Housing Committee

HOUSING COMMITTEE DATE: Wednesday, October 9, 2019 TIME: 5:30 PM LOCATION: City Hall, Room 209 AGENDA Review and accept Minutes of previous meeting held on September 11, 1. 2019 a. Draft Minutes from 9­11­19 2. Presentation of DRAFT 2019 Biennial Housing Report a. DRAFT 2019 Biennial Housing Report Communication Item: Update on 93 Douglass Street (site of former West 3. School)­ City Manager Jon Jennings will provide an update on this property Communication Item: Update on Disposition of Tax Acquired and City­ 4. Owned Property a. Update on Disposition of Tax Acquired and City­Owned Property 5. 2019 Work Plan Discussion a. 2019 Work Plan Discussion Next Meeting Date: November 13, 2019 City Hall, Room 209 389 Congress Street / www.portland.gov / tel, 207­874­8720 / tty, 207­874­8936 / fax, 207­756­8258  Housing Committee Minutes of September 11, 2019 Meeting NOTE: The Housing Committee meetings are now live-streamed, which can be viewed at this link: http://townhallstreams.com/stream.php?location_id=42&id=16398 These minutes provide a record of those in attendance, general discussions taking place, and motions made. A meeting of the Portland City Council’s Housing Committee (HC) was held on Wednesday, September 11, 2019 at 5:30 P.M. in room 209 of Portland’s City Hall. Councilors present at the meeting included Councilor Belinda Ray, and Committee members Councilor Kim Cook, Councilor Spencer Thibodeau, and Councilor Jill Duson, Chair of the Committee. City staff present included Christine Grimando, Acting Director of Planning and Urban Development, Mary Davis, Division Director Housing and Community Development, Victoria Volent, Housing Program Manager, Jessica Hanscombe Licensing and Housing Safety Manager, and Keith Gautreau, Fire Chief Item 1: Review and accept Minutes of previous meetings held on July 10, 2019 Motion by Councilor Thibodeau to move for adoption of the minutes from July 10, 2019. Motion was seconded by Councilor Duson and minutes approved 2-0 (Councilor Cook absent) Item 2: Review and Discussion of Affordable Housing Development Funding Request for 18 Luther Street Victoria Volent introduced this item with an updated overview of the affordable housing development funding request for the project at 18 Luther Street. During the July 10 meeting of the Housing Committee, the Committee requested the applicant, HomeStart, submit a Capital Needs Plan to address current and future maintenance needs prior to a funding request recommendation from the Committee to the City Council. HomeStart, a 501(c)(3), is requesting $36,000 in Housing Trust funds for further upgrades on the single family rental house they own, and to add an accessory dwelling unit (ADU) to the unit. Sherlock Homes Certified Home Inspections conducted an inspection of 18 Luther Street on May 16, 2019. Their report (see attached) identified numerous items requiring repair or replacement. The City of Portland conducted a Housing Safety inspection on August 8; the house passed the inspection. Reed and Company Architecture provided a preliminary cost estimate of $100,000 to $125,000 for construction of the 500 sq ft accessory dwelling unit to be attached at the rear of the cottage with a shared entry. This will be a single story, handicapped accessible building. The estimate includes “some volunteer participation”. HomeStart submitted a development budget that estimates construction costs of $117,500 plus a contingency budget of $5,875 for a subtotal construction budget 1 of $123,375. Additional soft costs of $21,848 and financing of $6,980 totals $152,203 in project costs. From October 1, 2015 through September 30, 2018, HomeStart received $12,715 in donations, and $21,784 in grants for a total of $34,499. These fund were used for improvements such as: complete building rewiring; added all new plumbing including drain and waste supply piping; partial insulation of cellar; extensive exterior and interior painting; renovation of enclosed three-season front porch, all new storm windows; and insulated inserts for all storm windows. HomeStart is awaiting a decision by Bangor savings Bank for up to $40,000 in funding; the decision is likely in November of this year. HomeStart also confirmed they intend to expand their end of year solicitation and depending upon the results of these two funding efforts, they may begin a major fundraiser in June. HomeStart has confirmed they do not have future pledges at this time. Genesis Community Loan Fund is prepared to issue a Commitment Letter for $71,000 at 5.6% for a term of 60 months, interest-only for a construction period of up to 12 months, then amortizing over 30 years for the construction of an accessory dwelling unit and renovations to the existing unit. Per the request of the Housing Committee (during their July 10 meeting), HomeStart has submitted a Capital Needs Plan appropriating a total of $21,700 for priority improvements. Staff provided guidance via e-mails and during a meeting in July as to the content and expectations of the Capital Needs Plan. Motion by Councilor Thibodeau to move for adoption of the funding request for 18 Luther Street. Motion was seconded by Councilor Duson. Councilor Duson opened this item for Public Comment. Councilor Duson disclosed that the Chair of Home Start, Betsey Remage-Healey is a long-term personal friend. Betsey Remage-Healey did comment that Peaks Island faces particular pressures because of the attractiveness of renting out just for the summer, so finding year-round long-term housing is very difficult. The funding will help create another unit of year-round long-term rental housing. Seeing no further requests to comment, Councilor Duson closed the item for further Public Comment. The Housing Committee voted (2-0) (Councilor Cook absent) to recommend funding this project in the amount of $36,000 from the Housing Trust Fund, with funding contingent on (1) the ability of the applicant to raise a minimum of $35,221 by April 1, 2020, through a capital campaign; (2) the City’s funding will be used for construction hard costs only and (3) the applicant would not be permitted to request future funding from the City to complete any of the repairs noted in the May 19, 2019 inspection report from Sherlock Homes Certified Home Inspections. Item 3: Welcome and Organizational Meeting for the Rental Housing Advisory Committee Councilor Duson welcomed the new members of the Rental Housing Advisory Committee and asked them to join the discussion at the front of the room. Each member introduction themselves after which Councilor Duson asked if member had comments or concerns. Aaron Berger asked if the start date of March 2019 could be changed to a later date as they have not had their first meeting yet and he is only serving for one year. Mary Davis noted that the City Clerk staggers terms and anyone whose 2 term is up may apply again and if selected by the Nomination Committee, then they would be eligible to serve three three-year terms. Committee members who are serving one year will not have that one year counted toward the three, three-year term limit. Thaddeus St. John followed up regarding how the terms were staggered and how that decision was made. Council Duson explained that members with legal background held preference towards an initial three-year term. Mary Davis was asked to provide a road map for the next steps to be taken following this meeting. Mary noted she would send an e-mail to all new members regarding the best date for the first meeting. During the first meeting, the members will be asked to elect a Chair and Co-Chair and establish what their regular meetings will look like. The City will hire someone to take notes and the minutes and staff will be available to arrange meeting rooms for the Committee’s use. Councilor Duson thanked the members for volunteering to serve. Based on a question by Aaron Berger, Councilor Duson provided instructions on how the Committee should organize itself (through an annual workplan) and expectations that the Committee will examine issues and provide recommendations to the Housing Committee. Councilor Duson noted this is not a complaints forum. Councilor Cook arrived at 5:58. Thaddeus St. John inquired into communication limits that should be observed outside of public meetings. Councilor Duson advised members to err on the side of treating all communications as communication that could be requested through a FOAA request. Decisions and policy negotiations should not be conducted outside of the public meeting. Councilor Cook noted that if more than two members communicate about an issue, then that communication might be considered a meeting. Corporation Counsel should advice on this question. The Rental Housing Advisory Committee agreed to conduct their first meeting on September 24, 2019. Item 4: Metro Regional Coalition Housing Resolution Councilor Duson introduced this item. Per Mary Davis, at the request of the Housing Committee and City Manager, the Housing Division pulled together information regarding local housing data to draft a recommendation for the Housing Committee. Much of the data describes demand, affordability, and housing production goals. The production goal of 256 units per year by 2027 are not solely meant for the City to achieve, they are also meant for the private market to assist in creating. Councilor Ray added background on how the resolution arrived to the Housing Committee. The seven member Metro Regional Coalition (MRC) is a subgroup of the 25 communities of GPCOG. The seven members meet regularly to find ways to create housing. The MRC has been trying to address housing and housing for the homeless in recognition of the great demand for housing within the state and across the nation. For over a year MRC met to discuss developing Housing First outside of Portland, however no community was able to step forward. MRC came back to the table to ask themselves how they could incentivize the creation of housing. The steps Portland have taken are the 3 steps that the experts recommend; other community’s needs to follow suite. Per MRC, the best method to move forward is to make a pact to pass local resolutions establishing affordable housing goals. Portland hopes to complete this step by October for adoption by the Council later this year. After the Housing Committee reviews the language, Councilor Ray hopes the resolution will move to Council for passage. Resolution is an important first step. By Portland going first, others may feel the pressure to join and take action. Councilor Cook is happy to lead by example to bring our neighboring communities along. Councilor Duson hopes to also inspire other communities. Councilor Ray is optimistic of working across communities. Motion by Councilor Cook to move for adoption of the Metro Regional Coalition Housing Resolution was seconded by Councilor Thibodeau. Councilor Duson opened this item to public comment. Zach Erickson inquired into the floor area and number of bedrooms associated with the 256 housing units per year and noted is would be more ambitious to included specifications on the number of bedrooms. Jim Devine, advocate for Preble Street’s Homeless Voices for Justice, supports any efforts to expand the base of Housing First housing. Councilor Duson closed the public comment period. Christine Grimando confirmed the Portland-South Portland area is not similar in size to the Portland area market. She also noted how the Comprehensive Plan speaks to housing for the next decade and what the City might reasonable strive to accomplish in housing growth. Councilor Cook indicated that more data is needed, but the number of bedrooms does not correlate to population growth as some of the units created in the last five years, for example, represent second homes. Therefore, counting bedrooms may be too ambitious and too technical at this time. Councilor Ray asked if the Affordable Housing TIF applies to middle -income housing. Per Mary Davis, the City’s AHTIF applies to development projects creating up to 120% Area Median Income, however, typically the AHTIF’s approved by the City Council tend to be for projects creating housing at a lower income bracket (such as 60% AMI and lower). Councilor Ray noted that the AHTIF may be a source of funding for development projects aimed at housing the missing middle. Councilor Ray asked the Committee for their input on adding another “whereas” to the Resolution, specifically, Portland’s commitment to continue to examine policy and land uses in the City to determine new ways to incentives housing development. Councilor Cook accepted and Councilor Thibodea seconded Councilor Ray’s friendly amendment. The Housing Committee voted (3-0) to recommend sending the Metro Regional Coalition Housing Resolution to the City Council as amended. 4 Item 5: Presentation, Overview, and Integrated Reports by Permitting and Inspections, and Fire Department Fire Chief Gautreau began the presentation by noting that the Fire Department continues to work in collaboration with the Housing Safety Department. The Fire Department organization has not changed much since the last update. The Fire Department efforts remain on residential housing. The greatest risk is still life safety with residential housing. Both departments (Fire and Housing Safety) are scheduled to receive national fire protection training. During the Council’s October agenda, the Fire Department will present the 2018 NFPA codes to the Council for adoption in Chapter 10 of the city codes. The Fire Department has eliminated the proactive joint inspections. The joint inspections were found to be intimidating to the homeowner, inconvenient to schedule and wait for members to join the inspection, and a duplication of effort. The goal is to get both departments into buildings every 3 or 4 years. The Fire Department is excited about providing joint messaging from both department as well as enforcement. A new document regarding windows has been drafted and will be distributed to the Southern Maine Landlord Association. Jessica Hanscombe updated the Committee on the status of long and short-term rental registrations in the City, as well an overview of the first Joint Housing Safety and Fire Prevention Meeting held in July 2019. Housing Safety will be meeting monthly to discuss Housing and Fire Code compliance and enforcement. In July of this year, the Permitting and Inspections Department reorganized and combined the Licensing and Housing Safety Divisions. The financials for fiscal year 2019 (7-1-2018 to 6-30-2019) and projections for FY 2020 were provided to the Committee as were the 2019 Inspections (year to date). Jessica provided a breakdown of each of the 2,586 inspections by type conducted over the last eight months. Jessica also met with the Southern Maine Landlord Association President. The outcome of the meeting was the creation of a bucket list of action items for the upcoming year. The Fire Department and Housing Safety looks forward to meeting with the SMLAP regularly during each of their upcoming meetings. The Housing Committee provided comments and questions to staff. Councilor Duson opened this item to public comment. A citizen requested a copy of the backup material. A citizen noted that the SMLA represents only 5% of the landlord population and that other landlords should be notified of changes and updates as well. A citizen asked how many units are not inspected. Chief Gautreau explained that unis are being inspected more frequency and is comfortable that all rental units have been inspected in the prior 5 years. Councilor Duson closed the public comment period. Councilor Duson thanked staff for working with tenants to find solutions. She also encouraged staff to participate in April Housing Month. 5 Item 6: Communication Item: Bayside Village Briefing Christine Grimando introduced this item by providing the background of the August 13, 2019 Planning Board meeting and the proposed project. The Planning Board has no jurisdiction of the sale of the property, which has had other changes in ownership since the 2006 Planning Board approval. The original approval (from 2006) was for a student lodging house. Lodging houses are a distinct category in the City’s Land Use Code, and not considered a residential dwelling unit under the Zoning Ordinance. When the applicant proposed to convert the student lodging to apartments this constituted a new use category for the site, and this triggered site plan, subdivision, and inclusionary zoning reviews. Noticing for the Planning Board meeting was conducted via newspaper ads, website postings, direct mailing to all property owners within 500 feet of the property, and neighborhood meetings. Current noticing requirements for applications to the Planning Board are to owners only. Tenant notices are not required in part because, unlike property owners, there is not a system to track, maintain, or distribute tenant names and addresses. Councilor Duson is glad to have received the developer’s (Tom Watson) letter to the Committee addressing the issue at hand. Per Christine, the information contained in the letter is not pertinent to the Planning Board’s responsibilities. Councilor Duson had expectations that staff would have looked into this further. Councilor Cook noted Division 30 of the Ordinance provides an additional method of notice and perhaps staff should investigate the use of signage as notification. Christine agrees there is room for a viable solution that could be reviewed in the ReCode. Councilor Ray confirmed the City’s responsibility with private sales and requirement for public notice. Councilor Duson opened the meeting to the Public Comment A citizen noted that sending a letter addressed to “Occupant” is fine with him. Councilor Duson closed the public comment period. Item 7: Communication Item: DRAFT FY19 HUD Consolidate Annual Performance Report Mary Davis introduced this item to the Committee. The Consolidate Annual Performance Report (CAPER) is a report required by HUD in which the City of Portland reports accomplishments for the CDBG, HOME and ESG Programs. The CAPER must be submitted to HUD by September 30. Staff continues to work on the report. An additional 20 or so page of charts will be attached to the report. Councilor Duson anticipates some of the data in the CAPER will appear in the biennial Housing Report. 