By Joanne Zuhl, Staff writer
Oregon’s network of community development organizations — those developers, nonprofits and agencies that have been the backbone of affordable housing and economic development for low-income, elderly and disabled Oregonians — has taken a thrashing in the past few years.
The recession hit community development corporations, or CDCs, front and back, cutting resources while increasing demand. Despite progress in preserving and creating apartments and homes affordable to people in poverty, they haven’t kept pace with the growing ranks of their clientele.
The Oregon Opportunity Network, or Oregon ON, represents those developers, housing authorities, investors, service providers and community leaders that make affordable housing happen in Oregon. Combined, they have developed more than 16,000 units of housing, including single-family homes, and helped counsel and support more than 10,000 new homebuyers annually, according to Oregon ON.
In May, John Miller took the helm of Oregon ON as its new executive director, having served for nine years as the executive director of HOST Development, a nonprofit community development organization that built homes for low- and moderate-income buyers in Portland.
Although the recession is “technically” over, the wake of the housing collapse and economic uncertainty continues to roil the marketplace and political halls. Street Roots talked with Miller about the state of affordable housing, the message from member developers, and the challenges ahead.
Joanne Zuhl: The big question: What is the pulse of affordable housing in Portland?
John Miller: I think that we have a really strong set of folks who are doing their best to deliver affordable housing with the resources that they have. And that we also have a city that is committed to delivering a reliable supply of affordable housing. But I think that, as always, and this has been the same, recession or no, that there are not enough resources to meet the needs. I started in the affordable-housing industry in 2002, and at that time real estate was going up, and there were still really not enough affordable shelter at all at that point. And I think we’re worse now because the recession has created a huge demand.
And the big issue often is we supply housing but we don’t supply all the services that go along with the housing, and those service dollars are still missing. And just like eight years ago, they’re still not here. Overall, we have more units, which is great, but we also have a much higher demand.
J.Z.: You mention the service components – do we lose a bang for our buck when we don’t have those wraparound services there?
J.M. Certainly. I think when you look at the cost to build a new unit, compared to the cost of bringing someone in, giving them some extra services, helping them to where they become self-sufficient and they can move out. You retain the unit, but you now use it for two people. Without those services, they could have been stuck there and you only have one turn out of a unit. The only way to fix that is to build more units. But I think in the long term, the key is helping people become self-sufficient, and not needing the subsidized unit over and over again. So you get a big bang for your buck if you provide services. The services, economically, might be a fraction of the cost compared to what it would take to build a new unit for every single person who has needs. You definitely lose when you don’t provide services.
J.Z.: Speaking about the new demand, and the recession, does that change Oregon ON’s message in 2011 and what you’re calling for to get back ahead of the game?
J.M. I’m not sure the message is necessarily altered, but I think it needs to be louder. There are a few things that we have seen differently. One is that a lot of the folks that our members are serving are the folks who were employed six months before, or a year before, or even two years ago when the recession hit. They had jobs, they were making ends meet. This is especially true on the foreclosure side, but also in rentals. Then as they lose their jobs, they lose their housing, and suddenly, demand for services and more affordable housing, everything goes up. That’s a different person than maybe eight years ago needing services. I think job creation and employment education programs and other things to help get people back to work, those are things Oregon ON would probably be supporting pretty loudly whereas eight years or so ago, it was more we really need services for folks who are chronically homeless and have lots of other issues that are keeping them from being able to earn a living. Well, now, the jobs just aren’t there.
J.Z.: Equity is the big buzzword these days, even before the census report showed Portland’s core lost 10,000 people of color, and before the audit by the Fair Housing Council of Oregon showed high rates of ethnic and racial discrimination. What does Oregon ON do with that information and how does it apply to your lobbying for your members?
J.M. Before I took this position, I was with HOST Development here in Portland, and we sold to low- and moderate- income folks. The big part of what we focused on were minority homebuyers, and we did about 400 houses, and about 200 of those were sold to minority home buyers over the years. And so with that, we saw a challenge. We noticed a lot of times the banking industry was tough, and even that folks just didn’t really understand that (homeownership) was a good option for them. ...
Portland has been a tricky place as far as these issues go. Most of the members’ missions are to serve underserved populations. When we look at our population compared to the general population, our percentage of minority tenancy is higher than the rest of the community, which is good. We welcome these audits and, in fact, we’ve asked that they be done every year for sure and randomly as needed. If there are offenders, we’re not going to wait another year for another test.
J.Z.: What actions would you like to see taken, at a policy level, taken to correct this and be a model for the rest of the nation on how to overcome something that every city has struggled with?
