AGENDA BILL. Beaverton City Council Beaverton, Oregon BUDGET IMPACT AMOUNT BUDGETED $0

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1 AGENDA BILL Beaverton City Council Beaverton, Oregon SUBJECT: Adopt FY FY Beaverton Housing Five Year Action Plan FOR AGENOA OF: ~BILL NO: MAYOR'S APPROVAL: (/..J. ~d (}~ DEPARTMENT OF ORIGIN: CDD ti(' DATE SUBMITTED: CLEARANCES: City Attorney fh_ C(\O ~ Finance,61.,z u:z. ~~ Development LI \/'\ PROCEEDING: ACTION ITEM (Contract Review Board) EXHIBITS: FY FY Beaverton Housing Five Year Action Plan - Public Draft BUDGET IMPACT EXPENDITURE REQUIRED $0 AMOUNT BUDGETED $0 APPROPRIATION REQUIRED $0 RECOMMENDED ACTION: City Council adopts FY FY Beaverton Housing Five Year Action Plan HISTORICAL PERSPECTIVE: The city has a long history of supporting housing activities, particularly affordable housing efforts, in order to promote a variety of housing types for a broad spectrum of incomes throughout the city. In the past, though multiple staff in different departments worked on housing efforts, the city primarily operated on a case-by-case basis rather than implementing a coordinated housing program. In March 2016, City Council adopted updates to the Housing Element of the Comprehensive Plan ("Housing Element"), which outlines the city's long-term housing goals. In addition to providing policy goals, an appendix to the Housing Element describes a multitude of potential actions to help meet those goals. Building off the newly-updated Housing Element, in order to coordinate housing activities, augment the city's efforts, and normalize housing activities, staff prepared the first Housing Five Year Action Plan ("HAP"). This plan identifies short-term housing priorities, describes the housing continuum, and specifies actual housing funding for the current fiscal year as well as a projection of funding for the following four years. It is anticipated the HAP will be updated annually to create a rolling five year plan. The annually updated plan will both provide direction to staff and housing partners where the city anticipates spending its housing dollars and maximize flexibility to respond to changing conditions. INFORMATION FOR CONSIDERATION: On June 28, 2016, City Council held a round table to review the draft FY FY Housing Five Year Action Plan. Based on comments received, staff revised the draft. A review draft was made public in the fall and presented at the city's first Housing Forum on September 14, The review draft is presented for adoption in the attached exhibit. Agenda Bill No: 16263

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3 MAYOR'S MESSAGE It is my great pleasure to introduce the city's first Housing Five Year Action Plan. Our city has done the visioning, we've done the planning, and we know exactly where we are headed as a community. This action plan provides us the platform we need to achieve our city's housing goals. "The City Council and I are committed to addressing these challenges head-on. We are committed to the principles in this plan, to ensure Beaverton fosters a variety of housing types for all incomes." The timing is right for this document. We all know that things are changing rapidly in our city. People are feeling the pressure of rising rental rates, increasing costs for housing, and shortages in rental and housing supplies. The City Council and I are committed to addressing these challenges head-on. We are committed to the principles in this plan, to ensure Beaverton fosters a variety of housing types for all incomes. The city is also enjoying some exciting developments in our downtown core, with the addition of nearly 250 new housing units, encompassing the full spectrum of housing options from affordable, workforce, and market rate housing, being recently developed. So much is happening now in our downtown with our urban renewal efforts, transportation improvements, expanded storefront programs, expanded community events, and more. We know that energizing the housing supply and getting more people living in our core, will be critical to help deliver the vibrant community vision we all share. Kudos to the Community Development Department and everyone involved in making this housing action plan a reality! Denny Doyle Mayor Page 1 [Front and Back Cover Photo: Barcelona, Built 2015)

4 1. INTRODUCTION The City of Beaverton promotes a variety of housing types for a broad spectrum of incomes to meet the needs of the community. The city provides funding to support homeless shelter services, assists in the development of affordable housing, develops codes and plans to guide single family residential development and healthy neighborhoods, and provides an adequate supply of available land for single family homes. The recent update of the Housing Chapter of the Comprehensive Plan identified goals and policies geared to help the city better address housing issues facing Beaverton. The Housing Five Year Action Plan describes actions to achieve the goals and implement the policies of the Comprehensive Plan, and pairs those actions with estimated annual budget requirements for a five year period. The year one budget is based on the adopted FY budget and will guide the city' s housing-related activities for this ye a r. The four year look-ahead describes the city's current plans for future housing actions and is subject to modification depending on council priorities and changing conditions. Each year the plan will be updated resulting in a rolling five-year forecast. -,!!f By 2035, Beaverton is projected to add 11,000 new households (approximately 18,cro rnae residents), an increase of more than 253 of the city's A) 15 housing supply. Addtionally, the city is experiencing changing demographics, induding an increasing number of ethnic minorities, smaller households (including millennials and empty nest baby boomers), older populations interested in aging in place, and low income households. Accommodating these changes will require new programs, partnerships, and policies, as well as strengthening current ones, to ensure all residents are afforded housing options. Page 2

5 2. HOUSING CONTINUUM HOMELESS SHELTER Housing to serve people without shelter or staying at a motel, in a vehicle, or with others temporarily. TRANSITIONAL HOUSING Housing to provide a place to live for 3- l 8 months while residents work towards permanent housing. AFFORDABLE HOUSING (see sidebar page 7) Housing affordable to individuals and families that earn of area median income. WORKFORCE HOUSING Housing affordable to individuals and families that earn of area median income. The city is committed to providing a mix of housing types for all incomes throughout the city. The Housing Five Year Action Plan outlines what type of housing within the Housing Continuum is being served by each action. Please refer to the figure on the left for definitions of all six housing types within the continuum. 3. ACTION TYPES In addition to describing which housing type is served by a specific action, the Action Plan organizes actions into the following five categories: 1. Programs: Recurring actions with consistent guidelines and parameters 2. Projects: Single actions for specific purposes 3. Best Practices: Research and creation of strategies based on best practices 4. Policy: Updates to or establishment of new codes, policies, and other internal processes 5. Outreach: Public outreach efforts Page 3

