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An affordable housing project in Portland is on pause while a new design is being created to reduce costs.

Hacienda CDC and Gorman & Company are redeveloping Villa de Clara Vista, which is in the Cully neighborhood, at 5300 N.E. Cully Blvd. The 100-unit garden-style apartment complex, built in the 1960s, has reached the end of its useful life, according to the Portland Housing Bureau. Currently, the plan is to demolish the existing 12 buildings and construct three four-story buildings with a total of 108 units.

鈥淒ue to age of the buildings and their original construction quality, renovation is not a feasible option,鈥� Hacienda CDC spokesperson Isaac Montes stated in an email. 鈥淗acienda has been working for many years to plan and implement a strategy that brings new, modern housing to the community that replaces 鈥� the current units.鈥�

The project team also includes design architect Salazar Architect, architect of record Hooker DeJong of Grand Rapids, Michigan; civil engineer BKF Engineers, structural engineer Aman Structural Engineering, landscape architect PLACE, general contractor LMC Construction.

The current design calls for including mass timber sourced from local sources. Other amenities would include laundry rooms, open space and sustainable features such as rooftop solar arrays, stormwater retention features, low-flow plumbing fixtures, and highly efficient windows, lighting and mechanical systems.

鈥淭he goal is to bring those savings in electricity and power down to the tenants,鈥� Hacienda CDC CEO Ernesto Fonseca said.

The units are to be affordable for people earning 30 to 60 percent of area median income.

The total project cost is approximately $75 million. Funding partners include Oregon Housing and Community Services (OHCS), Metro, Portland Clean Energy Fund (PCEF) and Raza Development Fund 鈥� a national Latino-focused nonprofit. But with the full scope of complexities clarified, the project team is facing a funding shortfall of $5 million.

Meanwhile, after securing a reservation with OHCS in 2023 for $10 million in funding, the project team surrendered that with the intention of reapplying later.

鈥淎bout a year and a half ago, we were supposed to start the project, but cost escalation and uncertainty in the market didn’t allow us to do that,鈥� Fonseca said.

A new design is expected to help bridge the funding gap. One possibility is that the buildings would be only three stories instead of four, allowing the elimination of costly elevators. In that scenario, the number of units would remain 108.

鈥淲e are going to be focused on finding savings first,鈥� Fonseca said of the design changes.

Previous plans were to build on a small portion of the site and preserve the rest of it for related use 鈥� possibly more affordable housing. But if buildings were to end up three stories, they would become wider and consume more of the site. That would leave only half an acre.

鈥淚t’s going to be big enough for us to build a community space right at the corner of Cully (Boulevard) and Emerson (Street),鈥� Fonseca said, noting that the space would become a mini plaza for the entire neighborhood.

Four to six months are expected to be devoted to the redesign effort. Then the team will reapply to OHCS through the Oregon Centralized Application (ORCA) process and seek additional resources such as a Community Development Block Grant, Metro funds, and donations.

If Hacienda CDC were unable to secure sufficient funding for the project, the nonprofit could choose to sell some of its bankable land, Fonseca said. The organization owns 20 acres between Salem and Portland.

When the redesign is complete, the team will create a master schedule and resubmit an application for city permits. Construction is expected to begin in late 2027 or early 2028.