Oregon housing package leaves existing shelters at risk of closure

By Lauren Dake (OPB) and Joni Auden Land (OPB)
March 17, 2023 12:48 a.m. Updated: March 23, 2023 10:24 p.m.

Cities across the state have been trying to get more people off the streets, but now they’re running out of money. In Bend, a new shelter sits empty while others are overcrowded.

Oregon lawmakers celebrated passing a multimillion-dollar housing package this week that will help create new shelter beds for unhoused people. Yet, at the same time, existing shelters across the state are at risk of shuttering and the latest infusion of cash isn’t going to help.


“It’s clearly concerning that we may see new shelters stood up … and potentially need to close existing shelters and possibly have a net loss of beds in our area,” said Kelly McIver, with the city of Eugene’s community development division.

Gov. Tina Kotek issued executive orders in January aimed at addressing the housing and homelessness crisis in the state. The $200 million package passed by the state House this week carves out about $85 million to expand shelter capacity in the Portland area, central Oregon and Lane County, among other places.

But the money is strictly limited to creating new shelter space. Shelters already operating don’t qualify, and city officials across Oregon say that could lead to recently opened facilities shutting down.

“(Kotek’s executive order) builds on existing shelter capacity, so it is critical that local communities maintain their existing investments,” a statement from Kotek’s office read. “That said, the Governor is committed to learning from local governments about their current funding gaps and encourages them to clearly communicate their specific needs to maintain existing shelter capacity to the legislature.”

“I think the cities have been pretty clear with the governor where the gaps are,” said Ariel Nelson with the League of Oregon Cities.

The Rainbow Motel in Bend, Ore., could eventually shelter dozens of unhoused people. But funding gaps at the city of Bend means it sits empty for now.

The Rainbow Motel in Bend, Ore., could eventually shelter dozens of unhoused people. But funding gaps at the city of Bend means it sits empty for now.

Joni Land / OPB

She pointed to examples across the state where cities either need funding to continue to operate shelters, or to finish building them since rising costs and inflation have created a funding gap.

In the midst of the COVID-19 pandemic, many cities started to play a larger role in creating shelter beds.

In Salem, for example, the city has had a lot of success with micro-shelter villages, but now the city needs nearly $9.5 million to keep operating them in the years to come.

In Eugene, Lane County and social service organizations historically took on the role of running shelters. But with the crisis on the streets worsening, and thanks to the use of federal stimulus American Rescue Plan Act funds, the city created shelter space for more than 250 people. With the federal funds drying up, those beds are at risk of closing.


During the first years of the pandemic, the city of Eugene “had to do something,” McIver said. Even though the city knew it would be difficult to sustain the funding, leveraging the one-time federal dollars made sense at the time.

At Bend’s largest shelter, people routinely sleep on couches, on the floor and under tables to escape the freezing Central Oregon winter. The 110 official beds at the Lighthouse Navigation Center aren’t enough.

The city of Bend currently funds two different shelters with approximately 160 beds combined. With funds dwindling, all those beds — like so many others across Oregon — could go away.

City of Bend Housing Director Lynne McConnell said the two shelters are funded until 2025. After that, the future becomes murkier.

“We do not have the tools to raise all the money ourselves,” McConnell said.

Evan Hendrix of the Lighthouse Navigation Center said the shelter doesn’t turn anyone away, but his staff do feel the pressure as more and more people seek refuge. The shelter, he said, is often the first stop for people who have lived on the streets for years.

Bend needs hundreds of more shelter beds to meet demand. The latest point-in-time count, an annual tally of an area’s unhoused population, estimates nearly 1,300 adults and children are experiencing homelessness in Central Oregon — a 17% increase compared to the year before.

“(Beds) have been full for the last four months running,” Hendrix said. “It’s become normalized a bit.”

The shelter has been a lifesaver for residents. Casey, who did not provide her last name, has lived at Lighthouse for two months. After both her legs were amputated, her fellow residents rallied around her and made her feel at home, she said.

“It took me losing everything I had to see that these people are the best part of town,” Casey said.

As Lighthouse continues to serve more people than it has beds, empty rooms and clean beds await a couple blocks away at the former Rainbow Motel. The city of Bend borrowed $4.5 million to purchase the property, originally as a potential site for a new city hall and affordable housing. Now, it’s slated to be a shelter with about 50 beds.

And it’s all ready for residents. Rooms have been remodeled with new beds and a fresh coat of paint. But McConnell said the city still needs about $1 million to hire an operator, money it doesn’t have.

“Being unable to open this facility when we have it available to us, and folks are experiencing homelessness right now in winter, feels like a failure,” McConnell said.

For now, the shelter sits empty.

The Legislature’s $200 million housing funding package still needs approval from the Democratically-controlled Senate, where it is expected to pass. The Legislature also still needs to approve a two-year budget, which could include additional dollars for city shelters.