6 Looking into the future, a Housing Strategies Report (October 2015) found that of the new housing units needed in Beaverton within the next 1wenty years, 383 are expected to be rental units. The report includes the following findings: 1. In order for projected renter households to spend 303 or less of their income towards housing, a total of 7,048 additional rental units, affordable at $620 or less per month (in 2014 dollars), are needed through PRIORITIZATION The Housing Chapter's Implementation Plan contains a list of activities to achieve the Housing Chapter's goals and policies. Due to scarce resources the city cannot implement all actions in any given year. The following priorities will guide action decisions in the near term: Downtown Revitalization Housing Affordability Trends Homelessness Downtown Revitalization The Central Beaverton area has extraordinary potential as part of a dynamic regional market, and is well-served by transit, nearby residential neighborhoods, and employment centers. However, it contains numerous vacant or underdeveloped properties. The revitalization of Central Beaverton is a core priority of the city and residents of Beaverton. A vibrant downtown is key to a strong community, and housing is a critical component of the effort to create an economically vital and livable downtown of needed potential houshg in 2035 will consist of single-family attached (such as townhomes), and multi-family attached (such as apa1men1s crcondos) houshg 1ypes. 3. A projected shortage of higher-rent units is projected, including single-family homes. Some renter households have the abffity to pay for larger, newer, and/or higher quality units than are currently avaffable. Developing more attached forms of housing and achieving geater density in Beaverton will be important in continuing to meet future needs for these types of housing. Page 4

7 The Community Vision, Civic Plan, Central Beaverton Urban Renewal Plan, and Creekside Master Plan and Implementation Strategy identify the importance of increasing the number of residential units and providing a range of housing options in the downtown core. Housing serving a range of incomes is a citywide priority and supports urban vitality. Given the lack of mid to high end multifamily housing in Beaverton, the city will work to encourage this product type in the central Beaverton area. Both public and private sectors will need to exercise leadership in directing resources to achieve the vision and address the challenges. The result will be a greatly enhanced tax base and new choices for Beaverton residents and workers. Th is Action Plan contains programs and projects a imed at increasing the number of market rate units in the downtown. Housing Affordability Trends As described in the Housing Chapter, Beaverton needs additional regulated affordable housing. The city's housing Page 5 market continues to experience significant increases in home prices and rental costs since the end of the economic recession. As of 2013, nearly half of all renter households in Beaverton were considered housing cost burdened, and the lack of affordable housing was the most frequently mentioned topic in the city's 2014 Housing Survey. [See inset on page 7 regarding affordability.] The root of the problem is that wages are not keeping pace with housing costs, which is exacerbated by a regional housing demand that is not met by current supply. The affordability gap is widening - forcing many people to pay more than they can afford for housing. For those in the lowest income segments this is especially troubling. The Action Plan identifies programs, projects, and policies to help shrink the affordability gap. The c ity intends to meet these challenges with an approach that combines incentivizing the development of new affordable housing, assisting to convert currently unregulated housing into regulated affordable housing, and researching best practices that are working elsewhere.

8 Homelessness The widening gap between incomes and housing costs forces Beaverton residents to devote a greater portion of their income to housing and less to food, childcare, medical expenses, home maintenance, and other expenses. This affordability gap is particularly stressful on households experiencing poverty and rapidly increases their risk of homelessness. A key metric for measuring homelessness in Beaverton is the Beaverton School District's (BSD) annual reporting on homeless students. (BSD uses a federal definition of homeless students that includes students living in a shelter, a motel, a vehicle, with others because they cannot afford housing, or in inadequate conditions, such as lacking heat, water, etc.) For the past five years, BSD identified the highest number of homeless students in Oregon. In 2015, BSD reported that l,616 students of 40,725 total students were classified as homeless. One reason many Beaverton residents may not equate their city with homelessness is that our homeless residents are largely unseen. Beaverton lacks an emergency homeless shelter and consequently lacks many of the supportive services that work in tandem with shelters. Historically, the city has supported non-beaverton shelters and homeless services that serve Beaverton residents. The solution to homelessness goes beyond shelters, however, and is closely linked to the provision of regulated affordable housing. In 2009 the Department of Housing and Urban Development altered its funding emphasis from one that focused on services for homeless individuals to one that more effectively responds to the long-term housing needs of those who are homeless or are at risk of becoming homeless. This policy shift was supported by a local report written by Vision Action Network of Washington In Sprtng 2016, the City of Beaverton's Comprehensive Plan Housing Element (Chapter 4) was updated, containing goals and policies intended to address the city's current and future housing needs across a spectrum of housing types, cost levels, and housing tenure. The Housing Element included five goals for the city's future housing activities: Goal 4.1.1: Provide an adequate supply of housing to meet future needs Goal 4.2.1: Provide a variety of housing types that meet the needs and preferences of residents Goal 4.3.1: Increase the supply of housing in Central Beaverton and close-in neighborhoods Goal 4.4.1: Encourage the development and preservation of fair and affordable housing Goal 4.5.1: Ensure that Beaverton continues to be one of the most livable communities in the region Page 6