6 Item 7: 2019 Work Plan Councilor Duson noted the Housing Committee has done a pretty good job of taking care of the items the Committee tasked themselves with. Mary Davis asked if the Housing Committee will be holding meeting during December. Councilor Duson would like the opportunity for the current Housing Committee to have a conversation on recommendations to the 2020 Housing Committee. She sees this occurring during the November meeting. Motion to adjourn by Councilor Thibodeau, seconded by Councilor Cook (approved 3-0) the meeting adjourned at 7:34 P.M. Respectfully submitted, Victoria Volent 7 Executive Summary Definition of Terms I. Housing Demographics a. Population b. Household Tenure c. Household Age Distribution d. Employment, Wages, and Income e. Income by Housing Type f. Poverty II. Housing Affordability a. Affordability Index & Affordability Gap b. Interpreting Income Levels c. Household Income Distribution d. Wages and the Cost of Rental Housing e. Household Income Distribution f. Housing-Cost Burdened III. Housing Supply a. Residential Property Characters b. Age of Housing Stock c. Vacancy Rates d. Housing Availability e. Planning Board Approval Activity f. Housing Supply: Certificate of Occupancy g. Place of Development h. Short Term Rentals i. Home Sales j. Development Costs k. Labor Shortage 1 Table of Contents IV. Housing Demand a. Federal Resources b. Condominiums c. Multi-Family Rentals d. Single-Family Houses e. Low-Income Housing/Homelessness f. Student Housing g. Desirability V. Housing Resources a. Federal Resources • HOME Investment Partnership Program • Community Development Block Grant (CDBG) • Emergency Solutions Grants Program (ESG) • Neighborhood Stabilization Program (NSP) • Lead Safe Housing • Brownfield Economic Development Initiative (BEDI) b. Local Resources • Housing Trust Fund (HTF) • Affordable Housing Tax Increment Financing (AHTIF) • Housing Development Fund (HDF) • Selling/Leasing City-Owned and Tax Acquired Property VI. Housing Toolbox a. Inclusionary Zoning b. Hotel Inclusionary Zoning c. Housing Replacement Ordinance d. Reduced Fees for Developing Affordable Housing e. Downtown Height Overlay District Amendment f. B-1, B-1b Amendment g. Allowing Accessory Structure in R-3 and R-5 Zones to be converted to dwelling units h. R-6 Zone in the vicinity of Boyd, Oxford, and Mayo Street Rezoned to R-7 i. Multi-Family Density Standard Amendment j. R-6A Zone k. R-6A Zone l. Rezoning 89 Anderson Street m. R-5A Zone Amendment n. IR-1 and IR-2 Accessory Dwelling Unit (ADU) Amendment for Peaks Island 2  o. Reduced Parking Requirements & Fee-in-lieu Option p. Priority Review q. India Street Form Based Code (IS-FBC) r. Amendment to Zoning Ordinance for Greater Density and Height s. B-1 and B-1b Neighborhood Business Zone t. Munjoy Hill Neighborhood Conservation Overlay District u. Nonconforming Use and Nonconforming Buildings v. Transportation Improvements to Allow for Greater Density w.Short Term Rentals x. Portland Water District Efficiency and Repair Services Program y. Healthy Neighborhoods Program z. Rental Housing Advisory Committee aa. Housing Safety • Rental Housing Registration/Inspections • Fire Department Inspection Program Table of Contents 3 Executive Summary Housing stability promotes economic prosperity and the wellbeing of communities. Economic health in turn is a driving force behind housing demand and a link to housing costs. Attracting and retaining a diversified workforce relies on a healthy housing market as much as employment opportunities. The lack of affordable housing impedes the City’s goals for future growth. The Comprehensive Plan goal is for 75% of employees in Portland to be able to live in the City. This contemplates a production goal of 2,557 housing units over the next ten years, or 256 units per year. The Workforce Housing Study from 2015 found that, of all the housing produced, currently 29% is affordable at the median income. Based on City residents’ income, that number should be between 53% and 62%. Therefore, of the goal of 256 units produced a year, 136 to 159 should be affordable at the median income. The current Affordable Housing Fund application sets a goal of 65 to 90 units affordable at or below the median income, based on available funding. Despite market obstacles (cost of materials and a labor shortage) and geographical limitations, Portland continues to create housing for all age and income groups. That said, there are a number of housing challenges and issues that have been identified in this report. Some of the challenges are listed below. • Portland’s estimated median income in 2018 of $51,799, places the city towards the bottom of the Portland – South Portland Metropolitan Area community income earners. • The three largest job sectors (office administration, sales, and food preparation and service) within the Portland- South Portland labor market are some of the lowest paying jobs. • To purchase the median priced home in Portland of $316,000, a household would need an income of $102,173, which is almost double the actual median income in Portland of $51,799. • Portland’s largest household group, at 20% of the population, is low-income households. • 47 percent of renter-occupied households and 29 percent of owner-occupied households pay 30 percent or more of their income towards housing costs. • 54% of Portland’s housing stock was built pre 1950- which is the riskiest housing for lead hazards • Increased demand and limited homebuilding activities have contributed to a significant decline in available housing inventory. Within this backdrop, Portland is utilizing a wide variety of programs, planning, and deregulatory policies towards the creation and preservation of housing. • At the recommendation of the Housing Committee, the City Council approved subsidies during 2018 and 2019 in the amount of $2,073,439 in HOME funds, $280,000 in CDBG funding, $1,961,734 in Housing Trust Funds, and $13,846,142 in Affordable Housing Tax Increment Financing to create or rehabilitate 418 affordable and market rate housing units and a 40 room women’s lodging house. • Recent updates to the city code supports increasing residential density and height, providing incentives for creating affordable housing, backing the implementation of form-based codes, encouraging the creation of affordable accessory dwelling units, mandating inclusionary zoning, reducing lot size, expediting affordable housing administrative review, facilitating infill development, reducing development fees for the creation of affordable housing, and reducing parking minimums. • Portland’s Planning Board approved 2,300 units of residential housing from 2014 to August of 2019. This equates to approximately 383 units per year, which is greater than the Comprehensive Plan goal of 256 units per year. Inclusionary Zoning was adopted by Portland on October 19, 2015. Since then, 59 inclusionary zoning units have been approved by the Planning Board and $826,500 has been collected as a fee-in-lieu. These fees are deposited into the City’s Housing Trust fund and have been allocated to subsidize the creation of 492 units of affordable housing. • Additionally Portland is protecting against the loss of long-term rental units from leaving the local market to host short-term guests through its short-term rental ordinance. • The Maine Medical Center Healthy Neighborhoods Program will fund and execute housing and community improvement programs in the surrounding St. John Valley and other neighborhoods. • Improvements to the city's transportation infrastructure both on- and off peninsula will in part better accommodate greater housing density. • The new Portland Rental Housing Advisory Committee will provide the Housing Committee with recommendations or proposals for improvements, modifications, or changes regarding landlord and tenant policy issues, and identify educational opportunities, seminars, and materials that would be useful to landlords and tenants. • The Housing Safety Office administers a rental housing registration and inspection program for residential rental properties. The focus of residential inspections is now on one and two-unitproperties and short-term rental units. Finally, Portland is proud to embrace the Metro Regional Coalition Council Resolution regarding the housing affordability crisis in the Greater Portland region by affirming we will continue to focus local and federal resources on the creation of new housing that is affordable at all income levels with the goal of producing 2,577 housing units (256 units per year) by 2027. Portland recognizes the need to ensure a supply of safe, inclusive, affordable housing that strengthens our community, bolsters our economy, contributes to the quality of life of our residents, and population diversity. AFFORDABLE HOUSING. The term “affordable housing” means that the percentage of income a household is charged in rent and utilities, or of Terms must pay in monthly mortgage payments (including insurance and taxes), does not exceed 30% of a household’s gross income. AMERICAN COMMUNITY SURVEY. Conducted by the U. S. Census Bureau, the survey is sent to a small percentage of the population on a rotating basis through the decade. EXTREMELY LOW-INCOME. Extremely low- AREA MEDIAN INCOME (AMI). The household income individuals, households or tenants are income for the median or middle household in the region. those with a gross household income less than 30% of the Area Median Income as determined COMMUNITY DEVELOPMENT BLOCKGRANT by HUD. PROGRAM (CDBG). Created under the Housing and Community Development Act of 1974, this INCLUSIONARY ZONING. Development projects program provides grant funds to local and that create ten or more new dwelling units for state governments to develop viable urban rent or for sale and are required to ensure at communities by providing decent housing with least 10% of the units in the project meet the a suitable living environment and expanding definition of workforce housing unit for sale or economic opportunities to assist low and for rent. moderate- income residents. LOW INCOME. Low-Income individuals, households or tenants are those with a gross HOME. The HOME Investment Partnerships household income at or below 80% of the area Program provides formula grants to states and median income as determined by HUD. localities that community’s use- often in partnership with local nonprofit groups- to LOW INCOME HOUSING UNIT FOR RENT. fund a wide range of activities that build, buy, The rent affordable to a household earning at or and/or rehabilitate affordable housing for rent below 80% of the Area Median Income (AMI) as of homeownership. determined by HUD. HUD. The United States Department of Housing LOW INCOME HOUSING UNIT FOR SALE. & Urban Development. HUD's mission is to The sale price affordable to a household earning create strong, sustainable, inclusive at or below 80% of the Area Median Income communities and quality affordable homes for (AMI) as determined by HUD. all. 8 MAINE STATE HOUSING AUTHORITY. MaineHousing is the leading provider of affordable housing resources in Maine, helping Maine people to obtain and maintain quality affordable housing. MEDIAN INCOME. Median is the income of Terms level in the middle. Half of all incomes are above the middle, and half of all incomes are below the middle. TAX INCREMENT FINANCING (TIF). A flexible financing tool authorized under state MODERATE INCOME. Moderate-income law. The TIF program allows municipalities individuals, households or tenants are to provide financial assistance to local those with a gross household income at or economic development or affordable below 120% of the Area Median Income as housing development projects by using new determined byHUD. property tax revenue generated as a result of the new development. TIF revenue can MULTI-FAMILY UNIT. Includes rental and be used to pay for public or private projects. ownership units in multifamily buildings. NATIONAL ASSOCIATION OF HOME VERY LOW-INCOME. Very low-income BUILDERS. NAHB produces in-depth individuals, households or tenants are those economic analyses of the home building with a gross household income at or below industry based on private and government 50% of the Area Median Income as data. Builders, home buyers, and renters determined by HUD. are surveyed to gain insight into the issues and trends driving the industry. WORKFORCE HOUSING UNIT FOR RENT. NATIONAL LOW INCOME HOUSING Means a dwelling unit is affordable to a COALITION. NLIHC is dedicated solely to household earning at or below 100% of the achieving socially just public policy that Area Median Income as determined by HUD. ensures people with the lowest incomes in the United States have affordable and decent homes. WORKFORCE HOUSING UNIT FOR SALE. Means a dwelling unit for which the purchase PORTLAND-SOUTH PORTLAND HOUSING MARKET AREA. Comprised of price is affordable to a household earning at Cumberland, Sagadahoc, and York or below 120% of the Area Median Income as Counties. determined by HUD. 10 DEMOGRAPHICS Underlying demographic shifts—in particular, changing income and age structure of the population—shape the type, quantity, quality, and location of housing. Population • Portland’s population grew by an estimated 223 people from 2010 to 2018 • Lewiston’s population grew by an estimated 648 people from 2010 to 2018 • Bangor’s population grew by an estimated 1,042 people from 2010 to 2018 A municipality’s population size is an indicator of the needs of the residents; larger communities tend to have a larger percent of people requiring additional services from their community. Portland is the largest city in Maine with an estimated 2018 population of 66,417 people. Based on U.S. Census data, Portland grew by 223 people from 2010 to 2018. In comparison, the second largest city in Maine in 2018 is Lewiston with 36,592 people. Lewiston gained 648 people from 2010 to 2018. Bangor, with a 2018 population of 33,039 is the third largest Maine city. Bangor grew by 1,042 people during that same period. Household Tenure • 56% of Portland households are renter occupied • 44% of Portland households are owner occupied • Renter occupied households has increased by 2% since 2010 Per the 2017 American Community Survey (ACS) 5-year estimates, Portland had 30,167 total households. Of those households, 56 percent were renter occupied and 44 percent were owner occupied. This is a slight change of +2 percent and -2 percent respectively from 2010 when Portland had 30,686 total households with 54 percent renter occupied and 46 percent owner occupied.  HOUSING TENURE BY AGE 61.10% 43.60% 41.50% 27.40% 14.90% 11.50% AGE 15 - 34 AGE 35 - 64 AGE 65 AND OVER Renter Occupied Owner Occupied Source: U.S. Census Bureau 2013-2017 American Community Survey 5-year Estimates Household Age Distribution • The median age in Portland in 2018 was 36 which is less than the U.S. median of 37.8 • People aged 25 to 34 year olds make up the largest percentage of Portland residents • People aged 25 to 34 years old (this age group includes the millennial population (aged 23 to 38) grew by slightly more than 3% from 2010 • People aged 65 to 74 years old (this age group includes the older baby boomer population (currently aged 63 to 73) grew by about 2% from 2010 Maine continues to hold the distinction of being the nation’s oldest state population. While the median age in the United State in 2018 was 37.8 and 44.3 statewide, Portland’s median age is 36. People aged 25 to 34 year olds make up the largest percentage of residents in Portland. This age group has grown from 17.7 percent of the population in 2010 to 20.8 percent of the population in 2017. The percent of residents aged 55 to 64 year olds has also grown from 11.5 percent to 12.2 percent of the population in 2017. This is in contrast to residents aged 35 to 44 and 45 to 54 who have decreased by 2.1 percent and 1.4 percent of the population respectively. This downward trend reverses itself with those aged 55 to 74 years and over. This population grew by 2.8 percent from 2010 to 2017. People who are 23 to 38 years old in 2019 are also known as Millennials while Generation X is comprised of people aged 39 to 54. Baby Boomers are currently 55 to 72 years old.  