by the zone. A density bonus can allow affordable housing developments
to spread land and site costs over a greater number of housing units, making development more
cost-effective and allowing a greater number of units to be built on a given piece of land. A height
bonus is an alternative method of providing a similar incentive; however, a density bonus is a better
fit for Tigard based on the City's zoning regulations,which are more restrictive in terms of density
than in terms of building height. It is recommended that the bonus be scaled to the number or
percentage of units that meet the definition of affordable. For example,for a mixed-income project,
the number of units allowed on the site could be increased by 1 unit for each affordable housing unit
provided, up to some maximum (e.g., up to a certain percentage above the maximum for the zone;
the amount of the bonus is a policy judgment).This would allow a mixed-income project to build the
same number of market-rate units as they could under the regular zoning, and build affordable units
in addition to the market-rate units. (Note that this may not be possible in practice for every
development given other site, zoning, and building code constraints.) For a fully affordable housing
development, the project could simply increase the maximum density by whatever the maximum
bonus is.As a policy example,the City of Bend's density bonus provisions allow a maximum bonus of
1.5 times the base density for projects that dedicate up to 50%of units as affordable.
Tigard's density standards vary by zone and by types of residential development allowed (e.g.,
cottage clusters, apartments, quads, single family detached, etc.).The bonus could be available at
varying ratios based on the type of residential development and zone, and could offer a larger bonus
where more density is more appropriate and/or where the additional density is more valuable.The
bonus need not work everywhere and for every project, as long as it provides meaningful benefits
some of the time. Further analysis would be needed to determine with any degree of certainty
whether this would be the case. Monitoring program results over time would be useful in helping the
City calibrate it to work more effectively.
Market Environment Considerations:
• Density bonuses will be most effective in areas where developers commonly seek to exceed
current development code standards. If there is no market impetus to build at greater
density or height,these bonuses don't provide value. In some parts of Tigard,the ability to
add more housing density is likely to be a positive incentive, whereas the need to exceed
current height standards to do that is questionable. For example, existing density and height
allowances are already relative generous in Tigard's Downtown area and the market for
density or height bonuses there may not be strong. In those areas, parking requirements and
the construction costs of taller structures are a bigger constraint on what level of
development can be achieved.
• Many market-rate developers are likely to perceive affordable units as somewhat of a
sacrifice, but may be willing to add them as a "loss leader"that will allow the market portion
to be more affordable. To ensure that the developer sees an increased benefit from the
added density,the program should be calculated so that not all of the additional capacity is
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Affordable Housing Plan pg.50
taken up by the required affordable component. The bonus should allow for additional
market-rate units as well.
B. Reduced Parking Requirements
Reducing parking requirements can allow more housing units to be built on a given site—especially
when paired with density bonuses—and can reduce the cost of building surface parking, which costs
roughly$5,000 per space.Tigard's CDC requires a minimum of 1 space per dwelling unit for most
housing types including cottage clusters, courtyard apartments, quads, rowhouses, and single-family
detached houses. For apartments,the minimum requirements vary by size of units, ranging from 1
space for units with less than 500 square feet and 1-bedroom units, 1.25 for 2-bedroom units, and
1.5 spaces for 3-bedroom units. Also, apartment developments with 10 or more required vehicle
parking spaces are required to provide additional vehicle parking for guests, at a rate of 15% of the
minimum vehicle parking requirement. For some development where the lot is within 2,500 feet of a
right-of-way that includes transit service,the minimum parking requirement can be reduced by half.
This reduction applies to cottage cluster, courtyard apartments, and quads, but not apartments.
Some residential development has the option to use on-street parking credit; however,that is also
not an option provided for apartments.
Parking reductions for affordable housing should be linked to the presence and quality of transit
service, to ensure that residents without vehicles still have good transportation access. However,
since some residential development already receives transit-related parking reductions in Tigard,the
affordable housing reductions would need to be greater than the existing reductions. One option the
City could explore is to eliminate or significantly reduce minimum parking requirements for 100%
affordable housing developments located near high-quality transit service. Research suggests
significant differences in vehicle ownership and vehicle trip generation based on income levels and
access to transit services,which could justify waiving parking requirements altogether.31 This may be
most appropriate if targeted at housing that is deeply affordable (i.e., reserved for those earning less
than 50%AMI).
Policy Examples:The City of Portland waives parking requirements for housing developments located
near transit that provide a percentage of affordable units as part of the City's Inclusionary Housing
program. For development with affordable units located far from transit, Portland allows developers
to deduct the affordable housing units when calculating the number of required parking spaces."
The Beaverton Affordable Multifamily Housing Preservation and Development Study recommended
linking parking reductions to the presence and quality of transit service.The study recommended
that the City offer a reduction in minimum parking to 0.75 spaces per unit for affordable housing in
mixed-use zones and areas located near transit (down from the current requirement of 1 space per
unit in mixed-use zones).The study also suggested reducing parking requirements by 0.25 spaces per
unit for developments with affordable housing in all other areas,so that the range would be from 1.0
to 1.5 spaces per unit depending on number of bedrooms.The study noted that these reductions are
similar to those recently adopted by Washington County and are supported by recent research of car
ownership and trip generation rates for residents of affordable housing in other communities.33
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Affordable Housing Plan pg.51
Tigard Community Development Code Parking Analysis:
As a part of this report, DLCD has provided an analysis of the existing parking requirements in the
Tigard Community Development Code and recommendations for reducing the current parking
requirements.Analysis determined that the City "requires more parking than the market would likely
provide on its own."There are negative impacts of excess requirements, which include increasing
costs of development, often subsequently affecting cost of rent. DLCD provided draft language to
update CDC Chapter 18.410 Off-Street Parking and Loading (see Appendix B). Some of DLCD's
suggestions include:
• Remove limits for the on-street parking credit in CDC Chapter 18.410.090.These could be
widely available for all uses, need not be on the same side of the street,could be for spaces
as small as 20 feet, and could be on unimproved roadways.This can reduce the construction
of excess duplicative parking spaces,freeing up land and money for higher and better uses.
• Reduce the number of spaces required generally.There are many multi-unit developments in
transit-served areas in Portland,for example,that provide significantly less than one space
per unit, and are finding success in the market. Generally, developers have strong incentives
to build sufficient supply to meet demand. We would recommend that vehicle minimum
requirements be no more than 0.5 per unit for smaller units, and no more than 1 per unit for
larger units.
It is not within the scope of the Tigard Housing Strategies Implementation Plan to recommend
amendments to minimum parking requirements, except as part of an incentive zoning strategy.
However, the City could consider applying DLCD's recommendation for reducing parking minimums
(to 0.5-1 space per unit) to developments that include a minimum amount of affordable housing.The
City could also consider implementing DLCD's recommendations as part of a separate code
amendment project.
Market Environment Considerations:
The primary incentive offered by reduced parking requirements is greater use of a development site
for the built structure, or conversely the ability to use a smaller site/less land for the same structure.
It is common for developers to start with parking requirements and the constraints that they create
when they determine the potential of a development site. Often it is the space needed for parking,
landscaping, setbacks and related requirements that ultimately limit the achievable density on a site
rather than the density standard cited in the development code. Reducing the parking requirement
gives flexibility and allows an increase in density, which translates to more rentable space. A
secondary benefit is some saved cost on developing the parking area.
In a suburban environment, market developers will be hesitant to lower their parking ratio too far,
even if allowed, because they will presume that most renters will be car-owners. Also lenders and
potential investors may have more traditional expectations for the parking ratio. But some reduction
can be accommodated in most programs.
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Affordable Housing Plan pg.52
This measure is likely to result in the development of some new units in many projects. Unlike the
density/height bonus, it is likely to incentivize additional units over more of the city, not just where
density maximums are currently being reached.
C. Relief from Mixed-Use Requirements
Tigard currently has some mixed-use requirements associated with residential development in
commercial zones, which could be reduced or eliminated for affordable housing development.
The CDC permits residential uses in commercial zones, but only in mixed-use developments—
residential is allowed on or above the second floor and the ground floor must be a commercial use.
This provision exists in the Neighborhood Commercial (C-N), Community Commercial (C-C), and
General Commercial (C-G) zones. It should be noted that residential uses in this zone are not
regulated by the types of residential development outlined in CDC Chapter 18.200. If relief from the
ground-floor commercial requirements is permitted for affordable housing development, standards
should be updated to regulate the type of residential development permitted in the commercial
zones. If it is important to continue to create more active uses on the ground floor in these areas,the
City could encourage or require ground floors to include features such as community rooms,
business offices, or similar uses, in place of ground floor housing units. Because it is a significant
incentive, relief from mixed-use requirements should only be applied to developments comprised
entirely of affordable units and should require a significant affordability period-60 years, at a
minimum.
Market Environment Considerations:
The requirement for a mix of uses can certainly hinder development in a market where one real
estate category is in demand, but the market for the other category is soft. The traditional mixed-use
building of multiple residential floors over ground floor commercial can have some costs that single-
use structures do not. Often the floor plates for the two uses do not match up, complicating
development and adding costs. Special firewalls and other safety features are often required
between the uses. Some redundant systems need to be built in to the structure, such as entrances,
mail and waste facilities, and separate parking. Furthermore, some developers, investors and
property managers are only familiar with one category of real estate. In addition, building managers
or owners are faced with the task of continually leasing ground floor space to retail or commercial
businesses often at below-market rates. Finally,financial institutions are often reluctant to provide
financing for mixed use buildings in soft markets.
For these reasons, mixed-use development can face hurdles that single-use development does not.
A program to relieve affordable housing developers of mixed-use requirements that they would
otherwise face may be a strong incentive to some to add an affordable component to the building. If
the builder is uncomfortable with the commercial portion for any of the above reasons, he or she
may be willing to add affordable units in order to build residential only.As mentioned with the
density bonus, the program can be calibrated so that not all of the additional units made possible by
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.53
the dropped requirement must be affordable.The ability to add some additional market-rate units as
well will provide a stronger incentive.
NEW FUNDING SOURCES CONSIDERED IN THIS STRATEGY: None.
EXISTING FUNDING SOURCES CONSIDERED IN THIS STRATEGY: The City may be able to use
existing staff resources. If consultants are needed, the costs will be minimal and can likely be
accommodated within the departments' annual budgeting process.
RECOMMENDATION: Develop code amendments to apply density bonuses, reduced parking
requirements, and relief from mixed-use requirements for affordable housing.Tigard's Affordable
Housing Task Force suggested implementing reducing parking requirements and mixed-use relief as
higher priorities for implementation than density bonus amendments. However, it may be most
efficient to package all three incentives for the code amendment adoptions process.
• Density Bonus—Allow the number of units on a development site to be increased by 1 unit
for each affordable housing unit provided, up to an appropriate maximum that should be
determined by the City. Priority: Medium
• Reduced Parking Requirements—Reduce parking requirements for affordable housing
developments near high-frequency transit service to 0.75 spaces per unit. Allow a reduction
of 0.25 spaces per unit for affordable developments in all other areas. Priority: Medium
• Relief from Mixed Use Requirements—Allow multifamily projects that are 100% affordable to
avoid building commercial uses on the ground floor. Require a minimum affordability period
of 60 years. Priority: High
IMPLEMENTATION STEPS:
Immediate actions: Discuss and work with Community Development Department staff to add code
amendments into their work plan.
Medium term actions:
o Research best-practices,consult with stakeholders, and determine appropriate
incentives for Tigard.
o Draft code amendments.
o Provide opportunities for public comment.
o Bring amednments forward for hearings.
■ Long term actions: Implement the amended development code through development review.
Monitor utilization of the incentives and ask for feedback from developers who may have
considered the incentives.Test example developments for what other code amendments
may be needed to make the density bonuses and parking reductions more effective.
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Affordable Housing Plan pg.54
12. Community Land Trusts
HOW THE STRATEGY WORKS: A Community Land Trust (CLT) is a model wherein a community
organization owns land and provides long-term ground leases to low-income households to purchase
the homes on the land, agreeing to purchase prices, resale prices, equity capture, and other terms.
This model allows low-income households to become homeowners and capture some equity as the
home appreciates but ensures that the home remains affordable for future homebuyers. CLTs may
also lease land to affordable housing developers for the development of rental housing or may
develop and manage rental housing themselves. Land trusts are typically run as non-profits, with
support from the public sector and philanthropy, and could be linked to a land bank. Land trusts can
be focused on homeownership or rental units.
A community land trust (CLT) is an independent, nonprofit corporation chartered in the state where
it is located. Most operate within the boundaries of a targeted area,though some serve entire cities,
multiple cities, or even entire states. There are various types of CLTS which have varying funding
mechanisms, structures, etc. Examples include conventional CLTs, development-oriented CLTs, and
land bank stewards.Throughout the various CLTs, even those not sponsored by a government entity
often receive local government support in the form of seed funding, on-going administrative and
operational funding support, or land donations and grants.
Supporting an existing CLT would likely provide a greater impact than supporting the startup of a
new CLT.The City of Tigard could support a local CLT such as Proud Ground,which operates in five
counties in Oregon and Washington–Clackamas, Clark, Lincoln, Multnomah, and Washington—but
does not have any holdings in Tigard at this time. Proud Ground's model enables low-income
households to become homeowners and capture some predetermined limited share of equity as a
home appreciates in market value, but also allows the CLT to retain a larger share of the equity which
remains with the home and ensures that the same home remains permanently affordable for future
income-qualified homebuyers. For single-family homes, Proud Ground leases the land to the
homebuyer. For condos,they apply an affordability covenant, also known as deed restriction, to each
unit and the land is held in common by condo owners. Proud Ground and their partners typically
provide permanently affordable housing to individuals or families within the range of 30%to 60%
AMI.
The City can play a variety of roles in supporting CLTs through administrative or financial support:
A. Donate City-owned land to be managed by CLTs
The City can transfer property they see fit for affordable housing development to a CLT to
develop and maintain the development. Important considerations when evaluating public
land for donation are condition, location, and buildability of the property. Examples of local
jurisdictions donating publicly owned land to CLT are found in Portland and Lincoln County,
where both jurisdictions have donated land to Proud Ground.
B. Provide grants or low-interest loans for specific development or rehabilitation projects
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Affordable Housing Plan pg.55
Grants and loans can provide funds to CLTs to assist with predevelopment costs or
acquisition and rehabilitation costs for existing homes. From the CLT's perspective, grants are
preferable to low-interest loans because they are typically easier to manage.34
C. Provide down payment assistance for homes owned by CLTs
Providing down payment assistance grants can help create homeownership for those who
otherwise would not have the opportunity. Proud Ground estimates that$100,000 per unit in
subsidies is needed to create their permanently affordable dwellings.Typically the funding is
achieved by layering multiple funding sources. Grants to cover down payment costs can help
bridge the gap between what the homebuyer can afford and the actual cost of the home.
Both the City of Hillsboro and City of Beaverton provide down payment assistance grants in
partnership with Proud Ground. The City of Hillsboro offers down payment grants of$80,000
for first-time, income-qualified homebuyers.The grants allow the purchase of homes priced
up to$325,000.35 The City of Beaverton has a similar program that provides grants up to
$76,500 for homes in priced up to$305,000.36 Both Beaverton and Hillsboro use CDBG funds
to finance the grant programs. Another source of funding for this program could be CET
flexible funds.
D. Funding Partnership
Providing direct funding to a CLT is also an effective way to support affordable
homeownership. For example,the City of Hillsboro provides an annual set-aside of CDBG
funds to Proud Ground,which allows the organization to eschew the competitive grant
process annually. Proud Ground was not operating in Hillsboro prior to receiving funding
from the City;therefore,this partnership has been key to Proud Grounds ability to expand
their local capacity.This partnership was made possible, in part, by the City Council's priority
focus on affordable homeownership opportunities.
Individually a single CLT support mechanism is not sufficient to create an entire development,
however multiple types of support in combination with other incentives (e.g.SDC exemptions,
density bonuses, etc.) can make development of affordable housing feasible.
Market Environment Considerations:
In real estate markets where housing prices rise faster than household incomes, CLTs reduce the cost
of subsidizing affordable homeownership units over time.As housing prices rise, and incomes don't
keep up,the amount of subsidy needed to purchase the same home increases with each new buyer.
If the CLT owns the land, however,they can control the rate of price increase, reducing or
eliminating the need for a subsidy for subsequent buyers.
In submarkets or neighborhoods in the early stages of rising housing costs,CLTs can be effective at
gaining permanent control over at least some portion of the land and preserving land for income-
restricted housing units. In submarkets or neighborhoods with high housing/land costs,the CLT will
be able to acquire fewer housing units or less land.
NEW FUNDING SOURCES CONSIDERED IN THIS STRATEGY: CDBG and CET funds.
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Affordable Housing Plan pg.56
EXISTING FUNDING SOURCES CONSIDERED IN THIS STRATEGY: Existing general fund revenue
might be appropriate to direct towards supporting a CLT.
RECOMMENDATION: Partner with an existing local CLT organization to expand their capacity to
provide affordable homeownership in Tigard. Among the four types of support listed above, down
payment assistance is the most likely and appropriate approach in the near-or medium-term.
Development/rehabilitation grants, donation of City-owned land, and an annual funding set-aside
may be feasible in the long-term. Priority: High
IMPLEMENTATION STEPS:
• Immediate actions:Work with an existing local CLT organization to discuss opportunities for
expansion into Tigard.
• Medium term actions:
o Based on adoption of new funding sources, determine what capacity the City has to
provide assistance to an existing local CLT organization and how that aligns with their
needs.
o Develop down payment assistance grant program.This could start with a pilot project,
and could grow into a long-term program from there.
• Long term actions: Potentially provide on-going support through development/rehabilitation
grants, donation of City-owned land, and an annual funding set-aside.
PARTNERS: Existing local CLT organizations
13. Land Banking&Acquisition
HOW THE STRATEGY WORKS: Land acquisition and banking are tools that can be used separately
or together for development of new affordable housing or for preservation of existing affordable
housing- both regulated and low-cost market rate (LCMR) housing.
Land acquisition is a tool to secure sites for affordable housing. Public agencies can identify locations
where prices are going up and acquire land before the market becomes too competitive, with the
intention to use the land for affordable housing.The ability to identify promising sites within these
locations and act quickly and efficiently in acquiring them can tip the scales to make an affordable
housing development financially feasible.
Land banking is the acquisition and holding of properties for extended periods without immediate
plans for development, but with the intent that properties eventually be developed for affordable
housing. Land banks are often quasi-governmental entities created by municipalities to effectively
manage and repurpose an inventory of underused, abandoned, or foreclosed property. Public
agencies or larger nonprofits may be better equipped than small community development
corporations to do both land acquisition and banking.
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Affordable Housing Plan pg,57
In 2015, state legislation made it possible for local governments to create government authorities
that have an explicit focus on buying and holding land. While the land bank legislation was created
with the intent of incenting brownfield redevelopment,the tool can be used for the purpose of
creating affordable housing. Many cities had land acquisition strategies in place before this
legislation, using both general fund dollars and urban renewal funds to strategically purchase land or
buildings in high-opportunity areas. It may be worth exploring the benefits and drawbacks of using
this legislation to formalize a land bank as a focused entity that is separate from the City structure.
Clackamas County is one of the few jurisdictions to pursue the creation of a land banking authority as
a result of the state legislation.The County is currently in the process of developing the Clackamas
County Land Banking Authority (CCLBA).The land bank is planned to target brownfield
redevelopment and is primarily focused on increasing the availability of employment lands, but the
County has also begun to discuss the land bank's ability to provide land for affordable housing.
