Oregon has given developers $1.4 billion to fund affordable housing as the cost of developing each subsidized apartment has nearly doubled.
But thanks to a carve-out in its public records law, the state doesn’t have to provide the details of that spending.
Rob Davis, an investigative reporter at ProPublica, joins us with the story.
Note: The following transcript was transcribed using AI and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Oregon’s spending on low-income housing has exploded in the last five years. The state has given developers nearly $1.5 billion, with a lot more on the way. And per-unit costs have doubled over that time, but the public can’t get clear information about why that is because Oregon prevents a state agency from disclosing the financial details of subsidized housing projects.
ProPublica’s Investigative Journalist Rob Davis joins us now with more. Rob, it’s good to see you.
Rob Davis: Hey, it’s always good to see you.
Miller: I want to start with the context here. So this $1.4 billion in low-income housing money that Oregon spent in just the last five years, who’s giving that money out?
Davis: It’s being routed through the state’s housing finance agency, Oregon Housing and Community Services, which is administering this sort of paradigm shift in Oregon’s policy on affordable housing, a key priority of the governor who made building housing one of her top priorities. The money is going out. Once it goes out, you can’t see the details of where it’s going.
Miller: This is at a time when, as you noted and as I said briefly in my intro, that the cost of developing each apartment has nearly doubled over the last five years. It’s now $540,000 per unit. Even if you account for inflation, a doubling in five years, it seems hard to explain. So do we have any sense for what’s behind that increase?
Davis: That’s a great question. That’s actually the question that we started out to answer. I have an editor who asks smart questions of me. And he said, “You know, let’s look at how much this housing costs here. What do the nails cost?” So I sent a request to the state for just financial documents on a few projects. I sent the same request to a couple of agencies in Washington. And Washington agencies came back to me, one of them in three days. They said, “Here are your folders of information with all the cost information that you would want to know about these projects.”
Miller: For projects that a ton of public money went to. We can’t say that too many times. We’re not talking here about some private developer. This is public money.
Davis: It is a lot of public money. Washington, as has happened to me time and time again in my career in Oregon as an investigative reporter, you ask a Washington agency for a document and they give it to you. You ask an Oregon agency for a document and they stonewall you, they charge you money for it, they put up obstacles to you being able to get it. In this case, they cited a specific exemption in state law, which exempts from disclosure things like the details of costs of subsidized housing.
Miller: Do any other states have a similar law on the books preventing the public from learning these important financial details of affordable housing projects?
Davis: Just one that I know of which is New Jersey, which has strict cost controls. In general, Oregon is one of the only states in the nation that I’m aware of that exempts the disclosure of this information. Washington and California, which are also spending a lot of money to subsidize rental housing, low-income rental housing, they don’t exempt it. Officials in both states told us that they have had no slowdown or no lack of interest from developers there, in tapping into state subsidies because they know that the financials of a project are gonna be subject to disclosure.
Miller: That’s an important point you’re making there. So let’s go back into history a little bit, because you note that this exemption is something like 30 years old. So how was it justified or explained back in the early ‘90s?
Davis: The bill passed in 1997, House Bill 2147, at the request of the state agency, Oregon Housing and Community Services. Its deputy director at the time testified that the state thought that the cost information should be exempted from disclosure because it might give somebody an indication whether a corporation was ripe for a takeout, a buyout or whatever. Since then, the agency’s budget has grown by five times and their staff has grown by five times.
Miller: So is the basic idea of the exemption then, from 30 years ago or so, that this would be important financial or business information that having to divulge it would make it less likely the developer would want to play ball. Is that the basic idea?
Davis: Exactly.
Miller: And this is important work. We want developers to be taking this money and putting it in housing that the market otherwise isn’t going to build, so let’s not make it so they’re not interested?
Davis: Exactly.
Miller: OK, but what did you hear again from Washington and California about their experiences? These are in states where developers do have to, theoretically, have this information divulged.
Davis: Take California for example. Researchers have used this information there to find out things like, the state is spending $300 million a year on development fees. And the governor there just signed legislation that aims to cut those fees…
Miller: Do you think that’s a result of reporting about those fees? In other words, I’m asking an investigative reporter this. And I think you have a vested interest, as do I, I suppose, in seeing examples where the work of journalists actually affects public policy. But is it a kind of A + B leads to C, in this case?
Davis: That was based on work done by researchers at UC Berkeley. But whether it is economists or folks like me, these are useful documents. As you’ve noted, we are talking about a lot of money. Competition for these subsidies in California is steep. There is no shortage of folks with their hand out for state subsidies in California or in Washington. In California, they’re funding about half of the projects that come to them because there is so much demand for the money to help improve the finances, to help lower the rent of an apartment that’s built.
But LA Times reporters in 2020 used cost information about affordable housing developments to see that the cost had gone over a million dollars for some of these units. In Oregon, we’re now building subsidized housing that costs up to $900,000 a unit.
Miller: You did note that affordable housing information in Oregon is not a total black box. What can you find from Metro, the Portland regional government, or from the City of Portland?
Davis: Portland voters, in 2018, approved an affordable housing bond that Metro is administering. You can get some good high-level cost detail – the cost per unit, the cost per bedroom, the cost per square foot – from Metro, which is adding what they call “gap financing.” They’re adding extra money into these projects to help lower the rents. They publish an annual report every year. It’s got good high-level information. When you try to go down to the next level, why did it cost this amount of money per bedroom? Why did it cost this amount per square foot? That is where things here go into a black box.
Miller: Have lawmakers or the governor expressed any interest in getting rid of this unique public records exemption?
Davis: Not to me, but if they want to call me and share that information with me, I stand at the ready to take that call. The state Sunshine Committee said that they are interested in taking this up. Its co-chair told me that he’s interested in taking this up.
Miller: These are folks who work on public records?
Davis: They work on reviewing exemptions and trying to figure out which ones should be reconsidered. The director of Oregon Housing and Community Services told me that she recognizes that this is a topic of growing interest, meaning the cost of affordable housing, and would take our requests under consideration. We didn’t actually make a request to them, but that’s how they phrased their next steps. So I think we’re sort of in a wait-and-see mode.
Miller: Rob, thanks very much.
Davis: Hey, thank you so much.
Miller: Rob Davis does investigative reporting on the Northwest for ProPublica. You can find his new article about the lack of public information about subsidized housing projects on our website.
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