Low-income seniors sue out-of-state property manager over rising rent at Tigard apartments

A group of low-income Oregon seniors is suing their out-of-state property management company, alleging the company deliberately misled them by renting apartments that would soon dramatically rise in price.

The class-action suit was filed in Multnomah County Circuit Court on Tuesday against Mission Rock Residential, a Denver-based property management company. The company manages Woodspring Apartments, a federally subsidized building for low-income seniors located a few miles south of downtown Tigard.

This January, residents of Woodspring were told that, after 30 years, the building was no longer senior living required to remain affordable and that the owner would soon be bringing the building’s 172 units to market-rate rent. Many of the seniors who live there are on fixed incomes and say they will no longer be able to afford the rent.

The suit argues that when San Francisco real estate firm Hamilton Zanze bought the property five years ago, the property managers knew that the new owners intended to bring the apartment rates to market-rate rent in a matter of years. But the lawsuit alleges the property management company intentionally withheld that information until the last minute and continued to market the units to elderly seniors as a retirement option.

Michael Fuller, the lead attorney for the plaintiffs, says a judge should consider this a form of false advertising and deem it an “unlawful trade practice”

“If you sell someone a TV so they can watch the Super Bowl in six months, but you know this TV won’t allow them to do it — even though the TV works fine when you bought it — that’s false advertising,” Fuller said. “In this case, they knew these seniors were trying to find a place for the rest of their natural lives on fixed income — and they did not tell them that they wouldn’t be able to do that at this apartment complex.”

The suit names one plaintiff: Cheyenne, a disabled senior who began leasing an apartment in Woodspring in July 2020. According to the suit, Cheyenne, whose last name is not given in the legal documents, rented the apartment with the expectation that she would be able to stay there for decades.

“Plaintiff signed a residential property lease at Woodspring Apartments specifically because defendant led her to believe that Woodspring Apartments had the quality and style of being an apartment complex exclusively for low-income seniors looking to retire and live out their twilight years on a fixed income in a seniors-only community,” the suit states.

OPB previously reported on the plight of Woodspring tenants, many of whom are scrambling to find housing before rents rise at the end of 2023. Before this year, Woodspring was one of the few affordable complexes in Tigard, and it was required to keep rents at a level affordable to tenants making 60% of the area median income. In Tigard, that would be a little over $47,000, according to US census data. Many tenants said at the time they were never informed this was temporary — and may never have moved in had they been told.

“When I signed my lease, I had no idea,” tenant Heidi Johnstone told OPB in late May. “I would have thought twice about it.”

Fuller said he’s asking a judge to issue an injunction ordering the property manager to maintain apartment rents at a rate that is affordable for seniors on a fixed income. He added that the class action applies to all Woodspring seniors who moved in within the last five years and were told it was a senior living community.

But there’s a potential hitch. Fuller said the lead plaintiff had been asked to sign a waiver, saying that they would not join a class-action lawsuit. He said he believes other tenants were asked to sign the same waiver but contends it may not be legally binding.

Ultimately, he said, it will be up to a judge to decide.

Mission Rock did not immediately respond to a request for comment.