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“Affordable Housing” In Portland Tells Residents They Must Leave.

It all sounded so wonderful and rosy.

In 2004, the City of Portland, Oregon decided to enter into a partnership with a developer to build “affordable” housing as the City was worried that people were being priced out of the city.

The City helped pay for the land, and paid the developer to build what came to be known as “Headwaters Apartments.” The apartments were to be “green,” energy efficient and “environmentally sustainable.” After spending $14.7 million dollars (in 2007 dollars) ($1.9 million directly from the City coffers and a 2004 30 year bond for $12 million) the City then took over the running, maintenance, and management of the apartments by contracting out to a management firm in 2007.

Curiously, although the project was to help citizens find “affordable housing,” the project didn’t cater to those who couldn’t afford rents, allowing residents that made up to $97,000.

And the rent was less than “affordable.” From a 2011 article on the OregonLive site:

Headwaters’ one- and two-bedroom units are supposed to be affordable to two-person families making $46,100 or three-person families making $51,850. But managers base their rules on 100 percent of the median income. And they chart income by unit, not number of residents; they figure a two-bedroom unit could hold three people, for example. As a result, they allow a lone resident of a two-bedroom unit to make 1 1/2 times the full median income of a three-person household, or $97,200.

That’s probably just as well, given the rents. In Southwest Portland, average monthly rents run $684 for a one-bedroom unit and $907 for two bedrooms,according to the Metro Multifamily Housing Association.

At Headwaters, tenants pay $930 to $970 for one bedroom and $1,275 to $1,375 for two — plus $30 to $60 for parking.

Rents would most likely be higher, but the County in which the City is has the property tax exemption on the property that doesn’t require the City to pay taxes on the building.

Today, the rent are even higher:

Studio, 1 Bath – $1,436
1 Bed, 1 Bath – $1,429
2 Beds, 2 Baths – $2,170

That is, if you can rent the apartments and right now, you can’t.

On November 24, 2019, the City of Portland notified 4th floor residents that they were all being evicted and were given a three day notice to vacate the premises.

Why?

On Sunday, city officials told 4th-floor residents at Headwaters Apartments on Southwest 30th Avenue they had to be out by Wednesday. Notices posted throughout the halls explain the roof on the 4-story apartment building is deteriorating and in need of urgent repairs.

The city owns the affordable-living complex.

It said residents won’t be able to move back in for up to 11 months. In a letter sent to residents, Headwaters Apartments explained: “The roof’s condition combined with the potential for snow may create an unsafe situation.”

Residents have noticed things throughout the building’s fourth floor, like cracks in the foundation. They also shared photos with KOIN 6 News after they said contractors ripped through the ceiling during an evaluation.

Portland Housing Bureau spokeswoman Martha Calhoon say they don’t know yet what caused the roof problems.

“Structural engineers advised swift precautionary action,” adds Calhoon, who says the city does not yet have an estimate of how much it will cost the city.

The City is helping people move by assisting them in finding new residences, paying for moving costs, hotel bills, AirBnB rooms, etc., which is more costs to the taxpayers.

From afar, Headwaters Apartments appears to be a cautionary tale of what happens when a city decides to interfere in another market which it has no business being in.

Let’s summarize the problems:

1) The building intended purpose was to create “affordable housing.” It did not.
2) The rents for the apartments are higher than the rents in the area.
3) The building is tax exempt, meaning that other apartments in the area are faced with more costs. This results in an uneven playing field for the private landlords who still manage to beat the rental rates at the City owned Headwaters Apartments.
4) The citizens of Portland are paying for the building, and will continue to pay until 2034.
5) The roof is structurally unsound. That’s not the same thing as a leaky roof. “Unsound” means “in danger of collapse.” Who approved that design and construction? (Hint: the name begins with “City of” and ends with “Portland.”)
6) The City is saying the roof repair will take 11 months, but has no idea how much it will cost. That means the City hasn’t sent out any proposals to contractors on the work (or hasn’t received them back from contractors.) How can the City say that the work will take 11 months if they haven’t gotten estimates?

We hear a lot about cities building “affordable housing.”

What City governments don’t realize is that the biggest barriers to “affordable housing” are government regulations and taxes. In other words, a city will pass tax rates and laws that drive up the costs of home ownership and rental rates and then say “we need affordable housing.”

The Headwaters Apartments is an example of what happens when governments get involved in areas they shouldn’t while not addressing the core issues of a problems they created.

Be weary of calls for cities to propose, build, and own “affordable housing.”

Instead, people should demand that governments “stay in their lane” and address the costs of ownership and rentals and the government’s impact on that.



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