It was huge news in November when Portland passed its first-ever property tax bond for affordable housing.
The landslide victory meant the city would be able to borrow more than $258 million to spend on building and restoring affordable housing, which will be managed by the City of Portland. Even amid the sensible grumbling that bond backers would only guarantee 1,300 units from the money, it was a welcome step.
Now, though, Donald Trump's budget could eat into the net effect the housing bond might have in a city searching desperately for new affordable units.
As part of steep cuts to the US Department of Housing and Urban Development (HUD), Trump has proposed eliminating funding for Community Development Block Grants (CDBG) and the HOME Investment Partnerships Program.
Combined, those programs kick in millions of dollars a year to the City of Portland—money that comes with strings attached, but is also more flexible than the urban renewal dollars the city's historically funded housing projects with.
"It would be a loss," says Kurt Creager, director of the Portland Housing Bureau, of the potentially death of the $3 billion CDBG program. "It's a significant funding source."
Over the last decade, the city's received yearly HOME funds between roughly $3 million and $5 million—money that can be used for, in HUD's words, "building, buying, and/or rehabilitating affordable housing for rent or homeownership."
The city hauls in even more CDBG money. In FY 2015, for instance, HUD granted the city $10.8 million. Nearly half of that was spent on housing, and other grant money went to things like social services and mental health treatment. The bureau anticipates $7.7 million in CDBG funding in its next budget.
That money has an advantage over the bond money Portlanders approved last fall: leverage. Portland's limited in how it can spend cash from bonds, and officials can't begin the sorts of partnerships that allow them to leverage cash to much greater effect. With CDBG money, "we can leverage something along the lines of 5 to 1 pretty reliably," Creager says.
The grant money can also be used anywhere in the city, unlike urban renewal dollars that are tied to specific geographic zones.
But if Trump gets his way—and right now, that's a fairly big "if"—the cash would disappear. The president's budget outline paints HOME and CDBG as government bloat.
"The Federal Government has spent over $150 billion on this block grant since its inception in 1974, but the program is not well-targeted to the poorest populations and has not demonstrated results," the document says of the CDBG program. And the administration says it's promoting "fiscal responsibility" by slashing HOME and similar funds.
"State and local governments are better positioned to serve their communities based on local needs and priorities," the document says, not mentioning that that's what happens under these grants: the city gets money from the federal government and works to spend it in a way that meets local needs.
Creager and the housing bureau aren't hitting the panic button yet.
"We think cooler heads will prevail in congress," he says. So the housing bureau is "modeling" a 30 percent reduction in CDBG funding in the future, he says—not a complete drop off.
The uncertainty around Trump's budget is already being felt among some of Portland's poorest households. As we reported earlier this week, it's contributing to the fact that the county's housing authority isn't awarding new rent vouchers this year.
