City News

Long-planned affordable housing project could break ground early next year

The Oregon State Hospital North Campus property, pictured in 2019. A piece of the project would give the city of Salem a former residence hall for nurses to be turned into 52 units of affordable housing. (Troy Brynelson/Salem Reporter)

After years of delays, a much-needed affordable housing project in Salem is coming to fruition.

Yaquina Hall, which was constructed in 1947 as a nurses’ dormitory, will be turned into 52 affordable apartments managed by the Salem Housing Authority.

Nicole Utz, housing administrator, said they’re expected to close on the property on the Oregon State Hospital’s north campus by late November.

Construction will start within 30 days of the sale. It’s expected to take 13 months for Yaquina Hall to be completely renovated.

The project will offer project-based housing vouchers through the U.S. Department of Housing and Urban Development for people making less than 60% of the area’s median income.

A single person earning $​29,700 is at 60% of the Salem area’s median income. A family of four making $42,420 would also be at that level. 

There will be 20 units set aside for people with serious and persistent mental illness. The Oregon Health Authority chipped in $6.1 million to help with its development.

“We’re continuing to improve our housing affordability stock in our town to provide assistance to individuals in need. We’re really trying to fill the gaps of what is needed the most in the community,” Utz said.

She said Yaquina Hall will be historically preserved and local architect AC + Co and Walsh Construction will be doing the work.

She said six months before Yaquina Hall is completed, a waiting list will open. Last August, the housing authority opened Redwood Crossing, the city’s first permanent supportive housing project for low-income people.

Utz said there are more than 1,000 people on the waiting list for that project, which has 37 units. She said they had to close the waiting list within the first year of it being open.

That’s how much it’s needed,” she said of affordable housing.

Budget documents obtained by Salem Reporter show estimators in April 2017 pegged the cost to renovate Yaquina at $7.8 million. By November 2019, that rose to $13 million.

Now the project will cost $18.9 million.

Some of the cost will be paid for through a $10.8 million federal Low-Income Housing Tax Credit and a $2.7 million Historic Tax Credit.

Meantime, the city has invested about $1 million in the project so far.

Some of the expenses had to be duplicated because of the delays. Utz said Salem Housing Authority had to do three environmental analyses on the project because the others expired, making a third necessary to meet legal requirements.

Why it took so long

Salem and the state signed an agreement in December 2016 but couldn’t finish the deal until the lots were divided up. Before that could occur, the state had to widen roads, add sewer lines and make other improvements.

The city expected to buy the property in 2018 and have it renovated by early 2019.

In January 2020, the delays prompted Mayor Chuck Bennett to send a frustrated letter to the state, blaming officials for taking too long to get the property sold to the city. At the time, the street improvements hadn’t been completed and the lots hadn’t been subdivided.

When reached Thursday, Mayor Chuck Bennett said the issues with the affordable housing project are resolved now.

“It just had one hurdle after another to get over and I think they’re all pretty well cleared,” he said. “We’re moving forward expeditiously.”

Now, the 47-acre lot has been divided into lots that will become Yaquina Hall, a future park and a private housing development.

In September 2018, the state entered into an agreement with Mountain West Investment Corporation to sell 17 acres of the parcel. Neighborly Ventures is turning that lot into the 246-unit Jory Apartments at the corner of Park Avenue N.E. and D Street N.E. 

The developer is getting property tax rebates from the city of Salem for offering 36 units for people earning an average of 60% of the median area’s income.

(DISCLOSURE: Mountain West Investment Corp’s owner, Larry Tokarski, is a co-founder of Salem Reporter)

Contact reporter Saphara Harrell at 503-549-6250, [email protected].

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