Rising costs caused cancellation of previous plan to build eight affordable units

By Erick Bengel, Rogue Valley Times

Rogue Valley Habitat for Humanity, a nonprofit developer of affordable housing, may build in Ashland after all.

KDA Homes, an Ashland-based developer, has offered to donate two lots to Habitat for Humanity at the Beach Creek subdivision on North Mountain Avenue.

“It’s not completed yet, but we are working on a document that indicates that they will donate two pieces of property to us,” said Denise James, Habitat’s executive director.

The two developers had recently dissolved an agreement whereby KDA Homes would build dozens of market-rate units and Habitat would build eight units for families who earn 80% of the area median income.

KDA Homes is required to make affordable housing part of the 10-acre subdivision as a condition of the city’s annexation of 7.9 acres specifically for the project. On the annexed portion, the developer had donated eight lots to Habitat.

Several weeks ago, KDA Homes asked Habitat to pay an additional $600,000 — $75,000 per affordable housing unit — to help cover the costs of infrastructure such as streets, sidewalks, utilities and a bridge crossing over Beach Creek.

The city requires the infrastructure, but it was KDA Homes that requested Habitat for Humanity kick in for it, Brandon Goldman, Ashland’s community development director, clarified.

“In truth, it’s costly to develop affordable housing,” he said.

Mark Knox — a land-use planner at KDA Homes — explained in an email to Goldman that inflation, doubling interest rates, delays and issues with the workforce and supply chain had jacked up development costs since KDA Homes offered to donate the land.

The new price tag was more than Habitat felt it could afford, James said. The nonprofit had already planned to spend an additional $60,000 per low-income house to design them in conformity with rest of the KDA neighborhood.

Habitat broke the news to the families already chosen for the first two homes and told them it would try to find another option.

Then, after the Fourth of July, KDA Homes reached out to Habitat, offering to donate the two lots, without the new infrastructure charge.

Laz Ayala, a managing partner at KDA Homes, said, “That’s all still a go on my end.”

Once both parties sign the agreement, it will go to the city for approval.

Goldman said Habitat can build the two homes at Beach Creek even if KDA Homes has not found a qualified nonprofit developer to build the other affordable units.

If Habitat puts homes there, it will mark the first time in about 20 years that the nonprofit has built in Ashland.

James said she and her team may also have found a private property owner willing to sell land at a discount so Habitat can build more houses in the area.

Reach reporter Erick Bengel at ebengel@rv-times.com or 458-488-2031. This story first appeared in the Rogue Valley Times.