Percent of Population by Age Groups 20.8 17.7 14 13.7 14.8 14.5 12.7 13.1 11.5 12.2 7.5 5.4 4.7 3.9 2.7 2.2 15 TO 24 25 TO 34 35 TO 44 45 TO 54 55 TO 64 65 TO 74 75 TO 84 85 YEARS YEARS YEARS YEARS YEARS YEARS YEARS YEARS AND OVER 2010 2017 Source: U.S. Census Bureau 2006-2010 and 2013-2017 American Community Survey 5-year Estimates Employment, Wages and Income • The three largest job sectors within the Portland- South Portland labor market are some of the lowest paying jobs • Median household income in 2018 was $51,799 • Portland’s estimated median income ranks towards the bottom (38 out of 44) within the Portland – South Portland Metropolitan Area communities • Employees in many of the largest local job sectors cannot afford to rent or purchase a home in Portland. Within the Portland- South Portland labor market, the three largest job sectors are Office and Administrative Support (15% of all jobs); Sales (10%); and Food Preparation and Services (9%). Hourly wages in these occupational groups are some of the lowest paying jobs in major job sector categories. The median household income of Portland residents in 2018 was $51,430. As will be discussed in further detail later in this report, the income necessary to purchase the median priced home in Portland is $102,173. Approximately 79 percent of Portland residents cannot afford to purchase the median priced home. The median rent for a two-bedroom unit was $1,380 in 2018 according to the Portland Rental Market Survey, which may or may not include heat and other utilities. The income necessary to afford the median rent for a two- bedroom unit is $55,000, while the income necessary to afford the median one-bedroom rent of $1,050 is $42,000. Employees in many of the largest local job sectors cannot afford to rent or purchase a home in Portland.  Employment per 1,000 Median Hourly Annual Mean Occupation Title Employment jobs Wage Wage Percentage All Occupations 208,520 1,000 $19.07 $52,260 Office and Administrative Support 31,170 149.495 $17.60 $38,530 15% Sales and Related 21,250 101.929 $14.33 $41,460 10% Food Prep and Service 20,530 98.56 $11.97 $28,800 9% Management 14,180 67.990 $46.24 $109,170 7% Healthcare Practitioners 13,350 64.034 $32.86 $88,220 6.4% Education, Training, and Library 12,370 59.344 $23.91 $52,480 5.9% Transportation 11,710 56.172 $16.36 $36,600 5.6% Business and Financial 11,160 53.539 $30.59 $71,060 5.4% Production 9,830 47.152 $17.39 $38,850 4.7% Installation, Maintenance, & Repair 7,470 35.837 $22.06 $48,340 3.6 Construction 7,260 34.804 $19.66 $43,600 3.5% Community and Social Service 3,400 33.245 $21.09 $47,050 3.3% Protective Services 4,150 19.923 $18.41 $41,870 2% Cashiers 3,870 18.559 $11.10 $24,500 2% Legal 1,840 8.808 $30.53 $88,370 0.8% Landscaping and Groundskeeping 1,740 8.355 $15.61 $34,400 0.8% Maids and Housekeeping 1,520 7.268 $11.98 $25,680 0.7% US. Department of Labor Bureau of Labor Statistics, May 2018 Portland- South Portland, ME Wage Estimates Portland’s estimated median income in 2018 of $51,799, places the city towards the bottom of the Portland – South Portland Metropolitan Area community income earners. Area wide, Portland’s median income is 38 out of 44 cities and towns. South Portland, Biddeford, and Westbrook had estimated median incomes in 2018 of $65,195, $56,079, and $51,076 respectively. As noted in the 2030 Comprehensive Plan, “Portland’s lower household income reflects its status as an urban employment and housing center, home to a range of populations groups from the highly affluent to those just starting out in the workforce.” 2018 HOUSING FACTS AND AFFORDABILITY INDEX FOR PORTLAND – SOUTH PORTLAND METRO AREA HOUSING MARKET COMMUNITY MEDIAN INCOME RANKING PORTER $45,294 1 NEWFIELD $47,075 2 HIRAM $47,292 3 PARSONSFIELD $47,517 4 CORNISH $49,919 5 WESTBROOK $51,076 6 PORTLAND $51,799 7 SEBAGO $55,739 8 OLD ORCHARD BEACH $53,848 9 BIDDEFORD $56,079 10 STATE OF MAINE $56,987 11 Source: MaineHousing 2018 Portland-South Portland MA Housing Market/Housing Facts & Affordability Index Income by Housing Type • Median homeowner income in 2017 was $83,380 • Median renter income in 2017 was $33,654 Portland’s median household income went up by $6,277 between 2011 and 2017. The median income levels for renters and homeowners in Portland has grown since 2011. The median renter income is $33,654 per year. Median homeowner incomes are $83,380 in 2017, exceeding the 2011 by approximately $8,200. While median renter incomes increased slightly, they have consistently lagged behind homeowner incomes. Renters with special needs and seniors are more likely than other renters to have extremely low incomes. INCOME BY HOUSING TYPE $150,000 or more $100,000 to $149,999 $75,000 to $99,999 $50,000 to $74,999 $35,000 to $49,999 $25,000 to $34,999 $20,000 to $24,999 $15,000 to $19,999 $10,000 to $14,999 $5,000 to $9,999 Less than $5,000 0 500 1000 1500 2000 2500 3000 3500 Renters Owners Source: U.S. Census 2013-2017 American Community Survey 5-Year Estimates Poverty • 18% or 12,000 Portland residents live in poverty Individuals are considered living in poverty if the resources they share with others in the household are not enough to meet basic needs. An estimated 12,000 Portland residents (or 18%) live in poverty. Roughly, 22% are children and 12% are aged 65 or older. 2019 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA Persons in Family/Household Poverty Guideline 1 $12,490 2 $16,910 3 $21,330 4 $25,750 5 $30,170 Source: U.S. Department of Health & Human Services, 2019 PORTLAND CUMBERLAND COUNTY MAINE TOTAL POPULATION 65,407 281,447 1,294,998 POPULATION IN POVERTY 11,983 29,984 166,904 PERCENT IN POVERTY 18.3% 10.7% 12.8% Under 18 years 4% 2.6% 3.2% 18-64 years 12% 6.7% 8% 65 years and over 2.3% 1.4% 1.6% Source: 2013-2017 American Community Survey 5-year Estimates HOUSING AFFORDABILITY Affordability Index & Affordability Gap • Portland has an affordability gap of $155,796 • Of 41 city and towns in the Portland- South Portland Area Housing Market, Portland ranks 2nd in unaffordability. Maine State Housing Authority provides an annual Homeownership Affordability Index that provides median income levels by city and towns, and the income needed to afford the median home price. The Index measures the degree to which a typical homebuyer can afford the mortgage payments on the median-priced home. An index measurement of 1 indicates the median income of the household is just high enough to qualify for the median-priced ownership unit. An index measurement of less than 1 means the area is generally unaffordable- i.e., a household earning the area median income could not cover the payment on a median price home (30 year mortgage, taxes, and insurance) using no more than 28% of gross income. In 2018, to purchase the median priced home in Portland of $316,000, a household would need an income of $102,173, which is almost double the actual median income in Portland of $51,799. Based on the actual median income, Portland residents can only afford a home price of $160,204. Portland has a housing affordability gap of $155,796 ($316,000 - $160,204). Of the forty-one cities and towns that are included in the Portland-South Portland Metropolitan Area Housing Market, only Kennebunkport is less affordable when residents are looking for homes to purchase within their community. With an index of .51, only slightly more than half of Portland residents can afford to qualify for a mortgage to purchase the median priced home. Community Index Median Median Income Home Price Home Price Income Needed to Affordable to Afford Median Median Income Home Price Kennebunkport .47 $675,125 $87,500 $186,509 $316,733 Portland .51 $316,000 $51,799 $102,173 $160,204 Old Orchard .62 $285,000 $53,843 $86,250 $177,934 Beach Yarmouth .63 $465,000 $90,681 $143,041 $294,787 Westbrook .65 $250,942 $51,076 $78,758 $162,741 Cape Elizabeth .66 $543,000 $111,398 $167,966 $360,127 Source: MaineHousing 2018 Portland-South Portland MA Housing Market/Housing Facts & Affordability Index Interpreting Income Levels • The median income for a family of four in the Portland- South Portland metropolitan statistical area is $93,000 The U.S. Department of Housing and Urban Development (HUD) computes income limits for Portland based on local Area Median Income (AMI). At least 11 HUD programs and 14 other Federal programs use some variation of HUD’s income limits. For a household to income qualify for workforce housing for sale under the City’s Inclusionary Zoning Ordinance, the household may earn no more than 120% AMI, while workforce housing for rent is set at 100% or less AMI. 2019 INCOME LIMITS – PORTLAND HUD METRO FMR AREA Household Size 1 2 3 4 5 6 Area Median Income (AMI) 30% (Extremely Low Income) $19,550 $22,350 $25,150 $27,900 $30,170 $34,590 50% (Very Low Income) $32,550 $37,200 $41,850 $46,500 $50,250 $53,950 60% $39,060 $44,640 $50,220 $55,800 $60,264 $64,720 80% (Low Income) $52,100 $59,550 $67,000 $74,400 $80,400 $86,350 100% $65,100 $74,400 $83,700 $93,000 $100,400 $107,880 120% (Moderate Income) $78,120 $89,280 $100,440 $111,600 $120,528 $129,456 Source: U.S. Department of Housing and Urban Development, 2019 Fair Market Area Household Income Distribution Of the estimated 13,269 owner-occupied housing units and 16,898 renter-occupied housing units in Portland, 51.4% of renter households earn less than $35,000 per year compared to 15.7% of owner households. Conversely, 39.2% of owner households earn $100,000 or more compared to 8.7% of renter households. Income Range Owner, Owner, Renter, Renter, Total Total Estimate Percent Estimate Percent Estimate Percent $0 to $19,999 1,011 7.6% 5,392 31.8% 6,402 21.1% $20,000 to $24,999 360 2.7% 1,082 6.4% 1,442 4.8% $25,000 to $34,999 713 5.4% 2,227 13.2% 2,940 9.7% $35,000 to $49,999 1,443 10.9% 2,483 14.7% 3,926 13% $50,000 to $74,999 2,329 17.6% 2,738 16.2% 5,067 16.8% $75,000 to $99,999 2,219 16.7% 1,502 8.9% 3,721 12.3% $100,000 to $149,000 2,928 22.1% 971 5.7% 3,899 12.9% $150,000 or more 2,266 17.1% 503 3% 2,769 9.2% Source: U.S. Census 2013-2017 American Community Survey, 5-year Estimates Wages and the Cost of Rental Housing • Portland’s minimum wage as of July 1, 2019 is $11.11 per hour • The rent affordable at the State minimum wage is $572. • The hourly wage a household must earn to afford a two-bedroom rental unit, without paying more than 30% of their income towards housing, is $26.67 or $55,474 per year. • Maine ranks 7th in the nation with largest shortfall between average rent wage and two bedroom housing wage In the National Low Income Housing Coalition’s 2019 annual report, Out of Reach, Maine ranked 7th overall in states with the largest shortfall between average renter wage and two bedroom housing wage. Last year Maine ranked 9th overall meaning the shortfall in wages to housing cost in Maine is growing. However, in “no state, metropolitan area, or county can a worker earning the federal minimum wage or prevailing state minimum wage afford a two- bedroom rental home at fair market rent by working a standard 40-hour week.” Effective January 1, 2019, the State of Maine minimum wage was $11.00 per hour. On July 1, 2019, Portland’s minimum wage increased to $11.11 per hour. Per the NLIHC, the hourly wage that a household must earn in order to afford the Fair Market Rent in Portland for a two- bedroom rental apartment, without paying more than 30% of their income towards housing costs, is $26.67 or $55,480 per year. The rent affordable at the State minimum wage is $572/month. The NLIHC estimates the renter median household income in Portland is $954/month, and estimates the rent affordable at 30% of the area median income is $698/month leaving $256 per month for food, clothing, transportation, and medical care. States with the Largest Shortfall Between Average Renter Wage and Two-Bedroom Housing Wage $0.00 ($5.00) ($8.09) ($7.87) ($7.72) ($10.00) ($9.64) ($9.37) ($10.18) ($11.91) ($15.00) ($13.09) ($20.00) $20.13 ($25.00) Source: National Low Income Housing Coalition, 2019 (based on Maine’s minimum wage of $11.00 per hour) Household Income Distribution • 35% of Portland renter households are considered extremely low-income during 2016 • 56% of Portland residents were considered low-income households during 2016 • 73% of Rental households were considered low-income households during 2016 • 9% of Rental households fall within the low-income to workforce housing range during 2016 In August of this year, HUD released its Consolidated Planning/Comprehensive Housing Affordability Strategy data for 2012-2016. This data, known as the “CHAS” data, demonstrates the extent of housing problems and housing needs, particularly for low -income households. Per CHAS, Portland had an estimated extremely low-income population (<= 30% AMI) of 7,055 or 23% of its residents. The next largest household group at 20% of the population is households earning between 50% to 80% Area Median Income (AMI), also known as low- income households. Income Distribution Owner Renter Total Est. % Est. % Est. % Household Income <= 30% AMI 1,005 7.7% 6,050 35% 7,055 23% Household Income >30% to <= 50% AMI 935 7.2% 2,945 17% 3,880 13% Household Income >50% to <= 80% AMI 2,315 17.7% 3,650 21% 5,965 20% Household Income >80% to 100%% AMI 1,475 11.4% 1,505 9% 2,980 10% Household Income > 100% AMI 7,265 55.5% 3,070 18% 10,335 34% Total 12,990 100% 17,220 100% 30,210 100% Source: HUD Comprehensive Housing Affordability Strategy (CHAS) data for 2012-2016 Housing-Cost Burdened • 47 percent of renter-occupied households are housing-cost burdened • Almost 8,000 rental and 4,000 homeowner households are cost-burdened Housing affordability is calculated based on median household income relative to the income needed to purchase a median-priced house. As seen above, Portland is unaffordable to the median income household. Another means of measuring affordability, as defined by the Federal government, concludes housing costs should be at or below 30% of a household’s income to be affordable. Housing is unaffordable to moderate-income homebuyers/renters and existing moderate-income homeowners/renters if they have to spend more than 30 percent of their gross monthly income on housing costs. By definition, they are housing-cost  burdened. The 2013-2017 American Community Survey asked participating residents to indicate if their monthly housing costs as a percentage of household income is; less than 20 percent; 20 to 29 percent; or 30 percent or more (i.e. unaffordable). Approximately 29 percent of owner-occupied households -across multiple income ranges-indicated they are paying more than 30 percent of their income towards housing (including mortgage payments, insurance, property taxes and condo fees). Renter households fare far worse with 47 percent reporting they are paying more than 30 percent of their income towards rent and utilities. Income Range Less than $20,000 to $35,000 to $50,000 to $75,000 or Total or % $20,000 $34,999 $49,999 $74,999 more Total Owner 5,610 4,269 3,888 5,015 10,314 29,096 Housing Units Owner Households 790 816 799 864 683 3,952 paying 30% or more for Housing Costs Percent of Owner 6% 6.1% 6% 6.5% 5.1% Households paying 30% or more for 29.7% Housing Costs Total Rental Housing 4,721 3,196 2,445 2,686 2,901 15,949 Units Rental Households 3,826 2,431 1,212 436 89 7,994 paying 30% or more for Housing Costs Percent of Rental 22.6% 14.4% 7.2% 2.6% .5% 47.3% Households paying 30% or more for Housing Costs Source: 2013-2017 American Community Survey 5 year estimates HOUSING SUPPLY Residential Property Characters • 35.82% of all residential housing is single-family homes • Approximately 50% of all residential housing is in multi-family buildings • 14.77% of all residential housing is in buildings of 21 or more units • Condominiums and two-family dwellings are the next largest percentage of residential housing at 11.14% and 11.01% respectively • One-bedroom units are the most popularly proposed bedroom unit during 2014- 2019 The majority of Portland residents live in duplex and apartment buildings. Almost 40% of Portland’s residential housing stock is comprised of three-family or more buildings. Single- family houses and condominiums account for about 36% and 11% respectively of the housing stock. LAND USE # LIVING UNITS % OF PRIMARY RESIDENTIAL Seasonal 603 1.91% Rooming Houses 198 .63% Single Family 11,318 35.82% Two Family 3,480 11.01% Three Family 2,829 8.95% Four Family 1,144 3.62% Five to Ten Family 2,682 8.49% Eleven to Twenty Family 1,085 3.43% Twenty-one Plus Family 4,668 14.77% Condominium 3,520 11.14% Multi-Use Residential 26 .08% Apartment & Rooms 43 .14% Exempt Apartments 2,588 1.