Tag: TIF

Community, Government

City Council Approves TIF Districts

On October 30th, the Portland City Council approved six new Tax increment financing (TIF) districts that will set the stage for more than $2.5 billion in focused investment in those geographic areas over the next 30 years. Three of the approved districts encompass vast sections of East Portland, including most of 82nd Avenue and half of Montavilla. At the same session, the City Council passed a related Resolution to review Portland’s Set Aside Policy, which requires 45 percent of TIF funds to support affordable housing.

TIF is a funding tool for physical improvements to a specific geographic area. Although funding comes from people’s property tax payments in that District, it does not raise tax rates on its own. Instead, it freezes the portion of the taxes sent to the County and City general funds at its current level and then diverts any increases to a special fund that TIF districts can use for projects in the area where those funds were collected. Because of Ballot Measure 50 passed by voters in 1996, property tax increases are mostly capped at three percent annually unless the county reassesses a property due to construction or other upgrades. After the first five years, the City can issue bonds based on that expected three percent TIF district income, providing capital for projects in the district years ahead of collection. TIF offers the benefit of reserving a segment of tax dollars for use in the community where it’s collected instead of spreading tax funds across all areas of the City. Portland mandates 45 percent of TIF funds towards affordable housing, a policy that has led to 47 percent of Portland’s affordable housing units residing in former TIF districts.

Timberview VIII Apartments affordable housing in Gateway TIF District (Jacob Loeb)

A year ago, Prosper Portland began working with community members in the proposed areas to create new urban renewal districts in the Central City and East Portland. Prosper Portland focused its East Portland TIF Exploration on the Sumner-Parkrose-Argay-Columbia Corridor, East of 205 centers, and the 82nd Avenue area. During that year, group and community representatives participated in Steering Committees and Working Groups to shape the TIF plans to meet specific goals within the district. People attended numerous public meetings and submitted feedback through comments or surveys. The unanimous City Council vote on October 30th represents the final step in authorizing the TIF districts. Starting in 2025, Prosper Portland will begin forming the Community Leadership Committee (CLC) for each TIF district. CLC members will work on the first five-year Action Plan that uses the limited early funds to meet goals shaped by the working groups. As with many other modern TIF districts, early work in the 82nd Avenue district focuses on stabilizing vulnerable communities and preventing displacement. TIF districts receive relatively low funds during the first five years due to the incremental tax revenue growth that increases by around three percent a year. After five years, bonds can help even out spending in the district over the next quarter-century.

82nd Avenue District Map courtesy Prosper Portland

In October 2015, the Portland City Council approved Ordinance 187415 that amended the City’s 30 percent affordable housing Set Aside Policy to a citywide target of 45 percent within active TIF districts. During the October 30th, 2024, City Council discussions, Portland Mayor Ted Wheeler recalled that the percentage increase was an estimate, and council members at the time expected a revaluation to occur after five years. Based on this past expectation of review and an expressed challenge to the percentage by Commissioner Rene Gonzalez, Mayor Wheeler and Commissioner Carmen Rubio proposed a Resolution directing the City Administrator to review the current Set Aside Policy in collaboration with Prosper Portland and the Portland Housing Bureau. After working with public, private, and community stakeholders, the City Administrator’s review team will brief Prosper Portland’s Board of Commissioner and return to City Council with recommended amendments by November 30, 2026.

At the objection of Mayor Wheeler, City Council approved two amendments to the Set Aside Policy Review Resolution that elevated affordable home ownership. Commissioner Mingus Mapps’ amendment significantly altered the Resolution by dictating that recommended amendments will include affordable housing Set Aside Policy at “a minimum of 20% for affordable homeownership activities with a remaining 25% allocated to other affordable housing work” in the three East Portland TIF Districts. Mayor Wheeler’s objections centered on the prescriptive nature of this amendment, which could force reviewers to override input on affordable housing ratios in one part of the city. For East Portland residents critical of city leadership’s treatment of their community, this is another example of elected officials overriding their voices. A benefit of Commissioner Mapps’ amendment is it will secure the 45 percent affordable housing set aside minimum for the East Portland TIFs. Ultimately, the 2026 City Council will have the option to consider the proposed amendments with the understanding that the affordable homeownership ratio could be a disingenuous number.

