EXHIBIT A

Title 7, Housing Compliance Report to Metro

Third Round Report

As Required by Title7 of the Metro Regional Functional Plan

June 23, 2004

June 2004

Bureau of Planning

City of Portland

Portland, Oregon

Title 7, Housing Compliance Report to Metro

Table of Contents

SECTION ONE— Introduction  Page 1

SECTION TWO—Third Round Reporting Requirements  Page 3

A.  Reporting Requirements for Areas of Unincorporated Multnomah

 County in Portland’s Urban Services Boundary  Page 3

B.  Outcomes of Comprehensive Plan Amendments and Implementing

Ordinances Pending December 31, 2003 and Other Initiatives  Page 4

C.  Public Responses and Detail on Recently Adopted and Pending

 Comprehensive Plan Amendments and Ordinances  Page 7

D.  Outstanding Issues

APPENDIX ONE: Second Round Report to Metro on Title 7 Compliance

APPENDIX TWO: Multnomah County Programs

APPENDIX THREE: City Tax Exemption Program Foregone Revenue and Number of Units  for Seven years

Supporting Documents To Be Submitted to Metro Under Separate Cover

PDC Housing Production Report for FY 2002/203

River District Housing Implementation Strategy Winter 2003/2004

Title 7,

Housing Compliance Report to Metro

Third Round Reporting Requirements

Section 1 Introduction

On January 18, 2001, the Metro Council adopted Ordinance No. 00-882C, amending the Regional Framework Plan and Urban Growth Management Functional Plan. The adoption of this ordinance initiated a series of reporting requirements by local jurisdictions on their progress in achieving the goals of the Regional Affordable Housing Strategy (RAHS). In April 2002, the City of Portland submitted its first round of reporting which constituted a brief summary of the City’s actions on a variety of land use and other tools and strategies designed to promote broader affordable housing opportunities, especially to those households earning between 0 and 80 percent of the area median income.

To demonstrate compliance with Title 7, local jurisdictions must:

1.  Include strategies to ensure a diverse range of housing types within their jurisdictional boundaries.

2.  Include in their plans actions and implementation measures designed to maintain the existing supply of affordable housing as well as increase the opportunities for new dispersed affordable housing within their boundaries.

3.  Include plan policies, actions, and implementation measures aimed at increasing opportunities for households of all income levels to live within their individual jurisdictions in affordable housing.

In the summer of 2003, after the first round of reporting, the Metro Council amended the Title 7 reporting requirements to specify more clearly the minimum actions local jurisdictions must take in order to achieve compliance with the housing elements of the Regional Framework and Functional Plans. The relevant Metro Code requirements which describes the reporting requirements follows:

3.07.740 Requirements for Progress Report

Progress made by local jurisdictions in amending comprehensive plans and implementing ordinances and consideration of land use related affordable housing tools and strategies to meet the voluntary affordable housing production goals shall be reported according to the following schedule:

A.  By January 31, 2002, cities and counties within the Metro region shall submit a brief status report to Metro as to what items they have considered and which items remain to be considered. This analysis could include identification of affordable housing land use tools currently in use as well as consideration of the land use tools in Section 3.07.730(B).

B.  By December 31, 2003, each city and county within the Metro region shall provide a report to Metro on the status of its comprehensive plan and implementing ordinances explaining how each tool and strategy in subsection 3.07.730B was considered by its governing body. The report shall describe comprehensive plan and implementing ordinance amendments pending or adopted to implement each tool and strategy, or shall explain why the city or county decided not to adopt it.

C.  By June 30, 2004, each city and county within the Metro region shall report to Metro on the outcome of the amendments to its comprehensive plan and implementing ordinances pending at the time of submittal of the report described in subsection B of this section and on the public response, if any, to any implementation adopted by the city or county to increase the community’s stock of affordable housing, including but not limited to the tools and strategies in subsection 3.07.730B.

The first round of reporting noted in Section 3.07.740 A, above, addresses the immediate legislative responses jurisdictions have taken, or could take, to consider strategies that would promote affordable housing production and preservation as suggested by the regional Affordable Housing Technical Advisory Committee (HTAC). The second round of reporting focuses on fundamental legislative and policy actions local governments have taken as reflected by local comprehensive plan compliance with the regional goals expressed by Title 7. This third and final round of reporting requires jurisdictions addresses the outcomes of amendments to their comprehensive plan and implementing ordinances pending at the time of the second report due December 31, 2003. Reporting is also required on the public response to these amendments and to the adoption of other implementation measures to increase the community’s stock of affordable housing. In addition, jurisdictions are requested to address outstanding issues from the second report. This report by the City of Portland responds to this directive. This report is due to Metro by June 30, 2004 as noted in Section 3.07.740 C, above.

