On Monday, the Salem City Council approved the use of millions of dollars to subsidize two affordable housing projects that are expected to add over 300 apartments to the city in coming years.
The two projects include a 183-unit apartment building at the intersection of Southeast Joseph Street and Aumsville Highway, and a 120-unit development in northeast Salem at the site of the former Salem General Hospital.
Councilor Virginia Stapleton formally resigned from her post as council president and councilors appointed Linda Nishioka to replace her. Stapleton stepped down to focus on her campaign for the Oregon House of Representatives. Her council term ends Dec. 31.
Councilors also voted unanimously in favor of modifying the city’s subsidy program for apartment development to require transparency documentation be submitted by all contractors, subcontractors and companies performing work on projects funded by the program.
City allocates $3 million for affordable housing development
City councilors voted 7-2 to spend $3 million for pre-construction improvements to a planned private affordable housing development at Southeast Joseph Street and Aumsville Highway. Councilors Virginia Stapleton and Micki Varney voted no on the project after raising concerns about the price and location, which Stapelton said would create burdens for certain residents.
It will be the first use of the $10 million voters in 2022 set aside for city-funded affordable housing projects as part of a larger infrastructure bond measure.
Even with the city money, the project isn’t a sure thing. Improvements are expected to cost $5.5 million total, so developers will need to pay the remaining $2.5 million. The project also depends on state funding which is still pending. Developers will learn in August if they’ve received state money and expect to begin construction in the spring of 2025.
City Councilor Vanessa Nordyke said she was unsure if using $3 million out of the $10 million set aside for affordable housing projects would be a wise move given the limited funding.
“There is still a pretty big price tag where you are going to have to come up with the rest to make this project a reality. And I want it to work, and I want you to get every penny you need to make it happen,” Nordyke said. “But what happens if you don’t get the funds and what happens to the $3 million that we have provided in off site improvements? Because once those improvements are made we can’t take them back.” She ultimately voted for spending the money.
Salem General Hospital site housing project
On Monday, councilors unanimously agreed to alter an existing agreement to facilitate a $3.4 million property purchase between Salem Health and affordable housing developer Green Light, which is planning a 120-unit affordable apartment building in northeast Salem.
Under the updated deal, the city will buy 10.6 acres at the 2500 block of Northeast Center Street, near Yaquina Hall, for $3.4 million from Salem Health and then sell it to Green Light for the same price to be developed into housing.
The deal will allow the city to retain 50,000 square feet of the property for conservation purposes where a park and memorial site would be developed, according to a staff memo from City Attorney Dan Atchison.
The city is required to buy the site by no later than Dec. 31, 2024.
The amended deal lowers the purchase price for the site by $400,000. That money will be used to develop the conservation area.
The city will also take an additional $400,000 from the affordable housing bond funds to pay for improvements on D Street adjacent to the development. That money will not be repaid.
New transparency requirements should help address worker exploitation on job sites
The proposal from Mayor Chris Hoy – to modify the city’s subsidy program for apartment development to require more transparency documentation – comes after councilors approved a 10-year property tax break for a downtown apartment building planned by Portland-based Deacon Development.
After several members of the Western States Regional Council of Carpenters testified before the council alleging unfair labor practices on another city-subsidized Deacon Development, councilors decided to award Deacon the tax break with the caveat that new transparency requirements would be put in place to prevent worker exploitation on worksites.
On Monday, councilors voted to implement those transparency requirements.
Eric Morgan, a special representative from the Western States Regional Council of Carpenters, testified Monday in support of the new transparency requirements designed to address what he said was rampant worker exploitation on construction sites. Morgan said he hopes the rules will eventually apply more broadly and not just for projects funded by public dollars.
“This is a great partial step in shining light on worker exploitation, but I have a question,” Morgan said. “If we recognize that worker exploitation is a problem then what is the concern to moving this to help protect workers on all projects in the city. Cash payment, wage theft, tax fraud and overall worker exploitation runs rampant in the construction market.”
The mayor said the actions taken Monday are only one step in a longer process to protect workers and create transparency around public funds in Salem.
