Sahaan McKelvey is tired of turning people away.
McKelvey is the head of community and family programs for Self Enhancement Inc., a North Portland nonprofit that works with Black youth and their families. He oversees programs that offer shelter and other supports to people experiencing homelessness and provide rental assistance to people at risk of homelessness. But because of staffing shortages at SEI, McKelvey said he’s increasingly forced to say “no” to families seeking help.
“If we don’t have money to fully staff programs, we can’t get resources out the door to people that need them,” McKelvey said. “What it comes down to is, the magnitude of need is greater than the resource to meet that need.”
McKelvey has seen a constant turnover of staff at SEI due to the nonprofit’s inability to pay competitive wages. But McKelvey doesn’t fault SEI’s leadership — instead he places the blame on the government.
Like many Portland-area nonprofits, SEI’s housing programs are partially funded by the regional supportive housing services tax, the voter-approved fund meant to support organizations with programs that help move homeless people into housing and keep people from entering homelessness. This funding stream has been slow to reach the people it’s intended to support in Multnomah County, however. The Joint Office of Homeless Services, the agency that oversees Multnomah County’s pot of the supportive housing tax, reported in May that it spent only $40 million in the first three quarters of the 2023 fiscal year. That’s less than half of the $83.4 million it intended to distribute during this time period.
County officials point to several reasons for this massive underspending, including frequent turnover in Joint Office leadership and bureaucratic hiccups that come with operating any new tax. But most public officials and service providers agree that staffing gaps due to low wages at nonprofits is the key reason these dollars have gone unspent.
“The biggest challenge that Multnomah County is facing … is being able to hire and retain a workforce,” said Patricia Rojas, housing director at Metro Regional Government. ”That is going to be probably the most important thing that we can address at this point in time.”
Metro is responsible for overseeing the supportive housing tax. In May, after seeing the Joint Office wasn’t meeting its spending goals, Metro announced that it would intervene to ensure Multnomah County spent the tens of millions of dollars it promised to by the end of June. Rojas, who is overseeing that process, says addressing the staffing issue is her priority.
“It’s a huge opportunity for our system to make short-term investments right now to get that funding out into the providers and to the frontline workers doing the work,” Rojas said.
Service providers struggle to get supportive housing dollars
The May news of the Joint Office’s massive underspending shocked taxpayers and political officials alike. But longtime service providers were less surprised.
That’s because of the way the Joint Office’s contracting system is set up. When nonprofits sign a contract with the Joint Office to receive supportive housing dollars, they don’t immediately get the money. Contractors are instead reimbursed by the county after they complete the work agreed upon in a contract. Nonprofits say this payment structure means many nonprofits deplete their budgets quickly and before work is completed, making it impossible to increase wages for staff employed to do the contracted work.
If organizations don’t complete the work promised in their initial contract, some of the funds return to the Joint Office’s coffers. That’s the case for McKelvey, who said that SEI hasn’t been able to meet its contract goals — which is usually calculated by people served — because it didn’t have enough employees.
“If we don’t have money to fully staff programs,” McKelvey said, “we can’t meet the outcomes.”
The contracting system keeps service providers with limited budgets from even applying to receive supportive housing funds.
“I know agencies that have floated [the county] a million dollars for six months until they were reimbursed,” said Katie O’Brien, director of homeless nonprofit Rose Haven. “And for agencies that are smaller, like ours, we can’t afford to play that game.”
Emmy Ritter is the director of Raphael House, a nonprofit that helps people escaping domestic violence find permanent, affordable housing. Her organization gets supportive housing tax dollars through the Joint Office, but Ritter says her ability to pay competitive wages makes her hesitant to apply for new contracts.
“The heart and success of the work in helping the most vulnerable people in our community build new, safe and stable lives starts with staff building trusting relationships with each person,” Ritter wrote in an email to OPB. “Turnover in staffing not only impacts contracting … but more importantly, [the] outcomes for the people we serve.”
Low pay leads to high turnover at service providers
The high-stress work of helping vulnerable people for little pay wears on staff.
“When staff realize that they qualify for the programs they’re providing for low-income communities, that’s hard,” said SEI’s McKelvey. “I’ve heard, ‘I can do things for my clients that I can’t do for myself.’ That has been bad for morale.”