Affordable housing is proposed to be one of the three criteria for the scoring sheet to inform
acquisition decisions,the criteria mirrors CCLBA's priorities.37 The CCLBA is still in the early stages of
creation;their business plan was presented to the County Board of Commissioners in April 2019 and
approved contingent on funding.38 The City should continue to track the CCBLA's process of
development, implementation, and impact.
For land banking or acquisition, having a set of criteria to evaluate potential sites is necessary to
support strategic land investments. For the City to be both nimble and strategic, it should map any
spatial criteria in advance.The City could also develop a target list of properties for potential
acquisitions (which would need to be kept confidential) to pursue these acquisitions.The City could
also explore opportunities to trade vacant land for developed LCMR housing, or to acquire existing
LCMR housing directly, as part of the land acquisition strategy and housing preservation program.
(Note: acquisition of LCMR housing is discussed as part of Strategy#9 of the AHP.)
Market Environment Considerations:
Land acquisition by a city or city partner is the most direct method to ensure that a key parcel or
location will be preserved to meet public goals such as affordable housing, mixed uses, transit-
oriented development, etc. By controlling the property,the City ultimately dictates what happens
there. The value of the land is a strong incentive that can be offered to potential development
partners to participate in the project.
Land can be acquired cost-effectively if purchased in down-cycles and used to leverage developer
investment. Land banking allows for patient investment in rental or ownership units.
NEW FUNDING SOURCES CONSIDERED IN THIS STRATEGY: A portion of CET funds could
potentially be used for land acquisition.
EXISTING FUNDING SOURCES CONSIDERED IN THIS STRATEGY: Tax increment financing (TIF) is
likely the most appropriate source of funding for land acquisition in urban renewal areas. However,
its use for broader land acquisition for affordable housing will be somewhat limited, given that TIF
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Affordable Housing Plan pg.58
can only be used for property acquisition inside the URA boundaries. General funds can also
potentially be dedicated to land acquisition.
RECOMMENDATION: Availability of land for the city to acquire is limited. However, the City could
evaluate their current inventory of properties and consider what properties may be available in the
future. With the amount of funding and administrative investment to develop program and acquire
property should not be a high priority of the city with the number of properties expected to receive
in return. We recommend the city take steps to be prepared if properties are presented but avoid
developing an extensive program targeting land banking and acquisition. Priority: Low
IMPLEMENTATION STEPS:
Immediate actions:There are many actions the City would need to take in the near-term to develop a
land acquisition strategy to serve affordable housing.These include, but are not limited to:
o Verify potential funding levels and sources with a focus on the ability to deploy funds
quickly and flexibly when opportunities arise.
o Consider internal staffing capacity and roles with a focus on the ability to act quickly
and flexibly when opportunities arise.
o Evaluate pros and cons of creating a separate land banking authority(as authorized in
the 2015 legislature).
o Establish criteria for evaluating and prioritizing sites.
o Reach out to other potential public sector or private sector partners to consider
investment targets and/or to strategize on how to leverage funding. Partners could
include existing affordable housing nonprofits in the area who might assist in
developing and operating affordable housing in the long run; real estate market
partners who are actively watching the market; and/or other public agencies, service
providers,or religious institutions who may have surplus land from time to time.The
City should identify which partners it would work with to build and operate housing.
The City should also consider how tightly it would prefer to partner (e.g.joint
development, land lease, or property sale).
o Discuss target areas for land acquisition within urban renewal districts (tied to tax
increment financing)or citywide.
Medium term actions:Once funding levels and sources have been determined, and criteria have
been considered,the City should begin scanning the market for potential sites. Partners in the
private real estate market will be essential to help track and watch the market.The City could also
develop a prioritized list of sites and contact property owners (directly or via a partner) proactively to
inquire about the property owner's interest in selling.Sites may include vacant land, properties that
are correctly zoned but underutilized, or properties that could be fully redeveloped. Brownfield sites
could be evaluated if assessment and remediation funding can be found.
The City should assemble staff and funding so that it can react and deploy quickly when
opportunities arise.
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Affordable Housing Plan pg.59
Long term actions:The City will likely want to establish a comprehensive Land Acquisition Strategy so
that it has a plan for how it will operate the program for the longer term. Items to incorporate in the
strategy could include:
o Funding sources and uses
o Criteria for site evaluation
o Established and committed partners
o MOUS or development agreement templates with partners
o Strategies for transferring land after acquired
o Metrics for evaluating program success
Such a strategy will help quell uncertainty and allow the City to act quickly without worrying
about how it will divest or use the investment in the future.
Once several transactions have occurred,the City will likely want to evaluate the program's
success based on the metrics in the strategy.
PARTNERS: Potential partners include Oregon Housing and Community Services (OHCS),the
Housing Authority of Washington County,the Network for Oregon Affordable Housing, the
Community Housing Fund, any affordable housing organization working in the City, private
developers, real estate market professionals, banks and CDFIs, and many others.
ADDITIONAL CONSIDERATIONS: The City will need to use caution in public documentation of this
strategy to be vague on location of land acquisition targets, so that land pricing is not affected.
Because land costs tend to increase over time,the sooner the City can acquire the land, the more
cost-effective the strategy will be.
14. Staff Allocation to Housing Program
HOW THE STRATEGY WORKS: As a long-term strategy to increase the City's administrative capacity
for addressing affordable housing issues and providing more effective and efficient use of resources,
the City could consider dedicating one or more full or part-time staff members to these efforts.The
dedicated staff member could oversee affordable housing programs, develop housing policy, and
serve as a liaison to the City's housing partners, including non-profits, Washington County, Metro,
and other local, regional, or state partners.
Having a dedicated staff person to oversee housing programs would provide more resources, a
higher degree of continuity, and potentially more technical expertise towards the task of
implementing the strategies identified in the Tigard Affordable Housing Plan. Developing and
implementing some of the strategies and programs described in this document will take a significant
amount of staff time. Ultimately,the City will need to decide if the expense of dedicating additional
staff resources to these activities is financially feasible and justified based on an assessment of the
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.60
enhanced ability of a number of these strategies to leverage financial or partnering resources
towards achieving affordable housing goals.
RECOMMENDATION: Develop a Staffing Roadmap
Tigard should approach this strategy as a long-term plan or roadmap for staffing its affordable
housing work over the next 10 years.The City can expect that as its population and tax base grows,
its budget will increase, likely resulting in additional administrative capacity over the next decade. At
the same time,the need for staff dedicated to its housing programs is likely to increase as rising
property values intensify the urgency to provide affordable housing, and as the City adopts strategies
to address housing issues.Therefore, staffing levels for the City's housing programs should be
commensurate with the City's growth, the rising need for housing, and the additional work required
to meet the need.The long-term plan should also account for additional funding sources that could
contribute to funding additional City staff.
The staffing roadmap should account for staffing needs associated with each housing strategy
adopted as part of the Affordable Housing Plan.The draft strategy evaluation tables included in the
AHP (Appendix B) identify the expected relative level of administrative investment needed for each
strategy.The City should use this assessment to estimate staffing needs based on which strategies
are adopted and based on timing of implementation. It may make sense to start with lower-
investment strategies that require less staff time to implement—especially those with the potential
for greater impact—then to implement strategies with higher administrative needs as staffing
capacity grows.As part of the AHP implementation,the City should also connect housing strategies
with potential new funding sources, which will help the City determine the appropriate timing for
implementation of each strategy and to identify needed financial resources.
Many other cities in the Metro-area have staff dedicated to housing-related work. For example,the
City of Hillsboro has two full-time staff—a CDBG coordinator and a project manager.The CDBG
coordinator was hired when Hillsboro became a full entitlement community.The project manager
made the transition from working on housing only part-time to dedicating all his time to housing
when the Metro Housing Bond conversations picked up speed and required full-time attention. Aside
from hiring a CDBG coordinator,the City did not add personnel to increase staffing capacity for
housing; rather, the existing roles were simply reconfigured.Tigard could consider a similar
approach, at least in the near- or medium-term.The City could also start by adding 0.5 FTE, and
either assigning that staff member to housing work or redistributing responsibilities from existing
staff so that they may dedicate their full time to housing.
In order to hire an affordable housing staff member,the City will presumably need funding from one
of the funding sources recommended in this report or will need to prioritize this position over other
staff.Therefore, it must follow implementation of one or more funding strategies. Priority: Medium
NEW FUNDING SOURCES CONSIDERED IN THIS STRATEGY: Should the City pursue individual
CDBG entitlement in the long-term, a portion of funds could be used to cover administrative costs.
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Affordable Housing Plan pg.61
However,these funds would not be sufficient to support staff time dedicated to any other housing
programs, besides those funded by CDBG dollars (and may not even be sufficient to cover those
costs, as discussed under Strategy#2). A portion of CET funds could potentially be used to partially
fund staff resources for affordable housing programs.
EXISTING FUNDING SOURCES CONSIDERED IN THIS STRATEGY: The general fund would likely
be a primary source of funding for the City's housing staff.
IMPLEMENTATION STEPS:
• Immediate actions:
o To the extent that housing-related work is spread among multiple existing staff members,
consider consolidating existing functions into one full-time staff member dedicated to
housing issues and programs.
o Estimate staffing needs in the short-, medium-, and long-term, based on the
implementation framework of the Affordable Housing Plan. Determine what can be
accomplished using existing staff and resources, and what strategies would require
additional administrative capacity.
o Consider partnering or contracting with another organization (nonprofit or public entity)
to share staffing resources and expertise.This could be done through a shared funding
arrangement and could be an efficient way to meet the capacity needed for housing
coordination with a staff member in a partnering organization.
• Medium term actions:
o Once it is determined that additional City staff is needed, advocate for adding housing
staff to the City budget.This will require making the case to City Council as to why
additional staff is justified. Council needs to understand the urgency of the need,what
the City would lose if staff were not dedicated to housing issues, why housing issues
should be prioritized in relation to other staff duties, and how additional staffing could
help leverage additional non-City resources dedicated to addressing housing needs.
o Consider adding 0.5 FTE prior to a full-time hire.
o Continue assessing and estimating staff needs as new housing strategies are
implemented and as staff's understanding of needed administrative investment evolves.
• long term actions:
o Continue advocating for additional staff as the City's housing programs expand and
progress, and as the City's tax base and budget grows.
o Continue seeking additional funding sources to support additional administrative
capacity.
PARTNERS: N/A
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15. City Support for Resident Services and Supportive Housing Services
HOW THE STRATEGY WORKS: This strategy involves the City extending support to existing
providers of resident services—typically nonprofit agencies.The purpose of these services is to
increase housing stability and improve quality of life for residents of regulated affordable housing.
These services are typically provided to those earning very low incomes (30%AMI or less), for whom
housing alone may not be sufficient to support stability and economic independence.
It is important to distinguish "resident services" from "supportive housing"—two key categories of
services provided to occupants of affordable housing. While there is overlap between resident
services and supportive housing, a key difference is the populations that are targeted. Definitions
and examples of each category of services are provided below.
• Resident Services–Housing enriched with "resident services" refers to permanent
(regulated) rental housing,focusing on increased opportunity and self-sufficiency for
residents, with at least one person on-site providing the coordination of services (some
delivered by the owner directly on-site, others by referral to local partners). Optimally, this is
coordinated with property management.
Typical on-site resident services may include:
o After-school/summer programs (for safe haven and to increase educational
performance)
o Computer learning centers and lending libraries
o Financial literacy and homeownership preparation
o Neighborhood watch and other public safety
o Health classes and activities (e.g.,yoga, blood pressure,fall prevention)
Typical referral services include:
o Housing navigators/case management
o Health (including mental health and addictions)
o Job readiness and job placement
o General Educational Development certificate (GED) and other adult education
opportunities
o Emergency needs for rental, utility,food to help households in crisis
o Access to transportation or child care assistance to ensure access to jobs, services39
Community Partners for Affordable Housing (CPAH) is one nonprofit affordable housing
provider working in Tigard and other area communities that extends resident services to its
tenants. In addition to services similar to the lists above, CPAH's resident services
coordinators provide eviction prevention and assistance for food and utilities to help tenants
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.63
stay stable in their homes. CPAH also provides community gardening and other community-
building and placemaking activities.
• Supportive Housing—Supportive housing is most often a strategy for addressing
homelessness. According to the U.S. Interagency Council on Homelessness, "supportive
housing combines non-time-limited affordable housing assistance with wrap-around
supportive services for people experiencing homelessness, as well as other people with
disabilities."40 Supportive housing is widely believed to work well for those who face the most
complex challenges—very low incomes, substance abuse, mental health issues, chronic
illness, diverse disabilities, or other serious challenges to stable housing.41 Typical social
services provided with supportive housing include job training, life skills training, alcohol and
substance abuse treatment,child care, educational programs, and case management.
Resident services and supportive housing services have been identified as a critical need for the
success of the Metro regional affordable housing bond. Metro-area voters approved the $652.8
million general obligation bond in 2018, with the goal of creating affordable housing for
approximately 12,000 people in the greater Portland region. Of the 3,900 permanently affordable
homes that are to be created, 1,600 homes will be deeply affordable to households earning 30%
AMI. In early implementation meetings for the housing bond, resident services have emerged as a
large gap and critical need in making the targeted 30%AMI housing successful.
Resident services may be the more likely focus of the City of Tigard's support as part of a larger
affordable housing strategy. Resident services are less targeted to specific high-need populations,
and can enhance the effectiveness of the City's investments in affordable housing by helping to
stabilize housing for residents of affordable units. Resident services also help build community
among residents through various group events and classes, an outcome that is very much in line with
the purpose and goals of Tigard's Community Development Department.
While supportive housing services such as homeless services, and services for those facing mental
illness or substance abuse, are more typically the purview of the County or the State, the City may
have a role to play in helping fill the funding gap identified in the Metro housing bond conversations.
Tigard already provides support to nonprofit partners such as Just Compassion, which provides
services to homeless adults in the area.The City is collaborating with Just Compassion to address the
lack of homelessness resources in Tigard and has provided a small social services grant and in-kind
support.4z
POTENTIAL CITY SUPPORT:
Resident services and supportive housing services provided by nonprofits are funded through a
combination of public and philanthropic grants, charitable donations, and other fundraising. The best
way the City could support and enhance these services in Tigard is through additional funding to
these nonprofit organizations.
As an example,the City of Beaverton extended a $200,000 deferred payment Resident Services
Forgivable Loan to directly support the long-term provision of a half-time resident services
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 10,2019
Affordable Housing Plan pg.64
coordinator at CPAH's Cedar Grove affordable housing project. Cedar Grove is located in a high-
opportunity,transit-oriented area and will provide 44 units that are affordable at or below 50%AMI.
The intention is to pair the Resident Services Forgivable Loan proceeds with philanthropic grant
proceeds to create an endowment fund that—along with project income—will be used to provide
perpetual residential services to the Cedar Grove project.43,44
In addition to financial support,the City could also support local nonprofits' provision of services by
promoting the integration of affordable housing with on-site services for very low-income residents
into existing neighborhoods.These types of developments often face neighborhood opposition,
which can slow or even stall the development process.The City can support the efforts of local
nonprofit developers by advocating for the affordable developments, meeting with concerned
neighbors, and providing information that can help address their concerns.
NEW FUNDING SOURCES CONSIDERED IN THIS STRATEGY: CDBG and CET funds could be used
to support resident services and supportive housing services.Tigard is also considering adoption of a
local option levy for public safety and a bond for construction of a new police facility,which would be
sent to voters in 2020. While policing is the primary focus for this levy,funding for homeless services
could potentially also be incorporated. Supportive housing can often be more cost effective at
addressing homelessness, when compared to the cost of police services or other emergency services.
EXISTING FUNDING SOURCES CONSIDERED IN THIS STRATEGY: Potential funding from existing
sources include the general fund or tax increment financing (TIF) in urban renewal areas.
RECOMMENDATION: In the near-term, advocate for supportive housing services to be incorporated
into the 2020 public safety levy. In the medium- or long-term, dedicate City funding to supporting
non-profits in providing resident services. This strategy can be incorporated into several current or
near-term City initiatives. Priority: High
IMPLEMENTATION STEPS:
• Immediate actions:
o Work with City Council to advocate for supportive housing services as part of strategy
development for the 2020 safety levy.
o Consult with partners, stakeholders, and community members to identify gaps in funding
for resident and supportive services—both for existing affordable housing and for
planned future developments.
• Medium term actions:
o Identify a sustainable funding source for supporting resident and supportive services.
o Work with City Council to determine an appropriate annual funding allocation, based on
the identified need and on available City funds.
o Identify the mechanism for allocating City funds—e.g., grants, low-interest or forgivable
loans, etc.
o Determine the process for selecting eligible projects to support.
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Affordable Housing Plan pg.65
o Incorporate support for resident services into the City's strategic plan and budget.
o Administer the funding program.
•
Longterm actions:Track outcomes of funding and maintain partnerships with nonprofit
housing organizations.
PARTNERS: Washington County, Community Partners for Affordable Housing (CPAH),and other
nonprofit organizations that currently provide or intend to provide residential services.
3.4 Overview of Housing Strategies
Several recommendations of the AHP require preparation and adoption of development code
amendments.The strategies which would require amendments to Tigard's Community Development
Code are incentive zoning and inclusionary zoning. Adoption of incentive zoning policies are
recommended in the medium-term. For efficiency,the City should consider bundling the
development and adoption hearings processes for part or all of the code amendments to implement
incentive zoning. Inclusionary zoning is not a recommendation in the near-term,therefore no actions
for this strategy should be pursued by the City at this time. Other strategy recommendations, such as
Addressing Restrictive CC&Rs,Tenant and Homeowner Protections, and Tax Abatements may require
amendments to the City of Tigard's Municipal Code. See the proposed implementation timeline
(below) for a suggested approximate schedule to implement the recommendations.
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Affordable Housing Plan pg.66
Section 4: Summary of Recommendations
Table 6.Summary of recommendations for all strategies discussed in the AHP
Strategy Recommendation Priority Cost
Funding Sources
I. Construction Excise Tax Adopt a 1%CET on both residential and commercial/industrial High N/A
construction.
2.CDBG Entitlement Pursue joint entitlement, in partnership with Washington County. High N/A
3.TIF Set Aside Create a TIF set-aside for affordable housing development and programs in Medium N/A
both the Tigard Triangle and City Center URAs.
Tools that Remove Development Barriers
Offer deferral and financing of SDCs at a low interest rate desired housing Medium $
types. _
4. Reduced or Exempted SDCs Participate in a regional process with other Washington County service Medium $
providers to lower non-City SDCs.
- — --- ----------------------------
Update the City's SDC methodology to tie fees to dwelling size. Low $$
5. Development Fee Reductions Not recommended N/A N/A
Update the City's existing Nonprofit Low-income Housing program to
terminate the tax exemption if the eligibility criteria are no longer met and Medium $
6.Tax Abatements to apply it to land held for development of affordable housing.
Adopt a tax freeze for residential rehabilitation and apply controls for rental Medium $
rates during the period of the abatement
Pending the adoption of HB 2001,adopt policies in the Tigard Municipal
7.Addressing Restrictive CC&Rs Code that prohibit a private contract from including provisions that restrict High $
middle housing.
(table continued on next page)
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan pg.67
Programs to Develop or Preserve Affordable Housing
Not recommended in the near-or medium-term. If state provisions for administering
8. Inclusionary Zoning IZ programs were revised to remove some of the barriers to implementation Low $$
discussed above,future implementation in Tigard may be more feasible. _
Develop a low-interest loan program for rehabilitation of LCMR in exchange for Medium $$
regulating rents to preserve affordability.