J.M. It’s an ongoing issue. You hear about what’s happened at the Interstate Corridor in particular, where they’ve built up all this nice new housing, but it’s not the same people that are going there. (See “Interstate and beyond,” Street Roots, June 24) And a lot of the African-American businesses along the area have closed and are moving out and they’re being replaced. What we did at HOST was to focus on marketing to the local community. We went to them often, got them engaged in the process. I think that helps. It’s tricky when you allow the market to really just do its thing and you don’t have any safety net in there to make sure the market just doesn’t go wild.
One of the problems with urban renewal areas is we allow the market to just run with it. And so we fix it up. But who comes? Is it the people that we wanted to build it for or is it unintentioned? But without intention about being inclusive and marketing to folks and giving financial support to businesses and so forth, and if you just sit back and say let the law of market forces build this community on its own, then I think that’s where we get in trouble. The big money isn’t always necessarily in the areas we’re trying to help. And that’s a problem. So in URAs, along with building nice buildings, there also needs to be job training and economic development activity going on for those folks that we’re trying to serve. If we’re really going in to try to build up a community, than it has to be more than just the infrastructure, it also has to be the people in it as well, and we need to bring them along.
J.Z.: Money: We had the economic housing collapse, the low-income housing tax credits aking a hit, federal blog grants were restructured, and we know that there is a TIF cliff, with the revenue from tax increment financing begins declining dramatically as urban renewal districts are built out. Where is our money going to come from?
J.M. Everyone’s scratching their heads on the TIF cliff. One of the things that TIF is good for, and other funding is good for, is building new housing. And we all agree that there is a big demand for affordable housing and the supply isn’t keeping up with the demand. But there are different ways to meet the demand. One way is to build new housing, another way is to find housing that is existing and convert it to long-term affordable housing. How do you do that? Basically, buy existing buildings, rehab them. Presumably you can do that more economically than building a brand new building.
J.Z.: So just get smarter with the money we have?
J.M. Yeah. Unfortunately, the way our system is set up now, we build new buildings as often as we can, and that keeps the whole industry healthy, but eventually you run out of money to build new buildings. Using our existing housing stock, converting it to long-term affordable, is one solution, and that we don’t spend as much. When you look at TIF, it’s hard to say ... TIF made a lot of sense when property values were rising and everything was on the upswing. It’s probably going to be a while before we get back into that kind of a mindset. Banking on the future didn’t turn out very well in some areas as far as property values. I guess there is no easy answer.
J.Z.: The 30 percent set-aside. Obviously Oregon ON has been involved in the push to preserve it, and for it being applied to each urban renewal district. The mayor has said it’s not specifically for each URA, and there are timelines shifting. Why is this so important?
J.M. It’s extremely important for the reasons we talked about earlier. I often think that the gentrification isn’t the bad thing, it’s the displacement that’s the bad thing. But the displacement that the gentrification causes gets even more confounded if we’re not setting some of that money aside in every single district to provide affordable homes. That’s the answer, really. If you’re making investments in the community, it has to be made for everyone in the community, and not just the more affluent folks who will be coming in. We have to have affordable options in every community. And so I absolutely believe it needs to be by district. And I agree with Commissioner Nick Fish that it needs to be a floor, not a ceiling. I think we should be striving to exceed 30 percent in every district. I’m sitting on the committee that’s doing the five-year review, and I was part of the group that set up all the numbers five years ago. We fought pretty hard to get by district, and we were actually pretty disappointed that it wasn’t 30 percent across the board. I understand why the Memorial Coliseum area gets an exception. And in some areas, people just didn’t live there, and it didn’t make sense to push for 30 percent when no one was there in the first place. But it needs to be preserved, and we’d like to see it even more.
J.Z.: So what are the priorities for Oregon ON moving forward?
J.M. The bigger picture: sustainability. Organizations are concerned. They see all these financial things on the horizons that you’ve mentioned, and the government is scratching its head as well. There’s really not a clear way in how to keep this whole system moving forward. That’s really risen to the top of the priorities. How do we sustain and keep this whole system going forward, this industry statewide? Hopefully we’ll come up with some great best practices that can be emulated around the country. I went out to a national meeting in D.C. about three weeks ago with a group of people just like me from all over the country, heads of CDC organizations, and everyone’s facing the same problem. Sustainability is the big thing. A lot of times when they’re talking about sustainability, they’re talking about mergers and things like that. We just want to make sure that our whole network — we’ve got all kinds of service industry support groups — is working together.