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47 <br /> <br /> of and access to Affordable units. <br />Background Information: Defining Housing Affordability in Eugene <br />Housing is generally considered “affordable” if monthly housing costs account for 30% or less of a <br />household’s income. For households that cannot afford market-rate housing, federal, state, and local <br />governments may provide assistance in two ways: <br />● Government subsidies: Several government funding sources provide funding to cover the gap <br />between what qualifying households can pay, and the cost of providing Affordable housing. In <br />general, new Affordable housing development requires a contribution from a local government in <br />addition to state and federal funding. Most subsidies target households with incomes at or below <br />60% of Area Median Income for rental housing and 80% of Area Median Income for homeownership. <br />● Requirements or incentives for private-sector contributions: Local governments can create <br />requirements or provide incentives for private development to contribute towards Affordable <br />housing. For example, local governments may require private development to pay a tax towards to <br />support Affordable housing (the construction excise tax), require a percentage of new units to <br />remain Affordable to low- or moderate-income households (an inclusionary zoning requirement), or <br />allow development at a greater height or density in exchange for Affordable units (density bonus). <br />These two methods are often combined in projects. Units that are produced through either of these two <br />methods are typically subject to a deed restriction or covenant under which the property owner agrees to <br />restrict the units to households in certain income categories for a given amount of time, and to limit <br />monthly rents or purchase prices. <br />● Eugene has 3,406 protected affordable rental units with deed restrictions that specify income <br />requirements. These units are funded through a variety of sources, including federal low-income <br />housing tax credits, HOME project funds, Section 8, and others, and are owned primarily by non- <br />profit organizations and the Lane County housing authority – Homes for Good. A smaller number of <br />units are owned by private entities. <br />● These units are largely reserved for very low-income households (with household incomes under <br />50% of area median income). <br />● These units make up approximately 5% of total units in Eugene, while one-third of Eugene <br />households have annual incomes less than $25,000, which is around 50% area median income for a <br />2-person household. <br />What We Heard: Barriers to Building Affordable Housing in Eugene and Strategies for Overcoming Them <br />● Federal funds for Affordable housing have been in decline for many years. <br />● Construction costs are rising for multifamily product types. <br />● Developers are concerned that a Construction Excise Tax (CET), and other additional fees/ taxes on <br />development, may negatively impact project feasibility for market rate units. <br />● Developers responded very favorably to incentives for providing protected affordable units, such as <br />density bonuses, SDC and permit fee reductions or waivers, or flexible parking requirements. <br /> <br />Strategy 3: Increase inventory of and access to Affordable Housing. <br />December 10, 2018, Work Session - Item 2