Explore the option of a Housing Preservation Fund Medium $$$
9. Preservation of Low Cost Discuss with Washington County the potential for partnerships in acquiring LCMR Low $$
Market Rate(LCMR)Housing housing and converting to regulated affordable housing
---– —_ -
Promote the use of the City's Nonprofit Low-income Housing program for use in High $
acquisition and rehabilitation projects
Adopt a tax freeze for residential rehabilitation and apply controls for rental rates Medium $
during the period of the abatement.
10.Tenant and Homeowner Develop rental registration and inspection program. High $
Protections Adopt tenant application reform policies. Medium $
_ Develop code amendments to allow density bonus.Allow the number of units on a
development site to be increased by 1 unit for each affordable housing unit Medium $
provided, up to an appropriate maximum that should be determined by the City.
Develop code amendments to allow reduced parking requirements.Allow affordable
11. Incentive Zoning housing developments near high-frequency transit service to reduce requirements to Medium $
0.75 spaces per unit and a reduction of 0.25 spaces per unit for affordable
developments in all other areas.
Develop code amendments to allow relief from mixed use requirements.Allow
multifamily projects that are 100%affordable to avoid building commercial uses on High $
the ground floor.
12. Community Land Trusts Partner with an exisiting local CLT organization to expand their capacity to provide High $$$
affordable homeownership in Tigard through various programs.
13. Land Banking&Acquisition Take steps to be prepared for acquisition if properties are presented,but avoid Low $$$
developing an extensive program.
14.Staff Allocation to Housing
Program Develop along-term roadmap for developing staff capacity for housing work. Medium $$
15.City Support for Resident In the near-term,advocate for supportive housing services to be incorporated into
Services and Supportive the 2020 public safety levy. In the medium-or long-term,dedicate City funding to High $$
Housing Services supporting non-profits in providing resident services.
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Affordable Housing Plan Appendix A-1
Appendix A: Housing Strategy Summaries
This section provides summaries of housing strategies discussed in the Draft Affordable Housing Plan.
These were initially provided in the Background Report. (Note:The order of the summaries has been
rearranged since the Background Report to match the order presented in the Draft AHP).
Section 1. Funding Sources
(Note:these were addressed in Part 1 of the Draft AHP)
1. Construction Excise Tax
Description A construction excise tax(CET)is a tax on construction projects that can be used to
fund affordable housing. According to state statutes, the tax may be imposed on
improvements to real property that result in a new structure or additional square footage
in an existing structure.Cities and counties may levy a CET on residential
construction for up to 1% of the permit value; or on commercial and industrial
construction, with no cap on the rate of the CET.
The allowed uses for CET funding are defined by the state statutes.The City may retain
4%of funds to cover administrative costs.The funds remaining must be allocated as
follows, if the City uses a residential CET:
• 50% must be used for developer incentives(e.g.fee and SDC waivers,tax
abatements,etc.)
• 35%may be used flexibly for affordable housing programs,as defined by the
jurisdiction.
• 15%flows to Oregon Housing and Community Services(OHCS)for homeowner
programs.
If the City implements a CET on commercial or industrial uses,50%of the funds must be
used for allowed developer incentives and the remaining 50%are unrestricted.
Legal Basis The construction excise tax for affordable housing was enabled by Senate Bill 1533,
which the Oregon Legislature passed in 2016.The limitations and requirements
(discussed above)are outlined in ORS 320.170-195.
Usage in Tigard To date,eight jurisdictions(Portland,Corvallis,Cannon Beach, Hood River County, Hood
or Other Cities River City,and Newport) have passed local CETs under the new state statutes,and many
others are considering adopting the tool.45(Bend also had a previous program that was
grandfathered in prior to the new statutes,and therefore follows different rules.) In
addition, Metro assesses a CET on construction permits issued by local cities and
counties in the Metro region. Below are a few examples of City programs in the region:
The City of Portland's CET went into effect in 2016. It levies a 1%CET on residential,
commercial,and industrial development valued at$100,000 or more.The revenues pay
for production of housing at or below 60% MFI,developer incentives for inclusionary
zoning,along with state homeownership programs. Portland chose to dedicate 100%of
commercial and industrial revenues, including the 50%that is unrestricted,to supporting
the production and preservation of affordable housing.46 Overseen by the Portland
Housing Bureau,the CET program is expected to generate$8.1 million in revenue.47
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Affordable Housing Plan Appendix A-2
The City of Milwaukie adopted a CET on commercial, residential,and industrial
development in 2017.The City exempted deed-restricted affordable housing,ADUs,and
improvements less than $100,000 from paying the CET.The adopting ordinance
allocates funds as required by state statutes,specifying that flexible funds from the
commercial improvements will be used 50%toward housing available to those making
up to 120%of MR, and 50%for economic development programs in areas with sub-area
plans(such as Downtown and Riverfront, and the City's urban renewal areas). 48
Opportunities • An advantage of a CET is that once established, it would be straightforward to
and Constraints administer through the development permitting process.
• CET increases development costs in an environment where many developers are
already seeking relief from systems development charges,so it could impact
development feasibility and increase the costs of housing more generally. However, by
structuring the policy with offsetting incentives or tools to reduce development
barriers,the City could potentially limit the impact on feasibility for certain projects.
• The additional costs to developers are passed on to tenants in new buildings,thereby
increasing housing costs when demand for housing is high.
• Because CET revenue is development-derived, it will fluctuate with market cycles.
Options and Alternatives and questions to consider if the City of Tigard were to adopt a CET:
Alternatives • Should the CET be applied to both residential and commercial/industrial property
types?
• What tax percentage should be levied on residential construction (up to 1%)and on
commercial and industrial construction (unlimited). Most jurisdictions that have
implemented CETs in Oregon levy taxes at a rate of 1%for both development types.
• How should the 50%flexible commercial/industrial CET funds be dedicated (e.g.,for
economic development,affordable housing fund,or developer incentives)?
• What income levels should benefit from production of affordable units(e.g.,
households earning<60% MR,<120%MR,etc.)?
• Are there any conditions under which a developer would be exempted from paying
the CET?
Implementation Establishing a construction excise tax would necessitate that Tigard City Council pass a
Needs new City ordinance.The City should work closely with the development and housing
community in developing the fee structure. Implementing programs would need to be
developed,and possibly coordinated with housing partners.
2. CDBG Entitlement/ HOME Program
Description The Community Development Block Grant(CDBG) Entitlement Program is a federal
program administered by the Department of Housing and Urban Development(HUD).The
program provides annual grants to entitled cities and counties to"develop viable urban
communities by providing decent housing and a suitable living environment,and by
expanding economic opportunities, principally for low-and moderate-income persons."49
All activities funded through CDBG programs must meet one of three National Objectives:
1. Primarily benefit low and moderate income individuals,families and neighborhoods;
2. Prevent or eliminate slums and blight;
3. Meet an urgent local need.
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Affordable Housing Plan Appendix A-3
CDBG funds can be used for activities that support affordable housing, but they cannot
be used to construct new housing. Eligible activities that may support affordable housing
include acquisition of real property, rehabilitation of residential structures,and
construction of public facilities and improvements(such as water,sewer,streets,
neighborhood centers)that might support a new affordable housing development.
The HOME Investment Partnerships Program (HOME)is a related HUD program with a
specific focus on increasing the supply of housing for low-and very low-income
households.There are four eligible activities under HOME and all relate directly to
affordable housing: home purchase or rehabilitation assistance, building or rehabilitation
of housing,site acquisition or improvement,and supporting Community Housing
Development Organizations.As described below,Washington County is a CDBG
Entitlement Community(along with Beaverton and Hillsboro),and also operates the
county's HOME program,which supports affordable housing throughout the county.
Legal Basis The CDBG Entitlement Program is authorized under Title 1 of the Housing and
Community Development Act of 1974,Public Law 93-383,as amended;42 U.S.C.-5301
et seq.
In order for a local jurisdiction to be entitled to receive CDBG funds,they must have
populations of at least 50,000, based on population data provided by the U.S.Census
Bureau.According to the Census Bureau's annual population estimates,Tigard's
population in 2017 was 53,148,which would qualify the City for CDBG Entitlement.50
HUD determines the amount of each entitlement grantee's annual funding allocation by
a statutory dual formula which uses several objective measures of community needs,
including the extent of poverty, population, housing overcrowding,age of housing and
population growth lag in relationship to other metropolitan areas.51
The HOME program is authorized under the National Affordable Housing Act of 1990
(P.L. 101-625).
Similar to CDBG Entitlement,the HOME program uses a formula to determine funding
allocation,as well as eligibility for local jurisdictions.The formula allocation considers the
relative inadequacy of each jurisdiction's housing supply, its incidence of poverty,its
fiscal distress,and other factors. If eligible under the formula, local jurisdictions are
allocated at least$500,000($335,000 in years when Congress appropriates less than
$1.5 billion for HOME). Federal regulations require that every jurisdiction that receives
funds must provide 25 cents on their own for every HOME dollar used.Additional special
conditions also apply.
Usage in Tigard Currently,Tigard receives federal funding indirectly through Washington County,which
or Other Cities has been a CDBG Entitlement Community since 1979 and receives a direct allocation of
CDBG funds annually.Washington County administers funds throughout the County,
except in the Cities of Beaverton and Hillsboro,each of which runs its own CDBG
program.The Washington County CDBG Consortium consists of all remaining
municipalities in the county, including the City of Tigard,which are signatories to the
Urban County Intergovernmental Cooperation Agreement.
Beaverton became an Entitlement Community and established its own program in 1994;
since then,the City has expended approximately$11.5 million to assist low-and
moderate-income residents and revitalize areas of the city.52 Hillsboro only recently
became an Entitlement Community in 2018. Prior to that, it received an allocated set
aside from Washington County's annual CDBG funds.Although the cities run their own
programs, Beaverton and Hillsboro are still part of the Washington County Consortium,
and conduct joint planning under the Washington County Consolidated Plan.
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Affordable Housing Plan Appendix A-4
The City of Beaverton provides its CDBG services through vetted nonprofits using an
annual funding process,which is guided by the Washington County Consolidated Plan.
The Consolidated Plan provides Beaverton residents and others the opportunity to weigh
in on eligible activities recommended by staff based on needs research. Beaverton
spends its CDBG funds on homeless shelters/services,homeless prevention,youth and
family programs,other public services, lowering the cost of homeownership,critical
needs housing repair,small business development,and from time to time infrastructure
and public facility deve lopment/i m prove ment.53
The City of Hillsboro uses its CDBG funds to improve or provide facilities such as parks,
senior centers,shelter and health facilities,and group homes,which benefit eligible
neighborhoods or populations.
Other Entitlement Cities in Oregon include:Albany,Ashland, Bend,Corvallis, Eugene,
Gresham, Medford, Portland, Redmond,Salem,and Springfield.
The only cities in Oregon that are Partner Jurisdictions in the HOME program are
Corvallis, Eugene, Portland,and Salem.
Opportunities • Becoming CDBG Entitled orjoining the HOME program would likely allow the City to
and Constraints meet specific needs that are not currently being met by the county consortium.
• As noted above,CDBG funds cannot be used directly to construct affordable housing.
Unless it becomes a Participating Jurisdiction in the HOME program,the City of Tigard
would rely on the Washington County's HOME funds to fund affordable housing using
federal funds.
• There is a significant amount of planning and reporting required to meet federal grant
requirements for both CDBG Entitlement and HOME programs.Cities often have one or
more full-time staff members dedicated to coordinating with HUD and community
partners,and developing and administering specific programs or strategies. For the
CDBG program, up to 20 percent of each year's CDBG grant, plus program income,can
be used for planning and administrative cost;for the HOME program,the limit is 10
percent. However, Beaverton and Gresham indicated that they need to subsidize their
programs with general fund revenues because the costs to administer the programs
exceed the HUD revenues available to operate them.
• Funding thresholds for specific programs funded by HUD as part of the CDBG program
vary by the size of entitlement communities. In many cases,the maximum amount of
money available for projects in Tigard would be lower than for the County as a whole.
This could limit the size of HUD-funded projects that would be undertaken in Tigard to
some degree. In addition, resources for entitlement communities have decreased over
the last 20 years. In 2017,City of Beaverton staff noted that small entitlement
jurisdictions(close to 50,000 population)currently receive about$200,000 per year,
compared to over$400,000 received by Beaverton when it became an entitlement
community. Beaverton staff question whether this current level of resources,
coupled with associated administrative responsibilities and costs,would lead to a cost-
effective decision to become an entitlement jurisdiction for a city the size of Tigard.
Options and Following are the primary options available to the City of Tigard regarding HUD funding
Alternatives programs:
• Remain part of the Washington County Consortium,and work with the County to
determine which types of programs and activities will be implemented in Tigard
through a joint CDBG block grant agreement and set aside(similar to Hillsboro's
approach prior to forming its own program).
• Apply to become a separate CDBG Entitlement Community.This would give the City
more flexibility in implementing and tailoring programs more specific to local housing
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Affordable Housing Plan Appendix A-5
goals and priorities. However, it also comes with significant administrative costs,as
discussed above.The City should consider whether there are additional needs that it
can meet with CDBG funds on its own that could not be provided by working with
Washington County.The value of meeting these unmet demands will need to
outweigh the administrative and other costs associated with becoming an
entitlement community.
• Apply to become a HOME Partner Jurisdiction (in addition to,or instead of,CDBG
Entitlement).The HOME program has similar trade-offs to CDBG Entitlement, in
terms of administrative barriers,which the City should weigh carefully. However,an
advantage of the HOME program is that funds can be used directly to construct
affordable housing.
Implementation The City of Tigard would need to work with HUD to determine its eligibility and apply for
Needs the federal programs.The City would also need to work closely with Washington County
in taking on a different role within the Washington County Consortium,similar to
Beaverton and Hillsboro. Becoming a separate Entitlement Community or HOME Partner
Jurisdiction may reduce the federal funds available to the County,which would also need
to be considered. In addition,as mentioned above,the City may need to hire full-time
staff to manage the CDBG and/or HOME programs.
Other Funding Strategies
The following funding sources are either already in place in the City of Tigard,or have been used by
other jurisdictions but were not requested by the City to be included in this report. As such,these
tools are described briefly.
Tax Increment Financing Set Aside
The City of Tigard already uses urban renewal funding to construct public improvements that act as
incentives for private sector residential development and to augment the costs of selected
residential development projects.Tigard has two Urban Renewal Areas (URA):The City Center URA
and Tigard Triangle URA. As indicated in the SW Corridor Equitable Housing Strategy Report,Tigard
is considering a Tigard Triangle URA set aside for market rate and affordable housing.The City has
already begun work on the Tigard Triangle Equitable Urban Renewal Implementation project, which
will prioritize urban renewal plan projects in 2018-19.
General Obligation Bond(not included in Draft AHP)
General Obligation (GO) bonds provide a stable, dedicated revenue source through increased
property tax rates. On November 6, 2018, Metro-area voters approved a $652.8 million regional
general obligation bond, with the goal of creating affordable housing for approximately 12,000
people in the greater Portland region.Tigard will likely see affordable housing development from
the Metro bond, though funds will be channeled through the Housing Authority of Washington
County(HACW). In 2016, the City of Portland also passed its own $258 million GO bond for
affordable housing.The City of Tigard could consider a similar local bond; however, it may not
receive sufficient voter approval, given the recently-passed Metro bond, and would be a significant
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Affordable Housing Plan Appendix A-6
undertaking. A more strategic path could be to gain initial experience with implementation of the
regional bond, prior to further consideration of a local housing bond.
Local Option Levy(not included in Draft AHP)
A local option levy is a commonly-used public funding mechanism, though it is less frequently used
for affordable housing. A local option levy could be used by the City of Tigard or Washington County
to raise funds for affordable housing. Subject to voter approval,this tool would tax homes at a
specific rate and set those funds aside for affordable housing preservation, new development, or
programmatic support. Washington County has considered a five-year local option levy to expand
access to stable housing for low-income residents. However, County polling indicated that the levy
had insufficient voter support, and as of 2017 the County has chosen not to pursue it further.sass
Vancouver, Washington presents an example of a local option levy for affordable housing;voters
passed the $42 million levy in 2016.This tool was not included in the preliminary list of strategies
provided by the City. While it could be assessed further, preliminary City staff recommendations are
that it not be assessed further.
Existing General Fund Revenue(not included in Draft AHP)
The City could potentially commit additional revenue from its general fund toward creating
affordable housing.These funds would be fairly flexible in how they could be spent. However,
taking more from the general fund means taking it away from other City services or investments.
Section 2. Tools that Remove Development Barriers
(Note:these were addressed in Part 1 of the Draft AHP)
4. System Development Reductions,
Deferrals
Description System Development Charge(SDC)exemption is a tool used to reduce,waive,defer,
finance,or subsidize SDCs for affordable housing developments,with the goal of
reducing the cost of development.
One relatively popular program in Oregon is SDC reductions,waivers,or deferral for
accessory dwelling units(ADUs). Many SDC methodologies are intended to be
commensurable with the cost or impact to the system.Some missing middle housing
types,such as ADUs(often associated with affordable units),do not fit within the levels
within SDC methodologies because the impact of these types of housing on the need for
water,sewer or transportation facilities is not equivalent to that of other housing units,
given the reduced average size and occupancy of smaller units.Therefore, any reduction
that can be justified based on reduced demand or impact(e.g.smaller units, multifamily
vs.single family, housing types that tend to generate less traffic,etc.)is justifiable for
reducing or potentially waiving SDCs for these housing types.This type of reduction is
generally identified in the SDC methodology and rate setting.
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Affordable Housing Plan Appendix A-7
Legal Basis Policy-based reductions,waivers,or exemptions that do not have a basis in reduced
impacts or costs are not explicitly addressed in Oregon's SDC laws,and local
jurisdictions have taken a range of approaches to navigating this ambiguity. Recent state
legislation enabling inclusionary zoning(Senate Bill 1533) identifies SDC and permit fee
reductions or waivers as incentives that may be offered to development impacted by an
inclusionary zoning requirement.While SB 1533 does not include further discussion on
SDC or permit fee waivers or reductions for affordable housing generally, it has been
interpreted by some as authorizing SDC reductions or exemptions for affordable
multifamily development.As described below,several cities in Oregon choose to exempt
certain classes of development(including regulated affordable housing)from SDC
requirements.
Opportunities • There may be legal limitations of the City's ability to waive or reduce SDCs and there
and Constraints are specific requirements for how to implement an SDC fee reduction.
• SDC methodology statues are complicated and must be carefully considered with
the creation of such program.
• The City's SDC fees are only a portion of the total SDC fees development pays when
developing in the city.Therefore,there is a limit to how much of an exemption,
waiver or reduction can be allowed by the City, unless the partner with other
organizations.
Usage in Tigard Sources of Tigard's SDC fees include Washington County,Tigard Transportation,Tigard
or Other Cities Parks,Clean Water Services,Tigard Water Service Area,School Districts,and Metro.56
Tigard adopted SDC exemptions in March 2018,which exempt regulated affordable
housing from the City's Transportation and Park SDCs.To qualify for the program,the
regulated affordable housing must: have a public compliance agreement or contract, be
for households at or below 80 percent AMI,and keep units affordable for a minimum of
20 years.
Several Oregon cities have implemented various types of SDC exemptions or fee
reductions for affordable housing,a few examples include Portland, Eugene,
McMinnville,Sisters, Bend(ADU's only)and Ashland.Some cities backfill lost SDCs from
other budget items or revenue sources while others do not. Detailed descriptions of
some of the listed examples are below.
