Nonprofit DevNW begins building 12 new affordable homes in Florence

DevNW has begun its initial phase of construction on its community land trust development in Florence off 15th Street. Tucker Hines (left) and Drew Strout, EITs with Branch Engineering’s design team, use a GPS to set a surveying pin on the back corner of the site.

July 11, 2020 — It is no secret that America has a housing crisis on its hands, and Oregon is no exception. In fact, Oregon has the third least-affordable housing of all 50 states, according to Moody’s Analytics 2018 report. That is why nonprofits like DevNW have dedicated a lot of time and resources to creating more affordable housing options.

DevNW, a nonprofit organization that offers financial well-being counseling and assistance to Northwest communities, partnered with the City of Florence in 2018 to create 12 new 1- to 3-bedroom homes in the community that are affordable for low- to medium-income families. Initial construction is underway at 1424 Airport Road, at the corner of 15th and Nopal streets, where the dozen homes will be located.

“The project is exciting for a couple of reasons,” said Emily Reiman, CEO of DevNW. “One is that we actually have not been able to do single-family home ownership development for probably 15 years because there haven’t been sources of funding available from either the federal government or the state government. And the cost of development was just so high that we couldn’t build anything that was affordable for the moderate-income families that we serve.”

Reiman and her team worked for several years with partners around Oregon to get the state to create a funding source that supports affordable housing developments. Their efforts paid off in 2018, when the Oregon Legislature began allocating money from general obligation Article XI-Q bonds towards what’s called the Local Innovation and Fast Track (LIFT) Housing Program. The housing project in Florence was funded by the first round of the grants that were available from the LIFT Program.

“Because we’re using public funding, we have to guarantee that the housing will be affordable for 40 years, and that is what led us to use the Community Land Trust (CLT) model,” Reiman said. “In this model, you legally separate the ground from the house, and we [DevNW] maintain ownership of the ground, which is where the public subsidy sits. We then sell only the physical home to low- and moderate-income families.”

Part of the CLT model also requires the homeowners to agree that when they get ready to sell the home, they will sell it to another low- to moderate-income family at an affordable price. 

“So, it means that Florence now will have 12 units that are permanently affordable for low- and moderate-income homebuyers — and that is a wonderful community asset,” Reiman said.

Qualified homebuyers must make less than 80 percent of the area median income (AMI). The Florence AMI was $40,833 in 2018, according to the U.S. Census Bureau, meaning that income limits range from $36,350 per year for one person to $56,100 for a family of five.

Another reason these houses will be more affordable is because DevNW is using the “cottage cluster” model to design them. Under this model, several smaller single-family houses all clustered together around a common green space, which is shared by all the residents of the cottage cluster.

“To a certain extent, the green space can develop a more community feel because folks can use it as a community garden together, or kids can have room to actually play,” Reiman said.

In general, homeownership builds a strong community because families “buy into the neighborhood and the town,” according to Raiman. In the financial sense, the homeowners are contributing to the local economy through things like property taxes while also building assets and equity in their house.

“We also know that homeownership tends to increase participation in civic activities and in clubs and organizations related to that town or that neighborhood,” Reiman said. “It tends to help kids do better in school because they’re staying in the same schools consistently through their whole education career. So, the kind of social and community benefits of encouraging homeownership, I think, are really important too.” 

Florence City Recorder and Economic Development Coordinator Kelli Weese said she is excited about the benefits that the cottage cluster project and others like it can bring to the community. She also recognizes that Florence is in high need of affordable housing.

“This is a very innovative project and I’m really proud of it as a model,” Weese said. “We have housing efforts and initiatives as our No. 1 priority in the city’s work plans because it is just a dire need.”

In late 2017, the City of Florence conducted a housing needs analysis that determined how many new dwellings need to be built in the next 20 years, where they would need to go and what sort of amendments would need to be made to the city zoning codes to accommodate the increase in housing

“We’re just vastly behind the curve from what we need for housing,” Weese said. “That study had us needing 1,624 new homes over the course of 20 years. And at the current rate, we will be 944 homes short.”

After the study came out, the city decided to start actively looking for nonprofits to partner with to provide affordable homeownership opportunities. Meanwhile, DevNW was also looking for a housing development in Florence.

“It was really fortuitous that they were looking actively to find a project and we were looking actively to help support something like that,” Weese said. “What they were looking for was really land more than money, which was good for us because we don’t have a lot of disposable income at the city.”

The City of Florence gifted DevNW the site of the previous senior center, which has also been the site of the community garden, to build the cottage cluster. 

“The city partnered with them in the sense that we sold the land to them for free because otherwise it really wouldn’t have happened,” Weese said. “Affordable housing projects just don’t pencil out without some sort of subsidy.”

The median price of houses sold in Florence in June 2020 was $313,500 according to Realtor.com. It’s a price most families can’t afford. 

Weese said part of the reason housing costs are so high in Florence and along the coast is because there is a large market for second homes. Another reason is because the cost of construction on the coast is higher than in the valley due to a lack of construction workers from the area.

“A lot of times, people who are building homes are coming from the valley and that means that they’re staying in hotels or in RV parks or whatever,” Weese said. “And workers’ costs increases the cost of construction out here.”

With the help of the LIFT Funding program, the price of constructing the cottage cluster isn’t as big of a hurdle. However, Weese acknowledges that this is just one small step toward a much larger goal.

“We know that it’s just 12 units, and we need thousands, but it’s a start,” Weese said. “It’s a really great thing that we hope can be replicated in other areas of town, too.” 

Weese added that the priority right now is making sure this project gets done smoothly so that families can start moving in.

“But after that, we would love to partner again with DevNW or others as well,” Weese said. “We’ve been talking with Habitat for Humanity, for instance, in town — because frankly, we are a city. We don’t build homes, but we do our best to make sure that we’re getting out of the way in terms of making our codes as simple as possible and making our fees as low as possible, and then doing our best to subsidize and support as much as we can.”

Reiman said Florence did a great job supporting DevNW’s efforts towards making the project a reality.

“I just want to give a shout out to the city because the whole reason that this project ended up happening on this timeline is the city had approached us and said, ‘We really want affordable housing in Florence. What do we need to do? How can we be a good partner?’” Reiman said. “And so this really all started because of the city’s commitment to enabling the development of affordable housing in Florence.”

If the construction timeline stays on track, the homes will be ready for families to move in sometime in late spring of 2021. Home ownership applications were due in April.

For more information about the Florence cottage cluster project and others like it, go to DenNW.org under Affordable Housing or visit the Florence Chamber of Commerce website at https://www.ci.florence.or.us/economicdevelopment/airport-road-affordable-housing-project.

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