• Author Deb Mayer

Affordable Housing in Oregon -- the Bigger Picture

Updated: Apr 27, 2020

In its first edition of the new decade, January 1, 2020, Willamette Week published a story, Oregon’s Landmark Tenant Safeguards Haven’t Protected Deb Mayer. The article focuses on how a nearly 16% rent increase is making it difficult for one person, me, to stay in her home. I want to thank the many people have asked how I am and offered to help. I will be okay. I have family that cares about me and are there if I need help. I'll just have to cutback and be more frugal. I am protesting to protect those who aren't fortunate enough to have that kind of support. There are omissions and errors in the story that I want to write about. It's a complicated story, and I can understand why WW chose to do a truncated human interest piece instead of delving into the bigger story. For the record, I'm telling the broader story about what is happening to thousands of low income Oregonians -- causing many to become homeless. Like I said, it's complicated. There are many pieces to this puzzle and several are missing. Bear with me if you're interested in helping low income people stay in their homes because ultimately this is a search for solutions.

The Willamette Week Article

When I approached Willamette Week with the story months ago, I talked about how recent changes in policy at the federal, state, and local levels were removing protections that had allowed low income tenants to have stable housing. Rachel Monahan and I worked on the story for months, researching relevant agencies and interviewing many (mostly uncooperative) people. The story was postponed time and again because those in authority either obfuscated or dissembled information making fact-checking all but impossible. While I'm grateful to Willamette Week for publishing a housing story while Portland's two billionaire-owned newspapers cannot or will not engage in unbiased investigative reporting, the story is so narrow in scope that it ignores the bigger picture. KATU repeated the WW story and interviewed the reporter who wrote it without even contacting me, making me feel exposed and invisible at the same time. I sacrificed intimate details about my life in order to lay bare serious irregularities in government agencies. Since that part of the story has been ignored in the WW article, I've decided to write about it here as an adjunct topic to PAAO's Home Sweet Home Oregon project.

WW reporter Rachel Monahan is interviewed by KATU's Deb Knapp about me, Deb Mayer. When I called KATU to talk about some inaccuracies and offer additional information, the response was dismissive.

Before delving into questions of policy, I'd like to say a word about becoming poor later in life. There are many circumstances that can cause people to lose their resources and become poor as they near retirement – legal and medical bills, extended unemployment, and economic downturns being leading causes among them. Even those who plan carefully can find themselves needing help. It can happen to anyone, even you. Being judgmental when people lose their access to money is hateful and counterproductive. While telling personal stories highlights the inequities, it does little to solve problems. I do not collect PERS or any other pension. I live on an especially small social security income because back in the day many women my age chose to be stay-at-home-moms. Our social security income does not reflect that work. Also, for reasons beyond ,my control, I wasn't able to work for the last decade of my career when I had planned to prepare for retirement.

My SS income currently increases at 1.6% of the Consumer Price Index (CPI) annually. The CPI rate Oregon is allowing to raise "affordable" rents is over 3% (not to mention random amounts of 10% or higher) dictated by federal, state, and city statute. It may seems like a manageable difference, but wouldn't it make sense for the government to use the same CPI rate to raise real income as it uses to estimate rent?


Affordable Housing

"Affordable" housing is the term used to describe rental units that are subsidized by the government. To qualify, tenants must undergo an exhaustive certification process and be re-certified each year. There are at least a couple of ways rents can be subsidized. I'm going to focus on properties that receive Low Income Housing Tax Credits (LIHTC). But, before continuing, I'll explain one thing about HUD subsidies through other programs. From the WW article:

Tom Cusack, a retired federal housing official who writes the Oregon Housing Blog, says renters like Mayer are doubly unlucky.

Mr. Cusack says renters like me are unlucky -- doubly unlucky. Luck has nothing to do with it. The government has made deliberate decisions to cut taxes on wealthy individuals and corporations while at the same time stripping low income earners of protections once guaranteed to them.

