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City staff to evaluate new state revolving loan program to support moderate‑income housing
Summary
Staff explained a new state program (authorized by HB 1537 in 2024) that lets cities apply to be sponsoring jurisdictions for no‑interest revolving loans repaid from taxes on the improvement value. The city will consult county partners to determine interest and feasibility before deciding whether to apply.
Anne Catlin of the Community Development Department presented information April 7 on a new Oregon Housing and Community Services program authorized in 2024 (House Bill 1537) that creates a no‑interest revolving loan to incentivize housing affordable to households up to 120% of area median income.
How the program works (as presented)
Catlin said the state provides upfront funds to sponsoring jurisdictions. For eligible projects, the state‑determined amount is based on the assessed improvement value (the new construction value) and the taxes that would have been collected on that improvement value over a 10‑ to 15‑year window (the statute allows up to 15 years; a 10‑year period is common). The upfront funds may be used for hard and soft costs to support new housing development. When the project is complete, the improvement‑value taxes that would otherwise have been collected are used to repay the state loan (plus a small administrative charge, up to 5%, to cover local/county administration and state administrative costs).
Catlin emphasized differences from other tax‑abatement tools: the program is not limited to rentals and can be adapted to support workforce homeownership and a broader affordability range. Fire districts are excluded from the tax‑forgiveness calculation; the land portion of property taxes continues to be collected by taxing jurisdictions.
Council reaction and next steps
Councilors asked about who bears the fiscal impact and how this differs from tax‑increment or other abatement tools. Catlin said the shortfall is the foregone improvement‑value taxes for a fixed period and that Oregon Housing and Community Services staff will review project pro formas to confirm demonstrated financial need. Catlin said staff must consult with Linn and Benton counties and other taxing jurisdictions to evaluate whether they would support participation; that intergovernmental concurrence is needed before Albany applies to become a sponsoring jurisdiction.
Catlin asked council whether staff should pursue further research and county discussions; multiple councilors expressed support for staff to explore the opportunity. Catlin said staff will return with more detail if the counties and other taxing jurisdictions are willing to participate and if staff resources allow.