Glisan Landing Affordable Housing in Montavilla (Jacob Loeb)

The new wave of TIF districts, approved on October 30th, has the potential to invigorate development in their respective communities and expand the stock of affordable housing while working to reduce the displacement of residents and small businesses. The details of the TIF-funded projects will come from the five-year Action Plans crafted by CLC members and Prosper Portland staff in a co-creation process. Results will take years to materialize in each district. However, the funding mechanism needed for positive transformation can now begin collecting money in the 2025-2026 fiscal year. For 82nd Avenue and Montavilla, residents can expect increased funding towards improvements over the next three decades, with more affordable housing and infrastructure updates.

By

Jacob Loeb

Disclosure: The author of this article served on the 82nd Avenue TIF Working group and voted in favor of forming the district.

Commissioners Rene Gonzalez, Carmen Rubio, Mingus Mapps are running for Portland Mayor. Commissioner Dan Ryan is running for City Council District 2. Montavilla News does not endorse candidates or ballot measures.

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Government

Gonzalez Questions TIF Funding for Affordable Housing

On September 11th, Prosper Portland presented a report to Portland City Council on six proposed Tax Increment Financing (TIF) districts. After the presentation, Commissioner Rene Gonzalez questioned the merits of the city code requiring 45 percent of TIF funds set-aside for affordable housing in those districts. Based on comments during the session, the pending changes to the city’s form of government and a shift from past developer-friendly policies by the bureau prompted his objection. It is a sentiment supported by a business development advocacy group whose CEO recently penned an opinion piece published in the Oregonian.

Portland City Council adopted a TIF set-aside Policy for affordable housing in 2006, and that percentage of funding dedication increased from 30 percent to 45 percent in 2015. A 2024 ECOnorthwest TIF district investment impact report highlighted the policy’s effects across nearly two decades of development post that City Council change to TIF. The report found that 47 percent of all affordable housing in the city now resides within former TIF districts, and those areas experienced subsequent market-rate housing production growth four times greater than in other comparable segments of the city. Portland’s modern application of TIF differs from its historic Urban Renewal past, which removed housing for freeways and large civic projects. Current district proposals and recently approved TIF districts take a more holistic approach to economic development that aims to prevent displacement. Those new priorities strengthen communities before investing in large transformative projects like new parks, MAX light rail, or street grid enhancements similar to the Broadway Corridor Redevelopment plans.

Commissioner Gonzalez’s post-report comments did not question the need for housing or directly challenge the efficiency of past affordable housing production funded by TIF districts. However, they contested Prosper Portland’s ability to develop significant projects within TIF districts due to the current level of affordable housing required. “All of these choices have trade-offs. It’s great to talk about the plusses but also understanding the opportunity costs. And one of the biggest critiques that we discussed about Prosper over the last 15 years is the ability to deliver big projects, and we’re taking away tools from Prosper again to solve specifically one of the many problems we have in our community,” said Gonzalez.

Members of Prosper Portland and the Portland Housing Bureau addressed the Commissioner’s questions, supporting the current integration of affordable housing in TIF spending while reframing the assertion that Prosper Portland’s current approach has pulled back from all other areas in favor of affordable housing. “My top line assumption is that affordable housing and the resources that have gone to affordable housing if you compare the year 2000 to the year 2024, there’s a much higher level of investment in affordable housing. If you were to compare the kinds of investments that we’re making in public, private partnerships that support commercial development or major Community priorities, it’s probably about the same. What I think has declined precipitously since 2000 is the amount of funding that’s going into infrastructure,” explained Kimberly Branam, the outgoing Executive Director of Prosper Portland.