“Having this transparency documentation required, to me, is just the minimum for what is really just good business practices,” Hoy said. “Any time you want to come to the city and have public money, I think that we have a duty as a governing body to require transparency and openness to make sure that money is being spent in a way that benefits the public at large.”
Original story published Monday, July 8:
The Salem City Council will decide Monday whether to spend millions of dollars to subsidize two affordable housing projects that would add over 300 apartments to the city in coming years.
It would be the first use of the $10 million voters in 2022 set aside for city-funded affordable housing projects as part of a larger infrastructure bond measure.
Councilors will vote Monday on spending $3 million for street, water and sewer infrastructure as part of necessary improvements prior to the construction of 183 new affordable apartments at the intersection of Southeast Joseph Street and Southeast Aumsville Highway.
The project is being pursued by developer Neighborly Development, LLC and the apartments will be 60% of area median income, according to a staff memo from city director of community planning and development, Kristin Retherford. In Marion County, the 2024 area median income for a family of four is $54,780. Rent for a one bedroom apartment is estimated to be $1,028.
The money comes from the 2022 infrastructure package Salem voters approved, which included $10 million to promote affordable housing projects.
The project is located at the intersection of Southeast Joseph Street and Aumsville Highway, Kristin Retherford, the city’s director of community planning and development said in a staff memo. Improvements needed for construction are expected to cost $5.5 million, she said.
Construction on the new affordable housing will begin in the spring of 2025 if the project secures state money. If the developer gets word it will receive the award by August those funds are expected to become available in January 2025.
Salem General Hospital site housing project
On Monday, councilors will potentially alter an existing agreement to facilitate a $3.4 million property purchase between Salem Health and affordable housing developer Green Light, which is planning a 120-unit affordable apartment in northeast Salem.
Under the updated deal, the city will buy the around 10.6 acres at the 2500 block of Northeast Center Street, near Yaquina Hall, for $3.4 million from Salem Health and then sell it to Green Light for the same price to be developed into housing.
The deal would allow the city to retain 50,000 square feet of the property for conservation purposes where a park and memorial site would be developed, according to a staff memo from city attorney, Dan Atchison.
The city would be required buy the site by no later than Dec. 31, 2024.
The amended deal would lower the purchase price for the site by $400,000 which would be used to develop the conservation area.
If passed, the city will also take an additional $400,000 from the affordable housing bond funds to pay for improvements on D Street adjacent to the development. That money would not be repaid.
City to require transparency for contractors, subcontractors and companies
The council will decide Monday whether to modify the city’s subsidy program for apartment development to require transparency documentation be submitted by all contractors, subcontractors and companies performing work on projects funded by the program.
The proposal from Mayor Chris Hoy comes after councilors approved a 10-year property tax break for a downtown apartment building planned by Portland-based Deacon Development.
After several members of the Western States Regional Council of Carpenters testified before council alleging unfair labor practices on another city-subsidized Deacon development, councilors decided to award Deacon the tax break with the caveat that new transparency requirements would be put in place to prevent worker exploitation on worksites.
Other items
- City Councilor Virginia Stpleton will formally resign as council president to focus on her campaign for the Oregon House of Representatives.
- Mayor Chris Hoy will issue a proclamation certifying election results in the primary election on May 21, 2024.
- Councilors will hear the National Legal Aid and Defender Association Report for Salem Municipal Court Indigent Defense Services. The report is based on a study conducted in May 2021 on the current state of the indigent defense services for the Salem Municipal Court.
- Councilors will listen to an information session about a development with 26 new housing units.
- On Monday councilors will vote to amend an agreement between the city and the Orchard Heights Water Association for the first time, which will allow the Orchard Heights Water Association to add new legally created lots to its water service area.
Contact reporter Joe Siess: [email protected] or 503-335-7790.
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Joe Siess is a reporter for Salem Reporter. Joe joined Salem Reporter in 2024 and primarily covers city and county government but loves surprises. Joe previously reported for the Redmond Spokesman, the Bulletin in Bend, Klamath Falls Herald and News and the Malheur Enterprise. He was born in Independence, MO, where the Oregon Trail officially starts, and grew up in the Kansas City area.