After talking to Tom Cusack about his blog and receiving little probative information, I visited the HUD office in Portland. According to Julian Rose who works in the HUD office located in the lovely, vacuous Edith Green-Wendell Wyatt Federal building, the county agency has not received new applications for assistance for years. He said Multnomah County is not projected to provide assistance for new clients for another six years. He advises those in need to try Clackamas County or Clark County where at least one program is still viable. That means Portland residents would have to move to those counties that already have long waiting lists. This is one way the government is complicit in pushing low income earners out of Portland. For many living in Multnomah County though, an extra fifty to one hundred dollars a month in the form of a subsidy would mean the difference between sleeping in a bed at night and sleeping on the street. The gift of huge tax breaks to the rich has left an already underfunded HUD without funding to function.

According to Julian, any new funding that does come into the HUD office is being distributed to those already in programs to pay for rent increases. That means that all new money awarded to HUD is going straight to landlords, who are already benefitting from government programs, without helping even one new person. If ever there was an instance that blatantly illustrates how politically biased policy favors the rich while disenfranchising the poor, this has to be it.

Julian gave me a packet with application information for programs outside Multnomah County as I left.


Low Income Housing Tax Credits (LIHTC)

Low Income Housing Tax Credits (LIHTC) properties receive funding from the government for construction. They are bound by contract to offer "affordable" housing units for a specified period to low income residents in Portland. There are three agencies at work to supervise LIHTC properties: United States Housing and Urban Development (HUD) at the federal level, Oregon Housing and Community Services (OHCS) at the state level; and Portland Housing Bureau (PHB) at the local level. Determining how these agencies work together, which has oversight over what, and who is the final authority over decision involving all three is a nightmare when trying to get answers to questions. From my experience there is a lot of finger-pointing leading to even more goose-chasing between agencies.

Now may be a good time to get caffeinated because investigating the duties of these agencies and trying to find answers to obvious questions will cause your eyes to glaze over. Get comfy.

In the following discussion, Area Median Income (AMI) and Family Median Income (FMI) will be mentioned as a basis for raising rents. Knowing how to calculate median average is essential to understanding why policy decisions and actions affecting that number can greatly impact the lives of low income individuals and families.

The AMI can be artificially manipulated by the government. The income of people on the lower half of the median, usually seniors, veterans ,the disabled, and single parents have limited sources of income including social security, wages, tips, and salaries that generally do not rise quickly and cannot compete with windfall tax breaks awarded to the rich. By raising rents (which has the same impact as hiking taxes) on low income people, the government pushes them out of the area. Failure to fund HUD programs also forces the poor to move out of the county.

Government policies favoring the funding of gentrification projects work in favor of wealthy developers and property owners. At the same time they push more poor tenants to rural regions. Policies assuring tax cuts for the rich add to their wealth by increasing their interest and investment income. Those on the higher half of the median often have many other sources of income. The rich also have the option of moving into posh neighborhoods adding more wealth to the top half of the median.

Remember, it's the ranking of people, not the amount of their wealthy that affects the AMI. As poorer people leave the area by the thousands, the median income increases through attrition. The exodus has a snowball effect on the AMI. HUD sets the AMI based on that middle person. Compare the 2019 median person below with the one in the 2017 median person above. In this illustration the median income has increased from $80k to $400k in just two years. (The 2019 number is highly inflated to illustrate the point.) The hourly wage earner or care giver and the disabled veteran have been pushed out of the city because of higher rents. Their incomes did not increase even as much as the CPI. At the same time wealthy property owners and investors are drawn to city as legislators pass policies that will guarantee them a handsome return on their investments.

Family Median Income (FMI) is a calculation performed on the AMI. The FMI is used to set market rate rents. (More about that later.)

From Willamette Week:

Mayer is caught in a bind. Rent increases on her subsidized apartment are pegged by federal rules to the median family income for the local area. That means Mayer's rent rises as the average Portlander's income goes up. So when the economy booms, her landlord can hike her rent—even though her income is fixed.