The City of Eugene program provides SDC exemptions for affordable housing. Housing for
low-income persons in Eugene is exempt from paying SDCs otherwise required by City
code.The exemption is used in combination with other resources for larger multifamily
rental developments,but can also be used for small rental developments,and low-
income single-family homeownership development.The exemption is available to rental
housing developments for households with incomes of 60 percent of AMi,and for
homeownership developments for households with incomes of 80 percent of AMI.The
affordability requirement must be met for a period of five years.The City manager(or
designee)can exempt a base amount of the SDC exemption that is adjusted on an
annual basis.Any unallocated amount below that limit can be carried forward to the next
fiscal year. Fee waivers are covered by$150,000 annual transfer from General Fund.
The City also notes that the SDC exemption can also be counted toward the required
local match for state and federal funds provided to a development.In 2016,the City of
Eugene exempted$1.4 million,which was awarded through an RFP process.The
program has primarily been used by large residential developers and Habitat for
Humanity. If the property ceases to be used for low-income housing within 5 years of
being granted the exemption,the amount of the exemption must be repaid with interest.
57
The City of Portland provides SDC exemptions for affordable housing.Portland's
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SDC Exemption Program exempts developers of qualifying affordable housing projects
from paying SDCs levied by the City of Portland for transportation,water, parks and
environmental services. Eligible rental projects must serve households earning at or
below 60%of the AMI for a 60-year period. Exemptions can be prorated for mixed use or
mixed-income developments. Eligible homeownership projects must serve households at
or below 100%of the AMI for a family of four and must sell for less than a price cap
provided by City Code(2017 price cap is$350,000);sales must be"arm's length"
transactions;and units must not be rented. Exemptions are awarded on an application
basis;applications are submitted with building permits.The Portland Housing Bureau
administers and monitors the program, including compliance with regulatory
agreements.58The SDC exemptions were first adopted in 1997-1999. Roughly 400-500
units per year were granted Transportation SDC exemptions in the first five years of the
program,with an average value of over$290,000 per year. Exemptions for water and
parks averaged over$210,000 and nearly$280,000, respectively, per fiscal year in the
first few years of those programs.59
In June 2018,City of Portland also extended its SDC exemption program for ADUs. In
exchange,owners must sign a covenant stating that neither the ADU nor the primary
house will be rented as accessory short-term rentals for 10 years.
Options and The City could consider applying SDC waivers,exemption,or reductions to ADUs and
Alternatives other forms of missing middle housing, in order to increase the supply of lower-cost
housing in the city.
There is typically a limit to reductions,exemptions,or waivers of SDC fees because there
are several sources of SDC fees, including city,county,and special districts.Cities only
have control of a portion of the SDCs,which can limit the efficacy of the incentive.The
City could consider partnering with other organizations that charge SDCs in the city,
which could make the incentives more effective. However, negotiating an agreement with
these partner organizations may prove challenging.SDC reduction and deferral are
broadly used in Oregon and may be more politically acceptable than SDC waivers since
the revenue is deferred, not forgone.
Implementation There are many statutory requirements of SDCs; it is important that any provision of SDC
Needs reductions or waivers follow statutory requirements for the process of changing SDC
methodology and for the provisions of the reductions or waivers.
5. Development Reductions
Description Development fee reduction is a tool to reduce,waive,or defer development fees,such as
permit fees, in order to promote the development of affordable housing. Permit fees add
cost to a development,so reducing these costs also reduces development barriers.
Legal Basis Local development fees(besides system development charges,discussed below)are not
regulated by state law.
Usage in Tigard The City of Tigard currently does not have any development/permit fee reduction
or Other Cities programs in place for affordable housing. Examples from neighboring cities include the
following:
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City of Portland:Portland offers permit fee waivers to nonprofits for projects which
provide/develop housing for low-income groups(including emergency shelters).The
Bureau of Development Services(BDS)waives 100%of bureau permit fees for projects
costing up to$500 and 50%of fees for projects costing over$500,subject to
application approval.There is a maximum amount of$5,000 waived for each nonprofit
each fiscal year.60
City of Wilsonville:The City allows waivers of building,planning,and engineering permit
fees for affordable housing projects.The granting of the waiver and amount is
determined by the City Manager or manager's designee.Some eligibility requirements
require the development be a project of a nonprofit or government organization,it must
serve households at or below 60 percent AMI and must maintain that status for a
minimum of 40 years.61
Opportunities Once program guidelines are in place,a development fee reduction program would be
and Constraints relatively easy to administer.At the same time,there is a cost to the City to reduce or
waive development fees,as these fees are intended to recover costs for staff review.
However, permit fees add relatively little to development costs on a per-unit basis;
therefore, reducing fees may not provide a sufficient incentive to developers.
Options and Development fee reductions can be implemented with varying standards,and the City
Alternatives could either waive, reduce,or defer development fees. Fees can be reduced from various
departments(e.g.,building permits and land use permits).The amount of fee reduction
would depend on a careful calculation of impact to developers versus impact to City
revenues.The City will need to determine how much revenue from fees it would be
willing to forgo.
Implementation The implementation of a development fee reduction program would require the City to
Needs development program policies,promote,and administer the program.
6. Tax Abatements
Description Tax abatements are reductions in property taxes for affordable housing.Abatements may
be provided to nonprofit corporations or to private developers in exchange for developing
affordable housing. Property tax exemptions/freezes can also be applied to housing in
distressed areas,or for rehabilitated housing.Common tax abatement programs include
vertical housing programs that provide property tax exemptions for development that
reaches a certain height,and multifamily housing tax exemptions.
Legal Basis The state currently enables tax exemptions through three programs:(1)Vertical Housing
(ORS 307.841 to 307.867),(2) Multiple Unit Housing(ORS 307.600 to 307.637),and
(3) Nonprofit Low-income Housing(ORS 307.540 to 307.548). In 2017,two bills passed
the Oregon legislature that have implications for cities considering new abatements:
• HB 2377 Property Tax Exemption for Rehabilitated or Constructed Multi-Unit Rental
-This bill updates the previous property tax exemption law and allows optional
property tax abatement programs for up to 10 years that cities can use to incentivize
workforce or low-income units(up to 120%AMI)in multifamily developments and
rehabilitation projects.62
• SB 310 Vertical Housing Development Zones - With this legislation,the state
shifted oversight of the Vertical Housing program from state control to local
government.The requirements are now in state statutes and remain a partial
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property tax exemption for residential floors above the base floor,depending on the
number of floors.Through a competitive process,multi-unit projects can receive a
property tax exemption for up to ten years on structural improvements to the
property in exchange for setting aside a percentage of the units in the project as
affordable.
Usage in Tigard Tigard.The City of Tigard has already implemented several programs that address the
or Other Cities affordability and availability of housing through tax abatements.They include the
following:
Nonprofft Corporation Low Income Housing Tax Exemption.This program is a partnership
with Tigard/Tualatin School District and Tualatin Valley Fire&Rescue to provide tax
exemptions for low-income housing owned by nonprofit organizations.The Nonprofit
Corporation Low Income Housing Tax Exemption program was first adopted in 1996;as
of 2017,a total of five projects using the exemption have been completed by Community
Partners for Affordable Housing.The 2013 Housing Strategies Report suggested the
program could be expanded to offer the program to private sector developers if they
meet all the same requirements the nonprofits are required to meet.
Vertical Housing Development Zone(VHDZ).The City of Tigard's VHDZ provides partial
property tax exemptions of 20 percent per floor in the two eligible areas established by
the City that are well positioned for mixed-use multistory development.Since Senate Bill
310 has shifted administration of the program from the state to cities and counties
Tigard's Economic Development Director now administers the program.63
Additional examples from other cities include:
City of Beaverton Affordable Housing Tax Exemption Program.The program promotes the
construction of affordable rental housing to low-income households to receive an
exemption of up to 100 percent of property taxes for an unlimited timeline.The focus of
the program is households that earn less than 60 percent of the area median income.64
City of Seattle Multifamily Tax Exemption.The program provides a tax exemption on new
multifamily buildings that set aside at least 20 percent of the units as income-and rent-
restricted (0 - 80%AMI) in targeted areas.Currently,the program maximum is 12 years.
In 2017,31 projects were approved for the exemption.65 According to Metro,the
program,which is simple, predictable,and streamlined,can serve as a model for other
jurisdictions.66
Opportunities There is a cost to the City and other taxing jurisdictions to reduce property tax income.
and Constraints The City and partner jurisdictions must be willing to forego those revenues.The City
should consider the extent to which a new program,or enhancement of an existing
program,can be supported based on the City's funding needs.
Options and There are various types of tax abatement programs/policies for affordable housing as
Alternatives discussed above,each of which can have varying provisions,eligibility requirements,and
durations.As discussed above, programs can be offered only to nonprofit organizations
or also to private developers.
One option would be for the City of Tigard to expand its current low income housing tax
exemption program to make it available to for-profit developers as well as nonprofits.The
exemption could also be offered for properties that are held for the purpose of
developing low-income housing(i.e., land banked), in addition to occupied properties.
Tigard could also consider taking advantage of multi-unit tax exemptions in downtown
and transit areas,exemptions for distressed units,or property tax freezes for distressed
areas,each of which is enabled by state statutes.
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Implementation The City should assess their current programs to see if they can be more effective and/or
Needs expanded. New programs require the City to development of program policies,
promotion,and administration of the program.
7. Addressing Restrictive CC&Rs
Another type of potential barrier to development of affordable and alternative forms of housing
identified by City and DLCD staff is the presence of Covenants, Conditions, and Restrictions (CC&Rs)
imposed by Homeowners Associations. Such CC&Rs can restrict the size,design and appearance of
homes within a given neighborhood and place limitations on the ability to develop accessory dwelling
units or other forms of housing discussed in this document. Specific strategies to address the impacts
of CC&Rs will be discussed in the Draft Affordable Housing Plan document.
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Section 3. Tools to Develop or Preserve Affordable Housing
(Note:Strategies 8-10 were addressed in Part 2(A)of the Draft AHP)
8. Inclusionary Zoning(12)
Description Inclusionary zoning(IZ)(sometimes known as inclusionary housing)is a tool used to
produce affordable housing for low-to moderate-income households within new market-
rate residential developments.Typically, IZ is implemented through an ordinance with
mandatory requirements that a minimum percentage of a new development's total units
be designated as affordable,and that these units remain affordable for a set period of
time, usually between 10 and 20 years.Often,this ordinance applies only to
developments with a minimum number of units.Another option is to establish a
voluntary inclusionary zoning program with density and/or height bonuses,or reduced
parking requirements,as an incentive to reduce the land costs associated with providing
affordable units.This strategy is often referred to as"incentive zoning"and is discussed
below as housing strategy#4.
Legal Basis Inclusionary zoning was prohibited in Oregon between 1999 and 2016, until legislation
was passed in 2016 by Senate Bill 1533,which allowed jurisdictions to adopt
inclusionary zoning. However,this legislation came with a number of limitations that are
being regarded by affordable housing providers and advocates as making the strategy
challenging to implement in most small-and medium-sized jurisdictions in the state. Per
state statute,the requirements may only be applied to multifamily housing developments
of 20 units or more.67 In addition,jurisdictions must provide "finance-based incentives"
(e.g., property tax exemptions,fee waivers,development bonuses)to offset the cost of
providing affordable units, but in an undetermined amount.Cities must also provide
developers with the option to pay a "fee in lieu"instead of providing affordable units.
Further,cities may also establish a local excise tax to help fund the inclusionary zoning
program but are not required to do so.
These provisions required by the legislature are expected to limit the applicability and
extent of the application of inclusionary zoning programs and result in administrative and
financial hurdles to implementation, particularly for smaller communities. Relatively few
communities are expected to have the financial and administrative resources to
establish inclusionary zoning programs.
Usage in Tigard Tigard currently does not have an inclusionary zoning program.Since Senate Bill 1533
or Other Cities was passed in 2016, Portland is the only city in Oregon to pass inclusionary zoning
regulations. Examples can be found in neighboring states:several major cities in
California (Los Angeles and San Jose)and Seattle recently passed IZ regulations in
2017.
Portland Inclusionary Housing Program.The City of Portland requires new multi-dwelling
development with more than 20 dwelling units to be affordable at 80%median family
income(MFI),or pay a fee in lieu. Density bonuses(FAR/height bonuses)and alternative
fee-in-lieu are the bonus provisions provided to offset the cost of required affordable
housing units.68 The policy is expected to produce an average of 382 new affordable
units per year over 20 years, assuming the city lives up to the housing forecast
outlined in its comprehensive plan. IZ policies took effect in parts of the city in 2017,
and the final code amendments were implemented in 2018.69 An early analysis of the
program by the Portland Housing Bureau found that as of September 2018,the
program has resulted in 291 rent-restricted units (not yet constructed) in 33 private,
for-profit developments.70
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Opportunities • Mandatory inclusionary zoning can affect development feasibility and land values.
and Constraints Incentives and requirements must be carefully balanced so as not to inhibit housing
production.
• Inclusionary zoning requires close administrative oversight to ensure the mandatory
units are properly built and maintained. Further,administration of fee-in-lieu funds to
additional affordable housing units is required.
• Inclusionary zoning programs typically create a fraction of the needed affordable
housing units and their efficacy at producing affordable housing units fluctuates over
extended periods of time.
Options and Inclusionary programs can be mandatory or voluntary. Mandatory IZ is expected to
Alternatives produce more units,while the voluntary approach (sometimes known as "incentive
zoning,"which is discussed below) may avoid some of the pitfalls of a mandated
approach.The requirements of IZ should be balanced with flexibility and responsiveness
to local market dynamics.
Implementation Implementation of IZ requires time to develop the program and policies.Additionally, it is
Needs suggested that IZ be implemented through a phased approach to reduce associated
impacts on property values.
The following actions are recommended to assess the feasibility of an inclusionary
zoning program:
• Identify the approximate benefits of establishing a set of IZ provisions based on the
expected number of developments that would be subject to the standards and the
approximate number of resulting new units.
• Estimate the cost of establishing and administering the non-code based elements of
an IZ program, including a fee-in-lieu program and other finance-based incentives.
• Determine if the expected benefits outweigh the costs of establishing IZ program.
• If the costs outweigh the benefits and the City decides to move forward with the
program,establish needed code requirements and other administrative and
financial procedures and protocols needed for implementation.
9. Preservation 1 Low Cost Market Rate Housing '
Description Low cost market rate(LCMR) housing refers to housing with rents that fall below the
average rents for an area, but which are not income-restricted or regulated by or through
an agreement with a government agency. It can also be referred to as"naturally
occurring affordable housing'or"filtered housing."There are a number of reasons LCMR
housing is affordable: properties may be poorly maintained; located in areas with poor
economic growth,aging infrastructure,or a lack of investment;or simply located in less
affluent neighborhoods.
Many LCMR housing units are at risk of losing their affordability as property values
increase.There are several tools that are aimed at preserving LCMR housing.These
include providing funds or incentives to LCMR owners to make renovations and maintain
the units at an affordable price point; providing property tax exemptions in exchange for
converting LCMR housing to regulated affordable housing;and acquiring LCMR buildings
and converting them to regulated housing. Funding sources for such programs can
include subsidy programs, creating community investment corporations(CIC),housing
preservation funds,grant programs,or providing tax incentives for preservation.
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Affordable Housing Plan Appendix A-14
Incentive-based programs can include grants or loans for capital repairs or for
recapitalization to avoid LCMR property owners from selling or losing their LCMR status.
For unregulated LCMR units,the grants or loans would be made in exchange for
agreements to rent below market rate for a specific period of time.Specific mechanism
include low-interest loans,deferred payment or interest only loans,or grants to help
bridge funds for rehab projects.
Legal Basis N/A
Usage in Tigard While there are no current efforts in Tigard directly related to the preservation of LCMR
or Other Cities housing, preservation of existing affordable rental housing is one of the strategies
identified in the SW Corridor Equitable Housing Strategy. Recommendations from that
report are discussed below.
Network for Oregon Affordable Housing(NOAH)operates the Oregon Housing
Preservation Project(OHPP),which includes the Oregon Housing Acquisition Fund(OHAF)
and preservation loans for affordable housing.The OHAF provides short term financing
for entities looking to preserve affordable housing by offering acquisition loans with
favorable terms to help borrowers acquire unregulated market rate properties and
transition them to regulated affordable housing.OHPP's preservation loans help
qualified borrowers purchase and rehabilitate housing, renew subsidy contracts,obtain
bridge financing,or otherwise preserve multifamily affordable housing properties.
Whether borrowers are for-profit or nonprofit, buying unregulated or regulated properties,
this funding provides time and resources to align public subsidies and obtain long-term
or construction financing,to then operate properties with longterm rent restrictions.The
OHPP prioritizes preserving properties that are at risk of losing federal subsidies.
NOAH's loan programs are supported by public partners,such as the City of Portland,
Oregon Housing and Community Services, Fannie Mae,and CDFI funds, private
foundations,and private banks. Its preservation pool totals$35 million,and has been
used to support more than 725 units at 22 properties.
There are other examples of programs and policies to preserve LCMR housing around
the country.One example program being implemented in Minnesota is described below.
Greater Minnesota Housing Fund-NOAH Impact Fund is a social impact fund in the
Minneapolis-St. Paul region that connects developers and owner-operators with social
impact investors to preserve low cost market rate housing.The fund offers a double-
bottom line impact to investors in the form of social impact and return on equity,with the
goal of investor repayment in ten years.Since the fund's inception in 2015,it has
leveraged$25 million in capital investments to invest$100 million in property
acquisitions to preserve 1,000 at-risk unregulated affordable housing units in the Twin
Cities area.The fund acquires and rehabilitates these unregulated affordable housing
properties(Class B and C properties,from 40 to 200 units),and partners with local
affordable housing organizations to operate them with 15-year affordability
restrictions.71 The capital stack includes money from the public sector, institutional
funds from banks(with CRA requirements),nonprofit and for-profit investment
companies,and mission-based lenders.72
Opportunities • With established funds such as NOAH's OHAF or the Greater Minnesota Housing
and Constraints Fund,owner-operators and developers can use them to move quickly in the market,
with lower risks due to the effect of the more patient capital from social impact
investors.
• LCMR buildings may need to be brought up to health and safety standards required
in the building codes.
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• NOAH relies on support from philanthropic foundations for its capital stack,and is
therefore vulnerable when the philanthropic support is removed.73
Options and Potential roles for the City of Tigard include seeding and supporting a fund with a partner
Alternatives organization,acting as a guarantor on loans to reduce borrowing costs,or actively
managing and administering a fund.The SW Corridor Equitable Housing Strategy
recommends capitalizing NOAH's OHAF;working with funding partners to incorporate the
policy goals for acquisition into their funding criteria and explore joint NOFAs and
underwriting processes;continuing to fund community-based organizations to engage
tenants and participate in the selection of buildings for acquisition;and contracting with
brokers to solicit acquisition opportunities.
Implementation Programmatic strategies to preserve LCMR housing would require the City to be program-
Needs lead or create partnership with a local organization. Both require funding,development
of policies and program structure,and administration of the programs. Future monitoring
of compliance is also a consideration for implementation.
10. Tenant Protections
Description Tenant protections include local regulations and enforcement programs that provide
protections for tenants of existing affordable housing and low cost market rate housing
against evictions,excessive rent increases,discrimination, and health and safety
violations.Tenant protections can also provide various types of assistance to renters.
