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For years, Home Forward has operated with little scrutiny by public officials. Portland’s housing authority supplies 7,000 affordable apartments in the metro region—the backbone of the city’s low-income housing stock—but it’s a self-contained public agency funded largely by federal dollars and overseen by a nine-member board of commissioners. That board approves the budget and hires and fires the CEO, but has largely operated as a rubber stamp for organizational leadership. Commission appointees are subject to confirmation by the Portland City Council—and for much of last year, three of the nine seats remained empty.
But as the cracks at Home Forward keep widening, Portland city councilors are at last taking notice.
“Is this system to its core rotten?” Councilor Eric Zimmerman mused in a meeting last week.
He has reason for concern. As WW has reported in recent months, tenants at Home Forward’s Dawson Park Apartments in North Portland are dealing with a drug market inside their walls. High rates of nonpayment of rent and a vacancy rate of more than 10% mean that each year more of the organization’s buildings cannot make their required debt payments, necessitating cash transfers to plug the holes. Salaries of Home Forward’s four executives increased by 60% in three years’ time, even as data reveals it takes the agency on average six months to fill an empty unit.
Meanwhile, 7,000 people sleep outside every night in Multnomah County.
Some councilors, like Zimmerman, are declaring their displeasure with Home Forward itself, while others are taking a more forgiving approach, citing larger market forces plaguing the entire affordable housing world.
“I’m not blaming them, I’m not saying it’s their fault and they need to do better necessarily,” Councilor Sameer Kanal said at a recent council meeting. “I want to understand the reasons for it.”
Providing a canvas for the council to discuss the housing authority’s troubles is a pile of unspent Portland Housing Bureau funds—at least $20 million, perhaps as much as $56 million that the council can spend at its discretion this spring.
That surplus is a welcome silver lining as the council enters a dismal budget season. But having money to spend gives the council an opportunity to scrutinize Home Forward’s struggles—both outside and well within its control—for the first time in a long time.
At a Jan. 5 meeting of the council’s Finance Committee, Portland Housing Bureau interim director Michael Buonocore described the affordable housing sector in Portland as in “near crisis, if not full crisis.”
Take the Housing Bureau’s affordable portfolio, for example, said Buonocore, who was the executive director of Home Forward from 2015 to 2022.
Operating expenses have risen an average of 7.1% every year between 2019 and 2023, while rental income has grown by just 2% annually, dampened by higher-than-expected vacancies and nonpayment of rent. As of 2023, 55% of affordable buildings in the bureau’s regulatory portfolio were unable to make their debt payments after covering all operating expenses. (The bureau’s portfolio includes buildings whose construction it helped fund, including a number of Home Forward apartments.)
“You have this confluence of issues that’s hitting folks really hard,” Buonocore explained to the committee in January.
Against that difficult backdrop comes Home Forward’s homegrown problems: high vacancy rates, slow unit turnover times, buildings in poor condition, looser vetting of prospective tenants, and tenant concerns about drug use and dealing within buildings’ walls.
At recent council meetings and forums, a handful of councilors have called the vacancy rates and turnover times unacceptable, and called for greater scrutiny of Home Forward.
At a March 4 public forum, Councilor Elana Pirtle-Guiney even went so far as to say the city should consider withholding tax dollars from Home Forward if it can’t meet a certain occupancy standard.
“We might want to, as an accountability measure, start saying: You have to have a certain percent of your units filled over the past year to qualify for our public dollars to build your additional affordable housing,” Pirtle-Guiney said. “When we talk about this system of government having increased accountability, those are the types of conversations we need to start having.”
She reupped this idea to the entire council last week. “The only way we start to bring down those vacancy rates is if we have some incentives for doing so, and we have millions of dollars of incentives,” she said.
At the same forum, Councilor Dan Ryan said the council’s Homelessness and Housing Committee should bring in affordable housing providers and grill them about what’s going wrong. “The current Housing Committee has not had those tough conversations with our providers, and it’s time that we do that,” Ryan said.
Homelessness and Housing Committee chair Candace Avalos said recently she’s working to arrange such a meeting this spring.
The City Council has some leverage—$20 million worth.
Councilors for weeks now have discussed what to do with $20 million in unspent funds in the Portland House Bureau’s coffers. (An additional $35 million is also being contemplated.) Rent assistance, eviction defense, gap funding for housing developments, and returning money to the general fund are all on the table.
So are mortgage buydowns, or rent buydowns, for affordable housing providers like Home Forward whose buildings are fast approaching financial distress. Councilor Mitch Green specifically teased a proposal to spend $8.8 million on rent buydowns at buildings owned by REACH Community Development and Home Forward. By his office’s calculations, that could lower the rent at 145 apartments by roughly $350 a unit.
In such a scenario, the city would pay down debt obligations at a Home Forward building (or across multiple buildings), with the expectation that Home Forward would in turn lower rents to deepen affordability and, ideally, fill empty units faster and generate more rental income.
While some councilors felt it was a strong use of some of the money (“intuitively, it seems like maximizing our current affordable housing is pretty good bang for the buck,” Councilor Steve Novick said at one point), one councilor in particular said he was uncomfortable with what essentially amounted to a bailout of Home Forward, a for-profit corporation that WW found took, on average, six months to fill an empty unit.
“I’m having a hard time swallowing the six-month Home Forward pill right now. Lower the damn rent if you can’t find a renter,” Zimmerman said. “As much as I want to get down with the mortgage adjustments stuff, I need to understand why they didn’t do what everyone else did, which was to lower the damn rent.”
Buonocore said of his prior organization that typical underwriting practices during development don’t account for rising operating expenses and high rates of nonpayment of rent, meaning that the written assumptions of the original debt agreements don’t match the current reality.
“If we continue to do it the way we have, we’re setting folks up to fail and then telling them they’ve failed,” Buonocore said, adding that what’s often lost in the conversation is an abundance of Home Forward apartments “filled with folks who are not able to pay their rents.”
While Home Forward did not respond to councilors’ comments before press deadline, the organization’s spokesman, Rylee Ahnen, has previously said that Home Forward is doing its best amid federal funding uncertainty and takes resident concerns about safety seriously. Ahnen has also said the organization is working to fill vacancies and decrease the time it takes to fill a vacant unit.
Kanal, along with most other councilors, said he’s supportive of the buydown concept, and called high vacancy rates like Home Forward’s “the enemy.”
“If we can bring some of these buildings back to 100% filled,” Kanal said, “we’re going to solve a lot of the other problems or at least alleviate some of the symptoms.”
Zimmerman took a less forgiving view, posing the question of whether bailing out Home Forward’s buildings was in essence giving it a double public subsidy: one taxpayer subsidy to build the building, and now a second to pay down its debt obligations.
“I almost feel,” Zimmerman said, “like we’re in upside-down world.”
