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Portland city Commissioner Nick Fish talks to media at Bud Clark Commons during a tour in 2011, before the building opened.
(Molly Hottle)
Oregon's failure to track and plan for affordable housing has put the state at risk of losing existing units in the midst of a housing crisis, according to a new audit released on Tuesday.
Auditors from the Secretary of State's office found that poor data tracking, a lack of strategic planning and communication problems at Oregon Housing and Community Services undermined the housing finance agency's ability to preserve existing units and add new ones.
The agency also lacks written contracting and procurement policies, which allowed officials to continuously renew a no-bid contract with one nonprofit for more than a decade. The problems have persisted, despite multiple restructuring efforts and changes in leadership over the last five years. Director Margaret Van Vliet resigned in May while the audit was underway, and the agency is now headed by Director Margaret Solle Salazar.
The auditors echoed what many Oregonians have already experienced first-hand, saying the state "is in a housing crisis" with home values surging 12.5 percent from July 2015 to July 2016 and rental costs rising at nearly 7 percent a month.
Several problems sprang from the housing agency's data tracking failures. For example, information on the state's supply of multifamily affordable housing was so incomplete and inaccurate that auditors were unable to evaluate important aspects of the program, such as the effects of the agency's policies and trends in housing preservation.
"One housing provider told us the inventory showed a property for their organization that did not exist," auditors wrote.
Although employees had been collecting financial data on publicly funded housing projects using an award-winning system, agency leaders stopped the practice in 2012 for reasons not identified in the audit. As a result, state employees "have not been able to determine whether properties are financially viable," auditors wrote.
The housing agency "does not have standardized or written contracting and procurement policies, resulting in inconsistent practices," auditors wrote. For example, the state has continuously renewed a 2003 contract with the Portland nonprofit Neighborhood Partnerships to manage a state savings account program aimed at building participants' financial management skills.
"It has never been put out to bid, which is contrary to standard contracting practices, though (the housing agency) assured our team the contract will go to bid next year," auditors wrote.
Oregon law requires the agency to prepare a "comprehensive state plan for housing." But auditors found housing officials failed to report even the most basic information such as the level of need for affordable housing, the total supply available and amount of resources the state can tap -- for example tax credits and state, federal and local money -- to maintain and add housing.
One of the planning documents the agency did produce was missing clear goals, such as the number and locations of affordable rental units the state needs. The plan also failed to identify different housing needs in various regions of the state and was based on outdated data: although the plan is supposed to outline Oregon's housing needs for 2016 through 2020, it relies on federal data from 2007 thorough 2011.
The agency's shifting policy on how it allocates low-income housing tax credits made it difficult for developers to understand the state's priorities, and in state surveys over the years these partners consistently voiced frustration with the agency's communication problems. "One respondent said they felt like a problem to be dealt with, rather than a partner," auditors wrote.
A staffing shortage could be contributing to some of the problems with the state's multifamily program. Auditors noted that although the workload increased over the last five years, the number of staff working on multifamily housing remained the same.
In a letter responding to the audit, Salazar said the agency is already responding to many of the issues and implementing auditors' recommendations.
"It is not lost on anyone at the agency that Oregon faces a housing crisis and that a plan that will use data and research to guide the investment of our scarce housing dollars is a top priority," Salazar wrote.
-- Hillary Borrud
503-294-4034; @hborrud