The Avesta Oak Street Lofts is one of a handful of projects over the past decade that has made use of Portland's Housing Trust Fund, which is supposed to help fund affordable and workforce housing. (Portland Phoenix/Colin Ellis)
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Portland’s recently renamed Jill Duson Housing Trust Fund was created in the early 2000s with the goal of increasing access to rental and homeownership opportunities for working-class and low-income people.

But despite the fund’s intentions, it has had little use in the past decade.

The fund is expected to have no less than $500,000 in it any time, to be able to act quickly during an emergency. Mary Davis, the city’s director of Housing and Community Development, said the current fund balance is more than $1.45 million.

Davis said the fund was officially created in 2010, although deposits in the program date back to the early 2000s when there was a similar program known as the Housing Replacement Ordinance. 

Davis said the 2021 Housing Trust Fund plan will go before the City Council in May, after it was approved at the committee level in February. She said the $500,000 benchmark is a suggested minimum balance that can be reduced at the City Council’s discretion. 

Davis also said the funds have a specific use for affordable housing. They can’t be used for other purposes, such as a general budget shortfall.

According to a 2020 report, the fund had a balance of just over $979,000 last year. The 2019 report said there was a balance of nearly $1.3 million. The year before, there was just over $913,000 in the fund.

The 2017 report said there was a smaller balance than the city would like, at just over $468,000, which matched the balance from the preceding year.

The fund is fed by several sources, including fees from developers who don’t want to create the number of affordable housing units required in their projects. Additionally, portions of short-term rental registration fees contribute to the fund, along with fees triggered by the Housing Preservation and Replacement Ordinance.

Earlier this month, the City Council renamed the Housing Trust Fund for former City Councilor Jill Duson, who retired from the Council in 2020 after 20 years of public service on the council and School Board.

At the time of the unanimous decision to rename the fund, Duson said she was very proud of the work that led to its creation. Long considered a proponent of increased housing in the city, Duson said she first became interested in housing at a young age, when her mother joined a tenant strike.

“It’s been an important driver in my engagement in public service,” she said.

According to city documents on the program, the fund’s purpose is the “promotion, retention and creation of an adequate supply of housing, particularly affordable housing, for all economic groups and to limit the net loss of housing units” in Portland. Additionally, it is to “serve as a vehicle for addressing very low-income, low-income, and moderate-income housing needs.”

Very low-income residents are those earning at or below 50 percent of the area median income; low-income residents earn at or below 80 percent AMI, and moderate-income level is at or below 120 percent AMI.

Fund allocations are made through a competitive application process, and applications must be approved by both the Housing Committee and the full City Council.

To be eligible for funding, an application must be for new construction of affordable housing, preservation or rehabilitation of existing affordable housing, creating additional housing in an existing building that wasn’t originally designed for housing, acquisition of units, and other similar proposals.

According to previous reports, the average city investment per unit is $10,000, which does not include tax increment financing. The 2019 report said city contributions would not exceed $18,000 per unit, although these amounts can be adjusted by the City Council for unusual circumstances where a larger amount is needed to help facilitate a project that meets other city goals. Those higher costs ratios must be tied into Comprehensive Plan goals.

Additionally, qualifying projects must have affordability restrictions. For example, rental or cooperative units must remain affordable for the life of the housing unit, which is a minimum of 30 years. Homeownership units must include resale restrictions.

The city will also have the first right of refusal to purchase affordable units that are in jeopardy of losing their affordability restrictions from foreclosure, delinquency, condominium fee payments, or any other event outside the agreed-upon restrictions.

Deposits in the fund date back to 2002, expenditures began in 2011, and neither deposits nor expenditures have occurred on an annual basis: after deposits in 2002 and 2003, for example, there wasn’t another deposit until 2009. After three deposits in 2012, there wasn’t another until 2017.

Since the early 2000s, a few of the major deposits include just under $223,000 from 50 Monument Square, a mixed-use building; more than $72,000 from a hotel at 121 Middle St.; $280,000 from 443 Congress St., an office building, and more than $321,000 in various fees associated with short-term rentals. 

Davis said the fund has been used almost every year since 2015, and since 2011 there have been a dozen projects that have used resources from the fund. 

“Last year, in 2020, we provided funding for two projects,” she said. “In 2019 we provided funding for two projects, and for two projects in 2018.” 

In addition to the city’s Housing Trust Fund, there is also a Maine Housing Trust Fund, which is another funding source residents can access. The city also has Community Development Block Grants that are used in similar instances, though those funds have a more limited scope.

Since 2011, a few of the major expenditures from the trust fund included just over $380,500 to build the Avesta Lofts on Oak Street; $175,000 to build at 65 Munjoy St.; $300,000 to build at 977 Brighton Ave., and several items that have been allocated but not yet spent, including $500,000 for 337 Cumberland Ave. and just under $500,000 for 200 Valley St. 

City Councilor Spencer Thibodeau, chair of the Housing and Economic Development Committee, said it’s up to city staff to decide which applications will be recommended to the committee to receive fund financing. If the committee supports that recommendation, it is then forwarded to the full City Council. 

“There’s normally some back and forth on how funds are used, some sort of agreement to require affordability restrictions,” he said of the council process.

Thibodeau said the expenditures are tied to the overall budget process. Once a budget is set, projects can be considered, not just for the trust fund but for other housing funding sources.

“That normally happens in early summer, then it’s considered in June or July, and historically we vote in late August or early September,” he said.

A rendering of the Winter Landing building proposed for Winter Street in Portland’s West End. Behind it, on State Street, is the redeveloped Mercy Hospital. (Courtesy CHOM)

Family, senior housing proposed for hospital property 

Community Housing of Maine is proposing to build 93 units of affordable housing as part of the redevelopment of the old Mercy Hospital in Portland’s West End.

Cullen Ryan, executive director of CHOM, said the 93 units are part of two different developments on Winter Street: The Equinox, a 41-unit building designed by Ryan Senatore Architecture to serve families, and Winter Landing, a 52-unit building designed by CWS Architects that will serve people 55 and over.

Ryan said both buildings will be built to Passive House standards, meaning they will require very little energy for heating and cooling, and will comply with the city’s Green New Deal ordinance. The Portland Housing Authority is a partner with CHOM for both projects.

He said the intention is to start construction in late spring of 2022.

Ryan said both buildings will add income-restricted apartments to the downtown area and will help alleviate a shortage of rental housing.

“The projects are in a walkable city neighborhood, and create opportunities for older Mainers to affordably age in place and for members of the Portland workforce to live and work in the city,” he said.

Both projects will have to go before the Planning Board and the Historic Preservation Board because Winter Street is in the West End Historic District.

According to documents submitted by CHOM to the Historic Preservation Board for a March 17 workshop on the Equinox, the 41-unit, four-story building will be 44 feet tall.

The Equinox and Winter Landing are part of a larger redevelopment effort to convert Mercy Hospital into hundreds of apartments. That project, a partnership between local development firms Redfern Properties and the NewHeight Group, is expected to open in the second half of 2023. The hospital is transitioning away from State Street to its newer Fore River Parkway campus.

The redevelopment will create a nearly 196,000-square-foot mixed-use project, repurposing both Mercy Hospital and the adjacent Morrison House into a mix of affordable housing, workforce housing, senior-care units, commercial and office space, a gym, coworking space, and public space.

In total, the project aims to create around 400 units of new housing.

— Colin Ellis