Eugene is facing a housing crisis and there is a need for housing at all income levels. By adding new, more affordable, below-market housing options, housing mobility is encouraged, which can relieve pressure on the stock of lowest income housing options that have the highest demand in our community. Additionally, the project provides a more affordable option for rent-burdened residents paying more than 1/3 of their income on housing, allowing them to reduce costs, save money, and work towards greater financial stability.
- Households at 80% of AMI are underserved. There are very few available housing options for households earning between 60% and 80% AMI. In most cases, they do not qualify for existing Affordable Housing options. It is difficult to find market-rate housing that is affordable, leaving many at this income level housing-cost burdened. The proposed Montgomery project will create 66 new housing units for this income range, expanding the supply of moderate-income housing.
- We have a flexible financial resource to help meet this under-served need. Affordable Housing projects, including mixed-income housing projects, face a financial gap due to the below-market rents. It costs more to construct the building than the revenue from rents can support. There are a number of Affordable Housing tools that can help close these gaps, but these tools require rents to be affordable to households earning 60% AMI and below. As described in Question 6. Why isn’t this project for households with incomes less than 60% Area Median Income?, most financial tools support housing for households at 60% of AMI. This project is using local financial tools that are not limited to closing the financial gap for Affordable Housing that is for households at or below 60% AMI. The City is using an innovative mix of financial tools to support a first-of-its kind housing project in Eugene. See Question 5. What is the City of Eugene contributing to this project? for a description of the financial resources proposed to support the project.
- Downtown Eugene has very little moderate-income housing. There are Affordable Housing projects in the downtown (Aurora, West Town on 8th, Olive Plaza, and Market District Commons) that serve households at or below 60% of AMI, there are student housing projects (Titan court and 13th and Olive) and market-rate housing (Broadway Place, High Street Terrace, Gordon Lofts, and the Tate). But there are few opportunities to find housing that is affordable for moderate-income households. This project will create an opportunity to diversify income levels in the downtown. The Montgomery will create an opportunity for individuals who work in downtown restaurants, stores, or hotels to live close to those jobs and have easy access to the transit network.
- The City does not have financial resources to support the creation of housing with only income-qualified units at 80% AMI. Just under half of the units will be available at market-rate rents. The development team will use the revenue from the rents to cover the cost of construction. The rent from the moderate-income units will not generate enough revenue to cover the cost and would not be financially feasible.