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Workforce housing project slated for downtown Medford

A 40,000-square-foot, three-story building on the corner of Holly and West Eighth streets in Medford would contain 62 units intended for “workforce housing.” (Submitted image)
Construction planned to begin in May on 62-unit apartment building

Construction of a 62-unit apartment building in downtown Medford is scheduled to begin in May.

The 40,000-square-foot, three-story building would bring “workforce housing” to the southeast corner of South Holly and West Eighth streets.

The Medford Urban Renewal Agency Board of Directors, composed of the mayor and City Council members, unanimously approved the allocation of $1.2 million Feb. 17 to area developer Laz Ayala.

An earlier agreement called for an allocation of $750,000 from the agency. The added $450,000 was done to ensure the developer could secure other financing for the project.

Harry Weiss, director of the agency, said that waiting any longer to approve the agreement with Ayala would have resulted in a much higher interest rate for the construction loan.

At a higher rate of interest, building the dwellings would have become financially out of reach, Weiss added.

“We were running up against a deadline,” Ayala said. “And we couldn’t have done it without the additional contribution from the city.”

Cost to complete the apartments is now estimated at $13 million. Ayala said the project increased from an earlier estimate of $12 million.

City officials have wanted to see workforce housing constructed in downtown Medford for many years.

According to the National Association of Realtors, workforce housing “is affordable to workers and close to their jobs.”

The apartments will be priced for people who earn 80% to 120% of the area median income, which in 2020 was $52,243, according to the U.S. Census Bureau.

Nearby employers include city government and some county government offices, financial institutions and other businesses and institutions, including the Mail Tribune and Lithia Motors, Ayala pointed out.

The partnership with the renewal agency will help bring the project to fruition.

The agency provided the $1.2 million in seed money as well as a promise of taking on future relocation of utilities and sidewalk construction. The agency also sold the property at Holly and Eighth to Ayala for its appraised value.

Workforce housing is difficult to create. Weiss said during the February meeting the profit margin for a workforce housing project is not as lucrative as it is for high-end residential projects.

Workforce housing isn’t eligible for the substantial government subsidies that can be obtained for developing low-income housing, either.

“We have a housing crisis that extends across the entire spectrum of our housing needs,” Weiss said at the February meeting.

Weiss and Ayala noted that the already tight local housing market has been made worse by the increased construction costs stemming from the COVID-19 pandemic and losses caused by the 2020 Almeda fire, which burned more than 2,500 homes between Ashland and Medford.

The studio, one- and two-bedroom units — the largest unit being just 850 square feet — would be the first market-rate housing project built downtown in years, the developers said.

“It’s really a moment to celebrate,” Ayala added.

Reach reporter Terri Harber at tharber@rosebudmedia.com or 541-776-4468.