FILE - Residents at Home Forward's Northwest Tower in Portland, Ore., in 2024. Reporting from Willamette Week has found the agency has an unusually high vacancy rate and takes, on average, half a year to fill vacant units at some of its properties.
Anna Lueck / OPB
Home Forward, the housing authority for Portland and Multnomah County, is the largest provider of affordable housing in the state. Reporting from Willamette Week has found that the agency has an unusually high vacancy rate and takes, on average, half a year to fill vacant units at some of its properties. The lack of rental revenue from empty units is making it difficult for the agency to pay off its debts.
Sophie Peel is a reporter for Willamette Week covering Portland City Hall and neighborhoods. She joins us with more details about her investigation into Home Forward.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Home Forward, the housing authority for Portland and Multnomah County, is the largest provider of affordable housing in the state. For a few months now, Sophie Peel at Willamette Week has been looking into the agency’s record. She found that the vacancy rate for its units is twice as high as the Portland area’s overall rate for affordable housing, and that on average it takes more than half a year to fill a vacant unit. Meanwhile, the lack of rental revenue from these empty units is making it difficult for the agency to pay off its debts. Sophie Peel joins me now. It’s great to have you on the show.
Sophie Peel: Thank you for having me.
Miller: So you started writing about the vacancy rate at Home Forward properties back in December. At that time, one in seven of its units were vacant. Your follow-up reporting found that the vacancy rate, as I just mentioned, is twice as high as the Portland area’s overall rate for affordable housing units. What reasons did you hear for all of this from Home Forward itself?
Peel: Yeah, I would say predominantly Home Forward has said the reason for this kind of high percentage of vacancies is that market rates have dropped to the point where what is charged for a market rate unit is about what’s charged for a 60% area median income unit.
Miller: Let me just stop you there because when I first read this, I got to say I got a little bit confused because it seems like it’s counterintuitive a little bit. One of the reasons for the high vacancy rate of affordable housing is that market rate rents have gone down. First of all, that actually, that was a little bit surprising. It seems like good news, but can you help us understand the mechanism there?
Peel: Yeah, on the market rate side, I think it’s a little unclear why market rates have dropped. And when you look at a 60% AMI unit, it’s not that much. Like in typical times, it’s not that much less than a market rate unit. It’s maybe 150 bucks to 300 bucks. So for someone who is barely making that, that is a really important margin, but when you look broadly, the market rate doesn’t have to dip that much and 60% AMI units don’t have to rise that much in rent for them to basically be on par. And so what Home Forward says is that right now for people who would qualify for a 60% AMI unit, they basically have a choice oftentimes of, okay, do I want a market rate unit for the same price or do I want an affordable unit? And I think largely people will go with that market rate unit. They’re usually a little bit nicer. They usually have more amenities.
Miller: There’s maybe a wider variety of choices as well, as opposed to a limited number of buildings in a certain number of areas?
Peel: Right. And if you go for a market rent unit, you don’t have to go through all this paperwork with Home Forward, and getting an affordable housing unit, it’s really, it’s hard. It’s a chore. It’s a lengthy process, and for a market rate unit, it’s pretty simple.
Miller: Why can’t Home Forward say, okay, the market has changed and people who are earning around 60% of area mean incomes, they don’t want to rent our units as much as they did before. So we’ll open more of our units to people at lower income levels.
Peel: Yes. So that is, I think, one thing that people have been putting pressure on Home Forward for because there is nothing in their regulatory agreements. There’s nothing legally binding saying they can’t lower those rents. And it seems intuitive that if you would rather make maybe a couple 100 bucks less in rent on a unit then just have an empty unit and make no rent on that.
I think Home Forward is a really big machine. I think there may have been kind of a lag in understanding what the market was doing. But I will say in the past couple of months, they actually have lowered the rents at some of their buildings, modestly. And I think that’s probably in part because of some public pressure to do so. I also think that they probably realized, okay, we’ve got a problem here to fill more of these units. And no, we don’t want to lower these rents, and that’s largely because of their debt obligations. So a lot of these buildings are funded by debt. And so they have to pay back those debt payments just like you would pay down a mortgage every single month. It’s a monthly amount that they have to pay to pay down that debt. So they have to have a certain level of income.
But of course, I think everyone would say, again, some rent is better than no rent. You’re going to have a better time paying your debts off if you get some rent versus no rent, even if it’s a little bit less than ideally you would like. So I think Home Forward is sort of reckoning with that right now.
Miller: Has the vacancy rate for Home Forward properties changed significantly since you first started reporting on this two and a half months ago?
Peel: Yeah, so the 14% vacancy rate was from a November vacancy/occupancy report. And so, the latest numbers I’ve been provided by Home Forward are from late December. I think it was as of December 31st, 2025, and it had dropped modestly to 11%. So two data points isn’t necessarily enough to really extrapolate from that, but at least according to that, it has dropped modestly.
