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Portland Housing Authority outlines Congress Street social‑housing plan and flags roughly $5.8 million funding gap
Summary
Portland Housing Authority presented a 54‑unit Congress Street infill concept to the Social Housing Task Force, saying the non‑LIHTC scenario produces an estimated $107,000 per‑unit shortfall (about $5.8 million) and asking whether city equity or bonding could help close the gap.
The Portland Housing Authority on Thursday walked the Social Housing Task Force through a conceptual plan for a 54‑unit, seven‑story infill project on Congress Street and described a sizable financing shortfall under several non‑tax‑credit scenarios.
"We do have a $15.7 million interest‑only loan," Jay Waterman, director of real estate development for the Portland Housing Authority, told the group as he reviewed the authority’s pro forma. "We end up with cash flow at about $100,000 a year," he said, and estimated a per‑unit funding gap of about $107,000 — roughly $5.8 million total — if low‑income housing tax credit (LIHTC) equity is removed from the model.
Task force members probed the underlying assumptions: unit size and mix, allowable rents tied to AMI bands, and how removing LIHTC would change the project’s economics. Waterman said the memo modeled all units at 80 percent of area median income (AMI) for simplicity, then noted that other mixes (for example larger 2‑ and 3‑bedroom units targeted at different AMI bands) could change revenue and cost assumptions.
Members discussed hybrid approaches to reduce the gap. One option raised repeatedly was to ‘‘condo‑ize’’ a portion of the building — putting some higher‑income units into a separate ownership structure — so that the social‑housing portion could be financed more deeply by public subsidy while the other units attract private capital. Supporters said condoization can simplify deals for syndicators and investors; skeptics worried it might dilute social‑housing goals.
The discussion also ranged over non‑project remedies: lower construction interest rates, reduced city fees, expedited permitting, or a city bond that would supply equity. "If the city bonded for $15 million and invested it directly in that project ... is the city getting what we're talking about in terms of benefits?" one task force member asked; the authority said answers depend on structure and expectations about ownership, cash‑flow sharing and long‑term affordability covenants.
Waterman emphasized the number of variables and urged the task force to identify the goals it expects from a city–PHA partnership so the authority can return with a pro forma that matches the group’s priorities. The task force agreed to update the project’s assumptions and seek possible revenue and subsidy options before advancing a pilot.
The task force did not adopt any funding commitment at the meeting. It asked for refined financial models and clearer parameters for a pilot project to present to council and the public.