The purpose of these protections is help tenants of affordable units to access and retain
their housing,particularly for very low-income and other vulnerable community members.
Legal Basis There are extensive statewide landlord-tenant laws on the books in Oregon.These
include the Oregon State Residential Landlord and Tenant Act(ORS§ 90.100-90.875)
and Fair Housing Laws including, but not limited to,the Fair Housing Act(42 U.S.C.
3601)and Oregon's Unlawful Discrimination in Real Property. Rent control is prohibited
by Oregon State Law,but cities are permitted to provide provisions that go beyond
current state law for policies such as landlord registration, rental inspections, and notice
period for no-cause evictions. In addition,cities can also limit the circumstances under
which owners are allowed to convert rental units to condominiums,either by requiring
that tenants be offered the first right of refusal to purchase their units,by charging the
owner a fee for converting the building,or by requiring or incentivizing owners to set
aside a certain percentage of units in converted buildings as affordable units.Tenant
protection laws are not enforced,with the exception of civil rights violations, unless cities
choose to enforce,which requires local regulations to enforce74.
The City of Portland's Renter Relocation Assistance Program(discussed below)was
challenged in court on the basis that the program is a violation of Contract Clause,Article
I,Section 21,of the Oregon Constitution.75 The court ruled in favor of the City of
Portland.
Usage in Tigard Currently,Tigard does not have any landlord-tenant programs or provisions that go
or Other Cities beyond state regulations.As the deficit of affordable housing grows and housing prices
increase,Oregon cities have started to implement their own policies to protect residents.
Tenant protection policies proposed in the SW Corridor Equitable Housing Strategy
Report include screening criteria reform,security deposit reform,and application fee
protections. Milwaukie, Portland,Vancouver(WA),and Bend all have 90-day notice
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Affordable Housing Plan Appendix A-16
requirement for no-cause evictions.Other cities are implementing other tenant
protection policies as well;a few case studies are detailed below.
Gresham Rental Housing Inspections.The City of Gresham conducts random, mandatory
inspections of residential rental properties throughout the year to ensure properties
meet minimum fire, health,and life safety standards.The program also includes
inspections based on complaints and provides protection for those reporting violations.
In 2010 the program completed at least 1,800 inspections which resulted in one or
more violation.76
Portland Residential No-Cause Eviction Notices.The City of Portland requires 90-day
notice of no-cause eviction,which is higher than the typical 30-or 60-day notice.
Portland Mandatory Renter Relocation Assistance.A City of Portland Ordinance passed in
2017 requires landlords to pay relocation assistance when their tenants:are served a
no-cause eviction or a rent increase of 10 percent or higher over a 12-month period;
receive a substantial change in their lease terms;or do not receive the option to renew
their lease.The mandate applies to rental units in the City that are managed by a
landlord or property management company,and some exception criteria apply.The
relocation assistance amount ranges from $2,900 for a studio to$4,500 for 3+
bedrooms.
Salem Multifamily Housing License.All multifamily dwelling units with one or more beds
or rooms for rent are required to sign up for an annual license.All licensed multifamily
units are required to be inspected at least once every five years to ensure compliance
with the Salem Housing Code.
Opportunities Landlords are typically not in favor of tenant protection policies, and there may be
and Constraints pushback from the property management and development community. Protection
programs are likely to be associated with increased administrative needs and costs for
program enforcement.
Options and There are various types of tenant protection regulations and programs that cities can
Alternatives regulate. Examples include the following:
• Reform notice period for no-cause evictions - Increase no-cause eviction
notices to require 90-days notice.
• Landlord/Rental registration program - Require landlord registration to help
track and coordinate anti-displacement services.
• Mandatory residential rentals inspection program - Require residential rental
unit inspections to ensure they meet fire,health,and safety standards.Can
require more frequent inspections for multifamily or affordable housing units.
• Application fee protections-Enforce the requirement that landlords return
application fees when applications are not processed.
• Screening criteria reform - Eliminate the practice of landlords requiring 3 to 1
income to rent ratios.
• Security deposit reform - Cap security deposits and protect them from being
taken unfairly.
Implementation Tenant protection policies would necessitate adoption of a new City ordinance.The City
Needs would lead these programs,which require the resources to create the policies,
administer programs,and enforce the policies.Some policies could be implemented as
partnerships with housing organizations or regional jurisdictions.
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11. Incentive Zoning
Description Incentive zoning is a tool that creates incentives to developers to provide a community
benefit(such as affordable housing), in exchange for ability to build a project that would
not otherwise be allowed by the development code.The purpose of incentive zoning is to
encourage development of affordable housing and to increase its financial feasibility.A
few of the most common types of incentive zoning are detailed below.
Density and/or Height Bonuses
Density and height bonuses are the most common types of incentive zoning,and allow
increased density or height for affordable housing,or for housing types that tend to be
lower cost(e.g.cottage homes,duplexes/triplexes,etc.).This is done by increasing the
allowable height or floor area of a project above what is otherwise permitted in the
zoning district,or by increasing the allowable number of dwelling units in a residential
development.Additionally,setback and bulk standards may be allowed to vary to a
accommodate the added density or to reduce development costs. Encouraging the
development of affordable housing by offering density and/or height bonuses can work
in areas where demand is constrained by zoning requirements. It can also potentially act
as an incentive to build specific types of housing that are needed or desired in specific
areas.To ensure rental units remain affordable, private deed restrictions could be used
to preserve affordable status of rental units for a set period of time(e.g.30 years or
longer)and require renters to meet income-qualifications.
Reduction of Parking Requirements
Parking is often a limiting factor in multifamily development, because it can add to
construction costs and limit the amount of housing units that can be constructed on a
site. Parking reduction incentives can be applied separately or in conjunction with
density or height bonuses. Parking reductions targeted at affordable housing projects are
typically applied within a certain distance of transit services,so that alternate
transportation options are accessible for tenants that do not own vehicles.
Though density and height bonuses and reduced parking requirements are the most
common,other regulatory incentives for affordable housing are possible,such as relief
from design or development standards or relief from mixed-use requirements.An
example of the former is provided below.
Other incentive zoning strategies include expedited permit approval and fee reductions,
the latter of which is discussed elsewhere in this report.
Legal Basis Incentive zoning ordinances for affordable housing have existed in the United States
since the 1960s. In Oregon,density bonuses are listed in the Oregon Revised Statutes
as one of the actions and measures that could be adopted by local jurisdictions to
increase the likelihood of higher density residential development and to provide needed
housing,as required by state law.Adoption of an average residential density standard is
also included among the suggested actions or measures."
Usage in Tigard Density/height bonuses is a strategy suggested in the 2013 City of Tigard Housing
or Other Cities Strategies Report.According to the report, residential developers in Tigard appear to find
the standard height and density requirements adequate to build their projects.Currently,
there seems to be little or no demand for height and/or density bonuses,and in some
zones achieving the minimum densities may actually be more of a concern to developers
than exceeding the maximums. Project advisory committee members for the 2013
project noted that while the current market conditions do not suggest a significant
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Affordable Housing Plan Appendix A-18
demand for density or height bonuses,there may be some types of projects that would
benefit,and changing demographics could lead to further interest in these incentives in
the future.
With the City's recently-adopted package of"missing middle"code amendments,Tigard
also included parking reductions(of 50%if units are within one-half mile of transit)and
on-street parking credits in the R-3.5 to R-12 zones.Though these are not incentives for
regulated affordable housing,they do provide incentives for smaller,more affordable
housing types.
Numerous cities in Oregon have adopted density and/or height bonuses and parking
reductions for multifamily and/or affordable housing. In the Portland region, Forest
Grove, Portland,and Newberg are a few examples of cities that provide density bonuses
for affordable housing.Additionally,the City of Wilsonville provides parking reductions for
affordable housing. Washington County also recently adopted similar code amendments.
Recent code amendments in North Bethany,Washington County and Hillsboro provide
good examples of density bonus code language. Examples of programs from Oregon and
Washington cities are detailed below.
City of Ashland Affordable Housing Density Bonus.Affordable housing projects meeting
eligibility requirements(including rental housing affordable to households at or below
60%of AMI or ownership housing affordable to households at or below 80%of AMI for a
minimum of 30 years)receive a density bonus of two units for each affordable housing
unit provided, up to a maximum of a 35%increase in density.'$
Kirkland,WA Duplex,Triplex,and Cottage Home Density Bonuses. Cottage homes
(limited to 1,500 square feet of floor area)and two-and three-unit homes(up to 1,000
square feet of floor area average per unit)are allowed at double the density of detached
dwelling units in the underlying zone.79
City of Bend Parking Reductions for Affordable Housing and Transit Proximity. Required
parking for affordable housing units is 1 space per unit regardless of size.This is
compared to 1 space per studio or 1-bedroom unit, 1.5 spaces per 2-bedroom unit,and
2 spaces per 3-or more bedroom unit for market-rate multifamily development;or 2
spaces per market rate detached dwelling unit.Affordable housing units must meet the
same eligibility criteria as for other City of Bend affordable housing incentives(rental
units affordable to households at or below 60%of AMI,ownership units affordable to
households at or below 80%of AMI,etc.). Bend also offers a 10%reduction in required
parking for developments(except single family homes)within 660 feet of a transit route,
which can be applied in addition to the affordable housing reduction.80
Pierce County,WA Alternative Development Standards. Pierce County offers a range of
regulatory incentives for affordable housing developments. In addition to increased
density and reduced parking,the County also offers relief from several development
standards,including reduced active recreation requirements,reduced minimum lot area
and width, reduced design requirements for infill construction,and relief from building
orientation standards. Most of these alternate development standards require that at
least 20%of the units provided are affordable at 80%of AMI.81
Opportunities Incentive zoning ordinances must have strong enough incentives to promote the building
and Constraints of affordable units.To avoid unintended consequences and to ensure utilization,
incentive zoning tools should be supported by an analysis of market sensitivity and
updated regularly to reflect changing market dynamics; rolling applications can make the
program more attractive to private developers.
Density/Height Bonuses -Allowing a density bonus is likely to be valuable to developers
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Affordable Housing Plan Appendix A-19
who are seeking to build affordable or mixed-income housing in zones where
development at a higher density is feasible given other regulations and cost factors.
However, if the density bonus does not allow for development of more market-rate units
than would otherwise be possible on the site, it would not provide a true incentive to
market-rate housing developers.
Parking Reductions - To offset the loss of parking through the parking reduction
incentives,the incentives are often only offered within an accessible distance from
transit services,therefore limiting the applicability of the incentive program.Additionally,
some cities allow parking reductions for various types of development in transit
accessible areas, not just for affordable housing,which can decrease the effectiveness
of incentivizing affordable housing.
Options and There are many variations of the provisions and eligibility requirements of parking
Alternatives reductions and density and/or height bonuses in various cities.Options include the
amount of additional height, FAR,or residential density available;the amount of parking
reduction offered;and the targeted income levels for affordable units.
Implementation Incentive zoning would be a City-led program which would require amendments to the
Needs Tigard Community Development Code(CDC).The City would have to draft provisions,
eligibility requirements,etc.The City may greatly benefit by implementing parking
reductions(with provision to allow a set distance from transit)in preparation for the
construction of the Southwest Corridor Light Rail Line.
12. Public-Private Partnerships (PPPs) (not included in draft AHP)
Description Public-private partnerships are arrangements between public and private entities to
create more and/or affordable housing. Public-private partnerships can promote a
variety of affordable housing programs or projects and include partnerships from
multiple entities(public,private,and nonprofit).
Legal Basis Senate Bill 1582,passed in 2016,created the Local Innovation and Fast Track(LIFT)
Housing Program (ORS 458.485),which is discussed below.The bill set the parameters
for the LIFT program and provides funds to administer it that will allow the program to
begin creating more affordable housing as quickly as possible.
Usage in Tigard The City has participated in several residential PPPs in the past.A few examples are
or Other Cities discussed here.
The Fields Apartments.A recent example of an innovative PPP in Tigard is The Fields
mixed-use development,which is planned to include 260 housing units affordable to
residents earning 60%AMI or below, including 26 units serving extremely low-income
families at or below 30%AMI.The site will also include office development.To help
facilitate the project,the City of Tigard worked with the property owner to pursue a grant
from the Economic Development Administration that paid for infrastructure
improvements to unlock the economic development potential of the site.The City also
worked with the property owner to rezone the site,which allowed the apartments to be
developed.As mentioned below,the Fields project received a LIFT award to assist with
project financing,and the Washington County Housing Authority also contributed
financing.82
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Affordable Housing Plan Appendix A-20
Red Rock Commons Project.The development located in the Tigard Triangle generated
48 units for under 50%AMI.S3 The project received funding from numerous sources
including, but not limited to, Metro's Transit Oriented Development,Washington County's
Housing Opportunity Fund,OHCS LIFT loan ($2.1 million),and Tigard Triangle Urban
Renewal Funds($200,000).84
An example of a PPP strategy discussed in the SW Corridor Equitable Housing Strategy is
employer-assisted housing.As detailed in that report,anchor institutions or large
employers could directly participate in the development of affordable and/or market rate
housing for rent or homeownership to eligible employees by providing property and/or
low-cost financing.Another option is for employers to pay into a fund dedicated to
alleviating the housing burden for Southwest Corridor employees.
Local Innovation and Fast Track Housing Program(LIFT). LIFT is a state-administered
program that was approved through legislation in 2016 and provides funding for new
affordable housing across the state, including for projects by private developers.The
program was developed with the goal of quickly providing affordable housing units to low-
income families and has funded numerous projects since its inception, including the
Fields Apartments in Tigard (provided$9.8 million)and Cornerstone Apartments in
Salem (provided $4.9 million).
The Crossings at Gresham Station.The mixed-use development is located next to the
light-rail MAX station in Gresham.The building consists of 81 residential units and
20,000 square feet of ground-floor retail.The development was a public-private
partnership between Peak Development,the City of Gresham, Metro,and the State of
Oregon.The City of Gresham provided tax abatement, Metro provided funding from their
transit-oriented development program,and Oregon Housing and Community Services
(OHCS) provided grant and loan funding.85
Opportunities Public-private partnerships are often not associated with structured programs; rather,
and Constraints they are often individual projects,which has both advantages and disadvantages.
Projects are often opportunity-driven and may be spearheaded by the City or by private
developers or partner agencies.With this structure,there is less administrative burden to
the City, but it is also difficult to prepare for the capacity,typically financial,to participate
in a partnership.
Options and Typically, public-private partnerships are implemented on a case-by-case basis and
Alternatives therefore vary significantly in their structure,costs,and resulting number of units.This
makes it difficult to evaluate or compare alternative approaches to implementing them.
A benefit to this structure is the flexibility to include a variety of partnerships/funding
sources(as seen with The Crossings at Gresham Station).
Implementation The City should have the capacity,financial and administrative,to partner with a private
Needs entity on a partnership.
13. Community Land Trusts (CLTs)
Description Community Land Trusts(CLT)is a model wherein a community organization owns land
and provides long-term ground leases to low-income households to purchase the homes
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix A-21
on the land,agreeing to purchase prices,resale prices,equity capture,and other terms.
This model allows low-income households to become homeowners and capture some
equity as the home appreciates,but ensures that the home remains affordable for future
homebuyers. CLTs may also lease land to affordable housing developers for the
development of rental housing or may develop and manage rental housing themselves.
Land trusts are typically run as nonprofits,with support from the public sector and
philanthropy, and could be linked to a land bank. Land trusts can be focused on
homeownership or rental units.
Legal Basis A CLT lease creates a distinctive legal framework within which ownership of the land is
separated from ownership of the improvements on land.The structure involves a "fee
interest"in the leased land held by the CLT,and a "leasehold interest"held by the
homeowner. In most cases the homeowner's leasehold interest is accompanied by or
includes deeded ownership of the house and other improvements on the leased land.As
a general rule,there is no legal prohibition against the creation of separate ownership
interests in a building and the underlying land.86
Usage in Tigard No CLTs are currently operating in Tigard. However, recruiting CLTs to the SW Corridor is
or Other Cities a strategy included in the SW Corridor Equitable Housing Strategy Report.
Proud Ground(Portland Metro Area). Proud Ground was founded in 1999 and has grown
into one of the largest community land trusts in the country.The organization focuses on
affordable homeownership and controls ground leases associated with 270 homes in
Multnomah,Washington,Clackamas,and Clark County. Proud Ground also offers
homebuyer education and consulting services.Approximately 81 percent of the
organization's funding is derived from public subsidy, mostly from the jurisdictions where
Proud Ground operates.The remaining funding is generated through private donors.To
date,the City of Tigard has not provided funding to Proud Ground.
Sawmill Community Land Trust(Albuquerque). Founded in 1996,the Sawmill Community
Land Trust evolved from an existing Community Development Corporation(CDC)to serve
the Sawmill neighborhood on the edge of Historic Old Town,Albuquerque.The
organization was founded to address concerns about pollution from adjacent industrial
areas and anticipated gentrification of the neighborhood.The City of Albuquerque was a
critical partner in the growth of the CLT.The City purchased and donated to the CLT a 27-
acre parcel using CDBG funding,which the CLT developed into 93 affordable units,a mix
of single-family homes,apartments,and townhomes available for purchase(with a CLT
ground lease)or rent.Sawmill developed several additional multifamily properties in the
surrounding area, including a 46-unit senior housing property and a 60-unit live/work
building.The City of Albuquerque continues to provide operational funding to Sawmill.
Opportunities • Financing the initial acquisition of land and securing enough equity to scale the
and Constraints strategy are key challenges for the CLT model.Across the country, land trusts use a
variety of land acquisition mechanisms,from private financing and municipal
subsidies to relationships with land bank entities.
• In real estate markets where housing prices rise faster than household incomes,
CLTs reduce the cost of subsidizing affordable homeownership units over time.As
housing prices rise,and incomes do not keep up,the amount of subsidy needed to
purchase the same home increases with each new buyer. If the CLT owns the land,
however,they can control the rate of price increase, reducing or eliminating the need
for a subsidy for subsequent buyers(see figure below).
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Affordable Housing Plan Appendix A-22
The CLT Model limits the Rate of Increase in R: 17.=ri.es.
Keeping l4omes Affordable Over Time
Market
One-time subsidy Price
Resale price remains affordable Affordable
without any new subsidy Price
U
a`
c
t
it
m
n Time
Source:Beaverton Residential Anti-Displacement Strategy
Tools Assessment Summary
Options and CLTs can take a variety of forms and cities can support the work of CLTs in a variety of
Alternatives ways.The examples below illustrate several potential CLT models to consider.The first
two may be the most pertinent to a city of Tigard's size:
• Conventional CLT(Proud Ground).The most common form of CLTs are focused
exclusively on providing affordable homeownership of single-family housing.
These CLTs may operate at neighborhood,city,or regional scale.The properties
owned are typically"scattered site",though may be concentrated in particular
neighborhoods.
• Development-oriented CLT(Sawmill Community Land Trust).Some CLTs operate
scattered site homeownership programs while also acting as a nonprofit
affordable housing developer.These CLTs are essentially a hybrid of a CLT and a
Community Development Corporation(CDC).This model provides the
opportunity to respond to varying housing needs and development
opportunities.
• CLT network organization(Atlanta Land Trust Collaborative).Some CLTs also
function as network organization (or"central servers")for multiple CLTs in a city
or region.This model reduces administrative costs for members of the CLT
network and may enhance fundraising opportunities.
