Oregon is weighing whether to retool a rent forgiveness program that was central to Salem’s efforts to address the financial upheaval of the pandemic but which landlords and tenants alike now complain is clearly inadequate.

Among the frustrated renters is Dani Silva. In December 2020, Silva moved out of her loft apartment in Northwest Portland. She had lost her job as a tattoo artist because of the pandemic and in nine months had accrued $19,000 in back rent—a sum that only fully dawned on her when she saw it in writing.

“I got the bill for $19,000 from Everett Station. I had quit cigarettes for a good year and then, when I got the bill, I went out and bought a pack because what do you do?” Silva says. “I had never seen that amount of money on a piece of paper before.”

Silva left for a cheaper apartment near Laurelhurst Park. This spring, she felt a sliver of hope: The state was finally opening its pocketbook for landlord and tenant relief via a fund that had been approved months earlier by the Oregon Legislature.

The bill, which lawmakers passed in December, allocated $200 million for rent forgiveness: $150 million of that would be doled out to landlords to pay off tenants’ rent debt—the state would pay 80% as long as the landlord agreed to forgive the other 20%.

But as the state distributes the first round of rent forgiveness, it won’t give Silva’s landlord any money for her back rent—because she doesn’t live at Everett Station Lofts anymore.

The $150 million is only available for current tenants at the time of application.

Past renters who moved out, like Silva, can apply for a separate, $50 million pool of state funds. But she didn’t know about that money and still isn’t sure how to apply for it. The state’s chief means of rent forgiveness is closed to her—and to her landlord, who has no way of helping her obtain the state funds.

“I told the building manager it’s not going to happen. And she said, ‘I get it,’” says Silva, who turned to painting pet portraits to pay the bills. “It’s so funny to be on the similar side of the landlords. We’re both thinking: This isn’t helping.”

A similar story is playing out across Oregon. Landlords and tenants say denying tenants who moved out access to most of the state money devoted to rent forgiveness has resulted in a chaotic system that makes it prohibitively difficult to square rent debt—and leaves landlords chasing renters for outstanding payments.

By one industry calculation, former tenants across the state have left their buildings with $50 million in unpaid rent—money Salem’s main program won’t help landlords recoup.

“It’s been extremely aggravating, and I understand their focus is making sure current tenants aren’t evicted,” says Renee Larsen, vice president of Capital Property Management, which manages 130 buildings and over 2,000 units. “But owing money to a landlord is something that nearly every landlord screens for, so it’s making these people’s lives more difficult in finding housing.”

Larsen says her holdings have at least $132,000 in outstanding rent due from past tenants in 2020. And while Larsen can pester tenants for that debt and eventually turn them to collection agencies, she can’t work with tenants to secure state relief—and might never see it.

“The people who left had really high balances. So we’re talking about people who owe $5,000, $10,000 in rent,” Larsen says. “It’s a lot of money owed to our clients.”

Deborah Imse, executive director of the landlord guild Multifamily NW, says leaving former tenants out of the program is putting a huge burden on landlords. In data collected in April by MultifamilyNW, 38 landlords reported that 426 tenants out of just under 13,000 units had moved out since the onset of the pandemic, with an average of $2,593 in unpaid rent.

And the rent forgiveness passed by the Legislature won’t help landlords at all with debt owed by tenants who moved out.

A Portland State University Study last fall shared a staggering statistic: 35% of renters in Oregon were behind on their rent payments.

Around that time, state lawmakers began crafting a plan: allocate $150 million to a fund that would offer landlords 80% of unpaid rent as long as they took the hit for the other 20%. The expected result: 100% debt forgiveness for tenants.

Lawmakers approved House Bill 4401, sponsored by House Speaker Tina Kotek (D-Portland) and Reps. Julie Fahey (D-North Eugene) and Pam Marsh (D-Jackson County), by an 18-6 Senate vote in December.

But Oregon Housing and Community Services, the agency in charge of distributing the funds, and the Oregon Department of Justice, which interprets the legal ramifications of new legislation, both concluded that the language of the bill didn’t apply to tenants who weren’t currently occupying an apartment. The law’s language specified that landlords should list only “current tenants” who still owed rent. By definition, that excluded tenants who had moved out.

John VanLandingham, a Portland lawyer and vice president of the Oregon State Tenants Association, was part of the workgroup of legislators and housing experts who helped craft the bill.

“We were not thinking about this category. It’s not like anybody said, ‘Let’s screw those landlords,’” VanLandingham tells WW. “If we had thought about it, I think we would’ve included it.”

Fahey, the bill’s co-sponsor, says she kept past tenants out of the bill to remove any incentive for landlords to evict tenants who hadn’t paid rent or for other issues. (Gov. Kate Brown had already placed a moratorium on evictions for non-payment, but evictions for other reasons are still allowed).

She believed the $50 million fund to go directly to tenants would be enough.

But those funds, which have been available for months, are accessible only through a system of renter assistance programs that housing experts say are difficult to navigate. Many renters are aware only of the main program that runs through their former landlords, who are prohibited from helping them.

“[The fund] is only one of several programs currently working to provide relief for Oregon renters. Other tenant-based rental assistance programs are able to cover a broader range of past rental debt,” Charles Boyle, a spokesman for Gov. Brown, told WW. “And they will be rapidly scaling up in the coming weeks.”

By April, lawmakers had received enough complaints that one of the law’s sponsors addressed the problem. At an April 27 meeting of the House Committee on Human Services and Housing, Rep. Marsh said, “We’ve all been contacted by landlords who had tenants who have left and didn’t get payment.”

After WW first inquired about the restrictions, Natasha Detweiler-Daby, assistant director of planning and policy for Oregon Housing and Community Services, said the agency was consulting legal counsel to see if past renters could be included in the third round of funding.

A week later, Detweiler-Daby said OCHS was “confident” past renters would be eligible in the final round.

Meanwhile, Silva says her building experienced a mass exodus. Everett Station Lofts mostly held artists—workers whose service industry day jobs vanished in the pandemic. “The majority of the people who owed rent are gone,” Silva says.

Jena Murray was one of those renters. She was living in Everett Station with her three kids when the pandemic hit. She’s a photographer, and overnight her job became nonexistent. She accrued three months’ worth of debt.

By law, she could’ve stayed another nine months because of the governor’s eviction moratorium. Instead, she decided to stop accruing rent debt and moved back into her parents’ house.

When applications for the landlord rent forgiveness fund opened, her hopes were quickly dashed. “It came to a shock to most of us that found ourselves in this situation,” Murray says. “It’s like, ‘Oh my gosh, finally, relief is starting to down the pipeline! But not for you.’”

Clarification: This story has been changed to reflect Rep. Julie Fahey’s intent to discourage landlords from evicting tenants for reasons not covered by the state’s eviction moratorium.