PORTLAND — Mayor Ethan Strimling is asking for a $7 million bond to fund the city’s Housing Trust Fund.
“Housing is infrastructure … it is time for us to prioritize (it) in the same way,” he said at the outset of the Oct. 4 City Council Finance Committee meeting.
Strimling’s bond proposal, which could cost about $10 million – including debt service over 20 years – will be discussed again by the committee after city staff looks into how it might be implemented. Developers who might use the money are also asked for their insight.
The next date for discussion was not determined at the committee meeting.
A bond of this size would require a referendum for approval, and Strimling said he expects the bond to be on a ballot next spring or in a year without a special election.
Strimling has also proposed limiting annual bond allocations to $1.5 million for housing projects. At that rate, the debt service would be about $5 annually for the average city property of $250,000.
He expects the $7 million could deliver between 620 and 844 housing units, depending on varied per-unit estimates.
The city Housing Trust Fund presently has a balance of $913,500. A month ago, it reached $2.2 million before councilors approved allocating $925,000 for the Portland Housing Authority rebuild and the expansion of public housing on Front Street and $300,000 to help Avesta Housing fund housing on Brighton Avenue for people 55 and older.
Councilors have always kept a fund balance of at least $500,000 on hand, but have said they are open to reconsidering the practice.
The trust has been funded from fees to developers, proceeds from city land sales, and the payment in lieu of building affordable housing units required in the city’s inclusionary zoning ordinance.
A month ago, the city also contributed $1 million from the $3.3 million sale of land at Thames and Hancock streets to the fund.
Unlike funds from the U.S. Department of Housing & Urban Development, the money from the Housing Trust Fund can be used to build housing for people earning at or 120 percent above the area average median income.
HUD funding guidelines require spending for housing well below the median.
Councilor Nick Mavodones, the committee chairman, and Councilor Justin Costa, a committee member, did have doubts about the bond and how it might work.
Strimling envisions a process similar to what the state does with highway bonds, or the city does with sidewalk repairs by having a specific amount available with a process for determining which jobs get funded.
Mavodones, Costa and Councilor Jill Duson, who leads the council Housing Committee, wondered if an annual $1.5 million commitment to the trust could be part of capital improvements plan that bonds facilities, roads, and equipment needs.
City Manager Jon Jennings was not enthusiastic.
“I would be remiss if I did not mention the pressure that is on the CIP,” he said. “We have a pension bond that will continue to 2026, and millions and millions of dollars in infrastructure needs.”
Mavodones also worried about adding more debt to city finances even as he would look to boost the fund balance.
“When you start to look at this in the context of the operating budget, the schools’ operating needs and existing capital improvement program, I just think it all has to be looked at in its entirety,” he said.
New senior housing to replace this home at 977 Brighton Ave. received $300,000 in city Housing Trust Funds. Councilors are considering a bond to add $7 million to the fund.