Senate hearing spotlights revolving loan fund to spur mixed‑income housing (SB 684)

Senator Khan Pham opened a public hearing March 12 on Senate Bill 684, which would direct Oregon Housing and Community Services (OHCS) to establish a revolving loan fund offering below‑market, short‑term construction loans to support mixed‑income developments that keep their restricted units affordable for at least 90 years.

Supporters told the Senate Committee on Housing and Development the fund aims to replace high‑cost private equity in the construction capital stack with low‑cost public loans so projects that would otherwise stall can proceed. “This revolving loan fund will get subsidized loans in the hands of developers eager to build market rate and affordable housing in communities across the state,” Senator Pham said in opening remarks. The bill’s dash‑2 amendment, as described to the committee, expands the types of mixed‑income projects public housing authorities may finance or operate and defines key program terms.

Why it matters: witnesses said the model can increase housing production without drawing on federal low‑income housing tax credits (LIHTC), which are oversubscribed, and can be counter‑cyclical—helping projects pencil when private capital is scarce or interest rates are high. Sherry Boucher, housing director at the Center for Public Enterprise, described the model’s three components: an ownership structure that can sustain extended affordability (the bill sets a 90‑year minimum), a revolving loan that stands in for costly private equity during construction, and lower‑cost public debt to reduce total development costs. Boucher said the model in some jurisdictions yields roughly 30% affordable units and 70% market units and estimated that 30% affordable under this model can equate to the affordable output of a typical 9% LIHTC deal in some markets.

Montgomery County example: Andrew Friedson, a Montgomery County (Md.) council member, described the county’s housing production fund and its role in two large projects, including the 268‑unit Laureate. Friedson said Montgomery County approved a housing production fund resolution in March 2021, issued $50 million in bonds in August 2021, and made its first loan that December; the Laureate was open by June 2023 and is now more than 90% leased, he said. He told the committee that his county used public bonds to seed a revolving fund that repays and can be re‑lent to future projects, and that the fund helped produce an estimated minimum of 1,800 permanently affordable homes over a 20‑year projection tied to $100 million in capital.

State operational role: Natasha Detwiler Davie, director of affordable rental housing at OHCS, described how OHCS would use existing oversight and lending structures to manage the construction gap financing role under the bill. She explained that in the mixed‑income model OHCS would likely act as a construction lender for the gap financing piece while ensuring lenders’ risks are covered, and that the agency would leverage existing systems for monitoring and oversight rather than creating an entirely new compliance regime.

Questions and cautions: committee members asked about accessibility standards and prevailing wage triggers. Witnesses said projects would meet local and state accessibility requirements and that, where projects tap into conversion authorities such as Faircloth‑to‑RAD, HUD accessibility standards would apply. Committee discussion also noted prevailing wage rules may be triggered depending on project scope; a committee member observed prevailing wage would apply in the situations they discussed.

Stakeholder support: testimony in favor came from public housing authorities, nonprofit developers, trade groups and cities. Portland City Commissioner Mitch Green called the fund “a powerful tool” to reduce construction finance costs. Representatives from Home Forward, Northwest Housing Alternatives, Housing Oregon, the Oregon Housing Alliance, Multifamily Northwest, the Sightline Institute and other groups expressed support, urging that nonprofit and housing authority developers be eligible to access the fund.

What the bill would not do today: the committee held a public hearing but did not take a final vote or adopt the bill on March 12. No formal motions or vote tallies were recorded at this hearing.