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Tuesday, January 22, 2013

For the "lowest of the low," a new landlord

The low-income housing outfit now called Home Forward is selling its North Portland housing project known as St. Johns Woods -- a place whose poor morale has been documented in the media lately. The new owner, a Seattle outfit named Vitus Group, is paying $8.25 million for the 124 units of government subsidized low-income housing. That's about $66,500 per unit.

The place needs some work, and apparently Home Forward doesn't have the money to pay for it:

"We are pleased to pass the stewardship for this community resource to such a fine affordable housing organization," said Harriet Cormack, Home Forward’s board chair. "This is excellent news for the long-term health of St. Johns Woods, as we have been challenged to meet all of the property’s capital needs given our financing."

"The renovation scope of work will be prepared once the Contract for Purchase has been executed and the due diligence phase is underway. Vitus’ approach with the properties that they acquire and renovate is to address needed building system improvements, increase energy efficiency, renovation and maximization of the community and common areas and modernization of the interior units" said Sara Fay, Director of Vitus Group in Seattle.
Home Forward will use the net proceeds from the sale for real estate-related purposes, including investing in new affordable housing and renovations to its remaining properties.

Home Forward used to be called the Housing Authority of Portland, which made it sound like a government agency. It is and it isn't. It's a "municipal corporation," eating taxpayer money without all the messy red tape of being truly public. It's part of the PERS pension system, and it doesn't file reports with the IRS. Its annual report is here, but we couldn't find anybody's salary in there.

It's interesting that the group is liquidating its housing stock to raise funds for "renovations," which sounds a little like deferred maintenance. Meanwhile, their most recent meeting featured the award of a nice fat contract to Mark Edlen. Uh huh. There's also some bending and stretching of the public bidding rules going on. Perfectly Portland, we'd say.

Comments (2)

And the housing authority was at one time all entwined with the PDC too!

HomeForward's basic job is to get all the HUD money (like the Sec 8 payments) and then distribute them to the applicants since HUD is too busy (doing god knows what) to not pass out its own money.

In addition, they get money from PDC to buy/build places like this and run them with primarily deed restrictions only allowing tenants with income limits (sometimes they do have market-rate apartments).

That being said, the deed restrictions means the buyers will have to keep the same tenants and run it as LIH, but they'll probably apply for some rehab money since most of the profit comes from new const and rehab.

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