The City of Portland intends to indicate compliance by acceptance of this report by the Portland City Council and consideration and adoption of a resolution acknowledging the voluntary affordable housing production goals established for the City and the areas of unincorporated Multnomah County within Portland’s Urban Services Boundary (USB). These are referred to in this report as “urban pockets”. City Council adopted the voluntary five-year housing production goals set for the City of Portland by Metro by Resolution 36190 on December 17, 2003 but did not include the voluntary housing production goal for the urban pockets. The City of Portland has entered into intergovernmental agreements with Multnomah County to adopt all applicable comprehensive plans and implementing ordinance work required to enable the County to comply with the Metro Urban Growth Management Functional Plan. The latest of these was adopted by Portland City Council on March 14, 2001 by Ordinance 175398. This report will address the Title 7 requirements for the Multnomah County urban pockets.

Section Two: Round Three Reporting Requirements

A.  Reporting Requirements for Areas of Unincorporated Multnomah County in Portland’s Urban Services Boundary.

This section covers the City of Portland reporting requirements for the Multnomah County urban pockets in Portland’s USB.

Portland’s Intergovernmental Agreements with Multnomah County

Portland has entered into an Urban Planning Area Agreement (UPAA) to transfer responsibilities for implementing and administering comprehensive plan and zoning regulations from the County to the City for properties within unincorporated Multnomah County that are within the USB, the Metro Urban Services Area and the Urban Growth Boundary with the exception of West Hayden Island and a site known as Fred’s Marina. Previously, the City and the County had entered into an UPAA, which authorized the City to prepare applicable comprehensive plan and implementing ordinances for the urban pockets. Multnomah County adopted the City’s applicable land use regulations, comprehensive plans and zoning through the County Ordinance 967 on October 11, 2001 with an effective date of January 1, 2002.

Land Use Tools and Housing Policy Guidance Available to the Multnomah County Urban Pockets

As a consequence of Multnomah County’s adoption of Portland’s code and policies, housing policies and land use tools that further preserving the existing supply of affordable housing as well as increasing opportunities for new dispersed affordable housing are available in the urban pockets. Examples of these tools are the allowance in single dwelling zones of accessory dwelling units and duplexes on corner lots. A full listing of these land use tools is on pages 4 and 5 of the Second Round Report in Appendix 1. Goal 4, Housing, of the Comprehensive Plan provides policy guidance for quasi-judicial land use cases and policy guidance on long range planning issues that might arise in these areas.

Some urban pockets adjacent to the Outer Southeast and Southwest Portland planning districts were included in the Outer Southeast and Southwest Community Plan areas. Portions of the pockets had higher density Comprehensive Plan map designations applied as part of the Outer Southeast and Southwest Community Plans. Owners of properties in these pockets can request that their land be changed from the current zoning to the higher density Comprehensive Plan map designations, which creates additional housing opportunities on these areas at the edge of the City.

Other Housing Programs Available to the Multnomah County Urban Pockets

A City of Portland program that is available in the urban pockets, is the use of federal HOPWA funds to provide housing for people with AIDS. Other housing programs

administered by the Portland Development Commission and the Bureau of Community Development are not available in these areas. Also, until annexation, these areas are not eligible for any of the City’s property tax exemption programs administered by the Bureau of Planning and the Portland Development Commission designed to promote the provision and new construction of housing affordable to low, moderate and middle income housing. See Appendix 2 for Multnomah County Programs.

B.  Outcomes of Comprehensive Plan Amendments and Implementing Ordinances Pending December 31, 2003 and Other Initiatives

This section reports on the outcomes of recent City land use and non-land use initiatives as required by Metro Code section 3.07.730 C. These include affordable housing projects, initiated or completed as a result of the tools and strategies described in this and previous required reports; partnerships created between the City and affordable housing developers (both for and nonprofit); and pending amendments to the comprehensive plan and implementing ordinances. The greater detail of some of the pending ordinances and other initiatives, and the public response to these initiatives is reported in a chart starting on page 8.

