A 235-unit affordable housing community in downtown Portland is undergoing renovation; work is expected to finish this summer.

The U.S. Department of Housing and Urban Development (HUD) has provided Section 8 project-based rental assistance at Rose Schnitzer Tower. But that contract was set to end in December 2027. Via recapitalization, developer Guardian Real Estate Services preserved the subsidy for the next 20 years.

Portland has properties totaling more than 1,000 affordable housing units with regulatory agreements approaching expiration.

“Preserving existing buildings and preserving existing subsidies is huge, and frankly, just as important as new construction,” said Tom Brenneke, founder and president of Guardian Real Estate Services.

Rose Schnitzer Tower, at 1430 S.W. 12th Ave., was constructed in 1979. The 17-story building has one-bedroom units for low-income seniors. Residents pay 30 percent of their adjusted income for rent and utilities, while HUD provides a monthly subsidy payment to the owner to cover the remaining cost of maintaining and operating units.

The $9 million rehabilitation is addressing critical building systems and accessibility. The building envelope, mechanical and fire/life safety systems, accessibility features, interior common areas and designated mobility units are receiving improvements. Site work will include landscaping and entryway upgrades.

Approximately 12 residents will be temporarily relocated to available vacant units within the building or to nearby hotel rooms with kitchens.

The project team includes architect Leeb Architects, interior designer Tello Interiors, Denver-based construction manager and consultant Marx Okubo, general contractor R&H Construction, and relocation specialist Peregrine Relocations.

Guardian Real Estate Services recapitalized and executed the project for Robison Jewish Home, a Portland-based nonprofit. The company assisted with the building rehabilitation.

“We are a co-general partner, they (Robison Jewish Home) are a co-general partner, and a new tax credit investor, Royal Bank of Canada, is a limited partner,” Brenneke said.

Harold and Arlene Schnitzer donated the property to Robison Jewish Home around 20 years ago, Brenneke said, and the nonprofit will continue to own the property.

The project owner is Rose Schnitzer Tower Affordable Limited Partnership, which includes Robison Jewish Home, Guardian Real Estate Services, and tax credit investor Royal Bank of Canada.

Guardian Real Estate Services closed on financing for the project in December. A Freddie Mac Tax-Exempt Loan combined with 4 percent Low-Income Housing Tax Credit equity and $37 million in housing development revenue bonds from Oregon Housing and Community Services were used to complete the recapitalization.

“To really understand the way the state funding goes, you’ll find what I would characterize a very lopsided set of funding resources where around 75 percent of it is going toward new buildings and 25 percent is going for preserving existing affordable housing projects,” Brenneke said. “I’m an advocate for maybe some more balance here.”

Crafting a deal to preserve affordable housing is an enormous effort, Brenneke said, and it usually comes with rehabilitation.

Construction began in December and is expected to finish in July.

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