9 Housing is considered affordable for low, very low, and extremely low income households when they pay no more than 30 percent of their gross household income towards housing costs. Housing costs include mortgage, taxes, insurance, and utilities for owner-occupied homes or rent plus utilities for rental housing. A household paying more than 30 percent of its gross household income for housing costs is considered cost-burdened, regardless of whether a household owns or rents. Housing can be affordable either because it is owned by a non-profit that used public funds to purchase and/or rehabilitate the property, placing a requirement that housing costs remain affordable ("Regulated Affordable Housing"), or because it simply has a lower rent/sale price ("Naturally Occurring Affordable Housing"). For Regulated Affadable Housing units, affordability is typically divided into three brackets: AMI (area median income) Extremely Low Income AMI Very Low Income AMI Low Income Unlike Regulated Affordable Housing units, which are required to maintain affordability over time, Naturally Occurring Affordable Housing prices may increase as market conditions change. County that demonstrated it costs an average of $61 per person per night in a shelter. In comparison, the average rental subsi dy through permanent supportive housi ng was $17 a day per family. This creates a compelling argument that it is financia lly prudent to provide permanent affordable housing to reduce homelessness. With these policy goals, and the growing homeless problem within Beaverton, it is a p ri ority to find innovative so lutions to reduce and prevent homelessness. This Housing Five Year Action Plan identifies projects to be undertaken over the next five years in Beaverton aimed at doing just that, while also serving the immediate shelter needs of our homeless residents and providing permanent affordable housing. 5. SUMMARY The City of Beaverton is dedicated to supporting the housing needs of its current and future residents. This includes encouraging a mix of housing types for a wide range of incomes and demographics. As Beaverton continues to grow and becomes more urban, new housing types will be explored, as well as innovative uses of current housing. Lack of vacant land, changing economic factors, and regional demographic swings will all be considered as Beaverton strategically implements its housing activities. Page 7

10 6. ACTUAL FUNDING Although the first Housing Five Year Action Plan commences in fiscal year and shows an increase in funding for housing actions over previous years, historically, the city has directed significant funds towards housing. A summary of housing funding in includes: Actual Programs $388,398 Tax Exemption $52,439 Projects $722,000 Best Practices STAFF Policy STAFF Outreach STAFF TOTAL $1, 162, FY BUDGET The city's fiscal year housing budget represents work planned to be performed by departments throughout the city. It includes programs and projects to assist the development of affordable housing; programs to help residents remain in their homes or move into more stable housing; research into best practices that could lead to programs or projects in subsequent years; internal policy updates; and outreach on housing-related topics. Funding for actions listed in this plan comes from three primary funding sources: Community Development Block Grant (CDBG) funds, Beaverton Urban Redevelopment Agency (BURA) funds, and the city's General Fund (GF), which includes both the city's Community Services budget and general department budgets. mixed-use development planned on the former Westgate Theater site (Creekside Housing), and incenting future affordable housing development in Old Town and South Cooper Mountain. Three primary funding opportunities have been established to assist in affordable housing development over the next year: the Affordable Housing Acquisition Program to assist in land acquisition for future affordable housing development; the Affordable Housing Development Program for direct investment in a new affordable housing project in the coming year; and continuation of the Affordable Housing Tax Exemption Program to provide property tax exemption to non-profit affordable housing developers. The Vertical Housing Tax Abatement Program will also be continued to incent multi-story development in key areas such as downtown. Finally, two new activities will occur: assisting establishment of an Inclement Weather Shelter in Beaverton, and the creation of a to-be-determined New Affordable Housing Incentive Program. The FY budget also includes a host of programs, some new and some continuing from previous years, to assist Beaverton residents. Utilizing CDBG and General Fund dollars, the city will continue to fund nonprofit partners to implement programs such as a Home-ownership Program helping renters purchase homes under the community land trust model; a Housing Rehabilitation Program providing low-income home owners As stated in other sections of this plan, Beaverton needs new housing units to meet current and future demand. The FY budget therefore includes direct investment in current housing projects, such as the residential Page 8

11 assistance with needed building maintenance, an Emergency Rent Program helping low-income renters avoid homelessness due to lack of rental funds, and Homeless Shelter Services provided by shelters serving Beaverton residents. This year the city will also propose a Housing Code Enforcement Program aimed at ensuring all rental housing in Beaverton is regularly reviewed for life and safety violations. The city will also repeat a successful Neighborhood Stabilization Program that includes choosing one neighborhood in Beaverton to focus a single day of heavy maintenance and cleanup activity. City staff will conduct several housing-related internal activities this year, including the establishment of a cross departmental team devoted to housing issues. Other activities include considering the value of providing a Building Permit Letter earlier in the process to facilitate construction loan funding and reviewing a First-Time Home Buyer Loan Program for the over 500 city employees. In order to develop innovative solutions to difficult housing issues, staff will also research best practices on a variety of topics including: Finally, the city will conduct outreach to hear from city residents and partners on housing related issues. Besides general Housing Program Outreach, including regular updates by staff to key citizen advisory committees as well as to City Council, the city will host a Housing Public Forum to provide information on the city's housing activities and learn more from residents and interested stakeholders what housing issues impact them most. Because the city cannot address all of Beaverton's housing needs alone, this year staff will also conduct strategic Foundation Outreach to key partner foundations and similar mission-driven financial institutions. The following budget describes FY city funding for housing related actions. As listed above, some of the housing programs and projects are newly proposed, while others are the continued implementation of existing previously funded actions. Affordable Housing Investment Strategies, to incent the development of new affordable housing or the preservation of current; Anti-displacement Housing Strategies that will avert displacement of households that are priced out of their homes due to the increasing cost of housing; Tools to convert Unregulated to Regulated Multi-Family Housing, preserving the affordability over time; lnclusionary Zoning and what it would mean for Beaverton, which recently became a legal tool in the state of Oregon; and Housing Advocacy opportunities to help ensure adequate housing is provided for its residents. Page 9

