91视频

An of the city of Portland鈥檚 inclusionary housing program found the Housing Bureau has inadequate monitoring systems in place to ensure that affordable apartments go to low-income renters.

A check by inclusionary housing staff of three buildings found that apartments in one were not rented at rates that exceeded affordability requirements. In two other buildings, at least three apartments were rented without screening tenants for income eligibility. The buildings had been flagged because managers had not submitted compliance reports, or reported having no inclusionary housing units, the audit said.

鈥淏ureau staff said they rely on the honor system for reporting,鈥� Auditor Simone Rede鈥檚 office wrote in the report, which was released Wednesday.

The audit comes as the result of more than a year of work by Rede, a city watchdog who took office in January 2023, and her staff. Auditors dug into census data and went into the field to interview building managers and landlords.

鈥淲e went out and talked to property owners and managers to find out what they did and didn鈥檛 understand about the program,鈥� K.C. Jones, the city鈥檚 audit services director, said in an interview Wednesday.

The audit also found the Housing Bureau has squirreled away money meant for affordable housing. The money comes from what鈥檚 known as a 鈥渇ee-in-lieu,鈥� where the developer opts to pay a fee instead of providing affordable housing on site. The Housing Bureau has collected $5 million in these fees since 2017.

鈥淭he fees are intended to fund affordable housing development and preservation, but according to the bureau, as of June 2023, this had not yet happened,鈥� the audit stated. 鈥淚nstead, the fees have gone solely towards program operating costs, although bureau managers said they plan in the future to use the fees to also fill affordable housing finance gaps.鈥�

The bureau expects to collect an additional $7 million from one new building鈥檚 owners who have not fulfilled their agreement to open affordable condominiums, according to the audit.

The city launched the inclusionary housing program in 2017 with the goal of creating 23,000 more affordable units after the City Council declared a housing emergency. The program has fallen far short of that goal: As of April 2023, 566 apartments had been built, with 1,157 more 鈥渁nticipated,鈥� the audit stated.

The audit did not dig into the economics of multifamily development and construction in Portland. But some developers argue that the program has acted as a brake on housing development in the city of Portland.

鈥淚n my opinion, it鈥檚 an absolutely failed policy,鈥� said Greg Goodman, co-president of Downtown Development Group, a local developer responsible for Twelve West, Eleven West and other projects. 鈥淚t has been counterproductive to what they have tried to do.鈥�

A group of city leaders, including former Commissioner Dan Saltzman and former Housing Bureau directors Kurt Creager and Shannon Callahan, successfully pushed the project to implementation after the state Legislature authorized inclusionary housing. Portland is the only city in Oregon that has implemented inclusionary housing.

鈥淭hey have scared institutional investors away,鈥� Goodman said. 鈥淚t is totally flawed. Lenders don鈥檛 like it, institutions don鈥檛 like it, and if you look at where housing is happening, it鈥檚 outside of the city.鈥�

Goodman served on a panel of development experts when the policy was promulgated. The advisory group was not allowed to take a vote to recommend or reject the policy, he said.

鈥淲e were denied a right to vote, because they knew it was going to get a negative recommendation,鈥� he said.

The city should instead charge a 1 percent fee on all new permits, Goodman said, and use that money to buy or build affordable housing.

Overall, the audit and the Housing Bureau鈥檚 response depicted a program that has led to the development of hundreds of housing units affordable to renters at 60 percent to 80 percent of the area鈥檚 median family income. But the neediest people are not getting housing through the program, according to the audit.

鈥淭here is often a narrow window a household鈥檚 income must fall within to rent an Inclusionary Housing unit,鈥� the audit stated.

Auditors said building owners were confused about program requirements, while marketing to potential tenants fell through the cracks between the Housing Bureau, local nonprofit agencies and property owners.

鈥淪everal managers said that marketing inclusionary housing units and finding qualified tenants was difficult,鈥� the audit stated.

New buildings that are 100 percent affordable often receive media and nonprofit attention that buildings with a few inclusionary housing units may not, auditors found, 鈥渟o people looking for affordable housing may not know it exists.鈥�

鈥淪ome managers said they had expected or wanted marketing support from the Housing Bureau,鈥� the audit added. 鈥淭he bureau provides property managers a list of community-based organizations they suggest marketing to, but some property managers said their outreach to the organizations did not help attract qualified tenants.鈥�

Auditors found the program does not address the needs of very-low-income residents: 22 percent of Portland households had incomes of less than $35,000, according to the Census Bureau鈥檚 2022 American Community Survey.

鈥淚t would be very hard for a program of this type to be everything to everyone,鈥� Jones said.

Commissioner Carmen Rubio and Housing Bureau Director Helmi A. Hisserich indicated in a formal response to the audit that they have already made changes to the program.

鈥淧HB currently works closely with affordable housing providers, community-based organizations and other city departments on the IH program and buildings with IH units,鈥� Rubio and Hisserich stated. 鈥淭he bureau maintains an interactive map that displays properties under construction and open with IH units. 鈥� PHB acknowledges that there is additional opportunity to share information and is actively exploring new software that will allow property owners and managers to list IH units under construction and currently for rent.鈥�

Marketing and leasing are 鈥渦ltimately a property owner responsibility,鈥� Rubio and Hisserich added.

City leaders should continue to address the audit鈥檚 recommendations, Jones said.

鈥淲e do think they need to take into account the things we鈥檝e pointed out, because the changes they鈥檝e made may not address them,鈥� he said.