% Source: City of Portland Assessor’s Office FY19  From 2014 to September of 2019, the Planning Board has approved over 2,200 units of new and renovated rental and single-family houses. One-bedroom projects, followed by two- bedroom and efficiency units are the most popular projects proposed for approval. Larger (4 and 5) bedroom projects are associated with construction projects proposed by non-profit developers. Bedroom Count Efficiency 1-bdrm 2-bdrm 3-bdrm 4-bdrm 5-bdrm Units 443 1,044 485 224 36 2 approved Units under 31 118 83 56 0 0 Construction Units 303 534 214 65 0 0 Completed Source: Planning Department: 2014 – September 2019 Age of Housing Stock • 50% of Portland housing stock is 80 years old • 54% of Portland’s housing stock was built pre 1950- which is the riskiest housing for lead hazards Portland has approximately 33,785 housing units (rental and homeownership). Almost fifty percent (16,260) of those units were built before 1939. Seventy percent (23,761) were built before 1970. Older homes can be more expensive to maintain and heat while fire and lead hazard safety are additional concerns.  Year Built for All Housing 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1939 or 1940 to 1950 to 1960 to 1970 to 1980 to 1990 to 2000 to 2010 to 2014 or Earlier 1949 1959 1969 1979 1989 1999 2009 2013 later Year Built for All Housing Source: 2017 U.S. Census American Community Survey 5-Year Estimates Source: 2017 U.S. Census American Community Survey 5-Year Estimates Vacancy Rates • Rental apartment vacancy rate was 4.2% in June 2018 • Homeownership vacancy rate was 1.2% in June 2018 • Healthy market rate is 7-8% for rental housing and 2% for homeownership The vacancy rate measures the state of the housing market. Vacant units represent the supply of homes that exceeds demand, which is related to economic trends. A low vacancy rate can result in pressure on housing prices. A 2% or below vacancy rate for ownership and 7 – 8 % for rental units is considered natural vacancy rates in a healthy market. As of June 2018, the rental housing market in the Portland-South Portland Housing Market was 5.7% while the rental apartment market was 4.2% (which is a decrease from 6.6% one year earlier). The vacancy rate for homeownership units is at 1.2%, down from 1.4% in September of 2015. Increased demand and limited homebuilding activities have contributed to a significant decline in available inventory. Portland-South Portland Housing Market Vacancy Rates 8 7 6 5 4 3 2 1 0 Home Ownership Home Rental Multifamily Rental Healthy Rate Portland-SP Housing Market Source: HUD Office of Policy Development and Research, June 1, 2018 Housing Availability • Deficit of affordable and available units, at or below 50% AMI, is 17,904 units in Maine • Of every 100 extremely low-income renter household, only 59 occupy or have access to affordable and available units leaving a shortage of 41 rental homes per low-income renter household Each year the National Low Income Housing Coalitional (NLIHC) measures the availability of rental housing affordable to extremely low income (ELI) households and other income groups. Rental homes are both affordable and available at a particular level of income if they are affordable to households with income below the defined income level and are currently vacant, or are not occupied by households in a higher income range. Nationally and locally, ELI households face the largest shortage of affordable and available rental housing. In 2018, Maine had 59 affordable and available homes for every 100 extremely low income renter households. As household earning increased, the availability of housing units also increased. 105 and 108 affordable and available rental homes exist for every 100 renter households earning at or below 80% of AMI and 100% of AMI respectively. Deficit of Affordable and Available Units per Percent within Each Category with Severe Affordable 100 Households at or below Housing Cost Burden and Threshold Available Units at or below 50% AMI 50% AMI 80% AMI 100% AMI 50% AMI 80% AMI 100% AMI -17,904 75 105 108 73% 3% 0% Source: NLIHC Tabulations of 2016 ACS PUMS data According to the NLIHC, “the lack of new affordable rental construction in the private market, and insufficient housing assistance forces extremely low-income renters to rely on private- market housing that filters down in relative price as it becomes older. The filtering theory suggest that new market-rate development for higher-income households results in a chain of household moves that helps lower-income households: higher-income households move into new, more expensive homes, leaving behind their older and presumably less expensive housing, which is then occupied by other households who leave even older housing behind, and so on. The filtering process, however, fails to produce a sufficient supply of rental homes inexpensive enough for the lowest-income renters to afford.” Planning Board Approval Activity • 142 rental units were approved by the Planning Board during 2018 • 429 rental units were approved by the Planning Board during 2019 • 199 condominium units were approved by the Planning Board during 2018 • 16 condominium units were approved by the Planning Board during 2019 Between 2014 and August of 2019, the Planning Board approved almost 2,300 units of residential housing during Level III reviews (Level III site plan review is conducted for new building construction or additions of 10,000 square feet or more, subdivisions, multiple family  development, and change of use over 20,000 square feet). Approval types and quantity have fluctuated year to year based on the type of projects requesting approval. During the last five years, rental unit approvals (1,326 units) have outpaced all other approval types while two single-family subdivision approvals during 2017 (Knights Farm and Stroudwater) account for 76% of all single-family units approved through subdivision review. Condominium projects brought forward for review have steadily increased, but 2019 may see a sharp downturn as eight rental projects and one lodging house have sought and received Planning Board approval compared to one condominium project. Level III 2014 2015 2016 2017 2018 As of Total Unit-Approvals 8/19 Units Single-Family 0 0 0 104 23 9 136 Rental (mkt rate) 18 346 96 10 51 313 834 Rental 54 103 0 130 91 116 494 (subsidized) Condominium 60 141 95 175 199 16 686 Congregate Care 0 150 0 0 0 0 150 Facility Total Units 132 740 191 419 364 454 2,300 Approved Source: Portland Planning & Urban Development 8/19/19 Housing Supply: Certificate of Occupancy • During 2017, 419 units of residential housing were approved, but only 67 units have received a certificate of occupancy • Of the 22 residential development projects approved by the Planning Board during 2018, only 4 projects are completed A Certificate of Occupancy permit is issued after a building is deemed complete – which can be years after Planning Board approval. For example, 62 India Street (29 condo units) was approved in May 2016 but was not ready for occupancy until July of 2018- 26 months later. 25 High (63 condo units) was approved and completed over 29 months. Hobson’s Landing (383 Commercial Street; 85 condo units) received Planning Board approval during June of 2018 and anticipates occupancy during the fall of 2020. Other approved projects have not advanced  beyond the planning stage, such as; 75 Chestnut Street (53 rental units approved in 2016); 218- 220 Washington Street (45 condominiums approved in 2017); and 155 Sheridan (19 condominiums approved in 2017). As noted, large development projects require years to complete, and based on past history, Planning Board approval does not always equate to the eventual creation of much needed and anticipated residential housing. Level III 2014 2015 2016 2017 2018 As of Total Unit-Approvals 8/19 Units Single-Family 0 0 0 104 23 9 136 Rental (mkt rate) 18 346 96 10 51 313 834 Rental (subsidized) 54 103 0 130 91 116 494 Condo 60 141 95 175 199 16 686 Congregate Care 0 150 0 0 0 0 150 Facility Total Units 132 740 191 419 364 454 2,300 Approved Total Units under 0 0 0 173 207 0 380 Construction Total Units 0 0 58 179 112 454 803 approved but not under construction Total Units 132 740 133 67 45 0 1,117 Completed Source: Planning Board approvals, 2014 to August 2019 Place of development Code: Orange: Approved by Planning Board Green: Under Construction Blue: Completed SHORT TERM RENTALS • Cap of 400 non-owner occupied STR was attained on May 15 of this year • STR remove much needed housing from the supply of long-term housing As of May 15 of this year, 400 non-owner occupied residential units were registered as Short Term Rentals (STR). The rise of STR removes apartments and homes from the market, limiting the supply of long term housing for local residents, and drives up prices of the available housing stock. Traditional buyers may find themselves in competition with individuals or companies who assume revenue benefits with STR over long-term rentals. Most of the units offered as STR are on the Peninsula, which may have a disproportionate impact on those neighborhoods. Considering the Peninsula’s extremely low vacancy rate, any significant reduction in available housing stock is a concern. Type Total Amount Island Non Owner Owner Tenant Occupied Occupied Occupied Property 732 128 288 287 29 Units 872 131 400 312 29 Source: Permitting and Inspections Department 8/29/19 Home Sales • Home sales declined in 2017 and 2018, but sale prices increased • Low inventory of homes for sales impacted both sale numbers and prices Portland is the largest market in Maine for both single-family and condominium units. During 2017 and 2018, Portland experienced a decline in home sales; 2017 was the first decline since 2012, however, sale prices remain robust. According to the June 2018 HUD Comprehensive Housing Market Analysis “part of the increase in new home sales and prices since 2011 is attributed to increased development of relatively expensive condominiums because older households downsized from larger, single-family homes”. Per a local real estate agency, the median home sale price in 2018 of $316,250 was 10.4% greater than in 2017 and the median condominium sale price of $330,000 in 2018 increased 11% from the previous year’s median price of $297,500. During the first six months of 2019, the number of single-family sales transactions are approximately 2% below the comparable time-period for 2018 due mostly to low inventory levels.  Housing Type Median Price 2017 Median Price 2018 Median Price as of May 2019 Single-Family Homes $286,000 $316,250 $327,000 Condominiums $297,500 $330,000 $340,000 Source: Maine Home Connection from Maine Real Estate Information System, 2019 Development Costs • Cost of materials and labor shortage is the largest contributor to construction costs From the 2017 Maine State Housing Authority report, Development Cost Trends in Affordable Housing, “the largest contributor to construction cost was primarily comprised of material and labor costs. Subsidized development costs are similar to market-rate units and projects in metro areas generally cost less than projects in rural area likely due to economies of scale from increased density. Development costs have generally risen as a result of increased materials and land prices, and continued shortage of labor. Fast-forward to June of this year, the National Association of Home Builders reported tariffs on $10 billion worth of building materials, along with the shortage of construction workers, and concerns over housing finance continue to impact housing affordability.” Also, increased prices and construction delays notably impede the creation of subsidized rental housing as rent limits are determined and set for the year by HUD which does not allow developers to increase rents to cover higher costs. Labor Shortage • Unemployment rate of 2.6 percent in June is below the healthy rate of 4.5 to 5 percent • Shortage of skilled laborers leads to higher labor cost and increases development costs The cost/availability of labor was builders’ top concern in 2017 cited by 82% in a December National Association of Home Builders Survey. The unemployment rate of 2.6% in the Portland- South Portland Metropolitan area is below the statewide average of 3.2% as of June 2019. The Federal Reserve estimates a healthy economy will experience 4.5 to 5 percent unemployment. Associated General Contractors, a nation trade group, notes employers are paying more for overtime, recruitment and training and new technology to compensate for a lack of skilled workers. The shortage of skilled laborers leads to higher labor costs, which increases total development costs.  Location Unemployment Rate 6/19 Portland – South Portland Metro 2.6% Maine 3.2% United States 3.7% Source: Maine Department of Labor, Center for Workforce Research and Information HOUSING DEMAND Portland is a service center providing jobs, health services, and educational opportunities. Demand for housing by employees and students is a natural consequence growing out of this role. Two newly headquartered business, WEX and Covetrus, alone are expected to bring 1,500 to 2,000 new jobs to Portland. Portland is also nationally recognized and promoted as the Most Livable City (by Forbes), the Best Town in the East (by Outside Magazine), the Best Healthy Place to Retire (by AARP), the Best City for Mid-Level Professionals (by Kiplinger’s), the Best Cities for Young Professionals (by Forbes), and a food destination (by the New York Times). Positive publicity, changes in the city demographics and the limited amount of housing created over the past decade all contribute towards the shortage and demand for housing. Housing Demand • Demand for housing within the Portland-South Portland Housing Market will require an additional 7,200 housing units by 2021. • Buyers 36 years and younger are the largest share of homebuyers (34%) • 47% of Older Boomers, buy due to retirement To achieve a balanced market of demand and supply within the Portland- South Portland Housing Market Area, HUD estimates a demand for 5,525 units of ownership housing and 1,675 rental units to be created by 2021. Buyers 37 years and younger (Millennials/Gen Z) are the largest share of homebuyers at 34 percent of the market, and the largest share of first-time homebuyers (86% of Gen Z and 52% of Millennials) according to a 2019 National Association of Realtors report. Gen X consists of 24 percent of recent homebuyers. This group is the most likely to be married and have children under the age of 18 in their home. They are at the peak of their earning years and tend to buy the largest homes located within top performing school districts and near their place of work. Buyers 55 to 64 (Younger Baby Boomers) purchase multi-generational homes as their households consist of children both over and under age 18, and aging parents that need caretakers. Older Baby Boomers, aged 65 to 73, often purchase due to retirement, the desire to be closer to friends and family, and to downsize. Buyers 74 to 93 (the Silent Generation) purchase homes to also be closer to friends and family and for the desire to own a smaller home. Twenty-nine percent purchased senior-related housing and they tend to purchase the newest homes. Condominiums • 169 Newbury Street (Luminato), 26 units ($345,000 one-bdrm., $500,000 two-bdrm., $900,000 three-bdrm.) Sold-out six months before the development was completed • 25 High Street, 63 units while under construction were converted to condos. This building is sold out • 20 Thames, 28 units priced between $500,00 to more than $2 million, 5 units unsold • 383 Commercial (Hobson’s Landing), 85 units ($395,000 one-bdrm., $525,000 two- bdrm., $850,000 three-bdrm.). Expected completion date is fall 2020; 50% under contract During 2018, condominium units in Portland sold faster and at higher prices than in previous years. According to a report by Elise Loschiavo of the Vitalius Real Estate Group, the average condo price rose around 6% after several years on the rise (including a 20% increase in 2017). The average sale price for a condo on the Portland peninsula was $434,410 in 2018, while the average price off-peninsula was $247,933. The median days for a condo listing dropped from 20 days in 2017 to 13 days in 2018. Demand by suburban retirees desiring to downsize in an urban setting, millennials who prefer walkable and vibrant locations, and out-of-staters is fueling demand. Multi-Family Rentals • During the next three years, demand is expected for 1,675 new market-rate units in the Portland-South Portland housing market area (HUD 6/19) • Construction of new multi-family rental units in Portland include; 443 Congress Street, 28 multi-family rental units; Hiawatha, 139 unit multi-family rental units; and 58 Boyd Street, 55 multi-family rental units Per HUD, the demand for rental housing has “exceeded supply as relatively high home sales prices have prevented many renter households from pursuing homeownership”. Fewer young adults are buying homes, and the growing retiree population has also affected the demand for rental housing for both market and subsidized units. HUD defines the current apartment market conditions as slightly tight. 