Affordable Housing Projects and Partnerships

Various city agencies assist the preservation and production of affordable housing units. In particular, PDC and Bureau of Housing and Community Development (BHCD) are involved in public-private partnerships with private developers and nonprofits to both preserve and produce new housing.

•  PDC primarily makes use of tax increment funds for these purposes and receives some federal funds passed on to them from BHCD.

•  BHCD manages federal funds channeled to the City from the U.S. Department of Housing and Urban Development. These funds are the Community Development Block Grant, HOME funds, Housing for People with Aids (HOPWA) and the Emergency Shelter Grant. BHCD also manages City General Fund money to support housing and homeless programs as well as youth employment and public safety. BHCD has three strategic objectives: ending the institution of homelessness, increasing the range of housing opportunities for low-income people and expanding opportunities for low-income residents to improve their economic condition.

•  Other involvement by City agencies includes:

▪  The Bureau of Planning administers the nonprofit low income housing tax exemption program and co-administers the New Multiple Unit Housing program for new renter and owner-occupied housing construction in the Central City and urban renewal areas with PDC. Planning provides policy guidance on the multifamily program for Transit Oriented Areas and the new single family housing in Distressed Areas (renamed Homebuyer Opportunity Areas) program. PDC administers these programs and the renter and owner-occupied housing rehabilitation programs.

▪  PDC administers a Development Fee Waiver program for nonprofit affordable housing projects in the City of Portland. Under this program, some of the development fees associated with the rehabilitation or new construction of affordable housing units can be waived.

Information on individual housing projects and number of housing units produced are noted below:

•  PDC Housing Production Report for FY 2002/2003 and River District Housing Implementation Strategy Winter 2003/2004. (To be submitted to Metro as supporting documents)

•  Revenue Foregone and Number of Units for Seven Years FY96/97 through 02/03 for the City’s tax exemption programs (City Code Chapters 3.101-3.104) (See Appendix 3.)

In addition, the City of Portland is providing policy and funding assistance to the Housing Authority of Portland’s (HAP) HOPE VI project, the New Columbia, which will be an 850-unit community when completed. The former Columbia Villa had 462 housing units of public housing, which are now demolished.

Pending Amendments to the Comprehensive Plan and Implementing Ordinances

The City of Portland recently adopted a new housing policy in 1998 when it updated Goal 4, Housing, of the City’s Comprehensive Plan. New policies that relate to housing for areas of the City are added to the Comprehensive Plan with the adoption of area plans. These plans are often accompanied by the adoption of new zoning code regulations, which allow increased residential development at certain locations and height and floor area bonuses for affordable housing and other specified types of housing development. Included in Portland’s First Report submitted in 2002, was mention of the adoption of new floor area and height bonuses and mitigation for lost housing units as part of the Northwest District and Downtown’s West End Plans. Since that time, the South Waterfront Plan and the St. Johns Lombard Plan have been adopted. (Information is included on the South Waterfront Plan although it was adopted before December 31, 2003.) Each plan adds housing policies and/or objectives to the City’s Comprehensive Plan for these particular areas and each plan has included new zoning regulations (City Code Title 33). These plans also include non-land use implementation actions to promote the provision of new housing including affordable housing.

The Pleasant Valley Plan District regulations, which will be added to the City’s Zoning Code are pending. Planning Commission hearings are scheduled for July and August with action by City Council expected in September or October 2004. A concept plan for Pleasant Valley was approved by a multi-jurisdictional steering committee that included the City of Portland and Multnomah County on May 14, 2002. Pleasant Valley is a 1,532-acre community east of Portland and south of Gresham that was brought into the Urban Growth Boundary by Metro in 1998. The concept plan for this new town center includes a housing goal for the new community, which includes objectives requiring a broad range of housing types including affordable housing. Eventually, the City of Portland expects to annex 290 acres including a portion of the town center although the larger portion of town center is expected to become part of Gresham. The plan district regulations will apply to properties annexed to Portland.

A chart beginning on page 8 that lists the affordable housing tools adopted with each plan that was pending December 31, 2003 including the Pleasant Valley regulations that are pending and the public response. The South Waterfront Plan is also included since the tools adopted as part of that plan have not included in the two earlier reports. The non-land use implementation items in these plans are listed in a chart beginning on page 8 that details non-land use tools and strategies and public response. Two newer initiatives are not listed in the chart because it is early to report on the public response.

