Ronald Stinson moved into the Woodspring Apartments in 2010 thinking he’d found the place he would spend his golden years.
At first, things went swimmingly. Stinson enjoyed the Tigard 55-and-older community and being within walking distance of his local grocery store and pharmacy.
“This is the place I wanted to live out my life,” the 71-year-old said.
But in 2021, Stinson and his neighbors were jolted by an unwelcome piece of news: The subsidy that had kept the apartment community affordable had expired, and the entire complex was being sold to a San Francisco investment company that planned to hike the rent to market rate by 2024 — a budget-busting increase for most of the tenants.
Thousands of tenants across Oregon could soon face the same dilemma. Rent restrictions funded by expiring tax credits will evaporate for dozens of apartment complexes by the end of the decade.
A bill making its way through the Oregon House of Representatives could offer some help for tenants. House Bill 3042 would temporarily limit rent increases on properties after they age out of affordability protections and require more notice for tenants who might soon lose their affordable rents.
But the wave of tax credit expirations could make Oregon policymakers’ work harder as they try to build and preserve affordable housing.
Stinson and his neighbors sprung to action, organizing protests and writing letters to urge Washington County and the state to help them keep their rents stable.
Their efforts paid off this week, as the county board of commissioners agreed to buy the apartment complex for $48.5 million, half of the cost paid with funds from the state housing department, and keep rents subsidized. The building’s owner still must sign off on the transaction.
It’s unclear, however, how many of the other properties that lose their rent restrictions will find a willing buyer or a new subsidy to keep rents low.
Rob Prasch, the preservation director for the Network for Oregon Affordable Housing, said some of the buildings are owned by nonprofits that will continue to operate them as affordable housing. But a growing number of formerly affordable housing complexes across the country are selling to investment firms.
“We won’t have enough resources to preserve them all, and in some cases it won’t make sense to preserve them because of the cost,” he said. “In circumstances like that, we have to look at ways to protect residents from the impact.”
BILL WOULD STABILIZE RENTS
HB 3042 aims to give tenants in those properties more time before big rent increase take effect.
The bill would limit rent increases for apartments with recently expired affordable housing subsidies to 5% annually for three years. It would also require landlords to give tenants 30 months’ notice before affordability protections expire.
Hundreds of Oregon apartment complexes were built under the federal Low-Income Housing Tax Credit program, which debuted in the 1980s to give developers an incentive to fund affordable housing.
Apartments built through with those tax credits are required to keep rent affordable to low- or moderate-income residents for 30 years after construction, with no more than a 5% increase each year.
But after 30 years, the subsidy expires and landlords can begin to charge market rate — an increase that can force most of the tenants out of their apartments, risking homelessness.
Between now and 2030, more than 4,000 Oregon apartments will lose those affordable rent restrictions, leaving residents to scramble.
“Finding affordable or even senior housing could take years,” said Heidi Johnstone, a Woodspring tenant, at a February legislative hearing.
Rep. Courtney Neron, D-Wilsonville, represents parts of Tigard. She said surrounding communities like Sherwood and nearby King City don’t have enough affordable housing to absorb the Woodspring seniors on short notice if they were forced out.
The state’s largest apartment industry group, Multifamily NW, said HB 3042 would unfairly burden landlords as they also face rising costs.
“The housing provider doesn’t control when public support ends,” said Molly McGrew, a spokesperson for Multifamily NW. “To force affordable housing providers to continue to operate a property for three years after their subsidy has expired would be an impossible task.”
She said the bill could discourage developers from building more affordable housing units.
Under the bill, landlords could seek permission to raise current tenants’ rents sooner after the tax credit’s expiration, but it would be subject to the state housing department’s review and approval.
HB 3042 would also require landlords whose tax credits are expiring to give tenants 30 months’ notice before rents can be increased to market rate — the same notice they’re required to give the state. That’s an increase from one year under a 2021 statute.
Jessica Blakely of the Salem Housing Authority said the 30-month disclosure requirement would not only help current residents, but also those who might otherwise move into an apartment complex not knowing its rent restrictions will expire in a matter of months.
It also will give aid organizations enough time to begin working with them in advance of the expiration date so they’re not caught off guard.
Blakely’s agency is working with the residents of a Salem building whose protections are expiring in June.
“Residents have no idea this is coming,” she said. “They don’t have time to find resources with the existing statute.”
In 2021, after Woodspring’s affordable housing subsidy expired, the apartment owners sold the building to Hamilton Zanze, a San Francisco-based real estate investment company. That company announced it planned to increase rents to market rate by 2024.
Before then, residents had no idea the building’s obligation to keep rents low was coming to an end. Residents of some other tax credit-funded complexes aren’t covered by the grace period Woodspring residents received, a gap HB 3042 would close.
While some tenants rallied against the rent increase, others felt pressured to move — but struggled to find a place that met their fixed budgets.
“We can’t afford to move,” Stinson said. He receives less than $1,200 a month from Social Security, and most of that goes toward his rent. Increases, he said, haven’t kept up with the rising cost of living.
In late 2022, the county informed tenants that they would get a $2,600 voucher, which they could use toward rent or moving costs. Tenants thought that was a signal that rents were going to climb — until the county’s decision last week.
Margot Black, a tenant organizer who worked with the Woodspring residents, said she’s hopeful that the tenants’ efforts will inform broader changes.
“The tenants saved it, but it’s 2 1/2 years into one of the most stressful situations of their lives,” she said.
AFFORDABLE PROTECTIONS EXPIRING
The Oregon of Housing and Community Services Department tracks the properties receiving low-income tax subsidies and when they’ll expire.
This year 115 units will expire. By 2030, another 3,920 units will age out of their protections.
Under current state law, owners of affordable properties must give the state or local governments the opportunity to buy the property to keep it affordable, 13 months before the property expires.
But they can name their price — and local governments don’t buy every property. For-profit owners are unlikely to extend affordability protections without incentive, said Oregon Housing and Community Services spokesperson Delia Hernández. And even nonprofits or housing authorities usually need some kind of public subsidy.
“OHCS is tracking restrictions on properties in the state’s portfolio of publicly subsidized housing, and works to identify those most at risk,” said Hernández. “Still, OHCS resources are limited, and we are aware of three properties in the last two years where preservation efforts did not succeed and affordability for those projects was lost.”
According to state data, 35 properties of the 92 properties that have expiration dates between 2019 and 2026, are either currently being reviewed by the state for potential preservation or have already been purchased.
Even for the residents of Tigard’s Woodspring Apartments, who successfully staved off massive rent increases, uncertainties remain.
“The question now is, what is the rent increase going to be?” said Peggy Hepler, 85, one of the residents who organized to protest the rent hikes. “But I’m just so grateful that we’re going to be able to stay.”
—Jayati Ramakrishnan; jramakrishnan@oregonian.com