• Land bank steward(Denver Urban Land Conservancy).At least one CLT studied
functions as both a development-oriented CLT and an administrator of a land
banking fund.The Denver Urban Land Conservancy is the steward of a land trust
fund that targets properties near existing and future transit lines.The properties
are preserved for development of affordable rental units.The ULC is well-
positioned to act as a steward of the land bank because it has the
organizational capacity to administer it and the ability to obtain funding from
multiple public and private sources.
Implementation The City could provide support to CLTs in a variety of ways:
Needs
• Provide administrative or financial support for start-up and capacity-building for
new CLTs
• Donate City-owned land to be managed by CLTs
• Provide grants or low-interest loans for specific development or rehabilitation
projects
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Affordable Housing Plan Appendix A-23
• Provide incentives to private developers(density bonuses, parking reduction,
etc.) in exchange for the developer dedicating funds, land,or housing units to a
CLT
• Partner with Washington County to ensure that tax assessment methods are fair
and supportive of CLTs
The type of support the City would provide depends on the CLT model the City would like
to employ and the specific needs of the organizational partners
14. • Acquisition and Banking
Description Land acquisition is a tool to secure sites for affordable housing. Public agencies can
identify locations where prices are going up and acquire land before the market becomes
too competitive,with the intention to use the land for affordable housing.The ability to
identify promising sites within these locations and act quickly and efficiently in acquiring
them can tip the scales to make an affordable housing development financially feasible.
Land banking is the acquisition and holding of properties for extended periods without
immediate plans for development, but with the intent that properties eventually be
developed for affordable housing. Land banks are often are quasi-governmental entities
created by municipalities to effectively manage and repurpose an inventory of
underused,abandoned,or foreclosed property. Public agencies or larger nonprofits may
be better equipped than small community development corporations to do both land
acquisition and banking.
Legal Basis House Bill 2734,passed in June 2015, made it possible for local governments to create
land banks.The legislation was developed by a coalition led by Metro and including local
governments,chambers of commerce and environmental and housing advocacy groups.
The Oregon land bank legislation is unique among state land bank laws in that it was
crafted with the primary goal of supporting brownfield redevelopment. Protected from
environmental liability, land banks would have the legal authority to acquire
contaminated properties,clean them up and sell them for redevelopment,thereby
accomplishing the goal of getting brownfield properties back in active use. However, land
banks are a flexible tool that could be used to meet multiple public policy objectives and
could be adapted to support affordable housing goals.
Usage in Tigard Tigard has not yet engaged in any land banking or acquisition for affordable housing
or Other Cities purposes. However,the City has discussed potential plans for redeveloping its campus of
city facilities,including potential development of new housing in the area.This would
effectively represent use of the land banking strategy.Since HB 2734 passed in 2015,
2015, no Oregon cities have begun land banking but numerous have discussed the tool
to provide affordable housing units. Metro is exploring land acquisition for housing
preservation or new development as strategy#1 of its regional housing investment
opportunities.87 Examples from other Oregon cities are provided below.
Eugene Land Acquisition for Affordable Housing Program.
Initiated through a city council resolution in 1968 and reinforced through policy and
funding decisions in subsequent decades,the Eugene's Land Acquisition for Affordable
Housing Program is one of the most longstanding land banking for affordable housing
programs in the country. Due to its ability to respond to changing market conditions,the
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix A-24
program has benefitted from the ability to acquire land during economic downturns that
can be held for development when the market picks back up.Since the purchase of the
first site in 1979, nearly 90 acres have been acquired for affordable housing using
a combination of federal and local funds.Thus far,881 units of affordable housing units
have been developed on program parcels,and 48 units are currently under construction.
The Network of Oregon Affordable Housing(NOAH)Land Acquisition Loans. NOAH's Land
Acquisition Loans are for highly accessible land that is transit oriented and located in
close proximity to social and/or commercial services. Loans are available to for-and
nonprofit entities. Loans awarded range from $25,000 to$1,000,000.88 The Portland
Housing Bureau partnered with NOAH in 2016 to invest$1 million into the Oregon
Housing Acquisition Fund,administered by NOAH89.
Affordable Housing Land Acquisition Revolving Loan Program(LAP).The new program,
which was initiated in November 2018 by Oregon Housing and Community Services to
assist eligible organizations in Oregon with purchasing land suited for affordable housing
development. Eligible organizations include: local governments, local housing authorities,
nonprofit community or neighborhood based organizations,federally recognized Indian
tribes in Oregon,and regional or statewide nonprofit housing assistance agencies.
Funding targets for the program are 40%funds for homeownership for low income
households and 60%for organization operation rental housing for low income residents.
While the LAP program is initially targeting rural areas,the program could be an option in
Tigard if it is expanded or modified in the future to become available to urban
communities.90
Opportunities The challenge of high land cost in high-opportunity areas has spurred local interest in
and Constraints coordinated land acquisition/land banking models. Key challenges for land acquisition
include reliably identifying future areas of gentrification before prices go up,developing
the resources necessary to purchase the land,creating mechanisms for easy land
transfer and removing the liability associated with holding land. Land banking requires
significant up-front investment to acquire land,which typically requires grants,and
funding partnerships—with nonprofits, public entities,and private financing—to reach
necessary funding levels. In addition,while this technique can help address the long-
term need for affordable housing,it will not address the current need in the short-term.
Options and In addition to land acquisition and banking,another option for providing public land for
Alternatives affordable housing is to evaluate surplus land the City already owns and assess its
potential for future affordable housing. Funding for land banks range from private
financing and municipal subsidies to relationships with land bank entities.
implementation Based on the City's 2018 Buildable Land Inventory(BLI)there is limited vacant land in
Needs Tigard's Urban Growth Boundary,some of which may be appropriate for land banking for
future affordable housing development.The City must evaluate if the land acquisition
and/or banking model is feasible,given the availability,location and characteristics of
vacant or underdeveloped land. Further,the City must secure funding and/or work with
partners to find adequate funding for land banking/or acquisition,then create a plan and
partnerships for construction on the site(s).
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Affordable Housing Plan Appendix A-25
15. Staff Allocation to Housing Program
Description A strategy to increase the City's administrative capacity for addressing affordable
housing issues and provide more effective and efficient use of resources,the City could
consider dedicating one or more full or part-time staff members to these efforts.The
dedicated staff member could oversee affordable housing programs,develop housing
policy,and serve as a liaison to the City's housing partners, including nonprofits,
Washington County, Metro,and other local, regional,or state partners.
City of Tigard Housing Strategies Report(2013)suggested that given Tigard's relatively
small but dedicated planning staff,the City continue to address housing needs in a
consistent and coordinated manner,with some activities assigned to a specific staff
person.While all staff should be well-versed in the recommended housing strategies,
one staff person would be responsible for coordinating with other staff to review and
refine the list of strategies;to address any emerging housing issues,needs or tools not
previously identified; and to assess the City's progress in implementing recommended
housing strategies.
However,given that the housing affordability crisis has escalated since 2013, it may
make sense for the City to take its staffing approach a step further—perhaps by fully
dedicating a staffer to planning for affordable housing.
Legal Basis N/A
Usage in Tigard The 2013 Housing Strategies Report noted that the City did not have a single staff
or Other Cities person dedicated to addressing long range or current housing issues,including
implementation of strategies for addressing affordable housing needs. Instead,similar to
most small to medium size jurisdictions in Oregon, multiple staff people address
residential planning and development issues through a range of activities, including
reviewing residential development applications,incorporating planning for housing in
specific or sub-area planning processes,administering and updating the City's
Development Code,and coordinating with regional and county efforts related to housing
policy and development.
City of Beaverton.The City has several staff working on housing-related issues, including
a full-time Affordable Housing Manager,who was recently hired in fall 2018 and who is
drafting a work plan that will address a range of issues associated with affordable
housing, including homelessness,tenant advocacy,etc.The City also has two staff
dedicated to managing Beaverton's CDBG program. Many other staff in the City's
Development, Economic Development,and Planning departments also work on housing
policy development and related efforts.91
City of Bend.The City of Bend has two staff specifically dedicated to managing its
Affordable Housing programs.92
Opportunities Having a dedicated staff person to oversee housing programs would provide more
and Constraints resources, a higher degree of continuity,and potentially more technical expertise
towards the task of implementing the strategies identified through the THSIP process.
Developing and implementing some of the strategies and programs described in this
document will take a significant amount of staff time.Ultimately,the City will need to
decide if the expense of dedicating additional staff resources to these activities is
financially feasible and justified through the ability of a number of these strategies to
leverage financial or partnering resources towards achieving affordable housing goals.
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Affordable Housing Plan Appendix A-26
Options and The City could hire a full-time staff person or could dedicate an existing staff member as
Alternatives the point person for addressing housing issues and programs(as recommended in the
2013 report).Another alternative could be to partner or contract with another
organization(nonprofit or public entity)to share staffing resources and expertise.This
could be done through a shared funding arrangement and could be an efficient way to
meet the capacity needed for housing coordination with a staff member in a partnering
organization.
Implementation The City would need to account for staffing needs associated with implementing housing
Needs strategies in annual budgeting and work planning activities.This would entail regularly
estimating the amount of time needed to implement these strategies, prioritizing this
work in relation to other duties,and ensuring that adequate time and resources are
available to meet these goals within the City's overall resource limits.
Note:Strategy#15—City Support for Resident Services—was not included in the Background Report
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Affordable Housing Plan(REVISED DRAFT) Appendix B-1
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Affordable Housing Plan Appendix B-1
Appendix B: Draft Evaluation Tables
Tables 2 through 4 were deve%ped for earlier drafts ofAHP andguided the recommendations provided
in Section 3. The evaluations for the final recommendations for each strategy are found in Section 2.
These draft evaluation tables give insight into the process of this report from initial assessments of each
strategy to final recommendations.
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Affordable Housing Plan Appendix B-2
Table 7: Evaluation of Funding Sources
Administrative Investment Feasibility Flexibility Impact
How much time and resources Are there political,legal,or other Can the funding source be How much revenue might be produced,relative to other
are required to establish and obstacles to implementation? flexibly used to achieve tools?Are revenues stable and predictable?Can the
administer the funding source? Is the tool dependent on other multiple outcomes?Are there City use these funds to leverage resources from other
entities? limitations on the use of partners?
funds?Can the City change
how the funds are used over
time?
Local Construction
Excise Tax(CET) Once established,the CET A 1%local CET is legal.There Flexibility depends on how To some extent,revenues generated depend on
would be straightforward to would likely be opposition the CET is structured. structure(applied only to residential or also to
administer through the from developers and property Greater rates than 1%are commercial/industrial properties?).CET funding
development permitting owners.It is unclear how possible on commercial/ relies on an active construction cycle and,as
process. much a fee would affect industrial development. such,fluctuates from year to year.
development feasibility.By Must comport with state Over the prior 10 fiscal years(2009- 2018),
structuring the policy with requirements;some residential construction has accounted for
offsetting incentives,the City funding must go to the roughly 80%of the new property value from
can limit impact on feasibility State for affordability construction,and 20%has been commercial.
for certain projects. programs. Over this period,a 1%CET applied to all new
construction would have generated an estimated
average of$745,000 in revenue per year.Since
2016,the estimated annual revenue would have
been over$1 million annually.(There can be
significant fluctuation in annual construction due
to development cycles.)
Because commercial construction has made up a
smaller share of overall construction value over
this period,a doubling of the commercial CET
rate to 2%would increase overall revenue by
21%overall.While the commercial CET rate is
technically open ended,the negative impact on
project feasibility of each increment should be
considered.
CDBG Entitlement CDBG HOME CDBG HOME CDBG HOME CDBG HOME
/HOME Program There is a significant amount For the HOME program, HOME funds are more Becoming CDBG Entitled orjoining the HOME
(HOME not of planning and reporting federal regulations require a flexible than CDBG program would likely allow the City to meet
recommended) required to meet federal local contribution of 25 cents entitlement funds,in that specific needs that are not currently being met by
grant requirements for both for every HOME dollar used. they can be used to the county consortium.Tigard's potential CDBG
CDBG Entitlement and HOME The CDBG entitlement allocation could be estimated at around
programs.Cities often have $300,000 annually,based on Beaverton's and
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B-3
one or more full-time staff program is not subject to the directly fund development Hillsboro's allocations.Annual funds are subject
members dedicated to same requirement. of affordable housing. to Congressional appropriations.Funds are also
program administration.For subject to national politics,and the current
the CDBG program,up to administration has expressed a lack of support
20%of each year's CDBG for the department.
grant,plus program income, A decision over whether to apply for one or both
can be used for planning and federal programs will require careful
administrative cost;for consideration of funding availability,need,and
HOME,the limit is 10%. administrative capacity.
However,other entitlement
cities in the region reportedly
must subsidize their
programs with general fund
revenues because the costs
to administer the programs
exceed the HUD revenues
available to operate them.
Tax Increment
Financing(TIF)Set Tigard's Town Center TIF dollars are limited; The URA can use these Revenue depends on the level of set aside.The
Aside Development Agency and allocating them to funds for land acquisition, strength of TIF funding is that it is relatively
City Council would need to affordability would reduce pre-development stable and predictable over the life of the URA.It
establish a policy for a TIF funds available for other assistance,SDC is a good funding source to contribute to
set aside,and maintain its 5- economic development exemptions,or other development partnerships,in key areas where
year urban renewal action priorities.A TIF set aside may incentives. housing has already been identified as a priority
plan. be more feasible in the Tigard and codified in the UR plans.
The administrative Triangle URA,which has The adopted Urban Renewal Plans for Tigard's
investment to develop the roughly ten times the budget two adopted URAs do not specify a precise
program and administer over 20 years of TIF collection funding amount for affordable housing projects,
once implemented is similar. (see Impact column). though such projects can be included under
more general project categories in each plan.In
the 2019 fiscal year,the combined TIF revenue
of the urban renewal areas is projected to be
near$1 million.The amount that can reasonably
be set aside for affordable housing must be
balanced with the other identified projects,and
on-going debt service,of the URAs.
The City Center plan included roughly$2.8
million over 20 years,in project categories which
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B-4
might include affordable housing.3 The Tigard
Triangle plan included roughly$39 million over
20 years,over ten times as much.These
categories include many other types of potential
activities than those related to affordable
housing.The actual growth of revenue for these
activities will depend on the growth of real tax
increment in these districts.
3 Urban renewal project categories which might encompass affordable housing projects:Planning and Development Assistance(City Center);Re/Development Assistance
and Partnerships(Tigard Triangle).
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Affordable Housing Plan Appendix B-5
Table 8: Evaluation of Tools that Remove Development Barriers
Administrative Investment Feasibility Flexibility Impact
How much time and resources are Are there political,legal,or other Can the tool be flexibly used How many units might be produced,relative to
required to establish and administer obstacles to implementation? to achieve multiple other tools?
the program? Is the tool dependent on other entities? outcomes?Can the City Can the tool leverage investments from other
change how the program is partners?How long will the impact last?
used overtime?
Reduced or
Exempted SDCs Depends on how exemptions are SDC reductions based on reduced The tool is flexible,in Reducing,waiving or deferring SDCs can
awarded and how compliance is impact(e.g.lower transportation that it can be applied to have a sizable impact on development costs
monitored.If exemptions are SDCs due to lower car ownership incentivize a variety of and feasibility.A recent SDC survey by the
available to all eligible projects levels)can be easily justified with housing types(e.g., Homebuilders Association across the Metro
year-round,reviewing available data but are generally regulated affordable area found that Tigard's multifamily SDCs
applications should be fairly adopted into the methodology and housing,ADUs,missing are well above average and roughly 165%of
straight-forward,but will require rate setting.State law does not middle and other the median of the 42 cities and
some staff time.If exemptions explicitly address SDC waivers and alternative housing unincorporated areas studied.For the
are limited and awarded by RFP, exemptions for affordable housing; forms).SDC rates and building modeled,Tigard SDCs ranked near
this may increase administrative however,multiple jurisdictions reductions can be the highest,trailing only recent UGB
burden.If compliance is achieved have implemented such adjusted overtime as expansion areas.Offering some reduction of
by deed restriction,little or no exemptions without legal needed. these charges can be expected to create a
monitoring and enforcement is challenge.Case-by-case significant incentive over the current
required.If annual reporting is exemptions tend to be"back-filled" charges,but may only put Tigard on par with
required and projects are not from other sources,but across-the- some other communities depending on the
already subject to these board exemptions have been size of the discount.
requirements at a local level,this successfully implemented without
will increase administrative cross-subsidy or being reflected in
burden. the SDC methodology.Feasibility
Programs to finance or defer mostly depends on political
SDCs are generally done through willingness to forego revenues.
a contract and a lien on the SDC deferral and financing are
property,which takes some effort broadly used in Oregon and may be
from the City to set up,but more politically acceptable since
minimal on-going administrative the revenue is deferred,not
effort. forgone.
Development
Fee Reductions Development fee reductions are Development fee reductions or Since the City would be For new development or significant
(not subject to similar potential waivers are not dependent on the program lead and renovations that require permitting,the
recommended) monitoring and enforcement other entities;a program would be there are no external permit fees may be a small percentage of
issues as SDC under complete control of the City. pressures(legal or the total project cost but can amount to a
reductions/exemptions(see row With clear and justifiable program financial contributions) significant amount of money saved.
above).There is also a cost to the guidelines that target affordable the City has the flexibility Typically,mone saved earlier in the
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B-6
City to reduce or waive housing,there should be no to decide the eligibility development process alleviates portions of
development fees,as these fees political or legal obstacles to criteria and conditions of the cost to buyers or renters,therefore
are intended to recover costs for implementation.The amount of fee the program(percentage promoting greater affordability.The
staff review. reduction would depend on a or amount waived or developer is often tying up capital and/or
careful calculation of impact to reduced).The program paying interest on loans during the pre-
developers versus impact to City could be applied to development process,so reducing costs in
revenues. rehabilitation in addition this period can help the project move on to
The City will need to determine how to new construction. development and increase feasibility.
much revenue from fees it would However,permit fees add relatively little to
be willing to forgo.It is possible to development costs on a per-unit basis;
use other sources of funding to therefore,reducing fees may not provide a
backfill some of this loss.CET in sufficient incentive to developers.Generally,
particular mandates a portion goes fee waivers will have less impact than SDC
to funding this type of developer exemptions.
incentive.
Tax Abatements
Once program guidelines are in With targeted program guidelines, This tool's sole use is to Property tax abatements reduce ongoing
place,the property tax the program is likely to be abate taxes.State operating costs for affordable housing
abatement is relatively easy to politically acceptable.Precedent statues for all potential projects,which can be greatly beneficial for
administer.Requires compliance exists through the City's Vertical tax abatement programs affordable housing finances.The impact of
and monitoring.Program Housing program and Nonprofit require a minimum of the program depends on taxing district
establishment could be more corporation Low Income Housing 51%of the property's participation,since City taxes only account
burdensome if it takes Tax Exemption.The City must taxes(across all taxing for roughly 14.5%of total local government
substantial effort convince other determine how much revenue it districts)be exempted. taxes in recent years.If the City can secure
taxing districts to participate in would be willing to forgo,and for Since the City's taxes agreements with other taxing districts,the
the program. an effective program,must work account for roughly program will have the most impact.