Affordable Housing Production Goals, Non Land Use-Affordable Housing Tools, and Strategies and Funding for Housing

Other non-land use initiatives include new housing production goals, new funding and resource allocation initiatives, and the previously mentioned programs offering limited property tax exemptions.

Affordable Housing Production Goals

•  On December 17, 2003. City Council accepted the City of Portland’s Second Round Report to Metro and the adopted the five-year voluntary affordable housing production goal of 1,791 units for households under 30 percent MFI.

•  In January 2003, the Portland Development Commission adopted a resolution to increase housing production to assist an estimated 13,550 units or households from 2001-2011, and directed staff to determine if further increases in housing production are feasible, including additional affordable housing goals, increased market rate rental housing goals, and increased ownership unit goals. (Not listed in the non-land use tools and strategies chart with public response.)

New Initiatives

•  Citizen’s Commission on Homelessness convened to create a 10-year Plan to End the Institution of Homelessness. The plan will be a comprehensive body of recommendations to end homelessness in the Cities of Portland, Gresham and Multnomah County and is intended to be enacted by these cities and the county. The

Cities and the County, HAP, the state of Oregon, nonprofit housing providers. (Not listed in the non-land use tools and strategies chart with public response).

•  On June 8 and June 22, the Planning Commission held hearings on proposed changes to two of the city ‘s tax exemption programs. These are the reactivation of the single family new construction in homebuyer opportunity areas and the addition of and affordability requirement for rental projects and revisions to the public benefit list for the core area new multifamily program. City Council is expected to take action after the June 30, 2004 deadline for this report but will mostly likely act on Planning Commission’s recommendation in July 2004.

•  The City’s active support for and continued participation in the Blue Ribbon Committee on Housing Resource Development. The City is continuing to work with representatives and leaders of other jurisdictions throughout the region to develop a strategy to secure new resources for affordable housing.

New Funding and Resource Allocation Initiatives

The Mayor’s proposed budget for 2004-2005 would make up to $11 million from the City’s General Fund available for the affordable housing over the next three years and includes an ongoing commitment of General Fund resources to affordable housing.

C. Public Response and Detail on Recently Adopted and Pending Ordinances

Recently Adopted Land Use Tools and Strategies and Public Response

Non Land Use Tools and Strategies

Non Land Use Tools and Strategies

Non Land Use Tools and Strategies

D. Outstanding Issues

These are the issues listed in the Summary of Compliance letter sent May 10, 2004 to Mayor Katz after submittal of the Second Round Report and Ordinance adopting the voluntary affordable housing goal for Portland on December 17, 2003.

1.  Consideration of the portion of Multnomah County affordable housing production goal (134 units) that Portland will assume through the urban Planning Agreement it signed with the county.

Response

City Council is scheduled to adopt a resolution that included the voluntary housing production goal for the unincorporated portions of Multnomah County within Portland’s urban services boundary on June 23, 2004.

2.  Clarification of how one land use strategy (parking) contained in Metro Code Section 3.07.730B is addressed in the City’s Comprehensive Plan and implementing ordinances so as to ensure that the City’s existing strategy applies to the whole city other than the Central City, near public transit and in the Albina Community plan district.

Response

Most of the residential and commercial areas within the City of Portland and its urban services boundary (urban pockets) are near public transit service. Many multi-dwelling housing projects are located on streets with frequent transit service. Very few residential areas have no access to transit service. Policy 4.15 Regulatory Costs and Fees C. of Goal 4, Housing, of the Comprehensive Plan states ”Allow reduced parking requirements for housing where the parking demand is reduced and impacts are minimal. No more than one space per unit is required for residential uses outside the Central City. Single room occupancy hotels (SROs) in any location are exempt for parking requirements. Units in the High Density Multi-Dwelling Zone (RH) and the Central Residential Zone (RX) outside the Central City have reduced parking requirements. (See Table 266-1 and Table 266-2 in City Code Chapter 33.266, Parking and Loading). Minimal or no parking requirements reduce the costs of providing housing, particularly multifamily housing.

3.  Specific third year reporting requirements.

Response

This report addresses these requirements.