NEWBERG, Ore. — In mid-June, Newberg city councilors conditionally approved over $700,000 in funding for SPARK Newberg, a proposed housing program aimed at bridging the gap between renting and owning for local families.
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SPARK Newberg is a proposed four-year affordable housing initiative that plans to construct a 20-unit residence designed to help participants build financial literacy and save for a future home down payment.
Board Secretary Doug Cain said the idea for SPARK Newberg began over a year ago when Newberg Mayor Bill Rosacker approached him at the Newberg Early Birds Rotary Club with the concept. They shared the idea with other Rotarians, and interest quickly grew.
“Soon there was a group of us together in a room talking about this idea to help solve a very real problem in Newberg—the rising cost of homeownership and families in need,” Cain said.
As that interest grew, an advisory board formed, including representatives from A-dec, George Fox University, Lewis Audio & Video, and Providence Newberg Health Foundation.
The group shared a singular mission centered on a national issue: affordable housing. With the median home price in Newberg exceeding $426,000 and average rent reaching $1,570, many workers—including teachers, nurses, and first responders—struggle to live in the communities they serve, SPARK asserts.
Representatives from George Fox University, A-dec, and The Allison Inn & Spa appeared before the council on June 16 to support the proposal, saying they face challenges attracting employees due to limited affordable housing.
“The housing crisis is escalating daily,” the organization said in a statement on the website. “Without immediate action, we risk losing the very people who care for our children, save our lives, and make our community vibrant. Together, we can reverse this trend and restore hope.”
The group met weekly to refine the idea, ultimately bringing it to the Newberg City Council to request Construction Excise Tax (CET) funds.
What Are Construction Excise Tax Funds?
The Newberg City Council adopted the CET in December 2020 to address a growing housing affordability crisis locally. The tax added 1% to the building permit value of new construction projects, with the funds designated for creating or preserving affordable housing for households earning 80% or less of the area’s median income.
For context, a home assessed at $350,000—like those constructed in Phase 1 of Crestview Crossing—generated a CET of $3,500 each, paid by the developer.
Before sunsetting in May 2023, the CET generated approximately $1.5 million, which was required to be used for affordable housing projects. For the 2024–25 fiscal year, $1 million is available to eligible organizations and developers to purchase land, offset system development charges, pay infrastructure costs, provide rent assistance, or offer down payment support.
Additionally, all CET-funded projects must remain affordable for at least 60 years.
In the first round of CET funding in April 2024, the City Council awarded $310,738.35 to the Yamhill County Housing Authority, which manages funds from Oregon Community Development Block Grants and provides loans to low- and moderate-income residents for housing rehabilitation. The second Notice of Funding Availability was issued Nov. 14, 2024.
Affordable Rent Paired With Financial Education
SPARK Newberg is structured as a 48-month program for households earning less than 80% of the area median income—around $91,000 per year. Participants will pay below-market housing fees and receive training in financial planning and management.
CET funds would be used to acquire land for constructing 20 apartment-style units, allowing 20 families to join the program.
“The goal is to provide financial education so workers and families can save what they would otherwise spend on rent, eventually using that savings as a down payment on a home,” Cain said. “We believe that working families with stable housing create a foundation for success.”
The curriculum includes training on budgeting, emergency funds, debt management, credit improvement, investing, retirement, insurance, taxes, and civic engagement.
During the program, SPARK will retain a portion of each participant’s housing fee—still to be determined—in an interest-accruing account. At the end of the program, participants may apply for a grant to assist with down payment costs.
Eligibility includes earning less than 80% of the area median income, living within the Newberg-Dundee School District, and being employed in the same area. Participants must also agree to financial coaching and accountability measures.
SPARK intentionally refers to the resident payments as “fees” rather than rent and uses the term “dormitory” instead of “apartment” to avoid tenant-landlord legal relationships. This and the general legal structure will allow the organization to enforce codes of conduct and program participation requirements.
Cain said participants may leave at any time, as the program is at-will. If someone stops participating, SPARK will make efforts to help the participant reengage, but if those efforts are unsuccessful, the resident will be removed from the program.
“We understand things happen,” Cain said. “Life can sometimes get in the way, circumstances change, any number of things. We want to support as much as we can, but if the program isn’t working with them, we want to respect that and offer the opportunity to someone else for who it may work.”
The full operational model is still under development, pending funding confirmation.
Not Recommended, but Approved
During the June 16 City Council meeting, representatives from SPARK—including Cain—requested $1 million in funds. Newberg Area Habitat for Humanity (NAHFH) also requested $380,615 in CET funds to assist with a duplex project at 1201 E. Fifth St.
The Affordable Housing Commission, which reviews and recommends affordable housing projects to the council, endorsed the NAHFH proposal but did not recommend funding SPARK because it did not meet CET funding criteria.
Cain, Rosacker, and SPARK Treasurer Brian Naffin of Austin Industries appeared before the council to argue for SPARK’s approval despite its ineligibility.
Councilors asked several questions to better understand SPARK’s goals and operational viability.
Councilor Mike McBride voiced support for SPARK but acknowledged that NAHFH was the only applicant to meet funding criteria. He said he would prioritize NAHFH if a choice had to be made.
Councilor Peggy Kilburg supported full funding for SPARK over NAHFH, citing SPARK’s potential to help more people and gain traction.
Councilor Yarnell Hollamon raised concerns about the legality of allocating CET funds to an ineligible project. City Attorney James Walker said the issue could be reviewed at the council’s direction.
Ultimately, the council approved NAHFH’s request for $380,615 and voted 4-1 to allocate the remaining $742,934.52 in the CET fund to SPARK, pending legal review and 501(c)(3) nonprofit status. Kilburg voted against the motion, Councilor Derek Carmon was absent, and Mayor Rosacker abstained.
“There were a lot of great questions asked,” Cain said. “I think we came forward not knowing what the decision would be. But we’re very pleased with the results—we believe this is a very formidable and worthy project that can be really beneficial to the City of Newberg. We’re excited to get started.”
SPARK is awaiting funding to begin searching for a suitable property. The organization applied for nonprofit status in March and expects approval by August. The project cannot proceed without both nonprofit designation and legal review.
For more information, visit the SPARK Newberg website.
