Wilsonville City Council moves forward with affordable housing project

The Wilsonville City Council recently took another step toward the development of a mixed-use project that includes affordable housing at the Wilsonville Transit Center.

In a 4-0 vote at a meeting on Monday, May 20, the council adopted a development and disposition agreement with private holding company Palindrome for the project, which involves 121 units of affordable housing on the 1.3-acre property. South Metro Area Regional Transit, local social service organization Wilsonville Community Sharing and a coffee house will take space on the ground floor.

Construction is expected to begin in September 2024 and the certificate of occupancy takes effect in April 2026. As part of the agreement, the city will contribute $1.9 million to the project from a state grant and sell the property to Palindrome.

The city will also subsidize $1.42 million in system development charges for the affordable housing units and defer remaining SDCs until April 1, 2026. System development charges are one-time fees for developers that help the city fund infrastructure projects.

City Attorney Amanda Guile-Hinman said the city has not determined the funding sources yet for the SDC subsidy. She also does not believe the project would be feasible without this contribution

SDCs are typically due when developers apply for their building permit, before starting construction. Guile-Hinman said developers often pay the charges with a loan, which tend to have high interest rates that she said could cost the developer “hundreds of thousands of dollars.”

She said affordable housing projects tend to require multiple funding sources, such as the city, the developer, the Metro regional government and others, and can be difficult to “make pencil out.”

“Something like $1.4 million, if that was in question that they’d have to pay it and carry that cost, yes, it could significantly jeopardize whether the project could move forward,” Guile-Hinman said.

In a separate resolution that passed 3-0, the council established a program for SDC deferral for affordable housing projects on city-owned property. Guile-Hinman said that Wilsonville’s code requires the council to pass a program for SDC deferrals and does not allow the city to determine deferrals on a case-by-case basis.

Councilor Joann Linville abstained from the vote. While she said she supported SDC deferral for the transit-oriented development project, she has concerns about a blanket program that could affect the city in the future.

Councilor Katie Dunwell was unable to attend the council meeting.