Housing replacement rule scrutinized
A Portland City Council committee tonight plans to examine a housing ordinance that has drawn criticism from city officials and the business community.
The council's housing committee will discuss the Housing Replacement Ordinance, which requires developers or property owners who demolish housing units to replace them or pay $57,850 per unit to the city's housing replacement fund. Enacted in 2002, the ordinance was meant to preserve a stock of affordable housing in the city at a time when affordable rental units were being converted into condos, spurring concern over gentrification. Since 2002, only three projects have contributed to the fund, bringing in a total of $471,580.
Now, as rental vacancy rates have risen and recent projects have come under scrutiny, city and business officials are wondering whether the ordinance is achieving its goal -- or stifling economic development.
"It really adds a liability to a property owner," says Chris O'Neil, a government relations consultant at Drummond Woodsum and the Portland Community Chamber's city hall liaison. This type of ordinance is somewhat unusual, he says, and any added risk on a property "tends to be a deterrent" for new businesses looking to locate in the city. "If you're raising the cost of converting residential space to commercial space, you're raising the cost of businesses to locate in Portland."
The ordinance and its application have come under fire recently in the wake of the council's decision in November to uphold the requirement for a derelict building on Washington Avenue. The building, owned by Binga's Winga's co-owner Alec Altman, was at one time three units of housing but hadn't been used as a residence since the 1950s, Altman told the Portland Press Herald. Since the building was still zoned as residential, the city council has refused to allow redevelopment of the property until Altman contributes the more than $150,000 for the housing fund or replaces them.
Also stirring up controversy was the council's exemption of an artist-in-residence project proposed by Burt's Bees founder and philanthropist Roxanne Quimby, which will turn a seven-unit building on Congress Street into artists' studios. The council deemed the project exempt under the ordinance's "special merit section" and waived the $406,000 owed.
These developments have left some councilors questioning whether it should be revised or scrapped altogether, and prompted the Portland Community Chamber to hold a seminar on the topic. While O'Neil doesn't believe the ordinance will be repealed, he does hope the city takes a hard look at it. "The chamber has said that it's got a lot of problems with this, and the right thing to do is to peel it back and look at it and talk about it."
What should come under scrutiny is the way the ordinance is applied, the dollar amount and the special merit exemption, he says. "To legislate special merit is asking for trouble. It needs to be fixed."
Even while calling for a critical eye on the ordinance, O'Neil acknowledges that ensuring a range of housing stock can act as its own kind of economic boost. "These businesses benefit from having a work force that can live nearby. It's not black and white. We just think the pendulum has swung way too far."
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