Miller: How did developers or other housing officials outside of Home Forward respond to you, respond to the justifications that you’ve been hearing from Home Forward about the reasons for either the vacancy rate or the long time it takes to fill these units, which is obviously a number that’s related?
Peel: Yeah, I wouldn’t say I successfully talked to that many housing officials in other markets or certainly not at the city. But what I will say is that top executives who used to work at Home Forward who have worked for a long time in affordable housing would say, there’s some merit to that. It’s a tough market right now for affordable housing. So Home Forward is not alone in that struggle. However, they’re also very skeptical about Home Forward’s reasoning about, well, we can’t lower the rents, or their stubbornness. And I think they say, look, there’s nothing that stops you from lowering the rents to get more people in these units, and some rent is better than no rent.
Miller: One of the reasons that Home Forward put forward for its high vacancy rate is that some of its buildings ‒ like the Louisa Flowers, one official mentioned in the Lloyd district ‒ that they’re harder to rent out because they are “farther away from some of the city amenities.” Is that something the agency considered before they created this affordable housing?
Peel: I don’t know. I didn’t ask them that question. I think Home Forward for many, many years has just been a production, production, production mode. And so I think wherever they can build, they will build. And I think that’s fair. I don’t think that they necessarily have the luxury of saying, okay, is this building that we’re going to build, is it within a half mile of a grocery store? Is it in a quarter mile of a gas station? I don’t think they necessarily have that luxury. I will say when they provided that response about certain things being away from amenities, that may very well be part of the reason. But when they have long waitlists for every single property, it feels like someone would like to get a unit wherever they can get a unit, even if it’s a little bit further away from a grocery store than they would ideally like.
Miller: Some of your more recent reporting has dug into the overall finances for Home Forward. You mentioned that there’s no legal issue preventing them from lowering rents, but they do have to pay off this debt, which is a key thing, if not a legal question, a fiduciary one. What did you learn overall about the agency’s finances?
Peel: Sure, yeah. So I think the best metric to look at this agency’s finances is to really look at what’s called the debt service coverage ratio, which is basically a number that kind of quantifies an agency’s ability to pay back their debts on time. And so, if you have a 1.0 ratio, that means you’re bringing in just enough income to pay, a building is bringing just enough income to pay for all their operating expenses and pay for their debt payments on schedule. And so anything below 1.0 is, you’re not making enough money, and then anything over 1.0 is like a little bit of a buffer.
So most lenders ‒ this goes for both market rate buildings and for affordable buildings ‒ most often requiring at least a 1.1 ratio or higher, ideally like 1.25 or higher. So overall for Home Forward’s 110 buildings, not all of them have a required DCR and actually not all of them have debt, but many of them do. In 2020, so just five years ago ‒ well, I guess six years from now ‒ the debt service coverage ratio for their entire portfolio is 2.36. So they’re bringing in on average double what they needed to to pay off all their operating expenses and their debt. And then as of 2025 that had dropped to they estimate 1.12. The last number they know because they haven’t necessarily audited their financials for 2025, but for 2024 that DCR was 1.14. So it has dropped precipitously in the past five years.
Miller: What is the federal government’s role in what we’re talking about here and the financial picture that Home Forward is facing?
Peel: So I actually think the federal piece is…. So Home Forward really has two kinds of different businesses that they operate. This has helped me sort of sort through what they are because they’re a really large organization. They got a big ol’ budget, but they really do two kinds of almost distinct things. They’re not totally distinct, but largely they are.
One, they’re a landlord. So they have a bunch of these affordable buildings. They build the buildings, they rent out units, they bring in rental income. And then actually the bigger part of what they do is they get money from HUD for rent assistance. And so there’s over 10,000 rent assistance vouchers that they get from the feds and that they funnel into the community. So they give it to low-income people to find a unit either in a Home Forward building or another affordable unit or in the private market. And so that’s actually about 2/3 of what their budget goes to, is HUD dollars.
What the struggle with that right now is under the Trump administration, that funding for rent assistance is unclear how it’s going to shake out right now. And no shoe has like really, really dropped as far as funding goes, but Home Forward and a lot of other other housing authorities are really bracing for something to happen. They’re expecting deep cuts. That hasn’t really come to fruition yet, but I will say that Congress, when they appropriated funding for HUD, they did not necessarily increase the amount of rent assistance going to housing authorities this year to adjust for inflation. And inflation, like a lot of things, it is killing Home Forward. It’s killing housing authorities. So all their expenses are going up. Meanwhile, Congress basically kind of flatlined the federal rent assistance funding. And this has been an issue that at least last year Home Forward has actually exceeded their federal budget authority. So that means they get basically a flat rate from HUD for a housing voucher, but sometimes it actually costs more for them to actually distribute that voucher and fund that voucher than Congress is giving them funding for.