Initial administrative investment with other taxing districts to agree 14.5%of local taxes,the Tax exemptions can be a very strong tool to
to develop policies is more than to forgo their revenue. City must partner with incentivize affordable housing,and make
the administrative investment to other local taxing proposed projects more viable depending on
administer the program once districts to reach the how they are structured.A large new
implemented. 51%abatement. apartment complex might have a taxable
The City has discretion assessed value(TAV)of many millions of
to set eligibility criteria, dollars.Currently,such a development
including required contributes an estimated$17,200/year in
affordability levels(up to property taxes per$1 mil.in TAV.The City
120%AMI)and the can expect to see roughly$2,500/year/$1m
percent of affordable TAV(not including city bond levy).The
units required in a annual benefit to the property owner from a
building.Can be applied city tax abatement can amount to tens of
to rehabilitation in thousands of dollars,making this a strong
addition to new financial incentive.
construction. Because of the trade-off in revenue,the City
should carefully consider which tax
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B-7
exemption programs to use,and what the
desired outcomes are.In general,market-
rate developers will use the program that
maximizes benefits while requiring the least
changes to their development plans. For
instance,the Multi-Unit Housing exemption
can encourage housing closer to market-
rate levels(up to 120%of AMI)but this
might discourage use of the Low-Income
Housing program unless the benefits are
calibrated.
Addressing
Restrictive CC&Rs Once a policy to limit restrictive The policy is not dependent on The tool's sole use is to There are legal challenges to addressing
CC&Rs is drafted and adopted, other entities,which allows some limit restrictive CC&Rs existing CC&Rs.A policy to limit future
minimal administrative services flexibility.Similar polices are being that prevent restrictive CC&Rs may not impact a large
are needed.When new HOAs developed in neighboring cities as development of certain number of properties,as there is a limited
submit CC&R provisions to the required by Metro;therefore,there housing types;therefore, amount of land area available in the City's
City,staff would review them for will soon be local legal precedent it has limited reach, boundaries to develop new subdivisions
compliance with the new policy. (if it does not already exist). absent future litigation outside of areas currently under
The initial administrative or case law that could development.
investment of drafting and impact current
leading the policies through restrictions. Future
hearings requires more policy changes would be
administrative investment than a manageable task of
the ongoing administration of the adopting code
policy. amendments.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B-8
Table 9: Evaluation of Tools to Develop or Preserve Affordable Housing
Administrative Investment Feasibility Flexibility Impact
How much time and resources Are there political,legal,or other Can the tool be flexibly used to How many units might be produced,relative to
are required to establish and obstacles to implementation? achieve multiple outcomes?Can the other tools?
administer the program? Is the tool dependent on other City change how the program is used Can the tool leverage investments from other
entities? over time? partners?How long will the impact last?
Inclusionary
Zoning(IZ)(not IZ requires close State laws authorizing IZ The flexibility of IZ is limited by Mandatory inclusionary zoning can affect
recommended) administrative oversight to include a number of state statutes,which establish development feasibility and land values.
ensure the mandatory units limitations that create the parameters of any local IZ Incentives and requirements must be
are properly built and administrative and financial program.However,local carefully balanced so as not to inhibit
maintained. hurdles for the strategy(see jurisdictions can select many of housing production.
Further,administration of the Legal Basis description for the program details,including Inclusionary zoning programs typically create
fee-in-lieu funds will likely this strategy in Appendix A). which developer incentives will a fraction of the needed affordable housing
require establishment of a These limitations make it apply,establishing the in-lieu fee units and their efficacy at producing
more involved program to challenging to implement in rate,and determining how fee-in- affordable housing units fluctuates over
most small-and medium-sized lieu funds are spent.Cities can
administer and direct the extended periods of time.
funds to other affordable jurisdictions. adjust these details over time in
housing projects. IZ programs entail additional response to program The most likely market response to IZ are to
performance and outcomes. slow new development,at least in the early
Similarly,an IZ program also administration costs for years,as market-rate developers seek
requires establishment and developers to track and report opportunities in other communities that don't
on-going administration of the affordable units overtime. carry the same requirements.
the required"finance-based Often,this can present a
incentives"meant to offset management challenge and Another market response is likely a
the costs to developers. expense simply due to a marginal increase in rents in the remainder
market developer's of the units in the building,to offset the loss
unfamiliarity with affordable of revenue from affordable units.
housing.This unfamiliarity If the affordable rent level is kept constant
might curb new development, across the jurisdiction,then one possible
and future property sales if market response will be to build new
buyers are similarly unfamiliar multifamily apartment properties in areas
with affordable housing that are already lower rent.
management. Finally,an increase in development of
smaller rental properties of less than the 20-
unit threshold should be expected.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B-9
Administrative Investment Feasibility Flexibility Impact
How much time and resources are Are there political,legal,or other Can the tool be flexibly How many units might be produced,relative to other
required to establish and administer the obstacles to implementation? used to achieve multiple tools?
program? Is the tool dependent on other outcomes?Can the City Can the tool leverage investments from other partners?
entities? change how the program is How long will the impact last?
used overtime?
Preservation A B C D A B C D A B C D A B C D
of Low Cost A)Housing Preservation Fund A)Housing Preservation Fund A)Housing Preservation A)Housing Preservation Fund(HPF):Depending
Market Rate If Cit ,
(LCMR) (HPF): y runrequires
(HPF):Potential political Fund(HPF):The City on funding levels,these funds can be a powerful
Housing substantial staff time and upfront obstacles to implementation.If would be able to design tool for preservation,with the potential to
policymaking,plus ongoing City-run,the fund may need to the program around its stabilize a significant number of existing LCMR
administration and compliance establish its own entity within specific housing needs housing units.
monitoring.Partnering with a the City(like the Portland and goals.It would be B)Grants/Loans for Rehab:With a large and
separate entity would reduce Housing Bureau for City of free to change its steady investment,this program could encourage
administrative costs. Portland).No funding source is policies over time. partnerships with local property owners to
B)Grants/Loans for Rehab: Similar currently identified. B)Grants/Loans for preserve existing LCMR housing for a long period
administrative investment as an B)Grants/Loans for Rehab: Rehab:(same as HPF) of time.
HPF.The administration of loans Ideally,the fund would be C)Acquiring LCMR The impact of these programs will be dependent
can be significantly more complex administered by its own entity Housing:(same as HPF on the number of properties that qualify,and the
than grants.Contracting within City of Tigard(like PHB and grants/loans) ability to attract these owners to the program
administration to an established for City of Portland),or the City before market/gentrification forces or
preservation entity would reduce could set aside dollars to a D)Tax Abatement:See
Tax Abatement strategy encourages them to sell or redevelop older MFR
costs. partner. rating properties.The disposition,timeframe and goals
Programs will likely require an C)Acquiring LCMR Housing: of individual owners will determine participation.
inventory of potential residential The program would require The impact also will depend on the amount of
properties that might meet the significant funding to acquire funding available to be disbursed,and
qualifications,and some active properties.The tool is attractiveness of the terms.Grants will be more
marketing to good candidates to particularly effective in tight
attractive than loans,and loans with generous
raise awareness and encourage housing markets,which is also terms will be more attractive than conventional
participation. associated with higher cost of loans.In general,loan qualifications and terms
C)Acquiring LCMR Housing:Similar real estate. should be marginally more lenient than from
administrative investment as an D)Tax Abatement:See Tax commercial lenders,otherwise owners will seek
HPF or grants/loans.Would need to Abatement strategy rating market loans without affordability requirements.
find properties to acquire and find
C)Acquiring LCMR Housing:As this program
partner to assist in purchase and would require significant funding,the impact is
management of newly regulated likely to be limited compared to a grant or loan
affordable housing.
program.
D)Tax Abatements:See Tax D)Tax Abatement:See Tax Abatement strategy
Abatement strategy rating. rating.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B-10
Administrative Investment Feasibility Flexibility Impact
How much time and resources are Are there political,legal,or other Can the tool be flexibly used to How many units might be produced,relative
required to establish and administer the obstacles to implementation? achieve multiple outcomes?Can the to other tools?
program? Is the tool dependent on other entities? City change how the program is used Can the tool leverage investments from
over time? other partners?How long will the impact
last?
Tenant and A B A B A B
Homeowner
Protections A)Tenant Application Policy Reform: A) Tenant Application Policy Reform: A) Tenant Application Policy Programs and policies focused on
Policies would take some Pushback from rental property Reform:Policies have little tenant protection can help stabilize
administrative capacity to create owners is likely.Progressive rental flexibility based on their costs for existing renters and
and adopt,but little to administer policy reform has minimal provisions once they are homeowners,and may help broaden
once adopted.The City should precedence in the area,except for adopted.However,since the access to rental housing for more
determine the method of Portland,which makes it difficult to policies would be governed by people. However,this strategy will not
enforcement of the policies estimate level of pushback. the City,they could be revised as create new units and may not preserve
(complaint-based vs.active). B) Rental License and Inspection needed,with consideration of existing affordable units.
B)Rental License and Inspection Programs:Suggested programs the overlap and conformance
Programs:If the programs are City- would require commitment of City with state regulations.
led,would require administrative funds or dependent on nonprofit or B) Rental License and
capacity to enact and monitor County partners.However,funding Inspection Programs:City-led
compliance.Some programs can be needs are relatively small compared programs would have flexibility
implemented with assistance from a to other strategies explored in the to establish program guidelines,
community organization,reducing AHP. eligibility criteria,etc.
some of the administrative burden.
A license program would require less
administrative capacity if was
implemented without an inspection
program.
Incentive Simple approach Market calibration
Zoning: Simple approach:Relatively minimal Neighborhood opposition is possible, This would apply to both new, If properly calibrated to the current
initial staff investment to adopt depending on the magnitude of the regulated affordable housing market,density and height bonus could
changes if bundled together and/or bonuses and where they apply. and new market-rate incentivize certain forms of residential
coupled with other code changes. Opposition is likely to increase if developments that include development.It could also allow an
Ongoing administrative burden will paired with parking reductions(see affordable units. increase in the number of units that
be minimal if done through clear next row),which would make the would be built in a given affordable
and objective standards. bonuses more effective. housing project,or increase the
Density/ Market calibration:Additional study number of sites where a particular
Height required to establish the program type/scale of affordable or mixed-
Bonus and administer if the City wants to income housing development would be
calibrate the bonus to different feasible. However,without additional
market areas and gauge the incentive to build mixed-income
effectiveness of the bonus paired housing,a bonus would probably be
insufficient to incent more mixed
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B- 11
with other incentives and overtime. income/affordable housing projects
This is especially needed in than would have occurred anyway.
downtown and other mixed-use Further,density or height bonuses will
areas. only be effective in those areas where
developers tend to develop to current
maximum standards,indicating a
desire for greater development
capacity.
Establishment of the requirements Feasible from a technical standpoint This would apply only to new, Surface parking costs roughly$5,000-
would 'require technical analysis and and supported by research,but tends regulated affordable housing 10,000 per space,so reducing the
well-documented findings to adopt to generate community concern, units in mixed-income projects, number of spaces required can have a
code amendments,coupled with making it challenging to enact or to entire buildings that are relatively significant impact/benefit on
Reduced community outreach.Relatively low politically. 100%regulated affordable. development costs,particularly for
Parking administrative costs to administer larger,denser projects where parking
Requirements once enacted. drives land need and ability to achieve
density targets.
Parking reductions are generally
effective in most markets as they
provide developers with significant
flexibility and allow more intensive use
of the land.
Requires drafting and passing code Feasible from a technical standpoint. This could apply to new,mixed- Likely will not generate a large number
amendments.Low administrative Likely to have few political obstacles. income projects with regulated of affordable units but could result in
costs and minimal ongoing affordable units and entirely affordable housing development in
Relief from administration required. regulated affordable zones where it has not previously been
Mixed-Use development where 100%of developed.Requirements for ground
Requirements units are affordable. floor retail or commercial use can be a
significant impediment for non-profit
developers in terms of development
costs,time needed to lease ground-
floor space,and the ability to acquire
financing.
Community
Land Trusts Assuming that the City would City involvement relies on an This tool can only be used for CLTs are unlikely to produce
partner with an existing CLT,the active land trust partner.The City unit preservation and land for substantial unit numbers unless
City's role would be to provide could partner Proud Ground,and new units.The City can significant resources are raised from
financial and technical assistance. potentially other CLTs that may be establish goals and objectives a broad mix of funding partners,but
established in the future. coupled with its investments, they can provide permanent
affordability.The City's funds can
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B- 12
and those can change over help to leverage investments from
time. other partners.Could work in
conjunction with a land acquisition
strategy.
Land Banking
&Acquisition Staff effort will depend on budget Vacant land in high-opportunity Land banking allows for Relative to other tools,control of
amount and annual activity.A land areas with willing sellers is scarce patient investment in rental land allows for a potentially big
banking and/or acquisition strategy in Tigard.Could work in or ownership units.This is an impact.Land can be acquired cost-
could require development of conjunction with brownfield important tool to use in effectively if purchased in down-
program criteria and guidelines. revitalization programs. "down market"conditions. cycles and used to leverage
Requires staff well-versed in real Because land acquisition is Public agencies can often be developer investment.
estate and property management. expensive,this tool is generally more patient than a private Land acquisition by a city or city
used for opportunities,such as owner in the ultimate use of partner is the most direct method to
potential"catalyst"locations,or the property,waiting for the ensure that a key parcel or location
large multi-family housing sites right opportunity for will be preserved to meet public
that may be in danger of development. goals such as affordable housing,
development with less density or mixed uses,transit-oriented
higher priced housing. development,etc.By controlling the
property,the City ultimately dictates
what happens there.
The value of the land is a strong
incentive that can be offered to
potential development partners to
participate in the project and meet
the public goals.
Staff
Allocation to Adding staff would require Adding staff may not be feasible in A dedicated staff member A dedicated staff member for
Housing significant and ongoing investment the near-term,based on the would have flexibility to housing programs would have a
Program of City funds. current budget allocation,but will administer whichever housing significant impact on the City's ability
become more feasible as the City strategies the City determines to implement the range of housing
grows,especially if additional are the highest priority. strategies recommended in the AHP,
funding for housing programs is However,flexibility may particularly the ability to partner with,
secured. depend on the funding leverage and support other
sources for the position(s). organizations.Staff itself would not
Certain funding sources(such create housing,but additional staff
as CDBG)may have capacity would increase the
limitations on how they can effectiveness of most strategies in
be spent. creating or preserving affordable
housing units.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix B- 13
City Support
for Resident Providing financial support for The provision of resident services The City would have flexibility Resident services can enhance the
Services resident services would require is dependent other entities— in determining how financial effectiveness of the City's
relatively little administrative typically nonprofit housing support is provided,and to investments in affordable housing by
investment.Some initial providers.However,the City's which projects.However,the helping to stabilize housing for
administrative capacity would be support for these services would scope of this strategy is tenants of affordable units.City
required to identify funding sources likely face few political or legal relatively limited,and would support could also help fill a critical
and mechanisms.Selecting which obstacles.The primary limitation mostly benefit those with very gap in the affordable housing
projects to support would require would be available funding. low incomes. landscape more generally—including
ongoing,but small,administrative implementation of the Metro housing
investment. bond—by providing additional
support for those earning less than
30%AMI.However,this strategy will
not create new affordable units or
preserve existing units.Therefore,
the overall impact would be relatively
low,but it could have a high impact
on a smaller group of very low-
income residents.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix C- 1
Appendix C: SDC Comparison for ADUs
County Total W/O
Transpor- Transpor- Water& Water Sewer
tation Parks tation Other Sewer (Required) (Required) Total
Astoria 0 0 0 0 $0 0 0 $0
Beaverton(<1000sf) 0 5,772 5,696 0 $11,468 0 0 $11,468
Beaverton(>1000sf) 0 5,772 5,696 0 $11,468 0 5,650 $17,118
Bend 1,817 3,206 0 0 $5,023 0 0 $5,023
Eugene 2,692 4,246 0 0 $6,938 0 462 $7,400
Fairview 0 2,249 0 0 $2,249 3,528 3,434 $9,211
Forest Grove 0 4,000 5,696 130 $9,826 6,028 5,650 $21,504
Gresham(attached) 800 4,086 0 0 $4,886 0 0 $4,886
Gresham(detached) 3,996 4,086 0 0 $8,082 0 0 $8,082
Happy Valley 2,646 3,745 0 0 $6,391 0 6,092 $12,483
Hillsboro 0 0 0 0 $0 0 0 $0
Lake Oswego 0 0 0 0 $0 0 0 $0
Milwaukie 1,310 1,992 800 $4,102 5,232 $9,334
Oregon City 6,527 4,490 0 0 $11,017 0 4,601 $15,618
Portland 0 0 0 0 $0 0 0 $0
Scappoose 0 0 0 0 $0 0 0 $0
Sherwood 0 0 0 0 $0 0 0 $0
Springfield(current) 0 2,750 0 0 $2,750 3.000 1,500 $7,250
Springfield(future) 2,564 2,750 0 0 $5,314 3,000 4.500 $12,814
Tigard 3,672 5,941 5,207 0 $14,820 9,001 5,650 $29,471
Tigard(River Terrace) 5,370 6,270 5,207 0 $16,847 9,001 5,650 $31,498
Troutdale 0 0 0 0 $0 0 0 $0
Tualatin 0 0 0 0 $0 0 0 $0
Washington County(attached) 0 6,152 5,308 0 $11,460 0 0 $11,460
Washington County(detached) 0 6,152 8,458 0 $14,610 0 0 $14,610
Bonny Slope(attached) 4,958 6,152 5,308 4,958 $21,376 0 0 $21,376
Bonny Slope(detached) 8,290 6,152 8,458 8,290 $31,190 0 0 $31,190
North Bethany(attached) 4,017 6,152 5,308 4,017 $19,494 0 0 $19,494
North Bethany(detached) 6,560 6,152 8,458 6,560 $27,730 0 0 $27,730
West Linn 2,071 4,398 0 0 $6,469 4,713 2,525 $13,707
Wilsonville 0 0 0 0 $0 0 0 $0
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix D- 1
Appendix D: Parking Regulations in Tigard -
Assessment by DLCD
Schuler Warren, City of Tigard
Matt Hastie, Angelo Planning
Group RE: Parking Regulations in
Tigard I 1 February 2019
Dear Schuyler and Matt:
We have done a quick scan of Tigard's existing codes and requirements and the draft Housing
Strategy Implementation Plan under HB 4006. Apologies in advance if our quick review
recommends something that you are already doing or planning on doing.
Recommendations for Tigard's Housing Strategy Implementation Plan (THSIP):
1. The list of"Tools that Remove Development Barriers" (section 1.2) should include
reductions to off-street parking requirements. Although the THSIP is tasked with
including recommendations for code amendments, the only code amendment
recommended in the"Tools" section relates to CC&Rs.
2. In addition to disallowing CC&Rs from "prohibiting or limiting the type or density of
housing that would otherwise be allowable under city zoning," CC&Rs should also be
prevented from requiring more off-street parking (or less flexible parking standards)
than otherwise required by citycode.
3. Currently,parking is only mentioned to any extent under the section"Incentive Zoning" in
Table 2.3: Tools to Develop or Preserve Affordable Housing. Some of these reductions
could be applied more broadly and added to "Tools that Remove Development Barriers"
(see#1, above), instead of restricted only to affordable housing projects. Reducing parking
requirements has the potential to make all types of housing moreaffordable.
Additional Recommendations
Whether revised under the THSIP or separately, your Community Development Code requires
more parking than the market would likely provide on its own. These excess requirements, as
you are aware, boost costs to businesses and residents,while encouraging additional driving
with concomitant societal costs.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix D-2
Here are some items to consider for the Tigard Community Development Code,Chapter 18.410
Off-Street Parking and Loading.The first two of these are adapted from the DLCD Model Code
for Small Cities.