Although infrastructure support from TIF funds has declined in recent decades compared to past urban renewal spending, they have not disappeared. Infrastructure investment and projects that hasten gentrification are now shifted later in the TIF lifecycle. Modern TIF planning focuses on community stabilization ahead of significant project investment, strengthening existing residents and businesses against displacement before rents rise. This approach attempts to improve neighborhoods for the people already there, using the tax dollars collected in that district for its benefit. These programs now encourage private development and transportation funding but share economic growth with existing communities instead of predominantly benefiting private investment. “Historically, when you look at many TIF districts that were neighborhood TIF districts, a lot of them were anchored by a potential for new light rail lines. The challenge with having the first [TIF] investments out of the gate focused on the local match for federal [transit] investments is that then, you don’t have resources for the first five to ten years for other priorities. So the desire that we’ve heard is let’s learn from the lessons [of past TIF districts] and make sure that we’re stabilizing communities early on as those major infrastructure investments take place,” said Branam. “So along 82nd, as you’re planning for major investments, I think there’s a desire to make sure that early investments go towards the kinds of things that help small businesses purchase their property and homeowners stay in their homes,”

Portland Housing Bureau Director Helmi Hisserich reinforced the need to stabilize housing ahead of infrastructure investment as a tactic to fight gentrification and make more efficient use of public funding. “There is a direct corollary between major investments in the public sector, such as transportation and open space –which are very desirable– and the increase in property value, housing prices, and displacement,” said Hisserich. When public works projects increase area property value, the inflated costs for land will eat into the government’s budget for affordable housing developments. “Our current approach to affordable housing is to invest at the tail end, taking all of that value increase into our cost of that housing. So I think we need to be talking about a strategy where we’re investing early,” remarked Hisserich.

Commissioner Gonzalez expressed a perspective that the city is more vulnerable than when City Council first enacted this affordable housing funding policy. “Set-aside and the theory behind it goes back to 2006 [when] the city was booming. We were doing quite well at creating big projects and doing quite well at building. We were concerned that we were leaving people behind and so that it was not shared economic prosperity. I want to make space for this Council not to just hand off policies to the next Council that are based on very different assumptions. I think we are in a very different place in 2024 than we were in 2004. We’re not generating big projects, market [rate] housing has collapsed. I mean, we’re looking at a downtown armageddon if we don’t significantly change this trajectory,” said Gonzalez. He also noted that middle-income housing production is still relatively weak, and many Portlanders earn too much to qualify for the affordable housing TIF funds create. However, the greatest need for housing remains in the regulated affordable segment.

Lisa Abuaf, the Director of Development and Investment for Prosper Portland, addressed the agency’s efforts to support middle-income housing and the headwinds to working as a catalyst for middle-income housing creation. “We actually set aside a portion of our citywide funds to support middle-income housing. I want to acknowledge middle-income housing is not regulated affordable and you don’t have the federal programs to tap into. So it’s really challenging because we’re very dependent on what’s happening in the private debt and equity market. I think that’s actually what we’re seeing right now, and the volume of resources we have today in TIF can’t take the place of what has been private investment to date.” said Abuaf. Helmi Hisserich also cited an increased need for regulated affordable housing above all others. “While middle[-income] housing is a great area when we talk about affordability, 53 percent of the housing need is in households earning below $81,000 a year.” In 2024, a household of three people earning 80 percent of the Median Family Income would make $84,960 and could qualify for many TIF-funded affordable housing.

In Monique Claiborne’s opinion piece published in the September 15th Oregonian, she echoed the Commissioner’s desire to reexamine the affordable housing requirements. Claiborne is CEO of the regional economic development group Greater Portland Inc., a private agency that bolsters business development in Portland and surrounding areas. The article reiterates Commissioner Gonzalez’s perspective regarding TIF’s required affordable housing percentages and argues for returning Prosper Portland’s independence from the City Council before the new year’s changes to City Council. Since 2007, city leaders have gained increased control over Prosper Portland’s activities and budgets. Changes to Prosper Portland control and TIF allocations are not yet under consideration at City Hall. However, these comments could represent a test to see if there is support for rolling back changes made to TIF district project allocation and Prosper Portland’s operational stance.