2018 Estimated Demand for New Market-Rate Rental Housing in the Portland- South Portland HMA Source: HUD Portland-South Portland, Maine Comprehensive Housing Market Analysis June 1, 2018 Single-Family Houses • 1700 Westbrook Street (Stroudwater Preserve): 123 Single Family & Townhouses (under construction) “Sales of single-family existing homes in Maine remain stable and positive” according to the August report from the Maine Association of Realtors, and demand should remain stable based on an increase in inventory and lower mortgage interest rates. Demand remains stable as buyers wait for affordable housing to come onto the market. A Harvard University Housing Study in 2018 reported that homeownership rates among young adults today are lower than in the 80s as soaring housing costs, higher rates of college and graduate school attendance and lower rates of marriage and childbearing are to blame, however, the sheer number of young adults will eventually lift housing demand. Senior Housing • The Motherhouse at Baxter Woods, 88 55+ rental units at affordable and market rate • Stevens Square at Baxter Woods, 21 55+ market rate condominium units; broke-ground 8-26-19, anticipated occupancy is early 2021 • 173 Kennebec Street, 40 55+ units of low-income rental housing (proposed) • 83 Middle Street, 44 55+ units of low-income rental housing (proposed) • 200 Valley Street, 60 55+ units of low-income rental housing (proposed) A growing retiree population has increased the demand for housing. An estimated 13.7% of Portland households are headed by a person age 65 or older during 2017 (per the US Census Bureau) compared to 12.8% during 2010. Seniors age 75 or older need accessible buildings and apartments as well as supportive care due to the prevalence of increasing disability with age. Seniors hoping to age in place are downsizing into homes that require less upkeep, and offer a walkable community. Some seniors are seeking amenities such as fitness studios, recreation rooms, high-end fixtures and finish options. Stevens Square at Baxter Woods, a 21 unit condominium development for seniors broke ground on August 26. Prices range from $372,165 to $612,057- only 8 units remain unsold. Demand is also strong for affordable housing. According to Avesta Housing, “income qualified demand in Portland currently exceeds 500 households (age 55+) and is projected to remain above 500 through 2023. In addition, across Cumberland County, there are currently 5,000 income qualified households.” Households Age 65 or Older by Tenure 2010 ACS 5-Yr Sample 2017 ACS 5-Yr Sample Homeowners 3,309 3,629 Renters 2,471 2,524 Total 5,780 6,153 Source: US Census 2006-2010 American Community Survey 5-Year Estimates Source: US Census 2013-2017 American Community Survey 5-Year Estimates Low-Income Housing/Homelessness • Very high demand for Very-low and Extremely-Low Income housing • Over 3,600 Portland residents or employee are applicants on the Maine Centralized Waitlist An example of demand far exceeding supply is the 2017 report by Avesta that 1,600 households applied for an affordable apartment in Portland; however, they were only able to place 119 of those households. The Maine Centralized Waitlist contains 14,000 to 16,000 households waiting for affordable housing within the state. The Waitlist of applicants who live or work in Portland is 3,600+. Portland Housing Authority is providing housing through 1,754 Section 8 vouchers; 88 Veteran Vouchers; 28 HUD Mainstream Vouchers; 100 Loring House Vouchers; and 25 Foster Youth to Independence Initiatives. Of the 3,600+ waitlist applicants, 1,252 qualify for one the previously mentioned voucher programs. Portland Housing Authority’s “internal data, market research and professional management experience point to high demand for affordable rental homes in Portland. Of over 1,000 affordable rental apartments, the occupancy rates (> 98%) and fast lease-up rates are the norm. In particular, there is very high housing demand for Very-Low Income and Extremely-Low Income housing”. The average total number of individuals residing in Portland homeless shelters had a slight decrease from August of 2018 to August of 2019. The average number of adolescents dropped from 19 individual to 16; average families decreased from 206 individuals to 189 individuals (or 64 average families to 59 average families); and average adults declined from 507 individuals to 457 individuals (these numbers do not include the Expo). The Oxford Street Sheltered provided housing for forty individuals from other cities and towns in Maine during the month of August, as well as thirty out-of-state and four out-of-country shelter seekers. Oxford Street Shelter: Intakes by Residency August 2019 Maine Town Total Maine Town Total Total Total Auburn 1 Norway 1 Out-of- 30 Out-of- 4 State Country Augusta 1 Portland 26 Bangor 1 Rumford 1 Biddeford 5 Saco 1 Brewer 1 Sanford 2 Charleston 1 Scarborough 1 Falmouth 1 S. Portland 4 Freeport 1 Standish 1 Lewiston 5 Waterville 1 Machias 1 Wells 1 Milo 1 Westbrook 4 North 1 Windham 3 Berwick Source: City of Portland Health & Human Services Department, Social Services Division, 9/19 Student Housing • Approximately 2,500 USM students rent off campus in Portland • About 76% of off campus students rent apartments in Portland According to HUD’s 2018 Comprehensive Housing Market Analysis, “the rental market in the Housing Market Area is notably impacted by enrollment at the University of Southern Maine and the University of New England. Of the 16,100 students enrolled at the two universities, approximately 2,700 are housed in on-campus dormitories. The remaining 13,400 students who live off campus occupy an estimated 4,375 rental units. Students account for approximately 6 percent of the rental market.” During the fall of 2018, student housing at the University of Southern Maine, on the Gorham campus, was over-occupied by 112% (or 140 students). In USM’s 2019 report, Portland Campus Student Housing Project Definition, total residence hall capacity is 1,180 students. An additional 2,575 students live off-campus in Portland. Of those students, 6% rented in Parkside, 25% rented in the East End, 18% rented in the West End/Downtown, 40% rented North of 295, and approximately 12% rented in other neighborhoods. Approximately 76% of students renting off-campus live in apartments, 5% live in houses, and 20% rent a bedroom. The University of Southern Maine is aware of the demand for student housing and is working towards a solution. Source: Brailsford & Dunlavey/ USM: Portland Campus Student Housing Project Definition, June 2019 Desirability • Portland is the sixth most viewed city by out of state housing shoppers, out of 100 large metro areas across the US • About 38% of all views are from residents of Boston According to Realtor.com, Portland is number six for the share of views from out-of-state shoppers. Every quarter, Realtor.com conducts a cross market demand of which housing market received the most non-local views. The 100 largest metro areas across the county are ranked based on the number of out-of-state views. The metro centers on the top ten list are described as desirable destinations for retirees, vacation destinations, second-home markets, and booming employment centers. The Portland-South Portland area market is viewed most often by residents of Boston (37.1% of the time), New York City (12.8%), and Worcester, MA (3.3%). Rank Metro 2019 Share of Views from Out of State 1 Charleston- North Charleston, SC 59.8% 2 Boise City, ID 59.6% 3 Urban Honolulu, HI 56.0% 4 Columbia, SC 52.8% 5 Cape Coral- Fort Meyers, FL 52.1% 6 Portland-South Portland, ME 51.9% 7 North Port-Sarasota-Bradenton, FL 49.5% 8 Greenville-Anderson-Mauldin, SC 48.7% 9 Tucson, AZ 48.0% Source: Realtor.com Q2 2019 Cross Market Demand Report HOUSING RESOURCES According to the nonprofit Enterprise Community Partners, “new rental construction over the past decade has been largely geared toward the high end of the rental market, due to increasingly high development costs.” Public subsidies are needed to subsidize the production and operation of affordable homes for the reason that the private market provides too few homes affordable to the lowest-income households. A. Federal Resources The U.S. Department of Housing and Urban Development’s (HUD) mission is to “create strong, sustainable, inclusive communities and quality affordable housing for all.” To fund this mission, HUD allocates money directly to states and local governments for community planning and development projects through: • HOME Investment Partnerships Program (HOME) • Community Development Block Grants (CDBG) • Emergency Solutions Grants Program (ESG) • Neighborhood Stabilization Program – no longer available • Lead Hazard Control Grant • Brownfield Economic Development Initiative (U.S. EPA funded) HOME Investment Partnerships Program • FY 2019 HOME Award totaled $1,020,693, slightly less than FY 2018 total of $1,151,710 • $1,573,439 was committed towards the renovation and creation of 366 units of low income housing during 2018 and 2019 • Recent HOME funded projects; 37 Front Street (105 units); 178 Kennebec Street (51 units); Deering Place (75 units); 66 State Street (30 units); 83 Middle Street (44 units) HOME funds are awarded annually as formula grants to participating jurisdictions. HOME funds are used to assist with building, buying, and/or rehabilitating affordable housing for rent or homeownership as well as providing direct short-term rental assistance and security deposits to low-income families through the Tenant Based Rental Assistance Voucher Program (TBRA). During FY 18, Portland provided $118,529 in TBRA to 87 households During 2018 and 2019, $1,080,174 and $493,265 were committed respectively towards the creation of affordable housing. HOME has been the largest funding source for the City helping to develop approximately 1,143 units of low-income housing through the allocation of approximately $9.3 million in funds since 2000.  HOME Grant 2019 $1,020,693.00 2018 $1,151,710.00 2017 $824,856.00 2016 $832,643.00 2015 $820,832.00 2014 $913,178.00 2013 $866,153.00 2012 $898,543.00 2011 $1,221,812.00 2010 $1,379,749.00 2009 $1,387,142.00 $0.00 $200,000.00$400,000.00$600,000.00$800,000.00$1,000,000.00 $1,200,000.00 $1,400,000.00 $1,600,000.00 Annual Funding Source: HUD Exchange, HUD Awards and Allocations (2009-2019) Community Development Block Grant (CDBG) • FY 2019 CDBG award totaled $1,893,566, slightly less than FY 2018 total of $1,895,922 • $260,000 of CDBG funds was committed towards 166 units of low-income housing during 2018 and 2019 • 58 Boyd Street (55 units); and 37 Front Street (105 units) The Community Development Block Grant (CDBG) program distributes annual grants to provide communities with resources to develop and expand housing and economic opportunities for low-income households at or below 80% AMI. Approximately $3.7 million has been award during 2018 and 2019 of which $260,000 was committed towards 166 units of low-income housing.  Community Development Block Grant 2019 $1,893,566 2018 $1,895,922 2017 $1,745,465 2016 $1,791,448 2015 $1,791,064 2014 $1,815,577 2013 $1,850,549 2012 $1,688,198 2011 $1,940,539 2010 $2,325,975 2009 $2,142,580 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 Annual Funding Source: HUD Exchange, HUD Awards and Allocations (2009-2019) Emergency Solutions Grants Program (ESG) • Portland’s ESG funding award in 2018 was $157,131, and $160,873 in 2019 • Portland has seven homeless shelters HUD provides funding for the Emergency Solutions Grants Programs (ESG) to operate, provide essential services, and improve the number and quality of emergency shelters for homeless individuals and families as well as to prevent families/individuals from becoming homeless. Portland’s Health and Human Service Department operates both the Oxford Street Shelter, which is the largest emergency shelter in Maine, the Family Shelter, which is the largest shelter for families in Maine, and the Community Overflow Shelter(s) with ESG funding. The City’s shelter program provides efficient and effective support services to promote rapid re- stabilization and the achievement of permanent housing. The Family Shelter also serves as a Welcome House for new Mainer’s or refugees/immigrants. Neighborhood Stabilization Program (NSP) • Approximately $1.7 million in NSP funds helped develop the Adam Schools site into 16 moderate-income homeownership units The Neighborhood Stabilization Program provided emergency assistance to communities to purchase and redevelop foreclosed and abandoned properties to house workforce and low- income households. This program is no longer available. Lead Safe Housing • Since 1998, the Lead Safe Program has funded lead abatement work in 430 housing units, protecting local citizens and children from lead hazards in their homes The Lead Safe Program is funded by a competitive grant program available through HUD’s Office of Lead Hazard Control and Healthy Homes. The program is designed to raise awareness about the risks of childhood lead poisoning and to cover the costs of lead abatement of housing units in Portland that contain identified lead hazards. Portland received its sixth Lead Hazard Control Grant in 2016 that was for a three-year period. The 2016 grant included a Healthy Homes allocation, which was used in tandem with the Cumberland County and City HOME Rehab program in order to improve the overall health and safety of Cumberland County’s low to moderate income housing stock. HUD recently approved a total of $2,541,696 for the City of Portland for another round of three-year funding to continue assisting in the critical financing of the high cost of lead abatement work. In the summer of 2019, LD 1116 was signed into law mandating all children in Maine, regardless of income, be tested for lead at the ages of 1- and 2- years old. This new law, along with the lowering of Maine’s childhood lead poisoning standard in 2016, is expected to create a spike in the number of children identified with lead poisoning. The Lead Safe Housing Program works closely with the Maine CDC to address high priority cases with program funding when applicable. Brownfield Economic Development Initiative (BEDI) Through grants received from the U.S. Environmental Protecting Agency, Portland is able to cover the cost of site assessments and provide financial assistance in the form of low interest loans and grants to assist Portland and other cities with the redevelopment of abandoned industrial lots that are considered environmentally contaminated. Cleaning up and reinvesting in brownfields properties yield many benefits to a community. These range from increasing the local tax base, property redevelopment, and job growth to taking development pressure off of open land, and protecting the environment and people’s health. B. Local Resources Portland has valuable local funding tools to assist the City in financing affordable housing. The Housing Trust Funds (HTF) and Affordable Housing Tax Incremental Financing Districts (AHTIF) support the production of housing affordable to low and moderate-income households. Housing Trust Fund (HTF) • 137 units of affordable and workforce housing funded during 2018 and 2019 • $3,340,996.80 has been deposited into the fund from which $663,835 has been spent and $1,786,734 is committed towards future housing projects • The balance of the Housing Trust Fund is $890,427.80 (10-9-19) The Housing Trust Fund is a more flexible source of gap financing for projects that are not eligible for HUD funding. Projects creating housing for the missing-middle (less than 120% AMI) may be funded through the Housing Trust Fund. During 2018, two projects creating or renovating 151 units of housing, and during 2019, two projects creating or renovating 56 units of housing were approved at a cost of $1,225,000 and $561,734 respectively. Revenue is generated mainly from fees associated with the City’s Housing Preservation and Replacement Ordinance, Inclusionary Zoning fee-in-lieu, and Inclusionary Zoning for Hotel Projects fee-in-lieu. The Housing Trust Fund has a balance of $890,427.80. To date, $3,340,996.80 has been deposited into the fund from which $663,835 has been spent and $1,786,734 is committed towards future housing projects such as; 37 Front Street; 977 Brighton Avenue; 83 Middle Street; and 47 Boyd Street. The new Inclusionary Zoning for Hotels fee-in- lieu is expected to add $593,736 to the HTF (fees are deposited upon completion of the project). Expected fee-in-lieu deposits from Inclusionary Zoning total $1,393,325 (fees are also deposited upon completion of the project). Since 2011, the Housing Trust Fund assisted in creating 208 low income, 12 workforce homeownership units and 9 market rate units within 6 development projects. Affordable Housing Tax Increment Financing (AHTIF) • 58 Boyd Street: 55 Units (44 low-income/11 market rate) • 977 Brighton Ave: 40 Units (34 low-income/6 market rate) • Deering Place: 75 Units (45 low-income/30 market rate) • 178 Kennebec Street: 51 Units (40 low-income/11 market rate) • 66 State Street: 30 Units (30 low-income); 40 rooming units lodging home for women • 37 Front Street; 105 Units (84 low-income/21 market rate) Affordable Housing Tax Incremental Finance is a tool used by municipalities in Maine to assist in the development of affordable housing. An AHTIF works by capturing tax growth above the existing tax revenue from a project or district. These funds are then targeted to support a specific project or district. To qualify for subsidy funding (subject to City Council approval) through an Affordable Housing TIF, one key requirement is at least thirty-three percent (33%) of the units in a development must be affordable as units for rent or sale to households earning no more than 100% of the area median income (AMI) or 120% of the area median income respectively. Housing Development Fund (HDF) • Housing Development Funds have subsidized the creation of 218 housing units utilizing more than $1.5 million since 2000 The Housing Development Fund is comprised of loan repayments from CDBG’s Multi-family rehabilitation program, and proceeds from the sale of HUD Urban Development Action Grants UDAG) properties in Portland. The money that comes into this fund from these programs is repurposed, at this time towards subsidized housing development in Portland. HDF resources have subsidized the creation of 218 housing units utilizing $1,555,139 since 2000.  