12 7. FY BUDGET (cont.) A c t. ions Hou~ng Type CDBG GF BURA TOTAL Affordable Housing Acquisition Program AF; WF $200,000 Affordable Housing Development Program AF; WF $200,000 Affordable Housing Tax Exemption Program AF $0 AF;WF; Vertical Housing Tax Abatement Program MK; EX $0 Homeless Shelter Services Emergency Rent Program (non-profit) HM; AF $50,000 First-time Home Buyer Loan Program (internal) Sub Total South Cooper Mountain Housing N/A Cl) Old Town Housing MK... 0 w Creekside Housing MK... AF $361,000 STAFF $0 $275,000 $200,000 $836,000 $132,000 $132,000 $125,000 $125,000 $662,500 $ O New Affordable Housing Incentive Program AF; WK $50,000 $50,000 ~t--~~~~~~~~..;;._~~~~---'-~-+-~~----4~~~~--~~~--~~~+--~~-- o.. Inclement Weather Shelter Assistance HM $25,000 $25,000 Sub Total $0 $207,000 $787,500 $994,500 Affordable Housing Investment Strategy Cl) Exploration AF;WK STAFF $0 w U Anti-displacement Housing Strategy Exploration AF; WK STAFF $0 ~.._U-nr_e_g_u_la_t_e_d_t_o_R_e_g_u_la_t_e_d_M~u-lti--f-a_m_i_ly~~--~~--~~~--~~~--~~~--~~~-t ~ Housing Exploration ln AF;WK STAFF $0 O..t--~~"------~~~~~~~~~~~-+-~~----4~~~~--~~~--~~~+--~~-- w all lnclusionary Zoning Study Housing Advocacy Sub Total AF;WK ALL STAFF $0 STAFF $0 $0 $0 $0 so o~b_u_i_ld_in~g:; Pe_r_m_i_t_Le_t_te_r~~~~~~~~-'-~~--'~~~~..._~~~-'-~~~+--~~- AF;WK STAFF $0 ::::; Sub Total $0 $0 $0 so 0 A. ::c Housing Program Outreach ALL STAFF $0 01--~---':; ;;:; ~~~~~~~~~~--+-~~--t~~~~+-~~~+-~~~1--~~--t CC: Foundation Outreach ALL STAFF $0 W+--~~~~~~~~~~~~~~~---t-~~--t~~~~+-~~~-+-~~~+--~~-- e: Housing Public Forum ALL STAFF $0 o ~---~---':; ~~~~~~~~~~~~-'-~~--'~~~~..._~~~-'-~~~1--~~-- Sub Total $0 $0 $0 so TOTAL $361,000 $482,000 $987,500 $1,830,500 Housing Type: HM = Homeless AF = Affordable WF = Workforce MK = Market Rate EX = Executive Funding Source: CDBG = Community Development Block Grant GF = General Fund BURA = Beaverton Urban Redevelopment Agency Page JO

13 2 8. FOUR YEAR FORECAST CD The forecast for the next four years shows the expectation that many of the actions conducted in FY2016-l 7 will either continue or move from planning to implementation. This forecast indicates the city's current projection of future years' allocations to specific housing activities. Each year, the forecast will be updated during the annual budget process to further refine the projection. I 8 al: IL g TOTAL CDBG GF BURA TOTAL Affordable Housing Program TBD AF; WF $50,000 $50,000 $50,000 $50,000 Affordable Housing Acquisition Program AF; WF $1 25,000 $125,000 $250,000 $150,000 $150,000 $300,000 Affordable Housing Development Program AF; WF $125,000 $125,000 $250,000 $150,000 $150,000 $300,000 Affordable Housing Tax Exemption Program AF STAFF $0 STAFF $0 Unregulated to Regulated Multi-family Housing Program I AF I I STAFF I I $0 I 1$100,0001 I $100,ooo Vertical Housing Tax Abatement Program MK; EX I I STAFF I I $0 I I STAFF I I $0 Residential Infill Program MK STAFF $0 $1,000 $1,000 SOC Revolving Loan Program AF; WF STAFF $0 $50,000 $50,000 Propose lnclusionary Zoning Program AF; WF $0 $0 Home-ownership Program (non-profit) AF $180,000 $180,000 $182,000 $182,000 Housing Rehab Program (non-profit) AF $130,000 $130,000 $145,000 $145,000 Housing Code Enforcement Program STAFF $0 STAFF $0 Neighborhood Stabilization Program AF; WF $20,000 $20,000 $20,000 $20,000 Homeless Shelter Services HM $50,000 $30,000 $80,000 $50,000 $30,000 $80,000 Emergency Rent Program (non-profit) HM; AF $20,000 $30,000 $50,000 $80,000 $30,000 $110,000 First-time Home Buyer Loan Program (internal) STAFF $0 STAFF $0 Sub Total $380,000 $380,000 $250,000 $1,010,000 $457,000 $581,000 $300,000 $1,338,000 South Cooper Mountain Housing AF; EX I STAFF I $0 I $200,000 I $200,000 a Old Town Housing MK I I $200,000 I I $200,000 I I STAFF I I $0 al: IL Creekside Housing MK I I STAFF I I $0 I I STAFF I I $0

