Executive Summary


Oregon is in a housing crisis—housing costs are high, vacancy rates are low, and low-income Oregonians struggle to find affordable housing. Oregon Housing and Community Services (OHCS) is charged with being the state’s leader in housing, but challenges are hindering its progress in helping to address the affordable housing crisis.

We found OHCS should improve its affordable housing preservation efforts, strategic planning, and data management. In addition, OHCS should address organizational challenges, which include poor communication, inconsistent staffing levels, and inadequate policies and procedures. By improving in these areas, OHCS will be better able to help ensure affordable housing for low-income Oregonians.

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Affordable Housing is Essential to Meet Oregon’s Low-Income Housing Needs

housing1Increasing costs, combined with relatively stagnant incomes since the 2008 recession, have resulted in housing costs taking a bigger chunk of Oregonians’ paychecks.

Because the housing market generally does not produce new housing affordable to households making less than 60% of median income, federal, state and local governments work with nonprofit organizations and for-profit developers to create affordable housing for this segment of the population.

Housing subsidies that keep rents affordable for low-income Oregonians are important. A substantial amount of affordable housing could be lost in the next twenty years by way of expiring federal rent subsidies, use restrictions, maturing mortgages and/or deterioration.

Loss of affordable housing damages progress on meeting overall housing needs for the state. The loss of even a single rental unit could mean one more Oregon family may not be able to find a home.

Agency Efforts to Preserve Affordable Housing Fall Short

Affordable rental housing created with government subsidies is the main focus of our report. We found the agency could improve its housing planning and preservation of this existing low-income affordable housing.

Since 1991, OHCS has been required to complete an annual comprehensive plan for the state, detailing the housing needs of Oregonians. Thus far, statewide housing planning has come up short. Agency leadership is working to build on existing needs assessments and planning to create a comprehensive plan for the state. A major hurdle to achieving this goal is the lack of an accurate and reliable inventory of affordable housing, another task the agency is currently working to complete.

housing2Preserving federal rent subsidies is critical to helping preserve low-income affordable housing. It cannot be achieved without a variety of public and private partners working together collaboratively. Poor external communication aggravated strained relationships with housing developers and partners in the housing community. Although improved, OHCS could do more to strengthen relationships with partners.

OHCS could also work with funders in the state to better align funding cycles and application processes so preservation projects go more smoothly. Many housing developers rely on OHCS funding each year to build or preserve affordable housing, making OHCS a key partner. For developers investing millions of dollars and several years into projects, predictability and transparency are important. Clear funding priorities will help developers understand and plan for the affordable housing that OHCS is targeting.

Oregon also falls behind other states in providing funding developers need to make projects viable. Increased gap funding could expand the use of a tax credit program OHCS administers, resulting in preserving more low-income affordable housing.

Strategic Planning is Not Sufficient

The Oregon Legislature tasked OHCS with leading the state in housing policy and serving as the central source of affordable housing data, training and technical information. We found that OHCS is not achieving these expectations.

The agency needs to improve its strategic planning to better provide for affordable housing in the state. Without adequate strategic planning, OHCS’ vision for the future and priorities are unclear, potentially resulting in the loss of affordable housing. Improved planning, including setting measurable goals, will help OHCS identify priorities, recognize success, detect problems and respond with corrective action.

Better Data Management Needed for Informed Decision-Making

housing3The lack of complete and accurate data on the multifamily affordable housing portfolio kept us from completing planned work related to affordable housing. This included evaluating the effects of OHCS policies as well as overall trends of properties in need of preservation.

The agency could do much better at using data to inform decision-making. Due to inadequate resources dedicated to data systems and data management over a number of years, the systems are outdated, not integrated, and require workarounds. OHCS could benefit from an integrated data system that tracks projects from beginning to end. This would eliminate the workarounds that contribute to errors, incomplete data, and other problems we identified.

OHCS could also improve its collection and use of financial data from its affordable housing projects in order to help identify best practices. Such a system was in place, but was discontinued by agency leadership in 2012 and to date, has not been replaced.

Organizational Challenges Impede Agency from Addressing Affordable Housing

We identified organizational issues affecting all sections of the agency that impede OHCS efforts to adequately address affordable housing, including preserving low-income affordable housing. These challenges include poor communication inconsistent staffing levels, and inadequate policies and procedures.

housing4We found significant issues with both OHCS’ tone at the top and internal communication. Both are influenced by leadership’s operating style and management philosophy, among other things. More importantly, both are critical to enabling the agency to be successful at managing its priorities. To gain a better understanding of the agency work environment, we conducted a survey of agency staff. Overall, survey results indicate that significant communication issues exist between agency leadership and staff.

OHCS has also experienced capacity issues, such as loss of institutional knowledge due to turnover and agency restructuring. At the same time, the workload in the agency’s Multifamily Section has increased. The current workload and capacity leaves little time to analyze decision-making and data to improve administrative systems and bolster better policy. Having a better understanding of workflow and resources will help identify capacity for additional work and target areas in need of additional staff or resources.

In addition, we found that some agency policies and procedures were absent, outdated, or weak. For example, OHCS does not have standardized or written contracting and procurement policies, resulting in inconsistent practices.

Recommendations

To help ensure affordable housing for low-income Oregonians, we recommend OHCS management improve housing preservation efforts, strategic planning, and data management. We also recommend OHCS management address organizational challenges including organizational culture, communication with staff and stakeholders, workflow and capacity issues, and inadequate policies and procedures.

Agency Response

Oregon Housing and Community Services management generally agrees with the findings and recommendations in this report.  The full agency response can be found at the end of the report.