City officials spent Tuesday trying to set up another short-term gain in the housing market while also worrying about how to continue that momentum further down the road.
In the short term, a revised deal with Pendleton Heights developer Saj Jivanjee could clear the way for Pendleton to continue to pad its housing statistics well past its goal of 50 units per year.
Five months after the council unanimously rejected a previous proposal from Jivanjee, members approved a new incentive plan at a meeting Tuesday that Jivanjee has said will allow him to start building a 100-unit apartment complex to complement the 32 townhouses at Pendleton Heights.
Jivanjee has agreed to proceed in exchange for him paying $150,000 instead of $200,000 before the project starts. Additionally, Jivanjee wants the city to reimburse him for the city’s share of infrastructure costs once the project is complete.
Throughout the project, the city has fronted the infrastructure costs and Jivanjee is obligated to pay half of it back.
City Manager Robb Corbett estimates it would cost the city $176,651 to cover infrastructure improvements at the site and another $112,151 to reimburse Jivanjee, the latter being paid for with increased property tax revenue from the apartment complex.
Corbett told the council that the city had previously used the value of the land to pay its share.
Jivanjee has also fallen behind on his debt repayments, Corbett said, but the $150,000 payment from Jivanjee will catch him up.
Councilor Scott Fairley said most incentive deals were made on the front end, and if the council was going to offer money as the deal ended, it needed to offer it to all developers.
“Our money comes on the back end,” he said. “It’s just a ‘thank you’ for doing business in Pendleton.”
Councilor Becky Marks said she would vote for the deal but after several revisions to the incentive package, she was drawing a line in the sand.
“I will not do one more thing for this project,” she said.
Corbett said the city and Jivanjee started a partnership when the local housing market was significantly slower, and Pendleton Heights was always meant to be an example to other developers that new housing projects were feasible in Pendleton.
“I see us getting out of the incentive business, at least in terms of multi-family housing,” he said.
The council ultimately voted 6-2 to approve the deal, with Fairley and councilor McKennon McDonald voting against the agreement.
While the short-term outlook for housing growth looks good, the Pendleton Housing and Neighborhood Improvement Committee took a look at the city’s housing needs over the next 20 years.
At a meeting earlier Tuesday afternoon, the housing committee heard a presentation from FCS Group, a consultant hired to put together a housing needs analysis.
Based on an estimated annual population increase of 0.3 percent, FCS anticipated Pendleton would need another 606 housing units to meet future needs.
The projection report states that the rental needs are most acute on both poles of the income divide: there’s a shortage of 133 units for people earning $20,000 or less and a gap of 280 units for people earning $75,000 per year or more.
Corbett asked FCS officials whether they considered various “anomalies” in the data, like the large-scale housing developments in the works, the disparity between people who commute into Pendleton to work versus those who commute out, and Pendleton’s inclined topography.
The latter point was a source of frustration for Community Development Director Tim Simons.
While maps may give the impression that the land is open for development, the actual slant of the land makes it prohibitively expensive to develop on.
“Your cost went up from $120 per square foot to $220 per square foot,” he said. “No one’s going to do it.”
Mayor John Turner, the chairman of the housing committee, said there’s land that could be used for housing just beyond the urban growth boundary.
If the city could convince the Oregon Department of Land Conservation and Development that the land considered a candidate for in-fill is actually inhospitable to feasible development, the thinking goes, then the city could expand into new territory for housing.
The FCS officials said they hadn’t factored those “anomalies” into their study, but they would try to include them as they continue their study, which will eventually include a buildable land inventory and a residential land need analysis.
Another conclusion made through FCS’ housing project is that Pendleton’s current housing stock is very old. The median age of a house in Pendleton is 59 years old, compared with the state’s 41-year-old average.
As some of those old houses fall into disrepair, Pendleton resident Josh Cyganik is interested in fixing them up.
Cyganik went viral in 2015 when he organized a volunteer work party to do an exterior renovation of an elderly couple’s house. He said he’s gotten into volunteer work since then and has felt a pull to do his 2015 good deed on a wider scale.
He told the committee that he’d like to regularly organize volunteer work crews to renovate dilapidated homes in Pendleton for deserving owners.
Turner lauded Cyganik and his vision and asked staff to organize a meeting between Cyganik, the Community Action Program of East Central Oregon and Greater Eastern Oregon Development Corp. to further develop the idea.