This is true. Except as I've just pointed out, income isn't tied to the wages and salaries of the average Portlander, income includes dollars coming in from all sources including interest, investments, and many other portfolio items that the average Portlander does not have.

But as Portland incomes have climbed over the past decade, tenants like Mayer have effectively become poorer as their rents have grown far faster than their fixed incomes . . . Median income here has risen nearly 20 percent in the past five years . . . In other words, as more workers get jobs as Nike executives and Oregon Health & Science University hires more doctors, Mayer's rent goes up.

It could be true that income in Portland has increased by 20 percent, but not because NIKE, OHSU, or any other employers are luring in employees with huge salary increases. That would be HUGE national news. The more likely explanation is that the AMI and FMI are being manipulated by an influx of cash caused by policy changes and legislation that disenfranchises the poor and favors the rich. There is definitely an economic boon for the Oregon's wealthiest citizens.

Should anyone be surprised that under the Trump administration and Ben Carson HUD is manipulating the numbers to favor the wealthy and harm the poor? What does surprise me though is that a Democratic majority in Oregon's state legislature passed toxic legislation that favors landlords and will undoubtedly displace thousands of tenants, making many homeless.



HUD sets the Area Median (AMI) Income for states and some metropolitan areas. The chart below comes from the Oregon Housing Blog. (I'm assuming the first median column should read "median 2019" instead of 2018.)

A complete listing of all the affordable properties in the nation can be found at the HUD database. It contains over 50 columns of information including addresses, owners, and affordability data. Definitions are for each column are here. What concerns me about the database is that it is in spreadsheet format and be easily modified. I created a modified database of Oregon affordables and added one small detail. Can you find it?

HUD’s median family income estimates are established annually for use in determining eligibility for various assisted housing programs. The values are supplied by the Federal Housing Finance Agency. Family income is not the same as household income. Oregon's household income is undetermined but can be estimated using various factors. It is probably midrange compared to other states.

Median family income is typically higher than median household income because of the composition of households. Family households tend to have more people, and more of those members are in their prime earning years; as contrasted with members who have lesser incomes because they are very young or elderly. This makes no sense to me. FMI discriminates against young people and senior who are not earning optimum income. Oregon's 2019 FMI of $87,900 is based on a family of four. Average household income for a family of four could be much less -- think of a single mother with three small children or a family where only one parent works. Could this be why Oregon leads the nation in homeless children?

Click on the image to view the original online version.

Oregon has the highest state percentage FMI increase in the nation for 2019. Oregon's statewide HUD median family income increased by 7.9% (from $69,900 to $75,400), The table also shows that Oregon HUD median family income has increased by 67.2% from FY 1999-FY2019. Has your income increased over 67% in the last 20 years?

What the what is going on in Umatilla with a 23.1% increase since last year?


Policy and Legislation

The WW article blames the legislature for not including affordable housing in its cap on rent increases. From Willamette Week:

The Legislature could have included subsidized housing in its cap on rent increases, but House Speaker Tina Kotek (D-Portland) decided against it. "It was our understanding that these programs already have regulatory oversight and tenants would not experience rent gouging," says Kotek.

It really wouldn't have made a difference. In ordinary times Kotek may have been correct, but these are not ordinary times. Senate bill 608 is an abomination for tenants in general but it isn't the cause of the affordable housing debacle. Kotek is correct in thinking that LIHTC affordable housing rates have been stable for many years and that would give the illusion of protection for low income tenants. She and other legislators should have known that LIHTC tenants are protected from no-cause evictions even though landlords routinely serve poorer tenants with no-cause evictions. Usually tenants don't know they are protected by federal law and don't fight to keep their hard won homes.

As I pointed out already, HUD sets the median income that in turn sets rates for market rate housing. Affordable housing rates are then set as a percentage of that rate. Legislators weren't paying attention to the huge increases in the AMI for the past couple of years. The increase is so much this year that it allows rents for affordables to exceed the caps set for market rate rentals. That's why my rent increase can exceed 10% -- nearly 16%. Thanks Oregon legislators.


More to come.

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