Subsidized Housing Development in Portland Since 2000 Appropriation No. Owner/Project Date Units HOME HDF CDBG HTF TIF NSP 1 Unity Village 2000 33 $ 86,500 $ - $ 363,863 $ - $ - $ - 2 Island View Apartments 2013 70 $ 71,015 $ 192,639 $ 136,346 $ - $ - $ - 3 St. Dominic's Family Housing 2002 12 $ - $ 436,500 $ - $ - $ - $ - 4 Brannigan House 2002 10 $ 93,000 $ - $ - $ - $ - $ - 5 Wellesley Estates 2002 45 $ - $ 256,000 $ - $ - $ - $ - 6 Yale Court 2002 30 $ 150,000 $ 200,000 $ - $ - $ - $ - 7 Fay Garman Senior Housing 2003 12 $ 150,000 $ - $ - $ - $ - $ - 8 Logan Place 2003 30 $ 435,000 $ - $ - $ - $ - $ - 9 Peninsula Community I 2003 12 $ 300,000 $ - $ - $ - $ - $ - 10 Peninsula Community II 2004 16 $ 307,700 $ - $ - $ - $ - $ - 11 Peninsula Community III 2004 10 $ 200,000 $ - $ - $ - $ - $ - 12 IRIS Park Apartments 2004 31 $ - $ 250,000 $ - $ - $ - $ - 13 Walker Terrace 2004 40 $ 382,000 $ 220,000 $ - $ - $ - $ - 14 Fore River 2005 20 $ 388,474 $ - $ - $ - $ - $ - 15 Valley Apts. (Shalom House) 2005 24 $ 320,000 $ - $ - $ - $ - $ - 16 Pearl Place Apt 2005 60 $ 427,000 $ - $ - $ - $ 615,502 $ - 17 Bayside East 2006 20 $ 250,000 $ - $ - $ - $ - $ - 18 53 Danforth Street 2008 43 $ 325,000 $ - $ - $ - $ - $ - 19 Florence House 2008 25 $ 240,000 $ - $ - $ - $ - $ - 20 Oak Street Lofts 2011 37 $ - $ - $ - $ 380,585 $ - $ - 21 Pearl Place II 2011 54 $ 400,000 $ - $ - $ - $ - $ - 22 Elm Terrace 2011 38 $ 403,795 $ - $ - $ - $ - $ - 23 409 Cumberland 2012/2013 57 $ 500,000 $ - $ - $ - $ 759,392 $ - 24 Adams School 2013 16 $ - $ - $ - $ - $ - $ 1,710,000 25 Bayside Anchor 2013 45 $ 500,000 $ - $ - $ - $ - $ - 26 Thomas Heights 2013/2014 18 $ 522,448 $ - $ - $ - $ 207,116 $ - 27 17 Carleton Street Apt 2015 37 $ - $ - $ - $ - $ 726,000 $ - 28 Rosa True School 2015 10 $ 149,500 $ - $ - $ - $ - $ - 29 Motherhouse 2017 88 $ 627,223 $ - $ - $ - $ - $ - 30 65 Munjoy 2017 8 $ - $ - $ - $ 175,000 $ - $ - 31 58 Boyd Street 2018 55 $ 200,000 $ 30,000 $ 2,144,566 32 977 Brighton Avenue 2018 40 $ - $ - $ - $ 300,000 $ 1,954,486 $ - 33 Deering Place 2018 75 $ 500,000 $ - $ - $ - $ 4,185,757 $ - 34 37 Front Street 2018 111 $ 510,174 $ - $ 250,000 $ 925,000 $ 6,056,916 $ - 35 178 Kennebec Street 2018 51 $ 370,000 $ - $ - $ - $ 2,889,164 $ - 36 83 Middle Street 2019 44 $ 193,266 $ - $ - $ 136,734 $ - 37 47 Boyd Street 2019 12 $ - $ - $ - $ 425,000 $ - 38 66 State Street 2019 30 $ 299,999 $ - $ - $ - $ 2,672,169 $ - Units HOME HDF CDBG HTF TIF NSP Total 1369 $9,302,094 $1,555,139 $780,209 $2,342,319 $22,211,068 $1,710,000 Total City Investment $37,900,829 Last Updated 9-18-2019 Avg. City Contribution/Unit $27,685.05 Source: Housing and Community Development Selling/Leasing City-Owned and Tax Acquired Property • Sales proceeds are targeted for the Housing Trust Fund • 60 Parris Terrace: 23 condominium units (2 deed restricted workforce units) • 178 Kennebec Street: 51 rental units for households age 55+ • 83 Middle Street: 44 rental units for households age 55+ The City passed a provision governing tax acquired property wherein any profits from subsequent sales are allocated to the City’s Housing Trust Fund. The City may also provide city- owned land for housing development and may offer the land below market price to encourage housing development or support greater affordability. Selling city-owned land provides the City with unique control over the timing, location, and affordability of housing development in Portland. It also has the added benefit of turning land with no tax liability into an income generating property for the City’s tax rolls. The City is currently reviewing excess land with the intent of creating future housing. Previous transfers, such as 60 Parris Street from the City to a private developer, created 23 condominium units- two of which are deed restricted as Inclusionary Zoning units, and twenty-one that were sold at or below 120% AMI (i.e. workforce affordable). Similarly, the transfer of 178 Kennebec Street will result in 51 units of age 55+ housing; forty units will be leased at or below 60% AMI, and 11 units will be market rate. More recently, the City Council approved the option to lease land at 83 Middle Street to Community Housing of Maine for the proposed creation of 44 units of affordable housing for households aged 55+. HOUSING TOOLBOX Zoning is a local tool used to regulate the use of land in order to avoid nuisance conditions and to protect the health, safety and welfare of its citizens. Housing policy experts however cite the importance of reducing regularity barriers that limit the construction of housing through outdated, exclusionary, and unnecessary zoning regulations. There is a general agreement that barriers consist of regulations that were adopted to protect or maximize the value of the investment homeowners made in their residence against unwarranted fears. Those regulations have unnecessarily raised housing cost and negatively affected socioeconomic diversity. Inclusionary Zoning (Order 82-15/16, effective 11-18-15) • 40 Free Street; 5 workforce rental units approved in 2019 • 132 Marginal Way; 20 workforce rental units approved in 2019 • Total of $826,500 collected as fee-in-lieu • Provides 25% density bonus in certain zones and development fee reductions In October 2015, the City Council approved an amendment to the City’s zoning ordinance to mandate inclusionary zoning within all residential development projects of ten or more units. Qualifying projects are required to make available a minimum of 10% of their units as workforce housing to eligible households earning 100 to 120% of the area median income. Projects subject to Inclusionary Zoning are eligible for a 25% increase in total permitted units. Effective July 18, 2018 the term housing expense was amended (Order 247-18/19) to include condominium/HOA fees, mortgage insurance, and real estate taxes, and the sunset provision was deleted. The introduction of Inclusionary Zoning ensures critically needed workforce housing is built or through the fee-in-lieu option, funded for development at a later date. Four units of rental and condominium housing have been created on-site and two units of rental housing have been created off-site; eight single-family homes are planned or under construction; and thirty-five units of rental and condominium housing have been approved but are pending construction. $826,500 of fee-in-lieu payments have been deposited into the Housing Trust fund and allocated towards increasing the creation and affordability of rental housing. An additional $1,393,325 will be collected upon completion of nine approved housing projects. Hotel Inclusionary Zoning (Order 134-18/19 effective 2-22-19) • 121 Middle Street, pending fee-in-lieu of $79,926 • 1 Center Street, pending fee-in-lieu of $513,810 In 2019, Portland amended Chapter 14 of the Land Use Code to require new hotel projects with 10 or more hotel rooms within any 5-year period, to provide low-income housing for rent on- site, or pay a fee-in-lieu to support affordable housing in the City. Based on City analysis, most specifically the analysis documented in the Greater Portland Council of Government study “Proposed Hotel Linkage Fee: Supportable Range” finds that new hospitality development creates a need for new affordable housing. This need is the result of the fact that hospitality developments necessarily create a number of jobs that do not pay employees at a rate sufficient to allow those employees to afford market-rate housing in the City. Housing Replacement Ordinance (Order 280-09/10 effective 8-19-10) • Of the $1,056,830 deposited into the Housing Trust Fund (HTF), $630,585 has been expended to leverage the creation of 37 units of low-income housing, 8 workforce housing units, and 34 Housing First units. The city's land use ordinance contains a housing replacement requirement intended to limit the loss of housing stock but in cases where housing is lost, promote and facilitate the development of new housing supply. The ordinance requires the payment of a fee per unit for any net loss of housing as a result of demolition of an existing residential property or conversion of residential space to another use. The fees received by the City are contributed to the Housing Trust Fund. The last deposit into the Housing Trust Fund from the Housing Replacement Ordinance was for $250,000 during 2012. Reduced Fees for Developing Affordable Housing (Order 98-06/07 effective 12-4-06) • 72 Bishop Street- 30 affordable units • 17 Carleton Street- 37 affordable units • 134 Washington Street- 18 affordable units • 81 East Boyd Street – 45 affordable units • 58 Boyd Street – 44 affordable units • 510 Cumberland Avenue – 45 affordable units Portland adopted amendments to the land use code to reduce the development fees associated with the development of eligible affordable residential real estate projects by 5 to 25%. The cost of work (i.e. Building Permit) fees are also reduced based on the percentage of new units that are low income or workforce units. Downtown Height Overlay District Amendment (Order 91-13/14 effective 12-17-13) • 667 Congress St (Hiawatha- Longfellow Apartments)- 139 market-rate rental units. The Downtown Height Overlay District Map was amended to rezone parcels between Danforth and York Street to B-3 and increase the allowed height to sixty-five feet. Two years later the City adopted a second map amendment (Order 81 15/16 effective 11-18-15) to further expand the Downtown Height Overlay District on additional underutilized land between Danforth, York and High Streets to increase the allowable height from 45” to 65” for residential development. B-1, B-1b Amendment (Order 118 13/14 effective 1-15-14) • 118 Congress Street- 12 units An amendment to the B-1 and B-1b zone was adopted to encourage traditional small-scale commercial and mixed-use forms in existing neighborhood retail nodes. Buildings in the B-1 zone along Congress Street with commercial first floor and residential upper floors are allowed to be 50 feet in height rather than 45 feet. Allowing Accessory Structures in R-3 and R-5 Zones to be converted to dwelling units (Order 202-13/14 effective 5-28-14) • 14 low-income units have been approved by the Zoning Board of Appeals in the R-5 zone Any detached or accessory structure in the R-3 and R-5 zones, which were in existence on January 1, 1940, may be converted to dwelling units without meeting front, side or rear yard setbacks. Converted units within the R-5 zone must be affordable to households earning up to 80% of the area median income and are subject to income verification. Units may not be sold as condominium units. R-6 Zone in the Vicinity of Boyd, Oxford, and Mayo Street Rezoned to R-7 (Order 244-13/14 effective 6-18-14) • 81 East Oxford (Bayside Anchor) - 45 units (36 rental units for low-income households). • 58 Boyd Street- 55 units (44 rental units for low-income households). In May of 2014, the City Council passed an amendment to the zoning map in the vicinity of Boyd, Oxford, and Mayo Streets in East Bayside from R-6 to R-7 to allow for greater density for future housing development. Multi-Family Density Standard Amendment (Order 263 13/14 effective 7-16-14) • 101-121 Newbury Street- 35 units • 72 Bishop Street- 30 affordable units; • 3 Pleasant Avenue- 25 units The Commercial Business Zone (B-2, B-2b, B-2c) was amended to offer the opportunity for larger scale commercial and residential development along the city’s major arterials and shopping centers. This amendment permitted multi-family dwellings without boundary and commercial use restrictions, increased the permitted housing density, clarified the setback requirements, and provided for lively, urban ground floor uses. R-6A Zone (Order 73 14/15, effective 11-19-14) In October of 2014, the City Council passed an order creating a new R-6a zone to encourage higher density multi-family housing on large parcels located off the peninsula. The zone was designated appropriate for areas that are along major transportation routes, near service areas, and in redevelopment (underutilized) or infill areas. The R-6a zone encompasses the majority of Munjoy Hill. Prior to the text amendment, the minimum lot size of 4,500 sf rendered 71% of the existing parcels as non-conforming. After lowering the minimum lot size to 2,000 sf, 86% of the existing R-6a lots were considered conforming. R-6A Zone (Order 74 14/15 effective 11-19-14) • 777 Stevens Avenue (the Park Danforth) - 59 units of age restricted housing. Following the creation of the R-6a zone, the City Council amended the zoning map to include 777 Stevens and 880 Forest Avenue in the R-6a zone. This amendment allowed for the construction of a new building with fifty-four (59) senior independent living units attached to the existing building with a one-story connector. The new building is four stories along Arbor Street and Forest Avenue, with a fifth story corner projection. Rezoning 89 Anderson Street (Order 102-14/15 effective 1-14-15) • 89 Anderson Street (East Bayside Lofts)- 53 market rate apartments The zoning map was amended to rezone 89 Anderson Street from Residential R-6 to Neighborhood Business B-1b to support greater residential development above a ground floor commercial use to serve the local market. R-5A Zone Amendment (Order 276 14/15, effective 7-15-15) • 605 Stevens Avenue (Motherhouse) – 88 units of which 66 are affordable • 802 Ocean Avenue (Portland Retirement Residence) The R-5a zone was amended by the City Council allowing the creation of multifamily dwelling units as a permitted use. Multifamily development of four or more dwelling units qualify for height bonuses while three-family dwellings have dimensional requirements similar to those of lesser density. IR-1 and IR-2 Accessory Dwelling Unit (ADU) Amendment for Peaks Island (Order 82-15/16 effective 11-18-15) On October 19, 2015, the City Council approved amendments to the IR-1 and IR-2 zones allowing for revisions to the language regulating accessory dwelling units on Peaks Island. The revisions called for allowing ADUs on undersized lots within or as additions to existing dwellings provided certain conditions are met. These units would only be allowed if they are rented year round to households earning no more than 100% of the area median income. The intent is to provide affordable year round housing to Peaks Island residents who face pressure from seasonal rental markets. Reduced Parking Requirements & Fee-in-Lieu Option (Order 240-09/10 effective 6- 21-10 and Order 83-15/16 effective 11-2-15) • Nine projects, including six devoted to the creation of low-income housing have been permitted under the reduced parking requirements. One project, also aimed at low-income housing chose to pay a fee-in-lieu. The cost of providing parking in new residential development projects can often be substantial and encourages inefficient land use patterns. The city has reduced some parking requirement on the peninsula to help decrease parking-related costs and incentivize residential development. Developers in the non-residential or the IS-FBC zones have the option of paying a fee-in-lieu to meet their project's parking requirements. Fee-in-lieu payments go to the Sustainable Transportation Fund. For each low-income or workforce housing unit for rent or sale within an eligible project under the Affordable Housing Ordinance, no more than one parking space is required. Additionally, the planning board may establish a parking requirement for affordable housing units for rent or sale within an eligible project that is less than one parking space per affordable housing unit, regardless of the size of the structure. Priority Review (Order 82-15/16 effective 11-18-15) To the extent possible, the Planning Division offers expedited reviews for projects including low-income or workforce housing units. The Planning Board make its best effort to hear, review, conditionally approve or deny within one workshop and one public hearing any proposed plans or applications for eligible housing projects containing some low-income or workforce units. India Street Form Based Code (IS FBC) (Order 83-15/16 effective 12-2-15) • 169 Newbury Street (Luminato) 26 condo (2 off-site IZ units) • 62 India Street 29 condo units $276,500 to the Housing Trust Fund (collected) • 20 Thames Street 28 condo units $280,000 to the Housing Trust Fund (collected) • 56 Hampshire Street 30 rental units (1 off-site IZ unit, and $209,398 to Housing Trust Fund) (under