Woodspring Apartment tenants face imminent rent hikes – or worse
Oregon’s lack of affordable housing affects every city in the state. In Tigard, that crisis is playing out right now at an apartment complex that was formerly the exclusive preserve of seniors over age 55.
The Woodspring Apartments were built in 1991 off Durham Road in Tigard as an affordable housing project utilizing the federal Section 42 Low Income Housing Tax Credit program offered by the Internal Revenue Service. These tax credits typically carry a 30-year commitment to providing below-market rents to those making 60 percent of the regional average median income. After that period, the owner may choose to continue to receive tax credits by offering affordable rents or they may withdraw from the program and offer the units at market rates.
Six years ago, San Francisco-based real estate investment firm Hamilton Zanze acquired the Woodspring complex, which contains 172 two-bedroom apartments. At the time, the complex was still restricted to tenants age 55 or older and featured rents well below market value in the red-hot Portland area real estate market.
Since then, however, the owners have elected to withdraw from the Low Income Housing Tax Credit program in favor of renting the apartments at full market value. They have also removed the age restrictions. This announcement was made to current tenants on Dec. 31, 2020. Because the entire complex was occupied by low-income seniors living on a fixed income – typically Social Security benefits – these changes have left current tenants wondering where they will live in the future.
“It was a shock to everybody,” said current tenant Heidi Johnstone.
Oregon law provides a three-year “safe harbor” period for tenants of affordable housing when faced with the conversion of their building to market rate rents. That period ends Dec. 31, 2023.
In response, a determined group of tenants have decided to act collectively in an effort to try and convince Hamilton Zanze to reverse its stance and return the building to affordable status. They have enlisted Margot Black, a well-known community organizer and the founder of advocacy group Portland Tenants United, to aid them in this effort. Black ran unsuccessfully for Portland City Council last fall and has a reputation in the metro area as a tenacious and effective activist when it comes to tenants’ rights.
“The City of Tigard and Washington County assembled a table of folks last year to convince the new owners to stay in the program,” Black said. “Ultimately, they decided not to. After that three-year safe harbor period, everything is going market rate.”
Tigard Mayor Jason Snider said the City has been examining the situation for the past year along with Washington County and is interested in a “resolution that works for our residents.”
“The City is not directly in the housing business, we have to work with Washington County,” Snider said. “Although, we can help bring and convene the right conversations together and the right people talking, we’ve been doing that, and our City staff have been doing that for more than a year.”
With Black’s help, Johnstone and fellow tenant Coy Lay have now organized a tenant committee that is in communication with Hamilton Zanze. The committee held its first formal meeting on May 22, and shortly thereafter sent a letter to the firm asking the owners to reconsider their move to market-rate rentals. The group also met with Hamilton Zanze partner Mark Hamilton, who flew up from California to meet with them in early May. That meeting was inconclusive, Black said. But it left tenants encouraged by the fact the company was at least willing to talk with them.
“Usually they don’t reply, and that’s your permission to escalate,” Black said. “But they did. They said, ‘We got your email, we’re taking this super seriously, we want to meet with you.’”
In a statement provided to Tigard Life, Hamilton said his firm will only seek new tenants at Woodspring when previous tenants decide to vacate, “with units only then moving to market rate pricing as vacated units were renovated.” He added that all current income-restricted residents have been advised in writing they may stay at Woodspring at affordable rates through the end of 2023.
“Put simply, affordable housing inventory in Tigard, the Portland region, Oregon, and the entire country is too limited,” Hamilton stated. “We are listening to the Woodspring residents and actively exploring and discussing options with several local and state leaders. Our hope is to find ways for income restricted residents to remain in-place at Woodspring Apartments at affordable rents beyond 2023 by partnering with residents and local and state leaders to secure eligible, public investment in affordable housing.”
What that means in practice remains to be seen. Another meeting between tenants and Hamilton Zanze was set to take place in June. But until a solution is found, current tenants are looking at that 2023 deadline and wondering what lays beyond. Many say there is no way they would be able to afford the move to market-rate rents, which would mean a monthly increase of over $500 from current rates.
“If (rent) goes up, I’m 85 years old, I can’t move, I have no one to help me and I can’t work anymore,” said Sondra, a tenant who declined to give her last name. She noted that her current rent is $1,081 a month, paid for from a single Social Security check totaling just $1,635 each month.
“What was my reaction? Jesus, please come back and get me within the next three years. Because I can’t do it. There’s no way I can do it. There’s no place I can go, where I have what I have here.”
Johnstone moved to Tigard in 2010 and said the rent she paid for an apartment at that time was $737 a month, Now, the same unit rents for over $1,700 monthly.
“I feel I’m in a precarious mood,” she said. “I hate to sound so grim, but with this safe harbor period, I feel like I’m on death row. What am I going to do? Where am I going to go? How am I going to afford this?”
Another resident named Marie said that some current tenants may well wind up on the street if they are forced to move out of Woodspring.
“A lot of them have nowhere to go,” she said. “Guess what? They’ll wind up on the street. And at 75 and 80 years old, to wind up on the streets, they’ll be dead for sure.”
She added that she believes it is simply a matter of profit for the owners.
“I’m on a list for another place, but I’ve been on the list for three years, and a lot of these lists are like four or five years down the road,” she said. “My husband is dead, I’m on Social Security, I have very little savings, I can’t afford any of this. I think it’s a wonderful group, but my personal opinion on it, when it comes to the nitty gritty of it it’s not going to tread water. I don’t think so. Like anything else, it’s all about the bucks.”