The Cottage Grove City Council established a Housing Development Cost Assistance Program Jan. 13, incorporating a unique tool in the city’s effort to broaden the variety and increase the amount of housing in the area.
“No one else has done this that we know of,” said City Manager Richard Meyers. “We actually had to create this and make this up ourselves. We haven’t found any other city that’s doing anything like this.”
The program, which was voted into effect unanimously, enables the city to provide relief on system development charges and building fees to nonprofit or government agency developers with pro-jects which help the city meet its broad array of housing needs.
“It helps fill that spectrum out of trying to hit the full range of housing that we may need in the community,” Meyers said.
Though the program does not fully cover all costs, the city may pay a portion of building permit fees and system development charges for the projects.
“The ones that are going to benefit the most from it are going to be those citizens that need this kind of innovative new housing that hits the affordable — or moderate — income level,” said Meyers. “The thing it does for us is provide housing for these people who don’t have housing or have sub-standard housing and helps get them back on their feet to be able to do other things in the community and be part of the community.”
Nonprofits and government agencies which apply for assistance through the program must be reviewed by the City Council before assistance is given. In mixed-use developments, the program will only apply to costs which are associated with the residential portion of the project. Upon being awarded assistance, projects must begin construction or pay development fees within one year or will lose funding.
To be eligible for assistance, the city will evaluate projects based on criteria such as the number of dwelling units, income levels accommodated, housing types, public benefits and other evaluation points similar to those associated with the recently-approved Multi-Unit Property Tax Exemption (MUPTE) program.
Most notably, current projects such as the Cottage Village development on Madison Avenue and Legion Cottages on North I Street are expected to benefit from the program. City councilors are set to review the program’s first two requests for SquareOne Villages’ Cottage Village and Homes for Good’s Legion Cottages projects during the City Council meeting on Jan. 27.
Together, the two projects are expected to provide 17 new units upon completion to the income-burdened community. The combined request for assistance is expected to nearly exhaust the program’s yearly allowance.
“So the first year — even half-year — has been terribly successful in putting $100,000 out there in the market to help a variety of housing opportunities for nonprofits and/or government agencies,” Meyers said.
Request for assistance from the Cottage Village developers last year was partially the impetus be-hind the creation of the program.
Cottage Village Coalition President Bruce Kelsh was delighted in considering that the program may have long-term impact on nonprofit projects in the area.
“The Cottage Village group greatly appreciates the City Council’s thoughtful deliberation on how to support not only Cottage Village, but other future projects,” said Kelsh. “The city’s support is signif-icant in terms of when we write grants. It shows there’s local community support.”
In tandem with the city’s embrace of the MUPTE program, which provides up to 10 years of property tax exemption on new developments, the two housing programs are set to provide a more comprehensive housing assistance framework for the community.
“One of the things the council is looking at is, yes, MUPTE is great for the for-profits. But the nonprofits, it doesn’t do anything for,” said Meyers. “So they felt that this isn’t going to be something that’s going to be solely solved by the for-profit businesses and we do need some continuation of some of these nonprofit and government agency projects going on.”
Cottage Village and Legion Cottages are not the only development plans on the horizon to take notice of the new program.
“We’ve already talked with DevNW [who] is going to be making an application as well to help with their community land trust project, which would be great,” said Meyers.
DevNW, a nonprofit which was created last year when Neighborhood Economic Development Corporation and Willamette Neighborhood Housing Services united, will be holding a groundbreaking Jan. 24 for six community land trust homes.
The homes are meant to create permanent affordable houses in Cottage Grove.
With a three-year sunset clause built into the assistance program, it will be funded in that time through a trust fund which will be created in the city’s 2020-21 budget.
The city will contribute up to $25,000 a year from the Building Inspection Program Fund into the trust fund specifically for assistance for building permits and inspection fees.
Contributions from the Building Inspection Program Fund will be limited to ensure that no more than $50,000 is available within the trust fund for building permits and inspection fees at the beginning of the fiscal year.
For system development charges, the city will contribute up to $75,000 a year from other sources. Contributions for this assistance will be limited to ensure that no more than $150,000 is available within the trust fund for system development charge assistance.
Funding remaining in the trust fund at the end of the fiscal year will remain in the fund and be carried over to the next year.
“There are no new taxes going to be created as a result,” said Meyers, adding, “If we are creating something that’s going to be taking a load off some other pressures in the community, that could actually be saving money in the long run.”