October 21, 2011

Re-Up

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HUD Region 10 Public Affairs

Some 50,000 households in Oregon – or just over 100,000 people – with incomes of 80 percent or less of median receive help with their rent each month from HUD.  In a state where almost half of renters are “cost burdened” – that is, they spent 30 percent or more of their income for housing – HUD obviously plays an important role in keeping housing affordable in Oregon.

Many of these families live in some 300 privately-owned apartment complexes around the state that receive HUD project-based rental subsidies.  Thanks to those subsidies, these residents aren’t “cost burdened” in putting a roof over their heads.

The good news about privately-owned complexes receiving HUD project-based subsidies is that, for 20 or 30 or 40 years, they’re under contract to charge rents affordable to people who don’t make a lot of money or are elderly or disabled and on fixed incomes.  The bad news is that years pass, contracts mature and, once they do, the private owners are free and clear to convert their complexes to market rate housing.  Many, unfortunately, do.

That can – and has – put a lot of the most vulnerable at risk.  One minute they can afford the apartment in which they’ve lived so well so long. The next, it’s well beyond their means and they’re forced to for a new place to call home. At 60, 70 or 80 and on a Social Security check, it’s not exactly the kind  of moving experience you yearn for.

Communities across the country are facing up to the fact that housing stocks once so affordable could soon not be.  Like Portland, Oregon.  Consider its work to keep Uptown Tower, a 72-unit complex in southwest Portland on the affordable side of the ledger.  Its HUD project-based assistance was scheduled to end in 2013.  Located in a neighborhood that’s upscaling in a hurry, it was expected that the owner would convert the units to condos and charge rents well over the $600 a month its subsidized tenants currently paid.

The City wasn’t caught short.  Under the leadership of City Commissioner Nick Fish, it had launched the “11 by 13” initiative to try to preserve project-based subsidies in 11 privately-owned complexes before their contracts with HUD expired in 2013.  They’d already done so in five buildings.  Uptown Towers was next on their list.

“11 by 13” went to work, persuading Guardian Real Estate – a Portland-based firm that manages more than 12,000 units of affordable housing – to buy and then, at a cost of $2.4 million, to renovate and retrofit Uptown Tower.  It also assembled a financial package to make the numbers work – low-income housing tax credits, a $700,000 loan from a City housing preservation fund created through HUD’s Section 108 loan guarantee program.  And, yes, HUD extended project-based assistance for another 20 years beyond the scheduled 2013 expiration on the condition, of course, that the new owner would keep rents affordable. Without missing a beat, Guardian agreed.

With Uptown Towers, “11 by 13” so far has preserved some 520 apartments project and, the City estimates, some $50 million in HUD rent subsidies for Portlanders over the next 20 years.  It hopes to preserve at least 420 more. 

Bob Joyce, a retired clinical psychologist who’ll soon turn 70, calls Uptown Tower home.  “Getting into here,” he told Anne Saker of The Oregonian, “was a real improvement for me.  I had had my first full night’s sleep when I moved in.”  Now that affordability is guaranteed until 2033, may Mr. Joyce and his fellow Uptown Tower residents enjoy many, many more.

One Response to Re-Up

  1. Is this really a good thing in the long run? Low rentals usually endup being slums as there is no upside to the owner fixing the place.

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