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Last week, WW revealed that Home Forward, the city’s housing authority that serves Multnomah County, owns 955 affordable housing units that sit vacant. That’s about 1 in every 7 units that Home Forward owns.
A recent report by the real estate firm CoStar estimated that the vacancy rate across the 25,000 total affordable units in the city hovers around 7%—equivalent to 1,900 units. If CoStar’s estimates are right, that means half of the city’s vacant affordable units are owned by Home Forward.
With an operating budget of around $290 million annually, Home Forward provides a number of services and functions: It distributes federal Section 8 housing vouchers to low-income families, it builds affordable housing using public dollars from sources like the state and local housing bonds, and it serves as landlord to about 6,850 people.
Well, more like 6,000.
The city of Portland and Home Forward insist they’re intent on filling the vacancies. Yet the vacancy rate draws new scrutiny to the housing authority, and raises a troubling question: In a county where 7,500 people are sleeping outside on any given night, how can 955 publicly subsidized units sit empty?
“If I couldn’t keep my buildings full, I would generally think that I have most if not all the responsibility,” says Ed McNamara, a retired affordable housing developer in Portland. “The public funders should assess if they’re being good stewards of public money if they continue to fund organizations that don’t keep their buildings full.”
Home Forward defends its performance.
“Rising vacancies are a regionwide trend driven by market changes,” says Home Forward spokesman Rylee Ahnen. “Those same dynamics are affecting all housing providers, not just Home Forward.”
Home Forward is a nonprofit overseen by a nine-member board of directors. Home Forward’s current CEO, Ivory Mathews, has been at the nonprofit’s helm since 2022, succeeding Michael Buonocore, who stepped aside after serving as CEO for seven years. (Buonocore is now interim director of the Portland Housing Bureau.)
Home Forward in recent years has faced little scrutiny. Though it operates as a quasi-government agency, it has a budget entirely separate from the city of Portland and the county; elected officials have no oversight or control over its operations. Most of its $298 million annual operating budget this year—$199 million—is rental assistance money that comes from the U.S. Department of Housing and Urban Development to pay rent to landlords on behalf of low-income families. For a number of those families in the Portland area, Home Forward is also their landlord.
In public-facing documents, Home Forward says it strives for a 97% occupancy rate. It provided a slate of reasons to explain why instead it’s at 86%.
First, demand for 60% AMI units—units that may be rented only to families that make 60% or less of the area median income—is decreasing as market-rate rents drop and get closer to that price. Sixty-percent AMI units are typically called “workforce housing” because, while they’re still affordable, they’re not as cheap to rent as what housing experts call “deeply affordable” housing—or housing that’s rented at a deeply subsidized rent. (Home Forward could not immediately provide a breakdown of how many of the 955 vacant units are 60% AMI units and how many are rented at below the 60% AMI rate.)
In other cases, like at the Louisa Flowers building in the Lloyd District, Home Forward’s Ahnen says the location is a deterrent to prospective renters because it’s “farther away from some of the city amenities.”
Second, Home Forward says two of its buildings sustained such extreme damage during the January 2024 winter storm that the nonprofit is still rehabbing units in order to rent them out again.
Ahnen says the current 14% vacancy rate is higher than in recent years, in large part because some newer buildings are in lease-up periods and because some units were temporarily decommissioned by storm damage.
But even as Home Forward struggles to fill nearly 1,000 of its units, it’s continuing to build more.
In just the past year and a half, Home Forward completed or launched a half-dozen new developments. Most of the units in those projects are 60% AMI units—the very units Home Forward says there’s little demand for as market-rate rent prices begin to match rents charged for them.
In the 2010s, affordable developers built a glut of workforce housing. The 2018 Metro housing bond, which generated $652.8 million in taxpayer dollars, is on track to build 5,600 units. Around 60% of those units are available to families making 60% or less of the area median income, so those rents are typically at the higher end of what’s considered “affordable.”