McKelvey said some former colleagues leave social service work altogether.
“People start to realize they can work at Taco Bell or Target and make the same income,” he said. “And they don’t have to carry everything home with them from a challenging job every night.”
Others accept similar jobs at Multnomah County, which offers much higher pay. McKelvey declined to say how much SEI pays staff that work for its housing programs, but notes that it’s lower than starting pay for city or county employees doing similar work.
Glassdoor.com, a website where employees can share workplace salaries, reports that housing case managers at SEI make $23.50 per hour, on average.
According to county data, Multnomah County starts hourly wages for housing case managers with comparable experience as SEI caseworkers at $27 per hour.
The call for competitive wages for nonprofit contractors has attracted strong support among communities that don’t always agree. On May 31, Portland Business Alliance president Andrew Hoan sent a letter to the three county chairs representing the Portland metro region, demanding swift action.
“We must urgently address the ability of our service providers to hire and retain front line and support workers to do the tough and often heroic work of helping our homeless neighbors get the services they need,” the letter reads. “While there are many reasons for the staffing challenges with our service providers, we believe persistently low wages are the main culprit, which must be urgently diagnosed and addressed.”
The letter was co-signed by 64 organizations, including homeless service nonprofits, real estate industry groups, law firms, local small businesses and tech companies. Hoan specifically urged county leaders to increase nonprofit staff wages to “competitive” rates and update contracting processes to expedite the reimbursement process for nonprofits.
“Implementing these changes will address one of the critical ‘bottlenecks’ that are preventing quicker progress in reducing the unsheltered homeless population on our streets,” Hoan wrote.
The Portland Business Alliance, which has been critical of how the city handles homeless camping, supported the 2020 measure that created the supportive housing tax.
Northwest Pilot Project, a nonprofit that helps homeless seniors secure affordable housing, is one of the service providers signed on to the letter. Celine Mazoyer, who oversees housing case management for Northwest Pilot Project, said she wants to see Multnomah County leaders treat the region’s homelessness problem like the emergency it is.
“We call it a housing crisis and yet we don’t see programs being adequately staffed,” Mazoyer said. “We know what the answer is — we can solve homelessness, we just need [the government] to step up.”
Local leaders want to fix the contractor pay system
The county and city have tried to mend the contractor pay problem. The city and the county share responsibility for funding the Joint Office. Over the past two years, Portland and Multnomah County have each committed $2 million to increase provider wages within the Joint Office budget. The county also approved a new cost-of-living wage increase for homeless services contractors who work with the Joint Office.
But county leaders know this isn’t enough to resolve the staffing shortages that slow down spending and, therefore, results.
“We have serious work to do in our contracting practices,” said Susheela Jayapal, a county commissioner representing North Portland. “This is an obvious chokepoint, a significant barrier to anything we want to do.”
In a response to the latest Joint Office financial report, County Chair Jessica Vega Pederson expressed disappointment in the agency’s underspending of supportive housing funds. To repair this funding gap, she said she would be meeting with local governments, service providers and outside consultants to identify what caused this problem.
Metro’s May intervention has fast-tracked this process. Rojas, the Metro housing director, said she’s been meeting with Multnomah County leaders for weeks to create a plan to distribute the unspent supportive housing dollars before July 1.
While the exact details of the plan won’t be made public until the next week or two, Rojas said that she’s “strongly encouraging” the county to incorporate a plan that includes short-term incentives, like hiring and retention bonuses for nonprofit staff.
At the same time, Rojas wants to see a longer-term solution to the contracting hurdles.
“Contracting can be a very complex process, and there’s an opportunity to rethink how we do that so that it allows for money to move quicker,” Rojas said. “It’s an opportunity … to be creative and flexible to respond to the moment we’re in today, which is a crisis.”
Metro oversees how supportive housing tax dollars are spent in all three Portland-area counties, but Multnomah County is the first that needs the government’s intervention. Rojas said that’s likely because of the sheer size of Multnomah County’s homeless population and the complexity of the county’s homeless services system, which relies on a variety of funding sources.
Rojas hopes the plan to realign Multnomah County’s tax dollars will act as a guide for Clackamas and Washington counties if they encounter similar problems in the future.
“We’re working to build a regional system,” Rojas said. “So, what happens in any county impacts all counties.”