With many officials and research pointing to housing costs as a leading factor for Portland’s social problems, initiatives removing funding sources for affordable housing would likely fail to receive widespread support. However, Commissioner Gonzalez’s suggestive inquiries and Monique Claiborne’s opinion piece show signs of a growing cohort seeking change in TIF district set-aside percentages. People should expect more discussion of affordable housing set-aside in the coming months before a new 12-person City Council takes control. Prosper Portland staff committed to bringing additional information to the October 23rd City Council public hearing on TIF District Exploration.

By

Jacob Loeb

Disclosure: The author of this article served on the 82nd Avenue TIF Working group and voted in favor of forming the district that includes a 45% affordable housing set-aside.

Commissioner Rene Gonzalez is running for Portland Mayor. Montavilla News does not endorse candidates or ballot measures.

Promotion: Help keep independent news accessible to the community. Montavilla News has a Patreon account or you can pay for a full year directly online. We invite those who can contribute to this local news source to consider becoming paid subscriber or sponsor. We will always remain free to read regardless of subscription.

Community, Construction, Government, Infrastructure

82nd Ave and East Portland TIF Exploration

Over the next 30 years, more property tax dollars collected in parts of East Portland could go directly towards projects in that geography. If evaluators recommend new Tax Increment Financing (TIF) expansion to Portland City Council later this year, Portland could gain new TIF Districts along 82nd Avenue, East of Interstate 205, and in the Parkrose-Columbia Corridor. In 2023, Portland City Commissioner Carmen Rubio’s office convened an East Portland TIF Exploration Steering Committee to identify three possible TIF locations. That work progressed to the next phase of investigation in November 2023 with the formation of working groups charged with creating TIF boundaries, guiding principles, and permissible project lists. Those groups of community members, organization leaders, and business people must also communicate with the people in the affected area to determine if a TIF District is the right project funding tool for each proposed District. Community members can learn more about TIF and voice their opinions at TIF Open Houses this May.

Tax Increment Financing (TIF) is a funding tool for physical improvements to a specific geographic area. Although funding comes from people’s property tax payments in that District, it does not raise tax rates on its own. Instead, it freezes the portion of the taxes sent to the County and City at its current level and then diverts any increases to a special fund that TIF Districts can use for projects in the area where those funds were collected. Because of Ballot Measure 50 passed by voters in 1996, property tax increases are mostly capped at three percent annually. The City can issue bonds based on that expected three percent TIF District income, providing capital for projects in the District years ahead of collection. TIF has the benefit of reserving a segment of tax dollars for use in the community where it’s collected instead of spreading all tax funds across all areas of the City. Portland also dedicates 45 percent of funds collected towards affordable housing, a policy that has led to TIF districts now supporting 47 percent of Portland’s affordable housing units. Even with those upsides, forming a TIF District has the potential to cause harm to communities and has displaced people for decades under another name, Urban Renewal.

Past Urban Renewal projects used TIF District funds to fuel the destruction of communities across the country by demolishing “blighted” neighborhoods. The municipalities created new infrastructure and other public works in those areas, causing displacement and gentrification. The Albina neighborhood stands as a prime example from Portland’s past, where Urban Renewal displaced hundreds of Black families and businesses by creating Interstate 5 and other public projects where people once lived. However, even the relatively recent Interstate TIF District caused substantial displacement in the corridor surrounding the MAX Yellow line. Consequently, Prosper Portland adopted a new approach to implementing TIF Districts that relies on community guidance and early anti-displacement work. Portland’s newest TIF District in the Cully neighborhood spent nearly four years shaping a plan to fund projects meant to strengthen the existing residents while improving conditions. Approved in November 2022, the Cully TIF District is too young to prove this new model, and it will take years to see if it can meet all its goals. However, the three new TIF Districts under consideration will leverage the Cully work in an effort to create an equitable tool for funding improvements and provide community stabilization during a transformation already underway.