1. The applicant may propose a parking standard that is different than the standard under
subsections 3.5.030.A(1)and (2), above, for review and action by the[Planning Official/
Planning Commission]through a Type[II/III]procedure. The applicant's proposal shall
consist of a written request and a parking analysis. The parking analysis, at a minimum,
shall assess the average parking demand and available supply for existing and proposed uses
on the subject site; opportunities for shared parking with other uses in the vicinity; existing
public parking in the vicinity;transportation options existing or planned near the site, such
as frequent bus service, carpools, or private shuttles; and other relevant factors.
2. The(City decision-making body)through a Type[II/III]procedure may reduce the
off- street parking standards of Table 3.5.030.A for sites with one or more of the
following features:
a- Site has a bus stop with frequent transit service located adjacent to it, and the
site's frontage is improved with a bus stop waiting shelter, consistent with the
standards of the applicable transit service provider: Allow up to a [20] percent
reduction to the standard number of automobile parking spaces;4
b. Site has dedicated parking spaces for carpool or vanpool vehicles: Allow up to a
[10] percent reduction to the standard number of automobile parking spaces;
c. Site has dedicated parking spaces for motorcycles, scooters, or electric carts:
Allow reductions to the standard dimensions for parking spaces;
d. Site has more than the minimum number of required bicycle parking spaces:
Allow up to a [5-10] percent reduction to the number of automobile parking
spaces.
3. Consider amending the purpose statement to add in the purpose to not unduly burden housing
construction and business construction and renovation. Cities should aim to avoid the costs
of excessive required parking.
4. Remove the requirement that off-street parking must be on the same lot as it serves.This
will provide flexibility for building owners, may encourage walking past other businesses,
and allows for more walkable areas less interrupted by parking lots.As a less desirable
alternative, allow off-site parking within aquarter-mile.
5. Remove the prohibition on renting, leasing, or reassigning parking spaces. Limiting
the market-driven transfer of parking spaces will result in duplicative parking spaces.
4 This could be in addition to the Zone A and B standards adopted to comply with the Metro Regional
Transportation Functional Plan.On-site is significantly better than 0.5/0.25 mile walk.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan Appendix D -3
6. Clarify the typographical error in Bike Parking Standards in 18.41O.05O(c),where the
second sentence ends unexpectedly.
7. Remove limits for the on-street parking credit in 18.410.090. These could be widely
available for all uses, need not be on the same side of the street, could be for spaces as
small as 20 feet, and could be on unimproved roadways. This can reduce the construction
of excess duplicative parking spaces, freeing up land and money for higher and better uses.
8. Reduce the number of spaces required generally. There are many multi-unit developments
in transit-served areas in Portland, for example,that provide significantly less than one
space per unit, and are finding success in the market. Generally developers have strong
incentives to build sufficient supply to meet demand. We would recommend that vehicle
minimum requirements be no more than 0.5 per unit for smaller units, and no more than 1
per unit for larger units. As transportation network companies, automated vehicles,
electric scooters,e-bikes and other technologies reduce the demand for individual-owned
vehicles(at least second and third vehicles), it is important to not build in 30 years of debt
on overbuilt parking structures.
We do not have significant expertise in parking demand for commercial and industrial
developments, so cannot provide advice on those specific numbers, other than the standard
Shoupian5 advice to allow the market to drive provision, base any requirements on localized
data, and give developers the ability to request and make the case for adjustments.
We hope these suggestions are useful. We realize some of these policy choices are not without
controversy, and that the policies were recently updated,possibly after considering many of the
recommended changes above.
Please let us know if you would like to discuss these suggestions,have questions or need
additional assistance or research completed to implement these recommendations.
Regards,
Evan Manvel
Land Use and Transportation Planner
DLCD
Laura Buhl
Land Use and Transportation Planner
DLCD
cc: Anne Debbaut, Regional Representative, DLCD
5 Professor Donald Shoup,author of The High Cost of Free Parking and editor of Parking and The City.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan
HUD Exchange.Community Development Block Grant Entitlement Program.Available at:
httl2s://www.hudexchange.infolgrograms/cdbg-entiflement/.
2 City of Tigard.Comprehensive Annual Financial Report,FY2018.Available at:htt_p://www.tigard-
or.gov/document center/Financial docs/CAFR 2018.pdf
3 Personal communication with Alma Flores,City of Milwaukie,April 19,2019.
4 Personal communication with Derrick Tokos,City of Newport,April 22,2019.
s HUD Exchange.Community Development Block Grant Entitlement Program.Available at:
htips://www.hudexchange.info/12rograms/cdbg-entitlement/.
6 City of Tigard.Memorandum from Schuyler Warren,Associate Planner,RE:Community Development Block Grant
Entitlement Eligibility 2022,March 27,2019.
7 Washington County.2018 Action Plan.Available at:
hth2s://www.co.washington.or.us/ConiinunityDevelopment/`Planning/annual-draft-action-plan.cfm
11 U.S.Census Bureau/American FactFinder.Community Facts.Available at:
httls://factfinder.census.gov/faces/t-ableservices/sf/pageslproductview.xhtml?src=CF
9 City of Tigard.Memorandum from Schuyler Warren,March 27,2019.
10 City of Tigard.Memorandum from Schuyler Warren,March 27,2019.
11 Beaverton Urban Renewal Agency.Five Year Action Plan,FY 2018-19.Available at:
https://www.beavertonoregon.gov/DocumentCenterNiew/9828BURA-S-Year-Action-Plan-FY-2018-19?bidld=
72 Beaverton Urban Renewal Area 2016-2017 Annual Report.Available at:
htips://www.beavertonoregon.gov/documentcenter/view/16955
13 City of Portland."HOU-1.06-Affordable Housing Tax Increment Financing Set Aside Policy."Available at:
https://www.12ortlandoregon.gov/citycode/article/155330
14 City of Tigard.Municipal Code,Section 3.24 System Development Charge Program.Available at:
htips://www.tigard-or.gov/Titlesl-17/`03-24.12df
1s City of Tigard.System Development Charges,effective 8/1/2018.Available at:htip://www.tigard-
or.gov/document centeriBuilding/system development charges.pdf
16 Home Builders Association of Metropolitan Portland,2018 SDC Comparison.
17 City of Newport.System Development Charge Methodology.Available at:
httt://www.newl2ortoregon.gov/dept/cdd/documents/SDCRel2ort 2017.pdf
1R Metro.SW Corridor Steering committee recommendation,Attachment B.Available at:
htips://www.oregon.gov[LCDITGM/TGMProducts/lH-10 3.pdf
79 City of Portland.Homebuyer Opportunity Limited Tax Exemption Program(HOLTE).Avaliable at:
https://www.12ortiandoregon.gov4phb/74639
20 League of Oregon Cities.Oregon Property Tax Exemptions Related to Affordable Housing.Available at:
http://www.orcities.org/Portals/17/A-Z/AffHousingPropTax.pdf
21 Angelo Planning Group.Beaverton Housing Options Project.Issues and Opportunities Memo,dated January 8,
2019.
22 City of Beaverton.Memorandum to Mayor and City Council,RE:Metro urban growth boundary expansion
conditions of approval,December 28,2018.
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan
23 Oregon Legislative Information.A-Engrossed House Bill 2001.Available at:
http s://olis.leg.state.or.us/liz/2019R1/Downloads/MeasureDocument/HB200I/A-Engrossed
24 Sightline Institute.Inclusionary zoning:The most promising-or counter-productive-of all housing policies.
Available at:htips://www.sightline.org/2016/11/29/inclusionary-zoning-the-most-promising-or-counter-12roductive-
of-all-housing-policies/
25 City of Chicago.Troubled Building Initiative(TBI).Avaliable at:
htips://www.chicago.gov/city/en/depts/dcd/supe info/troubled buildinginnitiativetbi.html
26 Oregon State Legislature.SB 608(2019).Available at:
haps://olis.leg.state.or.usAiz/2019Rl/Measures/Overview/SB608
27 City of Portland.Office of Commissioner Eudaly,Screening Criteria Policy Concept(Updated 8/10/18).Available
at:https:/112ortlandoregon.gov/bps/31612
28 Hunter,Braden.Michgan Chronicle.Detroit City Council Passes Councilmember Ayers'Fair Chance Housing
Ordinance.Avaliable at:htlps://michiganchronicle.com/2019/02/15/detroit-city-council-passes-councilmember-ayers-
fair-chance-housing-ordinance-2/
29 City of Portland.Mandatory Renter Relocation Assistance.Available at:
haps://www.portlandoregon.gov/phb/74544.
30 City of Portland.Appendix H.Displacement Risk and Mitigation.Available at:
hLVs://www.12ortlandoregon.gov/bl2s/article/711707
31 Transportation impacts of affordable housing:Informing development review with travel behavior analysis;
Amanda Howell,et al;Journal of Transport and Land use;Vol.2,No.1(2018)
32 Portland Zoning Code Chapter 33.266.110.D.1.
33 Transportation impacts of affordable housing:Informing development review with travel behavior analysis;
Amanda Howell,et a;Journal of Transport and Land use;Vol.2,No.1(2018)
34 Personal communication with Diane Linn,Proud Ground,March 20,2019.
35 Proud Ground.Hillsboro Down Payment Grant.Available at:https://proudground.org/listings/hinsboro-down-
payment-grant/
36 Proud Ground.Beaverton Down Payment Grant.Available at:https://proudground.orgAistings/76500-down-
payment-grant-for-beaverton/
37 Clackams County&Buisness Oregon.Clackamas County Brownfields Land Bank Authoirty.December 2018.
Avaliable at:haps://dochub.dackarnas.us/documents/drupal/e7f3l4e9-b4lf-46dc-a257-4a5e5bc5d7e3
38 Clackamas County.Clackamas County Land Bank Authority(CCLBA)Buisness Plan,presented April 9,2019.
Avaliable at: hnps://www.clackamas.us/meetings/bcc/presentation/2019-04-09-2
39 Personal communication with Sheila Greenlaw-Fink,Community Housing Fund,March 18,2019.
90 United States Interagency Council on Homelessness.Supportive Housing.Available at:
ht!ps://www.usich.gov/solutions/housing/s-ul2l2ortive-housing
41"Public Housing Authorities:Helping to End Homelessness through Permanent Supportive Housing."
Journal of Housing&Community Development March/April 2008:18.
42 City of Tigard.Homelessness Resources.Available at:https://tigard-or.gov/city-hall/homelessness-resources.php
43 City of Beaverton.Beaverton City Council Agenda Bill,April 10,2018.Available at:
http://beaverton.granicus.com/Meta Viewer.php?view-id=2&clip-id=1909&meta-id=100988
44 City of Beaverton.Cedar Grove presentation to Beaverton City Council,April 10,2018.Available at:
http://beaverton.granicus.com/MetaViewer.php?view-id=2&clip-id=1909&meta-id=100989
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan
45 Oregon Housing Alliance.Construction Excise Tax.Available at:
https://www.oregonhousingalliance.org/construction-excise-tax/
46 City of Portland.2016.Affordable Housing Construction Excise Tax,FAQ.Available at:
htWs://www.porflandoregon.gov/bds/article/5`84417
47 Oregon Housing Alliance.
48 City of Milwaukie.Council Ordinance 2154,adopted November 21,2017.Available at:
haps://www.milwaukieoregon.gov/sites/default/files/fileattachments/ordinance/83011/or2l54.12df
49 HUD Exchange.Community Development Block Grant Entitlement Program.Available at:
https://www.hudexchange.info/programs/cdbg-entitlement/.
50 U.S.Census Bureau/American FactFinder.Community Facts,Tigard,Oregon.Available at:
haps://factfinder.census.gov/f aces/tableservices/jsf/pages/productview.xhtml?srr-CF
51 HUD Exchange.CDBG Entitlement Program Eligibility Requirements.Available at:
haps://www.hudexchange.info/programs/cdbg-entitlement/cdbg-entitlement-program-eligibility-requirements/
52 Washington County.2015-2020 Consolidated Plan for Washington County and the Cities of Beaverton and
Hillsboro.Available at:haps://www.co.washington.or.us/Communi!yDevelMrnent/Planning/upload/FINAL-
VOLUME-4-condensed-version-2015-2020-Con-Plan.12df
53 City of Beaverton.Community Development Block Grant.Available at:
https://www.beavertonoreg_on.gov/307/CDBG-Housi g-and-Community-Services
54 Washington County.Fiscal Year 2017-18 Proposed Budget Summary.Available at:
haps://www.co.washington.or.us/Support Services/Finance/CountyBudget/ulload/2017-
18 Proposed Budget Summary.pdf
ss Peter Wong,"County chair says housing levy idea is dead,"Forest Grove News Times.Available at:
https://paml2linmedia.com/f gnt/36-news/363869-244075-county-chair-says-housing-levy-idea-is-dead
m City of Tigard.System Development Charges-Effective 8/1/2018.Available at:
htip://www.tigard-or.gov/document center/Building/system development charges.pdf
57 McMinnville Affordable Housing Task Force meeting materials for July 13,2016.Attachment 2:SDC-Building Fee
Background Paper.Available at
htip://www.mcminnvilleoregon.gov/sites/default/files/fileattachments/city council/meeting/packets/1743/7 -
jul 13th agenda 1acket.12df
SR Portland Housing Bureau."System Development Charge Exemption."Available at:
https://www.portlandoregon.gov/phb/74642
s9 City of Portland.Development Review Advisory Committee(DRAC)System Development Charge(SDC)Review
Report and Recommendatons,May 2009;Appendix D:2002 Analysis of SDC Charges in the City of Portland.
Available at haps://www.portlandoregon.goy/bds/article/242994
60 City of Portland.Development Services Administrative Policies&Procedures."ENB-13.22-Fee Waivers."
Available at:https://www.gortlandoregon.gov/ciiycode/artide/126574
61 City of Wilsonville.Resolution No.2126.Available at:
haps://www.ci.wilsonville.or.us/sites/default/files/fileattachments/ordinance/61181/resolution no. 2126 pdf
62 Oregonlive Bill Tracker.House Bill 2377.Available at:http:/Jgov.oregonlive.com/bill/2017/HB2377/
63 City of Tigard.Vertical Housing Development Zone.http://www.tigard-or.gov/business/vhdz.php
64 City of Beaverton.Affordable Housing Tax Exemption Program.Available at:
https://www.beavertonoregon.gov/DocumentCenterNiew/"8870/Affordable-Housing-Tax-Exemption?bidld=
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
Affordable Housing Plan
65 City of Seattle.MFTE and Incentive Zoning Compliance.Avaliable at:htWs://www.seattle.gov/housing[property_-
managers/mfte-and-iz-comlliance
66 Metro."Opportunities and Challenges for Equitable Housing"(2016).Available at:
haps://www.oregonmetro.gov/sites/default/files/2016/01/28/EquitableHousingRel2ort-20160122.12df
67 Milwaukie Housing Strategies Report.Avalaible at:
haps://www.milwaukieoregon.gov/sites/default/files/fileattachments/planning-/page/75331/milwaukie housing strat
egies retort december 2016 clean_pdf
68 City of Portland.About the Inclusionary Housing Zoning Code Project.Available at:
htips:/Iwww.12ortlandoregon.gov/bps/article/584329
69 City of Portland.About the Inclusionary Housing Zoning Code Project.
70 City of Portland.18-Month Review of Inclusionary Housing Program. Available at:
hags://www.12ortlandoregon.govLphb/arficle/698886
71 NOAH.Impact Fund Presentation.Greater Minnesota Housing Fund.September 7,2017.
72 Bates,Dr.Lisa K."Preserving Housing Choice and Opportunity"October 1,2017.
"Bates,Dr.Lisa K.
74 Starlead Riker,Marina."Few Options for Tenants Against Law-Breaking Landlords."2016.Available at:
haps://www.al2news.com/c377fcca3l834bf4b92d38882e32bb27
75 Contract Clause,Article I,Section 21,of the Oregon Constitution-Ex-post facto laws;laws impairing contracts;
laws depending on authorization in order to take effect;laws submitted to electors.No ex-post facto law,or law
impairing the obligation of contracts shall ever be passed,nor shall any law be passed,the taking effect of which shall
be made to depend upon any authority,except as provided in this Constitution;provided,that laws locating the
Capitol of the State,locating County Seats,and submitting town,and corporate acts,and other local,and Special laws
may take effect,or not,upon a vote of the electors interested.
76 Beaven,Steve."In Gresham,Inspectors Find Violations at Rental Properties Throughout the City."2010.Available
at:haps://www.oregonlive.com/gresham/index.ssf/2010/10/in gresham city inspectors are.html
77 American Planning Association.Incentive Zoning:Meeting Urban Design and Affordable Housing Objectives(PAS
Report 494).Available at:https://planning-org-unloaded-media.s3.amazonaws.com/publication/download 12df/PAS-
Renort-494.pdf
78 City of Ashland.Land Use Ordinance,Chapter 18.2.5.Available at
htW:/Iwww.codepublishing.com/OR/Ashland/#!/LandUse/18.2.5.html#18.2.5.080 and
htip://www.codepublishing.com/OR/Ashland/#!/LandUse/18.2.5.html#18.2.5.050
79 City of Kirkland.Development Code.Chapter 113—Cottage,Carriage And Two/Three-Unit Homes.Available at:
http://www.codepublishing.com/WA/Kirkland/?I(irklandZl l3/KirklandZl l3.htm]
R0 City of Bend.Development Code.Chapter 3.3 Vehicle Parking,Loading andAnd Bicycle Parking.3.3.300 Vehicle
Parking Standards for On-Site Requirements.Available at:
http://www.codepublishing.com/OR/Bend/htmlBendL)CO3BendDC0303.htm1#3.3.300
A'Pierce Couty,WA.Pierce County Code,Chapter 18A.65 AFFORDABLE HOUSING INCENTIVES.Available at:
haps://www.codel2ublishing.com/W A/PierceCounty/html/PierceCouniyl8A/PierceCounty18A65.html#18A.65
m Oregon Housing and Community Services.Local Innovation and Fast Track(LIFT)Housing Awards,2016.
Available at:https://www.oregon.gov/ohcs/DO/lift/2016-Lift-Awards.12df
83 Washington County.Affordable Housing Staff Report.Available at:
https://www.co.washington.or.us/Housing/CommitteesPartners/ul2load/liAC-Packet-March-2018 gdf
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019
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84 Findings(Red Rock Creek Commons)
https://www.oregon.goviboli/WHD/PWR/docs/Red%20Rock%20Creek%20Commons pdf
85 https://www.oregonmetro.gov/sites/default/files/2016/08/25/crossings final pdf
86 CLT Network.The CLT Technical Manual.Available at:ham://cltnetwork.org/wl2-
content/uploads/2014/01/MASTER-CLT-MANUAL.12df
R'Memo from Elissa Gertler to Metro Council:Regional Equitable Housing Investment Opportunities,Attachment A.
August 28.2017
e8 NOAH.Acquisition and Preservation.ht!ps://noah-housing.org/financing/acquisition-and-preservation/
89 City of Portland.New City of Portland Partnership Will Support Land Acquisition for Affordable Housing.
Available at:https://www.portlandoregon.gov/phb/article/563754
90 State of Oregon.Affordable Housing Land Acquisition Revolving Loan Program(LAP).Available at:
https://www.oregon.gov/ohcs/Pages/`multifamily-housing-land-acquisition.asl2x
91 Personal communication with Javier Mena,City of Beaverton Affordable Housing Manager.December 31,2018.
92 City of Bend.Affordable Housing Program.Available at:
https://www.bendoregon.gov/government/departments/economic-development/affordable-housing_program
TIGARD HOUSING STRATEGY IMPLEMENTATION PLAN June 4,2019