14 - Extreme TOTAL I CDBG I GF I BURA I TOTAL Weather Shelter Assistance HM I I $5.ooo I I $5.ooo I I $5.ooo I I $5,000 "E 0 HM;AF; -2. CDBG Infrastructure/Facility Construction WF I $40,000 I I I $ I STAFF I I I $0 5 ILi Assist establishment of Homeless Shelter in 0... Beaverton I HM STAFF I STAFF I $0 STAFF I STAFF I $ : a. Sub Total S40,000 S205,000 so $245,000 so S205,000 so $205,000 I I I I I Affirmatively Further Fair Housing Standards Assessment I AF; WF I STAFF I STAFF I I $0 I STAFF I STAFF I I $0 fa u Mixed-Income Housing Strategy Exploration MK; EX STAFF $0 STAFF $0 0 Age Friendly Best Practices Exploration ALL STAFF $0 STAFF $0 :s a. Housing Grant Opportunities Exploration ALL STAFF $0 STAFF $0 t; Housing Advocacy ALL STAFF $0 STAFF $0 ILi 1111 Update Buildable Lands Inventory ALL STAFF $0 STAFF $0 Affordable Housing Best Practices Guide AF STAFF $0 STAFF $0 Sub Total so so so $0 so so so so Building Permit Letter ALL I STAFF I $0 I STAFF I $0 I >- Residential Infill Strategy u ::; Code Changes to Encourage Mix of Housing I MK; EX I I STAFF I I $0 I I STAFF I I $0 0 a. Types ALL STAFF I $0 I STAFF $0 Permit Fee Waiver ALL STAFF $0 STAFF $0 Sub Total $0 $0 $0 $0 $0 $0 $0 $0 :c Housing Program Outreach ALL STAFF $0 STAFF $0 u Affordable Housing Education Program AF $5,000 $5,000 $5,000 $5, c( ILi -0 0 I 0 = Sub Total so S5,000 so $5,000 so S5,000 so (Q $5,000 (!) ~ TOTAL N 11111: Housing Public Forum ALL STAFF $0 STAFF $0 S420,000 S590,000 S250,000 Sl,260,000 S457,000 S791,000 S300,000 $1,548,000

15 2 8. FOUR YEAR FORECAST (cont.) CD w I " TOTAL CDBG GF BURA TOTAL Affordable Housing Program TBD AF; WF $50,000 $50,000 $50,000 $50,000 Affordable Housing Acquisition Program AF; WF $150,000 $150,000 $300,000 $150,000 $150,000 $300,000 Affordable Housing Development Program AF; WF $150,000 $150,000 $300,000 $150,000 $150,000 $300,000 Affordable Housing Tax Exemption Program AF STAFF $0 STAFF $0 Unregulated to Regulated Multi-family Housing Program I AF I I $100,000 I I $100,0001 I $100,000 I I $100,000 Vertical Housing Tax Abatement Program MK; EX I I STAFF I I $0 I I STAFF I I $0 Residential Infill Program MK $1,000 $1,000 $1,000 $1,000 SOC Revolving Loan Program AF; WF $50,000 $50,000 $50,000 $50,000 0 Propose lnclusionary Zoning Program AF; WF STAFF $0 STAFF $0.: A. Home-ownership Program (non-profit) AF $184,000 $184,000 $99,000 $99,000 Housing Rehab Program (non-profit) AF $160,000 $160,000 $175,000 $175,000 Housing Code Enforcement Program STAFF $0 STAFF $0 Neighborhood Stabilization Program AF; WF $20,000 $20,000 $20,000 $20,000 Homeless Shelter Services HM $30,000 $30,000 $50,000 $30,000 $80,000 Emergency Rent Program (non-profit) HM; AF $80,000 $30,000 $110,000 $80,000 $30,000 $110,000 First-time Home Buyer Loan Program (internal) I I STAFF I $0 I STAFF I $0 Sub Total $424,000 $581,000 $300,000 $1,305,000 $404,000 $581,000 $300,000 $1,285,000 South Cooper Mountain Housing AF; EX I STAFF I $0 I STAFF I $0 a Old Town Housing MK I I STAFF I I $0 I 1$200,000 I I $200,000.: A. Creekside Housinq MK I 1$200,000 I I $200,000 I I STAFF I I $0

16 Extreme -"E 0 u HM;AF; CDBG 5 w Assist establishment of Homeless Shelter in TOTAL I CDBG I GF I BURA I TOTAL Weather Shelter Assistance HM I I $5,ooo I I $5,ooo I I $5,ooo I I $5,000 Infrastructure/Facility Construction WF I $25,ooo I I I $25,ooo I STAFF I I I $0 ""' Beaverton I HM $50,000 I $50,000 I $100,000 STAFF I STAFF I $0 2 A. Sub Total $75,000 $255,000 $0 $330,000 $0 $205,000 $0 $205,000 I I I I I Affirmatively Further Fair Housing Standards Assessment I AF; WF I STAFF I STAFF I I $0 I STAFF I STAFF I I $0.,, w u Mixed-Income Housing Strategy Exploration MK; EX STAFF $0 STAFF $0 0 Age Friendly Best Practices Exploration ALL STAFF $0 STAFF $0 c( a&: Housing Grant Opportunities Exploration ALL STAFF $0 STAFF $0 A.... Housing Advocacy ALL STAFF $0 STAFF $0.. ~ Update Buildable Lands Inventory ALL STAFF $0 STAFF $0 Affordable Housing Best Practices Guide AF STAFF $0 STAFF $0 Sub Total $0 $0 $0 $0 $0 $0 $0 $0 Building Permit Letter ALL I STAFF I $0 I > Residential Infill Strategy u ::::i I STAFF I $0 I MK; EX I I STAFF I I $0 I I STAFF I I $0 Code Changes to Encourage Mix of 0 A. Housing Types I ALL STAFF I $0 STAFF $0 Permit Fee Waiver ALL STAFF $0 STAFF $0 Sub Total $0 $0 $0 $0 $0 $0 $0 $0 :c Housing Program Outreach ALL STAFF $0 STAFF $0 u c( Affordable Housing Education Program AF $5,000 $5,000 $5,000 $5,000 w a&: Housing Public Forum ALL STAFF $0 STAFF $ I 0 = Sub Total $0 $5,000 $0 $5,000 $0 $5,000 $0 $5,000 co CD ~.)>.. TOTAL $499,000 $841,000 $300,000 $1,640,000 $404,000 $791,000 $300,000 $1,495,000

