GETTING TO YES
ASTORIA, OREGON - Len Brannen has been in the affordable housing business for almost 30 years. His firm, Shelter Resources Inc. out of Bellevue, Washington, has developed some 5,000 apartments in more than 100 multi-family complexes in Alaska, Arizona, Idaho, Oregon and Washington state. And he's apparently not the kind of guy used to taking "no" for an answer.
Just ask Rick Crager, deputy director of Oregon Housing & Community Services. "I'm the one who told him "no" four times," Crager told Edward Stratton of The Daily Astorian, when Brannen sought OHCS' help in developing Gateway I in Astoria, a 40-unit senior housing complex overlooking the Columbia River just a few miles east of where it flows into the Pacific.
Crager didn't say "no" because Gateway I was a bad idea but, reported Stratton, because of "a huge need" in Oregon's urban communities and "limited funds." The City also was supportive since it reflected a 1997 plan to clean up the area - once home to a plywood mill - and develop, said City Manager Paul Benoit, a "densely populated neighborhood" that "wasn't a rich person's neighborhood." Gateway I fit the bill.
Using Federal Low Income Housing Tax Credits Brammen finally was able to begin building Gateway I in 2005. It was an immediate success. So much so, that Brannen almost immediately moved forward with plans for Gateway II, a four-story, 33-unit complex for families next door.
The "no" he heard this time didn't come from Crager. As first proposed, much of the financing for the $8.4 million Gateway II development was to come from Federal Low Income Housing Tax Credits which are sold to private investors looking to reduce their tax obligations. The proceeds provide the developer of with the capital to build affordable housing. "It's almost kind of a Robin Hood thing," Brannen told The Astorian. "You're taking from those wealthy investors and giving to people with limited income."
But when the housing market collapsed in 2008 investor interest in tax credits cooled faster than a deep freeze and, across the country, "shovel ready" projects like Gateway II stalled. Able to raise just $4.2 million from the sale of credits, Gateway II went from sure thing to no go.
Fortunately, USDA Rural Development came forward with a $1 million mortgage and Crager and Oregon Housing & Community Services stepped-up with some of its own funds, HUD HOME funds and an allocation of some $1.6 million in HUD Tax Credit Allocation Program funds under the American Recovery and Reinvestment Act proposed by President Obama and passed by the Congress in 2009. TCAP, as HUD Secretary Donovan explained, could close the gap and "jump start" affordable housing projects across the country stalled by the market's collapse. TCAP certainly did that for Gateway II and, for that matter, for 21 other projects representing 611 units of new, affordable housing across Oregon.
Gateway II celebrated its opening in October. No surprise, it's already got a waiting list. "There's an extreme need for affordable housing," said Gateway I and II manager Susan Kauffman. "My phone has been ringing off the hook. For the past five months, I've been averaging 30 calls a day."
"We're full and we've just opened the doors," added Brannen. Which is why, probably, he refused way back when to take "no" for an answer.
|Content Archived: December 23, 2013|