However, affordable developers WW spoke to say it’s not as simple as saying demand is low across all 60% AMI units. In fact, Metro says, demand is high for multibedroom 60% AMI units. The low demand is specific to studios. Home Forward did not provide a breakdown of the 60% AMI units that lie vacant in its portfolio.
Ahnen says Home Forward’s ability to build more deeply affordable units is “shaped by the realities of how projects are financed” and that public financiers “require or incentivize 50-60% AMI units in order to make a project financially sustainable enough to support the 30% AMI units also included in those buildings.”
To be sure, Home Forward, like every other affordable housing developer, needs to balance its books. The typical way to do that is by earning developers’ fees, which developers—like Home Forward—receive from building new projects. Housing authorities and private and nonprofit developers of affordable housing are all incentivized to build new projects because they can earn those lucrative developer fees. The federal Low-Income Housing Tax Credit program, better known as LIHTC, offers particularly high developers’ fees. For organizations like Home Forward, which amid record-low payment of rent and rising operating costs are struggling, those developers’ fees help them stay operational.
And to be an affordable housing developer and landlord these days is certainly a tough gig.
Under the Trump administration, Congress this year failed to increase the budget of the Section 8 housing voucher program, forcing some housing authorities—including Home Forward—to halt issuing any new vouchers to those in need of intense rental assistance. A flush of pandemic-era rent assistance dollars distributed to local governments have all but run dry, so tenants are, more so than in recent years, left to pony up rent without the cushioning of local rent assistance dollars. The cost of living continues to increase, too, making it harder and harder for families barely making rent to write a monthly check on time to landlords like Home Forward.
Common sense would suggest, however, that Home Forward’s finances would be stronger if it were making any rental income off of the 955 empty units.
Tom Brenneke, a longtime affordable and market-rate housing developer, says Home Forward’s 14% vacancy rate should make lenders think twice about awarding funding to Home Forward rather than competitors, including private builders. (Brenneke is a private builder and often competes with Home Forward for state and local awards.)
“It’s inexcusable, frankly. The vacancy rate for Home Forward should be in the 3-to-5% range,” Brenneke says. “I think it’s ridiculous that these organizations can’t figure out business. Why should they be allowed to keep building and being given awards?”
Brenneke and another longtime affordable housing developer, McNamara, think Home Forward’s publicly stated reasons for the vacancies should be given additional scrutiny. After all, nothing prevents Home Forward from lowering rents for units that are proving hard to fill.
“In my experience, there’s nothing about affordable housing that prevents you from lowering rents,” says McNamara, who for years led REACH Community Development Corporation, another affordable housing developer.
Home Forward says it’s employing that tactic, at least at two buildings. After a planned rent hike at The Yards in Northwest Portland, one of the two buildings that is at just 50% occupancy due to the damage from the 2024 storm, tenants there lobbied Home Forward to reverse the planned rent hike. Last week, Home Forward agreed to do so. Ahnen says Home Forward also plans to lower rents at Pearl Court and has already lowered rents at the Swindells apartments, a strategy the organization will pursue “when we’re able to do so without affecting the stability of a building’s finances.”
Both the Portland Housing Bureau and Home Forward told WW last week that they’re working with Mayor Keith Wilson’s “Strike Team” to fill Home Forward vacancies. But when pressed further about the nature of that work and if any households had been moved into vacant Home Forward units yet through that effort, Housing Bureau spokesman Gabriel Mathews said: “The Strike Team’s work on activating vacancies is still in the planning phase, and has not yet moved any households into housing.”
Liam Frost, interim director of the Metro Housing Department, says the regional government is aware of and “concerned” by the vacancy rates, and will soon propose steps “designed to help ensure that affordable homes are filled quickly and for the long term.”
To McNamara, that Home Forward’s vacancy rate is higher than the average vacancy rate across affordable units in Portland deserves attention from lenders and grantors, including the state and local governments that choose how to dole out their housing bond dollars.
“If one owner has worse problems than everybody else,” McNamara says, “we need to look at what’s different about them.”