construction) • 86 Newbury Street (Shipyard) 10 rental units (1 IZ unit on site) The rezoning of India Street to a form-based code is intended to regulate development through emphasizing the relationship between buildings, streets, open space, walkability, and urban uses. By implementing this new zoning method, the city hopes to create a more predictable development environment for the private sector and the public alike. Also, one additional story of up to 12 feet in height is allowed for residential developments where 20% of the units are workforce units for sale or low-income housing units for rent. Amendments to Zoning Ordinance for Greater Density and Height (Order 31-17/18 effective 10-6-17) In 2017, the city amended Division 30 (Affordable Housing) to offer incentives for affordable housing in the B-1, B-1b, B-2, B-2b, B-2c, B-3, B-3b, B-5, R-7, and R-P zones to allow the maximum number of units that would otherwise be allowed to increase, along with a height bonus and a reduction in setback for Inclusionary Zoning projects that create a greater percentage of low-income or workforce units for sale or rent. These zones are best aligned to access transit along and adjacent to primary transit routes. Order 31-17/18 also provided dimensional bonuses to promote orderly development of low and moderate-income developments as Planned Residential Unit Developments (PRUDs). When any PRUD provides 50% or more workforce or low income housing, the area per dwelling unit would be reduced by 50%; the maximum number of units and maximum length of building do not apply but may be set through site plan review; minimum building setbacks may be reduced; and the minimum recreation space is reduced to 200 square feet per unit. The amendment also allows land on both sides of a street to count toward the minimum lot size requirement for the PRUD. B-1 and B-1b Neighborhood Business Zone (Order 170-17/18, effective 3-5-18) The City Council approved amendment of the city code to allow live/work units or straight residential units to remove the regulatory barrier on ground-floor units in off-peninsula locations. The B-1 and B-1b Neighborhood Business zones are intended to foster mixed-use development in its traditional form, with residential uses located over ground floor commercial spaces. However, this design standard is somewhat incompatible with fair housing laws that require residential projects of four or more units provide ADA accessible ground-floor units where no elevator exists, or make all units and common space accessible in a building where an elevator does exist. Installation of an elevator for universal building access in small-scale mixed- use projects is oftentimes challenging if not cost prohibitive, thus requiring a ground-floor residential unit. Munjoy Hill Neighborhood Conservation Overlay District (Order 221-17/18 effective 6-4-18) • 130 Morning Street (9 units, 1 affordable unit) • 33 Montreal Street (9 units, 1 affordable unit) • 128 North Street (6 units, 1 affordable unit) (under Planning Board review) The Munjoy Hill Neighborhood Conservation Overly District was added to Chapter 14 of the Land Use Ordinance to address the negative impacts of development pressures within Munjoy Hill and to create a positive framework for investment in the area. Alternative dimension and design standards and demolition review were created for the District. In addition, developments of three or more units that elect to maximize the height bonus of 45’ must include at least one workforce housing unit for rent or for sale. Nonconforming Use and Nonconforming Buildings (Order 222 17/18 effective 6-4-18) In 2018, the City amended section 14-381 through 14-437 to simplify and modernize the requirements for additions to non-conforming structures in order to better accommodate owner’s desire to put limited additions on these structures. The amendment addresses concerns the existing language made it difficult to add on to existing homes and, therefore, encourage demolition over renovation. Transportation Improvements to Allow for Greater Density • Redesign Franklin Street and the Forest Avenue corridor to allow for additional development and multi-modal transportation. The Planning and Urban Development Department, in cooperation with the Department of Public Works, has been working on improvements to the city's transportation infrastructure both on- and off peninsula in part to better accommodate greater housing density. Short Term Rentals (Order 179-16/17 effective 4-26-17) • 732 properties are registered as short-term rentals- 128 are on Peaks Island; 288 are non-owner occupied; 287 are owner-occupied, and 29 are tenant occupied • 872 units are registered as short-term rentals- 131 are on Peaks Island; 400 are non- owner occupied; 312 are owner-occupied; and 29 are tenant occupied • Total of $209,436.80 transferred into the Housing Trust Fund from funds not spent toward program administration Portland approve an ordinance in April 2017 that requires Short Term Rental (STR) units to be registered with the city effective January 1, 2018 and placed a rental cap of 300 non-owner occupied units on the mainland. During 2019, changes in how STR units were defined and a new rental cap of 400 non-owner occupied units on the mainland went into effect. The purposed of the Ordinance is to protect Portland’s long-term rental units from leaving the local market to host short-term guests, and to ensure the safety of each unit. The City adopted a registration fee to pay the cost of inspections. Funds not spend towards program administration are deposited into the Housing Trust Fund for the creation of affordable housing. Portland Water District Efficiency and Repair Services Program • A total of 10 projects were funded by the Portland Water District The Portland Water District Efficiency and Repair Services Program provides financial assistance to low-income residential customers of the Portland Water District (PWD) for the repairs and improvements that reduce water consumption through the installation of plumbing fixtures and water saving devices including the repair of leaking or broken water pipes, toilets, hot water tanks, faucets, showerheads, toilet dams, and low-flow devices. The City of Portland administers the program on behalf of the PWD. A qualified residential customer is one who owns and occupies a year round residence within the PWD service area and whose household income is at or below 80% of the area median income. The PWD has initially set aside $10,000 for this program but has funded a total of $15,700. Healthy Neighborhoods Program (Order 112-17/18 effective 12-20-17) The City Council approved an amendment to Chapter 14 of the City Code requiring Maine Medical Center to initiate and adopt a memorandum of understanding between MMC and the City of Portland towards a Healthy Neighborhoods Program within the Maine Medical Center Institutional Overlay Zone. The Program shall be designed to fund and execute housing and community improvement programs in the surrounding St. John Valley and other neighborhoods. Rental Housing Advisory Committee (Order 32-18/19 effective 9-12-18) Portland’s Rental Housing Advisory Committee provides the Housing Committee with recommendations or proposals for improvements, modifications, or changes regarding landlord and tenant policy issues, and identifies educational opportunities, seminars, and materials that would be useful to landlords and tenants. The Committee held their first meeting on September 24 to create a work plan of topics for future discussion. Housing Safety Rental Housing Registration/Inspections • 18,076 units registered in 2019; up from 15,675 units registered as of May 2017. • 25 illegal unit inspections (8-26-19) • 936 long and short-term housing safety inspections (8-26-19) The Housing Safety Office administers a rental housing registration and inspection program for residential rental properties in the City of Portland. All property owners are required to register residential rented apartment units, rented houses, rented rooms, or rented beds with the City's Housing Safety Office beginning January 1, 2016 or within thirty (30) days of renting a property. The annual registration fee pays for the cost of a citywide rental inspection program. Owners occupying a unit on their own property are not required to register the unit they occupy, but must register the units that are rented. Over 2,500 inspections of short- term and long-term units have been conducted as of August 26, 2019. Fire Department Inspection Program • 724 fire prevention inspections completed from January to September 4, 2019 In 2015, Portland established a task force to review its fire inspections programs. The traditional focus had been on three-unit and above structures (as well as schools, fire permits, and commercial buildings), but following the tragic Noyes Street fire, the focus of residential inspections is now one and two-unit properties, and with the introduction of the short-term rental program, these dwelling units also require on-site inspections.  CITY OF PORTLAND Planning & Urban Development Department Housing and Community Development Division TO: Councilor Duson, Chair Members of the Housing Committee FROM: Victoria Volent, Housing Program Manager Housing and Community Development DATE: October 2, 2019 SUBJECT: Disposition of Tax Acquired and City-owned Property Introduction This is an update to the May 16, 2019 memo to the Housing Committee regarding the disposition of tax acquired and city-owned property. 99 Capisic Street/Tax-Acquired Property The City received 7 bids on its offer for sale of 99 Capisic Street. After reviewing the bids, the City Owned and Tax-Acquired Property Committee (COTAPC) unanimously recommended to the City Manager the highest bid of $200,000, which offeror also wrote a letter that they would renovate the property. As noted in the May 16 memo the City Manager, upon review by the Finance Director, is authorized to sell tax-acquired properties if the assessed value is under $400,000. The property is under a Purchase and Sale Agreement with a deadline to close of October 8. Net proceeds from the sale would be deposited in the Housing Trust Fund (after payment of any taxes or fees owed). 622 Auburn / 165 Lambert Streets These lots are divided by Washington Avenue Extension at Auburn Street. 622 Auburn Street abuts the Falmouth property line and contains 4.85 acres of land. There appears to be development opportunity for housing in the upland area closer to Auburn Street. If it were rezoned from R-2 to R-3, it could open up the option of a Planned Residential Unit Development for approximately 10+/- units. 165 Lambert Street across the street contains 13.38 acres; the topography is very challenging and does provide for some wetland mitigation. Both properties were purchased, together with 13 acres in Falmouth abutting the 622 Auburn Street property, which the City still owns in order to create the Auburn Street Connector with Washington Avenue. This is leftover land from that purchase and construction. A Department Survey was conducted for 622 Auburn/165 Lambert Streets. Results of the survey show the Parking and School Departments do not have an interest in the parcels. Public Works would rather not sell either lot, particularly 165 Lambert Street, due to steep topography, much of it is wetlands, and a large portion of the 622 Auburn Street storm drain discharges into 165 Lambert Street, which flows into the Presumpscot River. The cost of wetland mitigation, storm water management, and fill would be astronomical and the damage to water quality in the river significant. However, there might be some developable land in the northwest corner of the parcel(s). If the parcels are sold, a conservation easement should be placed on the non-developable portions. Parks and Recreation would like to retain the parcels for a future athletic complex and open space. Both parcels are under environmental review by a consultant. A report is expected in October. 21 Randall Street A Department Survey was conducted for 21 Randall Street, with no stated interest by the City in retaining the property and support by the Planning Department in selling the parcel for housing. The Department of Public Works noted there is a major sewer easement through one of the lots, which would probably preclude development on that side of the property. The easement contains both a Portland Water District sewer line (from 1976) and a presumed abandoned sewer line. If the presumed abandoned sewer is not abandoned, then DPW recommends retaining the property containing the sewer line. The City is working with the Department of Public Works on the status of the underground utilities. 200 Lambert Street/City-Owned Property An environmental review is being conducted together with 622 Auburn and 165 Lambert Streets. The report is expected by October. 83 Middle Street The City Council met on September 4, 2019 and voted 9 – 0 for passage of the Order approving the Option to Lease and 99 –Year Lease Agreement with Community Housing of Maine for land at 83 Middle Street. The Option to Lease may be exercised for up to one- year. Community Housing of Maine (CHOM) requested a 99-year lease of city-owned property at 83 Middle Street to develop approximately 49 units of affordable rental housing for seniors aged 55 and older, which will also include a preference for 11 units for long-term shelter stayers, parking and ground level commercial space. CHOM has not presented preliminary plans to the Planning Department but has secured $330,000 in Affordable Housing Development funding from the City of Portland. Securing additional financing and Planning Board approval would be the next steps for this project. Attachments: May 16, 2019 Disposition of Tax Acquired and City-Owned Property  CITY OF PORTLAND Planning & Urban Development Department Housing and Community Development Division TO: Councilor Duson, Chair Members of the Housing Committee FROM: Victoria Volent, Housing Program Manager Housing and Community Development DATE: May 16, 2019 SUBJECT: Disposition of Tax Acquired and City-owned Property Introduction In response to the request from members of the Housing Committee, staff has prepared a review of the process and procedures for the sale of certain tax acquired and City-owned property pursuant to Section 2-313 of the City Code, and Rules for Disposition of City- owned and Tax Acquired Property as promulgated by the Finance Director and as may be amended from time to time by the City Manager. Background for Goals and Objectives of the Disposition Process The first of two goals for property disposition is to find the highest and best use for property for the benefit of the City, its neighborhoods, and its citizens. Second is to establish a clear and fair policy for the disposition of property. The responsibility of implementing the City’s Property Disposition Guidelines and Procedures is delegated to the City-Owned and Tax Acquired Property Committee (COTAPC). COTAPC is an internal-staff committee representing City Departments as follows: Assessor, Corporation Counsel, Economic Development, Executive, Finance, Planning and Urban Development, and Public Works. The Economic Development Department staffs COTAPC. COTAPC reviews properties for a recommendation to the City Manager to retain and/or sell the property. Prior to that recommendation to the City Manager, COTAPC will have surveyed City Departments, District Councilor, At Large Councilors, and the Mayor to obtain information on whether to sell or retain a specific property for municipal use, to ascertain whether there are neighborhood issues involving the use of the property, or whether conditions should be placed on a sale. This survey will also assist in identifying any known property environmental limitations, as well as an assessment for housing potential for vacant residentially zoned properties. Retaining vacant land for the Land Bank would require City Council authorization whether tax-acquired or City-owned. Retaining tax-acquired vacant land for City use can be done administratively by the City Manager if the assessed value is $400,000 or under. If the recommendation is to sell the City-owned or tax-acquired property, conditions may be placed on the property in the form of: affordability covenants and restrictions for residential property; type and density of development; design standards; and required local approvals and easements. All sales shall be subject to the approval of the City Council, except that the City Manager, upon review by the Finance Director, is authorized to sell tax-acquired properties that are residential land or residential buildings containing no more than three units and have an assessed value of no more than four hundred thousand dollars ($400,000). Such sales are conducted in accordance with the City of Portland’s Rules for the Disposition of City- owned and Tax Acquired Property. For City-owned properties and other tax-acquired properties outside of the City Manager’s disposition authority, the City Manager provides a recommendation to the City Council and/or City Council Committee to begin the disposition process. Disposition of property recommended for sale