OSH North Campus: Salem to buy Yaquina Hall for more than $520,000

Get ready for more affordable housing in Salem, a move that will help relieve a backlog of requests for cheaper living spaces in the city.

The city is buying Yaquina Hall on the Oregon State Hospital north campus from the state for more than $520,000, aiming to turn the historic building into dozens of housing units with less expensive rent — about $600.

On Monday, the city approved the $522,280 purchase and allowed the Salem Housing Authority to apply for $750,000 in federal community development block grant money to help fund renovations on the decades-old building. The Housing Authority, an arm of city's urban development department, is negotiating the deal with the state.

The project is intended to create 50 affordable units for "low and moderate income seniors, disabled (people) and families." One estimate said that's going to cost around $9.7 million, though it's still unclear where, exactly, all the money will come from. According to a city report, some rough numbers for potential funding sources include:

• Federal Community Development Grant via the city of Salem: $750,000
• Oregon Health Authority funds: $3.5 million
• Loan: $1.5 million
• Low-income housing tax credit: $2 million 

Construction costs will amount to almost $5.9 million, according to a draft report from the Housing Authority.

It is set to be funded with a mix roughly half public, half private dollars.

"We have a waiting list of 6,000 households," Salem Housing Authority administrator Andy Wilch said on Monday. The Housing Authority looks after more than 100 properties with 646 units.

The more than 51,000 square-foot Yaquina Hall was built in 1947, according to the city. It once housed nurses before turning into office space.

The sale comes as the state Department of Administrative Services, which manages the site, looks to break even on the north campus project.

OSH North Campus: State to sell Yaquina Hall to city

“We are thrilled the sale was approved," Shannon Ryan, an administrator with the department, said in an email. "This is the first milestone resulting from a partnership with the city and we are committed to continue down this path to get to as many wins for the community as possible."

The Housing Authority said it would go to the Oregon Housing and Community Services agency for funding toward the project, too.

But an audit released Tuesday from the secretary of state's office found OHCS is putting affordable housing that already exists "at risk" because of major deficiencies in its planning, data tracking and communication practices.

“We can’t help address Oregon’s housing crisis if we lose existing affordable housing,” Secretary of State Jeanne Atkins said in a statement.

Send questions, comments or news tips to jbach @statesmanjournal.com or 503-399-6714. Follow him on Twitter @JonathanMBach.

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