Miller: Do I understand correctly that then it’s possible that when they manage or process a voucher, get somebody in some housing units in the Portland area, for some of those vouchers, they’re actually losing money each time they get somebody into housing with a federal voucher?
Peel: Yeah, so oftentimes they’re having to basically get the federal subsidy, but the voucher actually in real time in Portland, given the market rate, given all these different factors, given rising utility costs, they have to subsidize what that additional amount costs. So that is really killing Home Forward and that at least, in this fiscal year, they’re saying, yeah, we’re facing a $30 million budget deficit largely because HUD isn’t giving us the amount of money that we need to give out these vouchers. So their per voucher cost is rising, whereas the HUD subsidy per voucher has basically flatlined.
Miller: Does that make it harder for the agency as a whole to then say, okay, we will lower rents at our own buildings? I mean, if everything in the end is one global budget, and if they’re potentially losing money because of HUD not keeping up with inflation, for example, does it make it harder to manage the rest of their properties?
Peel: Yes, certainly. I will say Home Forward is a very complicated agency and so different funding streams, they have some flexibility in how they use money. But HUD money has to be used for rent assistance. They can’t take HUD funds and pay off their debts with them. So I would think of those as kind of two separate pockets of money, buckets of money. But what I will say is like the federal piece is they’re really struggling on the federal side with that rent assistance money, and they’re also distinctly really struggling with their real estate portfolio. So like the two heads are both a little scarred up.
Miller: I want to turn to the questions of oversight. I mean, how does Home Forward operate and who in the end has control over what they’re doing?
Peel: So, yeah, Home Forward is very interesting. It almost operates as a nonprofit, but it’s not. It’s a public corporation and they are governed by a nine-member board of commissioners who approves their budget, who approves salaries. So they’re really the oversight body and it’s kind of an interesting hodgepodge. So there’s four people on the board that are chosen by the city of Portland. There’s two chosen by Multnomah County. There’s one who’s supposed to be a resident of Home Forward, and then there’s two chosen by the city of Gresham. And the city council actually has to approve all nine, even though they only nominate, they only choose four of their own.
And I will say looking through the board packets, I tried to scroll through basically four years of board packets every single month and it just feels like there is a lack of detail. There’s a lack of hard questions that are being asked by the board about what’s really going on in their properties and with their finances. And maybe I’m not seeing all those discussions, but as far as the board packets go, it just doesn’t feel like there’s really tough questions being asked by the board of the organization.
Miller: Elected officials throughout the Portland area, obviously statewide as well, say over and over we need to build more housing if we want to truly respond to and end this homelessness crisis. I’m curious how those words hit you, given the reporting you’ve done?
Peel: I’ve thought a lot about that because they seem a little counterintuitive. And I think as I’ve talked to people who are smarter than me about it, I think what’s counterintuitive is the type of units that Home Forward continues to build. And a lot of our affordable housing developers keep building 60% AMI units when really what we need are far more deeply-subsidized units. We need 40% AMI units. We need 30% AMI units.
Miller: Just as a reminder, when you say that, meaning people who make 60% of the area median wage or people who make less than that, 40% of the area median average wage or less than?
Peel: Right. And 60% AMI units are typically called “workforce housing.” And so that’s people who are still working, and they’re still making an income. But they’re making less than the 100% AMI. Really what we’re doing is we’re building the wrong level of housing. We have a lot of 60% AMI housing right now. And those vacancies, I think, are compounded by the fact that market rates have dropped to the point of basically meeting those 60% AMI levels. And the structural problem with this is that it incentivizes builders way more to build 60% AMI units. The funding is clear. There’s actually a real financing stack available for that. We have the low income housing tax credit program at the state level, which is primarily for 60% AMI units. A lot of these housing bonds like the Metro housing bond and the Portland housing bond, a fair amount of that money went to 60% AMI construction.
And so we just need more housing. That is undeniable. Even if every single one of Home Forward’s units were filled up that are vacant right now, we’d still have 6,000 people sleeping on the street every night. And so I think people who say, oh, well, there’s vacancies, we don’t need more affordable housing. I think they’re thinking about it wrong. I think what is correct is that we’re building the wrong type of housing right now.
And it is kind of a bummer to know that Home Forward, most of their projects that are in the pipeline right now… And these are projects that are like anywhere from one to seven years old, right? Some of them are approaching completion, others are just, just got the approvals. A lot of those units are 60% AMI units. And if the market kind of dips back up and if market rates go back up, then maybe we can fill those a little bit more. But I think there’s a structural problem that we haven’t really figured out yet.
Miller: Sophie, thanks very much.
Peel: Thanks for having me.
Miller: Sophie Peel is a reporter for Willamette Week.
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