Wednesday, September 15, 2010

Metro Local Infrastructure "Residential Incentives"/Subsidies: $3.8 Billion Projected, but ZERO Require Income Targeting; City of Portland to Produce 71% of Units, Supply 84% of $$.

Metro is accepting comments on their Community Investment Strategy/ Infrastructure report through October 1, 2010. (My prior post HERE).

I hope to get a complete set of my comments posted by the early part of next week in time for others to review and make their own comments. [I will provide more details on where to comment in a future post, I would NOT use the on line questionnaire].

In the interim, this post contains one of the most important conclusions I reached after reading through most of this long report and its appendices.

Problem 1: Metro Says 97,290 Units will Receive Residential Infrastructure "Incentives"/Subsidies, But Does Not Show 
A. Total Costs. 
B. That Any Subsidies Will be Required to be Targeted to Low Income Renter Households with the Highest Cost Burden Rates. 
C. The Heavy Concentration of Units and Subsidies Within the City of Portland.

After reading through the report and appendices it is apparent to me that Metro clearly understands that:
  1. Rising housing costs, NOT rising transportation costs are the reason that H+T cost burdens are projected to increase significantly.
  2. The rate of cost burdens are the highest among low income renter households. 

With this knowledge the policy responses from Metro to deal with growing cost burdens can only be viewed as disappointing and ineffective.

The principle tool that Metro apparently sees to address the affordability problem is the use by local government of residential "incentives" /subsidies. These are primarily urban renewal funds and incentives in "centers".

Appendix 1 includes a  residential "incentives"/subsidy table by sub area HERE. I added the numbers in that table and conclude that Metro projects that a total of 97,920 units will receive these subsidies by 2030, but there are three problems:
  1. NONE of the subsidies are REQUIRED to be targeted to low income renters who have the highest cost burdens and there is no apparent ongoing local reporting requirement for these incentives. 
  2. There is no calculation that shows the projected COST of these subsidies. 
  3. No where does Metro shows residential incentive totals by city, which would have revealed that the region is HEAVILY dependent on the City of Portland to deliver housing units and subsidies in centers and urban renewal districts for the entire region. 
To help address the second and third problems above I have created a table HERE that shows my projections (using Metro data) that:
  1. Costs for these residential infrastructure "incentives"/ subsidies will total $3.8 billion through 2030. 
  2. Residential "incentives"/subsidies in the City of Portland are projected to account for 71% of the units and supply 84% of the regions cost of these residential incentives. 

With projecting rising rates of cost burdens (Metro's updated table is HERE) and a projected $3.8 billion local expenditure for residential "incentives" /subsidies through 2030:
  1. SOME of those "incentives"/ subsidies must be targeted for exclusive use by low income renter households.
  2. Future reporting on the actual deployment/use of these subsidies must include reporting by subarea and City on the income levels of the housing built with these subsidies.  
  3. Metro's  Appendix 1 table must breakout residential infrastructure "incentives" by units and costs for each city and explicitly acknowledge that Metro's stated  "housing choice/ share the burdens and benefits of growth" policy is HEAVILY dependent on residential infrastructure incentives within the City of Portland, which is projected to produce 71% of the total regionwide units in center and urban renewal areas and supply 84% of the dollars through 2030.
  4. Metro must help create/support an effective REGION WIDE strategy to leverage additional FEDERAL dollars for housing, as federal dollars have been and continue to be the primary source of funding for affordable housing, especially outside the City of Portland. This unified housing approach should be similar to the existing region wide approach that provides unified support for annual and long range federal transportation funding.
Originally created and posted on the Oregon Housing Blog.

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