includes marketing and the review of bids/proposals with a final recommendation to the City Council Committee for its recommendation to the City Council, together with a Purchase and Sale Agreement. Lastly, the City Council authorizes the City Manager/Finance Director to execute documents necessary to close the sale. Marketing There are a variety of methods to market property to the general public. In some cases, more than one method may be employed. • Real Estate Broker Contract - selling with a pre-qualified approved Real Estate Broker to find a buyer. • Public Offering – Straight Bid Process - soliciting sealed proposals with an advertised public offering of a property or group of properties. Under this method, the offer with the highest bid will be selected. • Public Offering – Request for Proposal (RFP) – soliciting proposals using a Request for Proposal process. Under this method, because of varying proposals for use of the property are anticipated, the highest bid is not always selected. • Auction - contracting with a pre-qualified Auctioneer or Attorney for the sale of property. Real Estate Broker Contract The City currently has a broker under contract to sell tax-acquired properties. A tax- acquired property marketed by its real estate broker is generally sold “as-is” and “where-is” meaning the buyer is purchasing the property as it presently exists, and that the buyer is accepting the property “with all faults”, whether or not immediately apparent. The City drafts the Purchase and Sales agreement with any conditions upon sale, which Agreement the Broker has offerors sign. The Broker provides guidance to the City regarding the best method of disposing of tax acquired properties; provides an opinion of the value of the property with a recommended asking price and a minimum sale price; markets the property as broadly as possible; shows the property to prospective purchasers; and coordinated the sale of the property. The broker is paid a commission of 5% of the purchase price, paid from sale proceeds. A typical listing is advertised for one to two weeks. After the marketing period expires, the broker provides all sale offers to the City. Any unpaid taxes, past due utility bills, and City property related expensed are also deducted from the sale price. Public Offering - Straight Bid Offering The straight bid process ensures the highest price for the property. It does not allow conditions to be placed upon the property. Price is the only consideration. The City solicits sealed proposals with an advertised public offering. This method can be used for both tax-acquired properties and City-owned properties; the latter of which requires City Council approval. Public Offering – Request for Proposal The disposal of real estate through a request for proposal (RFP) is based on a negotiated proposal, with the City of Portland reserving the right to refuse any proposals. Again, under this method, because varying proposals for use of the property are anticipated, the highest bid is not always selected. Property may be sold “as-is” and “where is”, in its existing condition, with no warranties expressed or implied. The City does not contract with a broker to conduct the sale. The City does pay for an appraisal and survey if needed. • City-owned properties and tax-acquired properties not under City Manager Authority: City staff reviews the proposals and, in consultation with the City Manager, makes a recommendation to the appropriate Council Committee for its recommendation to the City Council. • Tax-acquired properties under City Manager authority: COTAPC reviews the proposals and makes a recommendation to the City Manager. The City Manager authorized the sale and City staff finalizes the closing of the sale. Public Auction Contracting with a pre-qualified Auctioneer or Attorney for the sale of property. Property is sold to the highest bidder. 99 Capisic Street/Tax-Acquired Property This tax-acquired property is assessed at $208,160. As previously noted, the City Manager, upon review by the Finance Director, is authorized to sell tax-acquired properties if the assessed value is under $400,000. Due to the uniqueness of this property, the City Manager recommended the Planning and Urban Development Department work with the Housing Committee to provide direction on sale. Based on the original City-wide department survey undertaken by COTAPC, the City Manager received the recommendation to sell the property with conditions of either obtaining a permit to renovate or demolish within 60 days of purchase, and sell at the Broker’s opinion of value. It was recommended to check in with the Broker about possibly dividing the property into two lots, one with the house, and one with just land for further housing development, and check with zoning/surveyor. Deb Andrews, the Historic Preservation Manager, indicated in her survey response that the property is not on the Registry for Historic Places, but is eligible. She further added “I would love to see the City require that it not be torn down when it puts it up for sale”. During the February 13, 2019 meeting of the Housing Committee, staff produced a memo for the Committee titled Public/Private Partnerships to Add Housing Units Utilizing City- Owned Land recommending waiting for the consultant’s structural evaluation of the existing house; explore adaptive reuse potential; and develop a Request for Proposal for renovation and potential additional housing. The following is from the consultant’s structural evaluation: With sufficient resources of money, expertise, time, and effort, (or at least three of the four) one could rehabilitate virtually any house. This structure faces a critical point in time where further water infiltration will irreversibly damage the entire building structure. Currently, this building would have to be completely gutted, sanitized, abated, strengthened, re-wired, insulated, re-plumbed and restored inside and out to rehabilitate it according to currently-adopted residential building codes. Permitting and Inspection’s Zoning Administrator notes: The minimum lot size in the R-3 zone is 6,500 square feet; the existing lot is 38,159 sf. The minimum required street frontage is 50'; the GIS map shows a total of 262.58′ of street frontage. There is also a minimum lot width of 65 feet; the lot is 262' wide where the existing building is located. The lot appears to be big enough to meet the minimum setbacks. The lot could be split into buildable lots as long as it is split so that all these requirements are met for both lots. The R-3 zone allows for single family homes [14-87(a)]. Under section 14-88 - Conditional Use, subsection (a)(2) allows you to add an accessory dwelling unit to a single family home. There is certain criteria that need to be met including but not limited to the accessory unit needs to have a minimum of 400 square feet of floor area, There are two other things to be aware of. One thing is that currently, there is one curb-cut/driveway. Public Works would have to confirm that a second curb-cut/driveway could be added for the new lot. The second thing is that where the new lot gets developed, care will need to be taken so that any runoff does not drain into the neighbor's property. The Committee has indicated a desire to sell property through a real estate broker. Staff is prepared to move forward with that option. If we are to do that, we are looking for direction from the Committee as to what conditions to place on that sale. Staff recommends two options: • Offering the site with only a preference for preservation of the existing building, with any proceeds to go to the Housing Trust to fund affordable housing elsewhere. There have been several unsolicited offers already that would allow this option to move forward; • Offering the site with an equal preference for preservation and affordable housing production. This is a difficult option to offer through a broker and might be better done through an RFP process. West School Site/ City-Owned Property Following the Committee’s last update, staff has learned the former West School parcel may qualify as a brownfield. A brownfield is a property whose expansion, redevelopment, or reuse is complicated by the presence of potential presence of a hazardous substance, pollutant, or contaminant. A Phase I Environment Site Assessment (ESA) is a research report that provides the history and status of a property and identifies potential environmental concerns. A Phase II ESA involves an investigation to confirm whether contamination is actually present at the site. If contamination is found in the samples collected during the Phase II ESA investigation, cleanup/remediation may be required to remove the contaminants prior to redevelopment of the site. The Bayside Project included a Phase I ESA (paid for by the City) and a Phase II ESA (paid for by the Department of Environmental Protection). Staff has begun the process to request COTAPC to survey City Departments, District Councilor, At Large Councilors, and the Mayor. There is some ongoing internal discussion about the best way to position this site for successful redevelopment. Staff recommends holding off on any sale at this time and will bring forward a recommendation from the City Manager as soon as possible. 622 Auburn / 165 Lambert Streets This City-owned property may be disposed by a broker (chosen through the RFP process) or through the Request for Proposal process. Staff has begun the process to request COTAPC to survey City Departments, District Councilor, At Large Councilors, and the Mayor for recommendations. 21 Randall Street This .32 acre or 13,956 sf parcel of City-owned land in the R-5 zone abuts the Front Street development project. The R-5 zone allows medium density residential development characterized by single-family, two-family, and low-intensity multi-family dwelling units. The minimum lot size for a single-family home is 6,000 square feet while a multiplex requires 9,000 square feet for development. Every 9,000 square feet allows for 6 units per building. At 13,956 square feet, 21 Randall would allow for one multiplex building of 6 units of housing. Attached is the Assessor information and GIS map highlighting the property in red. This parcel may be disposed by a broker (chosen through the RFP process) or through a Request for Proposal. The parcel may be sold either without conditions or with conditions regarding the creation of affordable housing. Staff has begun the process to request COTAPC to survey City Departments, District Councilor, At Large Councilors, and the Mayor for their recommendations. 200 Lambert Street/City-Owned Property After a City-wide survey and because of housing potential, the City Manager recommended the Planning and Urban Development Department work with the Housing Committee to provide direction on sale. There was interest from an abutting property owner to purchase the property and build a three-bay garage with an in-law apartment on top, noting that the development would share the same driveway as his house. This property is a leftover piece from when the City built the Washington Avenue extension to connect to Auburn Street (known as the Auburn Street Connector). The land is in an R-2 Zone, which requires 10,000 sf for a single family dwelling. The City-owned lot is 29,275 sf, so it is buildable. COTAPC’s recommendation to the City Manager was to put this City-owned property on the market as a single-family lot. Attached is the Assessor information and GIS map highlighting the property in red. This City-owned property may be disposed by a broker (chosen through the RFP process) or through the Request for Proposal process. This parcel may be sold either without conditions or with conditions regarding the creation of affordable housing. Staff recommends working with a broker directly for a site this small, with direction to the broker that we are ideally seeking an affordable housing development. Summary During the Housing Committee’s meeting on February 13, Jeff Levine provided a memo describing the above noted parcels along with a recommendation for following steps. 21 Randall Street has been added to the list of public/private partnerships to add housing units utilizing city-owned land based on direction from the Housing Committee at their last meeting on May 8. 200 Lambert Street has been added for review based on the recent recommendation by the City Manager. Attachments: Rules for Disposition of City-Owned and Tax-Acquired Property Division 3 Sale or Disposal of Real or Personal Property, Section 2-313 Public/Private Partnerships to Add Housing Units Utilizing City-Owned Land (2-8-19) Resurgence Engineering and preservation, inc. letter to Deborah Andrews (2-11-19 21 Randall Street Assessment 21 Randall Street GIS map 200 Lambert Street Assessment 200 Lambert Street GIS map  Draft 2019 Housing Committee Work Plan as of October 3, 2019 October 9, 2019 1. Presentation of 2019 Biennial Housing Report 2. Communication Item: Update on 93 Douglass Street (site of former West School) – City Manager Jon Jennings will provide an update for the Committee. 3. Communication Item: Update on Disposition of Tax Acquired and City-Owned Property 4. 2019 Work Plan Discussion November 13, 2019 1. Review of 2019 Annual Committee Report 2. 2019 and 2020 Work Plan Discussion (new and/or updated recommendations to forward to the 2020 Housing Committee) December 11, 2019 COMPLETED WORK January 9, 2019 1. 2019 Work Plan Discussion and Preparation for Council Goals and Objectives Setting Session February 13, 2019 1. Review, Discussion and Recommendation to the City Council of Proposed Portland Development Corp. By-Law Modification and Program Guideline Amendments to allow the use of Brownfields Funds for Residential Projects. 2. Housing Committee Accomplishments 2016-2018 3. Update on Rental Housing Advisory Committee 4. Review and discussion of opportunities to engage the city in a public/private partnership to add housing units to the City’s housing inventory utilizing city-owned property. (Auburn St., 99 Capisic St., West School Site.) Possible Executive Session 5. 2019 Work Plan Discussion – a. Housing Committee Goals for 2019; b. March meeting date March 7, 2019 (Joint Meeting with Finance Committee) 1. Housing Trust Fund Discussion March 27, 2019 1. (Action Item) Housing Program Budget - Review and Recommendation to the City Council 2. (Action Item) Rental Housing Advisory Committee Update and Proposed Ordinance Amendments 3. 2019 Work Plan Discussion April 10, 2019 1. Housing Policy Discussion – Non-Renewal of Leases and Notification Requirements, Voucher/Rental Subsidy Discrimination, Rental Application Fee Abuse 2. (Action Item) Affordable Housing Development Application - Review and Approval to Issue by the Committee 3. (Action Item) Review and Recommendation to the City Council of the 2019 Housing Trust Fund Annual Plan 4. Community Development Week – April 22-26/Fair Housing Month 5. 2019 Work Plan Discussion May 8, 2019 1. Report from the Permitting and Inspections Department on the implementation and outcome of initiatives concerning the permitting and review process, time frames, etc. 2. Report from Planning & Urban Development regarding Residential Housing from 2016-2019. 3. Verbal update from Corporation Counsel’s Office and staff regarding possible revisions to City Code Chapter 14, Division 23 Nonconforming Use and Nonconforming Buildings, Section 14-391 Nonconformity as to number of dwelling units. 4. Review of Affordable Housing TIF Applications 1  5. 2019 Work Plan Discussion May 21, 2019 (Joint Meeting with Economic Development Committee) 1. (Action Item) Review and Approval of Affordable Housing TIF Applications 2. Presentation from Health and Human Services Acting Director on possible public-private partnerships to support affordable housing projects on City-owned properties. 3. Presentation of Disposition of Tax Acquired and City-owned Property June 12, 2019 1. Review of 2019 Short Term Rental Registration Program (Possible Executive Session) 2. Communication Item FY20 HUD Annual Allocation Plan 3. Review of Affordable Housing Development Funding Requests July 10, 2019 1. (Action Item) Review and Approval of Funding Requests Received from the Affordable Housing Development Application 2. 2019 Work Plan Discussion 3. Verbal update on miscellaneous items August 14, 2019 cancelled September 11, 2019 1. Review of Affordable Housing Development Funding Request for 18 Luther Street 2. Welcome and Organizational Meeting for the Rental Housing Advisory Committee a. Introduction of newly appointed members of the Rental Housing Advisory Committee b. Quick overview of the language establishing the Committee and respond to questions c. Facilitate the Rental Housing Advisory Committee in establishing a meeting schedule 3. Metro Regional Coalition Housing Resolution 4. Presentation, Overview and Integrated Report from Permitting and Inspections and Fire Department re: Short-term and Long-term Rental Housing Safety & Inspection Program - Implementation and Financial Report (Public Comment) 5. Communication Item: FY19 HUD Consolidated Annual Performance Report 6. Communication Item: Bayside Village Briefing 7. 2019 Work Plan Discussion 2