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19 MAYOR'S MESSAGE It is my great pleasure to introduce the city's first Housing Five Year Action Plan. Our city has done the visioning, we've done the planning, and we know exactly where we are headed as a community. This action plan provides us the platform we need to achieve our city's housing goals. "The City Council and I are committed to addressing these challenges head-on. We are committed to the principles in this plan, to ensure Beaverton fosters a variety of housing types for all incomes." The timing is right for this document. We all know that things are changing rapidly in our city. People are feeling the pressure of rising rental rates, increasing costs for housing, and shortages in rental and housing supplies. The City Council and I are committed to addressing these challenges head-on. We are committed to the principles in this plan, to ensure Beaverton fosters a variety of housing types for all incomes. The city is also enjoying some exciting developments in our downtown core, with the addition of nearly 250 new housing units, encompassing the full spectrum of housing options from affordable, workforce, and market rate housing, being recently developed. So much is happening now in our downtown with our urban renewal efforts, transportation improvements, expanded storefront programs, expanded community events, and more. We know that energizing the housing supply and getting more people living in our core, will be critical to help deliver the vibrant community vision we all share. Kudos to the Community Development Department and everyone involved in making this housing action plan a reality! Denny Doyle Mayor Page 1 [Front and Back Cover Photo: Barcelona, Built 2015)

20 1. INTRODUCTION The City of Beaverton promotes a variety of housing types for a broad spectrum of incomes to meet the needs of the community. The city provides funding to support homeless shelter services, assists in the development of affordable housing, develops codes and plans to guide single family residential development and healthy neighborhoods, and provides an adequate supply of available land for single family homes. The recent update of the Housing Chapter of the Comprehensive Plan identified goals and policies geared to help the city better address housing issues facing Beaverton. The Housing Five Year Action Plan describes actions to achieve the goals and implement the policies of the Comprehensive Plan, and pairs those actions with estimated annual budget requirements for a five year period. The year one budget is based on the adopted FY budget and will guide the city' s housing-related activities for this ye a r. The four year look-ahead describes the city's current plans for future housing actions and is subject to modification depending on council priorities and changing conditions. Each year the plan will be updated resulting in a rolling five-year forecast. -,!!f By 2035, Beaverton is projected to add 11,000 new households (approximately 18,cro rnae residents), an increase of more than 253 of the city's A) 15 housing supply. Addtionally, the city is experiencing changing demographics, induding an increasing number of ethnic minorities, smaller households (including millennials and empty nest baby boomers), older populations interested in aging in place, and low income households. Accommodating these changes will require new programs, partnerships, and policies, as well as strengthening current ones, to ensure all residents are afforded housing options. Page 2

21 2. HOUSING CONTINUUM HOMELESS SHELTER Housing to serve people without shelter or staying at a motel, in a vehicle, or with others temporarily. TRANSITIONAL HOUSING Housing to provide a place to live for 3- l 8 months while residents work towards permanent housing. AFFORDABLE HOUSING (see sidebar page 7) Housing affordable to individuals and families that earn of area median income. WORKFORCE HOUSING Housing affordable to individuals and families that earn of area median income. The city is committed to providing a mix of housing types for all incomes throughout the city. The Housing Five Year Action Plan outlines what type of housing within the Housing Continuum is being served by each action. Please refer to the figure on the left for definitions of all six housing types within the continuum. 3. ACTION TYPES In addition to describing which housing type is served by a specific action, the Action Plan organizes actions into the following five categories: 1. Programs: Recurring actions with consistent guidelines and parameters 2. Projects: Single actions for specific purposes 3. Best Practices: Research and creation of strategies based on best practices 4. Policy: Updates to or establishment of new codes, policies, and other internal processes 5. Outreach: Public outreach efforts Page 3

22 Looking into the future, a Housing Strategies Report (October 2015) found that of the new housing units needed in Beaverton within the next 1wenty years, 383 are expected to be rental units. The report includes the following findings: 1. In order for projected renter households to spend 303 or less of their income towards housing, a total of 7,048 additional rental units, affordable at $620 or less per month (in 2014 dollars), are needed through PRIORITIZATION The Housing Chapter's Implementation Plan contains a list of activities to achieve the Housing Chapter's goals and policies. Due to scarce resources the city cannot implement all actions in any given year. The following priorities will guide action decisions in the near term: Downtown Revitalization Housing Affordability Trends Homelessness Downtown Revitalization The Central Beaverton area has extraordinary potential as part of a dynamic regional market, and is well-served by transit, nearby residential neighborhoods, and employment centers. However, it contains numerous vacant or underdeveloped properties. The revitalization of Central Beaverton is a core priority of the city and residents of Beaverton. A vibrant downtown is key to a strong community, and housing is a critical component of the effort to create an economically vital and livable downtown of needed potential houshg in 2035 will consist of single-family attached (such as townhomes), and multi-family attached (such as apa1men1s crcondos) houshg 1ypes. 3. A projected shortage of higher-rent units is projected, including single-family homes. Some renter households have the abffity to pay for larger, newer, and/or higher quality units than are currently avaffable. Developing more attached forms of housing and achieving geater density in Beaverton will be important in continuing to meet future needs for these types of housing. Page 4

23 The Community Vision, Civic Plan, Central Beaverton Urban Renewal Plan, and Creekside Master Plan and Implementation Strategy identify the importance of increasing the number of residential units and providing a range of housing options in the downtown core. Housing serving a range of incomes is a citywide priority and supports urban vitality. Given the lack of mid to high end multifamily housing in Beaverton, the city will work to encourage this product type in the central Beaverton area. Both public and private sectors will need to exercise leadership in directing resources to achieve the vision and address the challenges. The result will be a greatly enhanced tax base and new choices for Beaverton residents and workers. Th is Action Plan contains programs and projects a imed at increasing the number of market rate units in the downtown. Housing Affordability Trends As described in the Housing Chapter, Beaverton needs additional regulated affordable housing. The city's housing Page 5 market continues to experience significant increases in home prices and rental costs since the end of the economic recession. As of 2013, nearly half of all renter households in Beaverton were considered housing cost burdened, and the lack of affordable housing was the most frequently mentioned topic in the city's 2014 Housing Survey. [See inset on page 7 regarding affordability.] The root of the problem is that wages are not keeping pace with housing costs, which is exacerbated by a regional housing demand that is not met by current supply. The affordability gap is widening - forcing many people to pay more than they can afford for housing. For those in the lowest income segments this is especially troubling. The Action Plan identifies programs, projects, and policies to help shrink the affordability gap. The c ity intends to meet these challenges with an approach that combines incentivizing the development of new affordable housing, assisting to convert currently unregulated housing into regulated affordable housing, and researching best practices that are working elsewhere.

