Portland Mayor Ted Wheeler called his decision to spend public money on a pricey but innovative housing project in the Pearl District a good example of tapping private and federal resources to increase Portland's affordable housing supply.

The mayor released a statement Thursday defending the project and calling the city's $6 million investment in the $29 million housing complex "modest." Portland City Council candidate Jo Ann Hardesty, however, told Willamette Week that the investment does not make sense for addressing a housing crisis.

Willamette Week wrote in a Wednesday story that the mayor's decision ignored Portland Housing Bureau cost guidelines and defied his campaign promise to spend less per square foot to produce more units.

Portland Housing Bureau spokeswoman Martha Calhoon told The Oregonian/OregonLive in an email Thursday that the cost guidelines serve as "preference criteria, rather than a requirement." She said the bureau's solicitations have "always" contained preference for leveraging other financial resources.

The building will be the country's first high-rise made from cross laminated timber, a strong but flexible building material made from wooden boards glued together and then heated. It will have 11 stories and include 60 apartments affordable to households making 60 percent or less of the median family income.

Mayor Ted Wheeler on Thursday defended his investment in the innovative housing project.

Last year, the median family income in the Portland metro area was $74,700 for a family of four or $52,290 for an individual.

While each unit is expected to cost an average $480,000 to build, the city's contribution will amount to $100,000 per apartment.

Local housing authority Home Forward will contribute about $6.5 million, including grant money and fees the group will earn for development, according to Home Forward spokesman Tim Collier. About $10.6 million will come from federal tax credits, and building developer Project^ —pronounced "project"—will spend about $1.2 million.

"That's like paying for a Toyota and getting a Tesla in return," Wheeler wrote Thursday.

Wheeler wrote that leveraging private and other public resources is "essential" for creating affordable housing that lasts.

Investing in high-quality materials upfront will help ensure that the apartments affordable for 99 years as intended, he wrote.

"Less maintenance and repair over time translates into lower rents throughout the life of the building," Wheeler wrote.

He noted the project's numerous architectural awards including the Portland Design Commission Excellence Award and the U.S. Department of Agriculture's Tall Wood Building Prize.

The project's funds fall about $2 million short of its $29 million budget, and it remains unclear how the developer, Home Forward and the city will bridge the gap.

Home Forward said in a project application that Gov. Kate Brown's office would contribute $2 million from the governor's reserve.

Brown's spokesman, Bryan Hockaday, told The Oregonian/OregonLive Thursday that the governor's office does not plan to invest reserve money on the project.

"I'm not sure where Home Forward got that because that's not a commitment the governor made," Hockaday said.

He noted, however, that Brown does generally support use of cross laminated timber in development because it promotes Oregon's economy.

The governor has appeared at ribbon cuttings and convened a summit on timber to promote cross laminated timber as a way to promote economic stability for rural Oregon and expand opportunity for "communities hit hard by the decline of the natural resource economy."

Collier, Home Forward's spokesman, said on Thursday that the housing authority "overstated" the amount the governor's office would contribute but that the project's private developer is working with staff in the governor's office to find more funding for the project.

The organization's spokeswoman Oonagh Morgan Hurst told The Oregonian/OregonLive in an email Thursday that staff have worked with political consultant Len Bergstein and Brown's staff to find more funding.

"The source is yet to be determined," Collier said.

--Jessica Floum

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