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When the new Splash building on Northeast Sandy Boulevard opened late last year on the former site of a Pepsi bottling plant, it had 11 affordable housing units to offer a city in dire need of them.
Not surprisingly, all 11 got rented in their first week on the market, according to Security Properties, the Seattle-based developer.
Splash was supposed to have 44 affordable units, but during construction in 2022 the Oregon Department of Justice objected to how Security Properties planned to use a tax-exempt bond program and low-income housing credits to finance construction of Splash. The abbreviated version of events is that the affordable units were interspersed with market-rate units, making it difficult to determine how state money was being spent on common areas (“Flat Pepsi,” WW, April 13, 2022).
The DOJ lodged its objection just before Security Properties posted details of its bond sale in October 2021. The developer had already knocked down most of the bottling plant on the site (preserving graceful arches on the building). Construction stopped for months while Security Properties searched for a solution.
Sadly for low-income Portlanders, the only fix available was to slash the number of affordable units to 11, a fourth of the original number.
DOJ’s intervention irked state Rep. Rob Nosse (D-Portland), who introduced a bill to allow the state to fund buildings with a mix of market-rate and affordable housing. It became law on Jan. 1, 2024.
“It was a bureaucratic snafu,” Nosse said in an interview this week. “They wanted to do the right thing, but they couldn’t figure out how to finance it.”