24 Homelessness The widening gap between incomes and housing costs forces Beaverton residents to devote a greater portion of their income to housing and less to food, childcare, medical expenses, home maintenance, and other expenses. This affordability gap is particularly stressful on households experiencing poverty and rapidly increases their risk of homelessness. A key metric for measuring homelessness in Beaverton is the Beaverton School District's (BSD) annual reporting on homeless students. (BSD uses a federal definition of homeless students that includes students living in a shelter, a motel, a vehicle, with others because they cannot afford housing, or in inadequate conditions, such as lacking heat, water, etc.) For the past five years, BSD identified the highest number of homeless students in Oregon. In 2015, BSD reported that l,616 students of 40,725 total students were classified as homeless. One reason many Beaverton residents may not equate their city with homelessness is that our homeless residents are largely unseen. Beaverton lacks an emergency homeless shelter and consequently lacks many of the supportive services that work in tandem with shelters. Historically, the city has supported non-beaverton shelters and homeless services that serve Beaverton residents. The solution to homelessness goes beyond shelters, however, and is closely linked to the provision of regulated affordable housing. In 2009 the Department of Housing and Urban Development altered its funding emphasis from one that focused on services for homeless individuals to one that more effectively responds to the long-term housing needs of those who are homeless or are at risk of becoming homeless. This policy shift was supported by a local report written by Vision Action Network of Washington In Sprtng 2016, the City of Beaverton's Comprehensive Plan Housing Element (Chapter 4) was updated, containing goals and policies intended to address the city's current and future housing needs across a spectrum of housing types, cost levels, and housing tenure. The Housing Element included five goals for the city's future housing activities: Goal 4.1.1: Provide an adequate supply of housing to meet future needs Goal 4.2.1: Provide a variety of housing types that meet the needs and preferences of residents Goal 4.3.1: Increase the supply of housing in Central Beaverton and close-in neighborhoods Goal 4.4.1: Encourage the development and preservation of fair and affordable housing Goal 4.5.1: Ensure that Beaverton continues to be one of the most livable communities in the region Page 6

25 Housing is considered affordable for low, very low, and extremely low income households when they pay no more than 30 percent of their gross household income towards housing costs. Housing costs include mortgage, taxes, insurance, and utilities for owner-occupied homes or rent plus utilities for rental housing. A household paying more than 30 percent of its gross household income for housing costs is considered cost-burdened, regardless of whether a household owns or rents. Housing can be affordable either because it is owned by a non-profit that used public funds to purchase and/or rehabilitate the property, placing a requirement that housing costs remain affordable ("Regulated Affordable Housing"), or because it simply has a lower rent/sale price ("Naturally Occurring Affordable Housing"). For Regulated Affadable Housing units, affordability is typically divided into three brackets: AMI (area median income) Extremely Low Income AMI Very Low Income AMI Low Income Unlike Regulated Affordable Housing units, which are required to maintain affordability over time, Naturally Occurring Affordable Housing prices may increase as market conditions change. County that demonstrated it costs an average of $61 per person per night in a shelter. In comparison, the average rental subsi dy through permanent supportive housi ng was $17 a day per family. This creates a compelling argument that it is financia lly prudent to provide permanent affordable housing to reduce homelessness. With these policy goals, and the growing homeless problem within Beaverton, it is a p ri ority to find innovative so lutions to reduce and prevent homelessness. This Housing Five Year Action Plan identifies projects to be undertaken over the next five years in Beaverton aimed at doing just that, while also serving the immediate shelter needs of our homeless residents and providing permanent affordable housing. 5. SUMMARY The City of Beaverton is dedicated to supporting the housing needs of its current and future residents. This includes encouraging a mix of housing types for a wide range of incomes and demographics. As Beaverton continues to grow and becomes more urban, new housing types will be explored, as well as innovative uses of current housing. Lack of vacant land, changing economic factors, and regional demographic swings will all be considered as Beaverton strategically implements its housing activities. Page 7

26 6. ACTUAL FUNDING Although the first Housing Five Year Action Plan commences in fiscal year and shows an increase in funding for housing actions over previous years, historically, the city has directed significant funds towards housing. A summary of housing funding in includes: Actual Programs $388,398 Tax Exemption $52,439 Projects $722,000 Best Practices STAFF Policy STAFF Outreach STAFF TOTAL $1, 162, FY BUDGET The city's fiscal year housing budget represents work planned to be performed by departments throughout the city. It includes programs and projects to assist the development of affordable housing; programs to help residents remain in their homes or move into more stable housing; research into best practices that could lead to programs or projects in subsequent years; internal policy updates; and outreach on housing-related topics. Funding for actions listed in this plan comes from three primary funding sources: Community Development Block Grant (CDBG) funds, Beaverton Urban Redevelopment Agency (BURA) funds, and the city's General Fund (GF), which includes both the city's Community Services budget and general department budgets. mixed-use development planned on the former Westgate Theater site (Creekside Housing), and incenting future affordable housing development in Old Town and South Cooper Mountain. Three primary funding opportunities have been established to assist in affordable housing development over the next year: the Affordable Housing Acquisition Program to assist in land acquisition for future affordable housing development; the Affordable Housing Development Program for direct investment in a new affordable housing project in the coming year; and continuation of the Affordable Housing Tax Exemption Program to provide property tax exemption to non-profit affordable housing developers. The Vertical Housing Tax Abatement Program will also be continued to incent multi-story development in key areas such as downtown. Finally, two new activities will occur: assisting establishment of an Inclement Weather Shelter in Beaverton, and the creation of a to-be-determined New Affordable Housing Incentive Program. The FY budget also includes a host of programs, some new and some continuing from previous years, to assist Beaverton residents. Utilizing CDBG and General Fund dollars, the city will continue to fund nonprofit partners to implement programs such as a Home-ownership Program helping renters purchase homes under the community land trust model; a Housing Rehabilitation Program providing low-income home owners As stated in other sections of this plan, Beaverton needs new housing units to meet current and future demand. The FY budget therefore includes direct investment in current housing projects, such as the residential Page 8

