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The Saga of the Joyce Hotel Shows the Difficulty of Producing Affordable Housing

Six years after Portland declared a housing emergency, the building remains vacant.

In June 2016, Portland officials announced the purchase of an imperiled flophouse called the Joyce Hotel.

Located in the newly trendy West End at 322 SW 11th Ave., the Joyce and its ragtag clientele no longer fit the neighborhood. Gentrification beckoned and property owner Dan Zilka responded by serving his tenants eviction notices.

The Portland City Council arrived to save the day—and preserve one of downtown’s last single-room occupancy hotels.

“I am very pleased that the Joyce Hotel will remain open so that some of the most vulnerable people in our community will have a safe place to go, rather than being out on the street,” then-Housing Commissioner Dan Saltzman said.

Much has happened since. The Trump presidency. A pandemic. Voter approval of three housing and social services measures to collect a total north of $3 billion to aid people living on the margins.

What hasn’t happened: the reopening of the Joyce.

If all goes well, contractors will start renovating the 109-year-old hotel by year’s end. The building will offer 66 refurbished studio apartments in January 2023, after nearly seven years and the expenditure of $25.1 million. That equates to $398,000 per unit, or $1,198 per square foot.

“That’s a ridiculous amount of time,” says Jessie Burke, who, along with her husband, Jonathan Cohen, renovated the more venerable Society Hotel in Old Town. “And it’s really expensive.”

It is, however, not unique in Portland’s development of affordable housing.

On Sept. 20, the Bravo Youth Orchestras serenaded city and nonprofit leaders gathered for a ceremonial groundbreaking at 3000 SE Powell Blvd., where a 206-unit affordable housing complex will be built.

Mayor Ted Wheeler called the project, which will replace the Safari Club strip joint on the property, “a shining example of Portlanders standing together.”

It has followed a timeline similar to that for redeveloping the Joyce Hotel. The City Council voted to purchase the Powell property on Aug. 9, 2017. The Portland Housing Bureau says construction will take another 23 months—so move-in will begin in October 2023, six years after the land purchase.

Like the Joyce Hotel, which will serve tenants experiencing mental illness and substance abuse, the Powell project will include 30 units with “wrap-around services” for Portlanders dealing with similar challenges.

The need for such housing is obvious: Construction of new, low-income apartments is needed to reduce the number of people sleeping outdoors. But the pace at which the Joyce Hotel renovation and construction on the Powell project have proceeded has not kept pace with new arrivals to Portland, and appears outmatched by a wave of impending evictions.

One look at the Joyce’s timeline (see below) reveals a pair of gaps during which little happened. After Portland voters approved a $258 million affordable housing bond in 2016, three years passed before city officials awarded a nonprofit developer rights to the Joyce project.

Another two years have elapsed since then, with still no construction underway.

Housing Bureau spokeswoman Martha Calhoon says there are a number of reasons the project has moved so slowly. First, the city bought the building to preserve low-income housing but lacked money for renovation. It would have to find a partner. “At the time of purchase, no funding had been identified for future redevelopment,” Calhoon says.

The Joyce needed seismic work, a new elevator and much more. But the work would have to be done within strict constraints. “The building’s designation as a historic landmark creates additional challenges for the redevelopment timeline,” Calhoon says. “Under other circumstances, a building in similar condition would likely be demolished and replaced with a completely new structure.”

Scraping together the financing took time. After the city made some money available in October 2019, the developer it selected, Community Partners for Affordable Housing, had to combine that cash with funding from five other sources.

Expensive construction for tenants who have little income is a hard sell for investors. Arranging tax credit financing, the biggest chunk of capital ($9.3 million) is an arduous process. That’s a big part of why the hotel has stood empty since 2017.

To be sure, the project is complex. Critics are nonetheless frustrated.

John Russell, a downtown developer and property owner, acknowledges he’s not in the affordable housing business, but his past service on the board of Prosper Portland, the city’s Planning and Sustainability Commission, and the Oregon Transportation Commission has given him perspective on public construction.

“What’s missing at the city and the county is any sense of urgency,” says Russell. “There’s just a sense of complacency about how long things take—I don’t’ think Vera Katz would have put up with it.”

Wheeler deferred questions about why projects take so long to Portland Housing Bureau director Shannon Callahan.

“Each of these projects comes with its own challenges,” Callahan says. The Powell property includes a gully that decades ago was filled in with trash, she says. That makes the ground unstable. In addition, in order to expand the project, the developer Home Forward acquired an adjacent property, which took more time.

She notes the Housing Bureau can move quickly when projects are in less-developed areas. A 60-unit bureau-funded project called Cedar Commons opened this year at 11450 SE Division St., just two years after it was announced. Unlike the Joyce Hotel and Powell projects, which rely heavily on tax credit investors, the city paid for most of Cedar Commons.

“There was no leverage in that deal,” Callahan says.

Critics of the city’s strategy want faster solutions. One way that can work: The Joint Office of Homeless Services recently used state and federal COVID bailout money to purchase a 43-room Motel 6 in East Multnomah County for $4.95 million—that’s $115,000 a unit, less than a third of the Joyce Hotel’s cost. It’s not an apples-to-apples comparison—the Joyce will far outlast the Motel 6—but the years the Joyce spent vacant are time and money wasted and more nights spent on the streets for Portland’s homeless.

Mike Wilkerson, a housing economist at ECONorthwest, says the long development time and high per-unit costs of some city projects means the buildings help relatively few people.

He suggests a different approach: “Rent vouchers should be considered as part of the solution,” Wilkerson says. “They could yield immediate benefits to more households and incentivize the development of additional properties. This is a near-term action that directly benefits families and moves us in the right direction for long-run solutions (more housing).”

Old Joyce

A timeline of the acquisition and development of the Joyce Hotel.

Oct. 7, 2015

The Portland City Council declares a housing emergency.

Dec. 31, 2015

Dan Zilka, who then owned the Joyce, posts 90-day eviction notices for the building’s tenants.

June 2016

After first bidding for the property in March 2016, the city announces it will purchase the hotel for $4.22 million.

Nov. 8, 2016

Portland voters approve a $258 million bond to build, buy or renovate affordable housing.

October 2017

The last remaining tenant moves out of the Joyce.

October 2019

Community Partners for Affordable Housing and Carleton Hart Architecture are awarded rights and funding to redevelop the Joyce.

December 2021

Construction is scheduled to begin and last for 13 months.

January 2023

The Portland Housing Bureau expects new tenants to begin occupying the building.