Affordable development in NE Salem gets $24 million state-backed loan

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State officials are backing a $24.2 million loan to an affordable housing development in Salem’s Northeast neighborhood that could be home to as many as 500 people within two years.

Developers broke ground Dec. 5 on the new complex at 891 23rd St. N.E. They say the funding will help pay for development and construction costs of the Gussie Belle Commons, the housing project by Home First Development and Green Light Development.

The $45 million project is primarily paid for by tax credits, state funding and the recently announced loan, which is backed by the state to help fast-track affordable housing development through a competitive grant process. The project received a $17.9 million state grant in July 2023.

It’s one of eight affordable housing developments that recently received funding through the state Housing and Community Services Department, the agency said in a news release on Nov. 4.

The project is part of a surge in apartment construction in Salem, with several downtown developments planned or in progress. It also comes as the city and state continue to face a housing crisis, with rental costs on the rise and a shortage of available units.

The Portland developers intend to build 120 apartments in the first phase of the project. Of those, 90 will be family units with two, three or four bedrooms, according Ben Pray, owner of First Home Development.

Pray said the total number of residents could be between 300 and 500 people. 

They expect to start welcoming residents by the third quarter of 2026.

Salem Health previously owned the land until the city of Salem “stepped in to support the project” by buying it short-term, according to Pray. Developers bought the property from the city on Dec. 4.

Developers plan to eventually build a total of 180 units, according to Tim Lawler, development manager for Green Light Development. 

Lawler said they plan to complete the final 60 units by late 2026.

He said the developers also own land that’s adjacent to the property and are “exploring the feasibility” of building a daycare facility for working families in Salem. They have applied for “multiple sources of funding to ensure affordability for providers and families,” according to Pray.

The complex will be open to people earning at or below 60% of Marion County’s median income, Pray said. That’s $38,400 for a single person or $54,780 for a family of four.

Developers also plan to reserve at least 24 units for people earning 30% or less of the median area income – $19,200 for a single person and $27,400 for a family of four. 

Rent costs would vary based on a resident’s income.

The complex will have nine three-story, “garden-style” residential buildings and one single-story community building, according to Nov. 1 meeting materials of the state Housing Stability Council, which awarded the funding.

Outdoor amenities will include a dog play area, playground, electric vehicle charging stations and “a full solar array,” according to the council. Apartment units will have electric forced air heating and cooling, a dishwasher, microwave, patio or balcony, on-site parking, and an in-unit washer and dryer.

Pray told Salem Reporter last fall that the site is ideal because it is close to public transportation, large enough to support a large number of units and amenities, and well-served by utilities.

The neighborhood is near the Lee Mission Cemetery and Oregon State Hospital, and includes several other large apartment developments. Yaquina Hall, a city-run affordable housing project with space for 150 people that opened in May 2023, is across the street, and the Jory Apartments are also nearby.

Lynn Takata, chair of Northeast Neighbors, said that developers redesigned their original plans for the complex to meet the needs of the neighborhood association. That included preserving a giant sequoia tree, adding green space, reducing parking, and adding features that reduce stormwater runoff. 

The city also installed a flashing light beacon on Northeast D Street, which is north of the property, for pedestrian safety.

Takata said some residents have been concerned about losing green space because the association has one of the lowest park acreages per capita in the city and is the second-densest neighborhood association.

“We recognize the critical need for more affordable housing and voted to support the development, though feedback from neighbors in northeast Salem reflect concerns that affordable housing, transitional housing and services ideally would be distributed throughout the city and not concentrated in northeast Salem,” she said in an email.

The site is also next door to two service providers – the Mid Willamette Valley Community Action Agency and Seed of Faith Ministries, a Black-led church in northeast Salem. Both providers plan to refer prospective renters to the complex and provide services to help them stay housed, according to the council.

Green Light Development has signed a co-developer agreement with Seed of Faith, which will lead outreach work and coordinate resident referrals for up to 25 of the new apartment homes. The church will have an office in the complex’s community building to help residents and property managers.

Developers previously held listening sessions with Black residents of Salem and members of Seed of Faith’s local congregation who said that many families move to Salem to be closer to relatives incarcerated at the Oregon State Penitentiary, the state’s only maximum-security prison. They also said minority renters face bias from property management companies.

To counter those issues, developers included members of the congregation in its interview panel when choosing a property manager, according to the council. They selected Boise-based Northwest Real Estate Capital Corp. in September.

The apartments will be named after Gussie Belle Brown, who moved to Salem in 1968 and worked as a certified nursing assistant at Salem Hospital for over 30 years, according to an obituary.

Bishop Wade Harris, the longtime pastor at Seed of Faith Ministries, said Brown also served as a pastor at State Street Church of God for around 15 years. She died on Dec. 19, 2022.

Harris said last fall that he suggested naming the apartments after Brown due to her history of working with homeless people, particularly senior citizens, to connect them with service providers and get them into housing.

Contact reporter Ardeshir Tabrizian: [email protected] or 503-929-3053.

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