The issues around TIF District formation are complex. Past projects have shown that an improvement for some can cause injury to others, and it often disproportionately harms people from communities of color. It is essential that a variety of residents participate in conversations, learning about the positive impacts and helping shape risk mitigations that will prevent harm. Montavilla Residents can attend the May 6th meeting in The Orchards on 82nd building at 8118 Southeast Division Street from 6 to 8 p.m. or the May 9th meetings held in the African Youth & Community Organization (AYCO) building at 2110 SE 82nd Avenue. All three sessions are presented in English with translators available for Cantonese at 6:15 p.m., Vietnamese at 6:50 p.m., and Somali at 7:20 p.m. Attendees are asked to pre-register online for the Orchards meeting and the AYCO meeting. For people looking to attend on another day or are more invested in the East of I-205 TIF, there is an event on Saturday, May 11th, from 11 a.m. to 1 p.m. in the Gethsemane Lutheran Church at 11560 SE Market Street. People can request translation services when registering online.

Update: Added additional meeting information for May 6th event.

Article by

Jacob Loeb

Disclosure: The author of this article serves on the 82nd Ave TIF Working Group. It is a unpaid volunteer position. However, participants can receive honorariums for attending each meeting that have a cash value. Montavilla News does not endorse candidates, ballot measures, or government initiatives. The Authors participation in this Working Group and votes should not be considered the opinion of this publication.

Construction, Infrastructure, View of Montavilla

NE 97th Avenue LID Grid Restoration

Next summer, the Portland Bureau of Transportation (PBOT) will begin a multi-year project to reconnect portions of the City’s street grid east of Interstate 205. This work will slice up several long blocks, opening the way for new housing developments emphasizing walking, Biking, and public transportation. The project will span from NE 94th Avenue to NE 100th Avenue, with work occurring in two phases.

PBOT intends to begin Phase 1 work in mid-2023, completing sidewalk infill on NE 97th Avenue. Previous developments and public works projects added modern road infrastructure to NE 97th from NE Glisan Street to NE Davis Street. Crews will continue that work south to E Burnside Street. That area currently lacks curbs and sidewalks. This phase will also improve conditions on E Burnside Street from 94th Avenue to 97th Avenue. Portions of the sidewalk and road surface have deteriorated, particularly near the TriMet Max tracks that cross the westbound lane.

E Burnside Street at 94th Avenue Looking east

Planned for the Summer of 2024, Phase 2 of the project has a greater impact on the local streetscape. This work will create new streets and require significant private land dedication to complete. PBOT crews will build new segments of NE Couch Street from NE 97th to 99th avenues and NE Davis Street from NE 97th to 100th avenues. The project’s scope includes new streets, sidewalks, and stormwater improvements.

NE 97th Avenue and NE Couch / Davis LIDs from Portland Maps

As a Local Improvement District (LID), property owners will supply funding for this $15 million project with tax increment financing (TIF) from the Gateway Urban Renewal Area and a transportation system development charge (TSDC). PBOT will cover overhead costs incurred by managing this project.

Developer Joe Westerman and his companies own the majority of the affected properties in the LID. That concentrated ownership likely helped drive the City’s efforts to reconnect streets and will allow a significant change in road use. Although near the I205 Multi-use Path, this section of Portland is challenging to navigate outside of a car. Long blocks force pedestrians onto busy roadways and extend walking distances as people double back to reach a destination. Walkable and bike-able streets near public transit reduce the number of parking spaces needed, allowing for larger developments that maximize land usage and housing density.

NE 97th Avenue at NE Davis Street looking towards E Burnside

In 2019, this area received a surge in development interest, with one project at the corner of E Burnside Street and NE 97th Avenue receiving design approval. Other projects stalled in the Early Assistance phase of development, including a six-story building with 77 units. These planned improvements could help reignite developer interest in this area and spur a new wave of housing construction. Look for road crews to begin work next summer and prepare for new streets in 2024.

East Montavilla Sanborn Map 1928

By

Jacob Loeb

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