Douglas Fir Apartments
DEVELOPMENT SCOPE
New construction of a 15‐unit affordable housing community that serves low‐income individuals who are homeless and/or diagnosed with persistent mental health issues.
PROJECT OVERVIEW
New Narrative is a Tigard-based nonprofit that offers integrative mental healthcare, peer support programs, and a variety of types of housing options to meet the needs of people who experience mental health issues. The Douglas Fir Apartments project arose when New Narrative recognized an opportunity to develop an unused portion of a flag lot where its outer southeast Portland clinic is located. There was enough space at the rear of the property to build a small apartment building.
At 15 units, the Douglas Fir Apartments offer an ideal housing option for individuals who risk experiencing negative mental health impacts from living in higher-density environments. The three-story building is conveniently located near a vocational and social rehabilitation program, the adjacent New Narrative clinic, and additional treatment options, as well as shopping, food, and retail establishments. Rental subsidies, provided through Multnomah County, keep rents affordable to residents, many of whom are exiting homelessness and earn little to no income. Residents of the Douglas Fir Apartments have access to mental health services and case management through New Narrative’s internal service teams.
Creative Solutions
Finance. Because the project was small, was being developed in an environment of rapidly inflating construction costs, and contained 100% supportive housing units, the financing path was challenging. With sources typically used to capitalize larger developments inaccessible, the finance team cobbled together $4.6 million in smaller investments. The interaction of cost inflation with the long capital stack contributed to ongoing closing delays fed by repeatedly arising budgetary gaps. Moreover, a rent assistance contract set to expire after eight years (future renewal is dependent on action by voters) created an underwriting issue for long-term lenders. The team addressed the issue by securing a long-term rent assistance guarantee from Multnomah County and, ultimately, closed an eight-source deal.
Design and Construction. The Douglas Fir Apartments contains 15 one-bedroom and studio units, along with a laundry room, community room, and office. The design-construction team collaborated to design and build a cost-efficient building that incorporates durable finishes and maximizes the buildable area of a constrained site. Having set a goal to award a high percentage of all construction contracts and some consulting contracts (e.g. structural and civil engineers) to MWESB firms, the team successfully achieved a 65% MWESB participation rate.
Photos by Pete Eckert.
SPONSOR
New Narrative
LOCATION
Portland, Oregon
HDC ROLE
Financial structuring and construction management
DEVELOPMENT PARTNERS
→ Scott Edwards Architects
→ O’Neill Construction
→ Oregon Housing and Community Services
→ Oregon Health Authority (OHA)
→ Network for Oregon Affordable Housing (NOAH)
→ FHLB Des Moines
→ Metro
→ Multnomah County
→ Energy Trust of Oregon
FUNDING SOURCES
→ Oregon SGAP funds
→ FHLB Affordable Housing Program grant
→ Capital grants
→ Transit-oriented development grant
→ Mental health housing grant
→ Green building incentives
→ Permanent loan
→ Sponsor capital contribution
SQUARE FEET
Residential: 5,915
Common Space: 4,062
Total: 9,977
COST
Construction: $3.3 million
Total Development: $5.1 million
TIMELINE
Fall 2019 to Spring 2023