Jan. 6—WARRENTON — Despite challenges posed by rising interest rates and supply chain issues, construction of Trillium House, a 42-unit affordable housing project, is set to be completed by May.

Mary Bradshaw, of Northwest Housing Alternatives, a Milwaukie-based not-for-profit affordable housing developer partnering with the Northwest Oregon Housing Authority on the project, called the timing "a small miracle."

She praised Walsh Construction Co. for managing to keep the project on time. She added that the project highlights the difficultly of develop housing in coastal communities.

"I've been through two recessions — I've never seen a construction market like we have right now where it's been so many disruptions in supply chains, labor's been hard to get," Bradshaw said during a housing authority board meeting on Thursday.

The biggest challenge remaining, she said, is the rising interest rate on the construction loan, which has doubled since the project closed. As a result, a shortfall of $450,000 to $475,000 is expected.

Bradshaw said several strategies are being pursued to fill the gap.

"We're inching down on it and we're eating away at it, but one of the biggest things is going to be a very efficient lease-up," she said. "The faster we can get the building full and operations stabilized, we can convert to (permanent) financing and save on construction interest."

Bradshaw said she has also been actively looking for grants to help bridge the gap.

She said rising interest rates is an issue nobody saw coming, and one that all projects are having to contend with. Bradshaw and the board are hopeful the state will step in to help.

The four-story Trillium House at Chelsea Gardens, located next to Home Depot, will include one-, two- and three-bedroom units for households earning up to 60% of area median income.

The housing authority, which provides critical housing assistance to people in Clatsop, Columbia and Tillamook counties, is partnering with Clatsop Behavioral Healthcare and Clatsop Community Action to provide services to residents.

Five units will be dedicated for households with serious mental illness. Clatsop Behavioral Healthcare, Clatsop County's mental health and substance abuse treatment provider, will provide referrals and supportive services.

Eight units will be reserved for households with project-based vouchers, which ties assistance to a unit versus an individual. Six will be reserved for households under the agriculture workforce tax credit program, which could be used for workers at seafood processors.

The project is one of three new housing developments the housing authority is finalizing.

The others include Holden Creek Village, a 60-unit apartment complex in Tillamook, and Broadleaf Arbor, a 239-unit project in St. Helens.

The projects add to the housing authority's 14 properties that total 277 units.

The agency is also in the design phase of an expansion of the Owens-Adair in Astoria, which will add 50 units of affordable housing for seniors and people with disabilities near downtown.

On Thursday, the housing authority also advanced the redevelopment of Champion Park Apartments, a 130-unit complex in Tillamook, and Gable Park Apartments, a 35-unit complex in St. Helens. The redevelopment of Gable Park Apartments will increase the unit count to 50 to 70 units.