27 assistance with needed building maintenance, an Emergency Rent Program helping low-income renters avoid homelessness due to lack of rental funds, and Homeless Shelter Services provided by shelters serving Beaverton residents. This year the city will also propose a Housing Code Enforcement Program aimed at ensuring all rental housing in Beaverton is regularly reviewed for life and safety violations. The city will also repeat a successful Neighborhood Stabilization Program that includes choosing one neighborhood in Beaverton to focus a single day of heavy maintenance and cleanup activity. City staff will conduct several housing-related internal activities this year, including the establishment of a cross departmental team devoted to housing issues. Other activities include considering the value of providing a Building Permit Letter earlier in the process to facilitate construction loan funding and reviewing a First-Time Home Buyer Loan Program for the over 500 city employees. In order to develop innovative solutions to difficult housing issues, staff will also research best practices on a variety of topics including: Finally, the city will conduct outreach to hear from city residents and partners on housing related issues. Besides general Housing Program Outreach, including regular updates by staff to key citizen advisory committees as well as to City Council, the city will host a Housing Public Forum to provide information on the city's housing activities and learn more from residents and interested stakeholders what housing issues impact them most. Because the city cannot address all of Beaverton's housing needs alone, this year staff will also conduct strategic Foundation Outreach to key partner foundations and similar mission-driven financial institutions. The following budget describes FY city funding for housing related actions. As listed above, some of the housing programs and projects are newly proposed, while others are the continued implementation of existing previously funded actions. Affordable Housing Investment Strategies, to incent the development of new affordable housing or the preservation of current; Anti-displacement Housing Strategies that will avert displacement of households that are priced out of their homes due to the increasing cost of housing; Tools to convert Unregulated to Regulated Multi-Family Housing, preserving the affordability over time; lnclusionary Zoning and what it would mean for Beaverton, which recently became a legal tool in the state of Oregon; and Housing Advocacy opportunities to help ensure adequate housing is provided for its residents. Page 9

28 7. FY BUDGET (cont.) A c t. ions Hou~ng Type CDBG GF BURA TOTAL Affordable Housing Acquisition Program AF; WF $200,000 Affordable Housing Development Program AF; WF $200,000 Affordable Housing Tax Exemption Program AF $0 AF;WF; Vertical Housing Tax Abatement Program MK; EX $0 Homeless Shelter Services Emergency Rent Program (non-profit) HM; AF $50,000 First-time Home Buyer Loan Program (internal) Sub Total South Cooper Mountain Housing N/A Cl) Old Town Housing MK... 0 w Creekside Housing MK... AF $361,000 STAFF $0 $275,000 $200,000 $836,000 $132,000 $132,000 $125,000 $125,000 $662,500 $ O New Affordable Housing Incentive Program AF; WK $50,000 $50,000 ~t--~~~~~~~~..;;._~~~~---'-~-+-~~----4~~~~--~~~--~~~+--~~-- o.. Inclement Weather Shelter Assistance HM $25,000 $25,000 Sub Total $0 $207,000 $787,500 $994,500 Affordable Housing Investment Strategy Cl) Exploration AF;WK STAFF $0 w U Anti-displacement Housing Strategy Exploration AF; WK STAFF $0 ~.._U-nr_e_g_u_la_t_e_d_t_o_R_e_g_u_la_t_e_d_M~u-lti--f-a_m_i_ly~~--~~--~~~--~~~--~~~--~~~-t ~ Housing Exploration ln AF;WK STAFF $0 O..t--~~"------~~~~~~~~~~~-+-~~----4~~~~--~~~--~~~+--~~-- w all lnclusionary Zoning Study Housing Advocacy Sub Total AF;WK ALL STAFF $0 STAFF $0 $0 $0 $0 so o~b_u_i_ld_in~g:; Pe_r_m_i_t_Le_t_te_r~~~~~~~~-'-~~--'~~~~..._~~~-'-~~~+--~~- AF;WK STAFF $0 ::::; Sub Total $0 $0 $0 so 0 A. ::c Housing Program Outreach ALL STAFF $0 01--~---':; ;;:; ~~~~~~~~~~--+-~~--t~~~~+-~~~+-~~~1--~~--t CC: Foundation Outreach ALL STAFF $0 W+--~~~~~~~~~~~~~~~---t-~~--t~~~~+-~~~-+-~~~+--~~-- e: Housing Public Forum ALL STAFF $0 o ~---~---':; ~~~~~~~~~~~~-'-~~--'~~~~..._~~~-'-~~~1--~~-- Sub Total $0 $0 $0 so TOTAL $361,000 $482,000 $987,500 $1,830,500 Housing Type: HM = Homeless AF = Affordable WF = Workforce MK = Market Rate EX = Executive Funding Source: CDBG = Community Development Block Grant GF = General Fund BURA = Beaverton Urban Redevelopment Agency Page JO