Washington County is stepping in to purchase a low-income Tigard apartment complex to safeguard its senior tenants from a looming rent hike.
The unique intervention comes as the federal tax credit program that has kept the Woodspring Apartments’ rents low for decades is set to expire. The complex is the first of many affordable rentals in the region to reach this alarming expiration date, which could threaten the housing stability of thousands of low-income renters.
In this photo from June 2021, Heidi Johnstone distributes a newsletter and meeting summary of the Woodspring Tenants Association throughout the affordable housing senior resident complex in Tigard, Ore. Johnstone and other tenants were looking for ways to keep the complex affordable.
Kristyna Wentz-Graff / OPB
The Tuesday vote by the Washington County Board of Commissioners follows three years of tenant advocacy — and legal challenges — opposing the current property owners’ plan to increase rents at the 172-unit apartment complex to market rate prices in 2024.
“It’s not about four walls, it’s about a community that’s been here for 30 years,” said a Woodspring tenant named Cheyenne, who only gave her first name while testifying before the Washington County Board of Commissioners Tuesday.
The rents at the Woodspring have been locked in at affordable rates for the past three decades, thanks to owners’ participation in a federal tax credit initiative. The Low-Income Housing Tax Credit program, established in the early 1990s, offers property owners a tax credit in exchange for their promise to keep rents below market rate for 30 years. That time frame expired at Woodspring in 2021, allowing its owners to begin hiking rents up to market rates.
Tenants said they were blindsided by this news in early 2021, when they first received notice of the looming price change from their property owner, San Francisco real estate firm Hamilton Zanze. The company, which purchased the property five years earlier, is legally required to give tenants until the end of 2023 to relocate or face increased rents.
Under the federal program, Woodspring has been required to keep rents at a level affordable to tenants making 60% of the area median income. In Tigard, that’s a little over $47,000 annually, according to U.S. Census data. Woodspring tenants, the majority of whom are seniors, say the proposed rent increase would be enough to force several people into homelessness.
“This is where [tenants] expected to age in place,” Woodspring tenant Heidi Johnstone told OPB in 2021. “This was going to be their last home, and all of a sudden that has been pulled out from underneath them and they’re scared.”
In June 2021, tenants filed a lawsuit against Hamilton Zanze, alleging the company intentionally misled them by leasing apartments without informing renters their homes would soon dramatically rise in price.
Plaintiffs agreed to a settlement with the company in December 2022, yet the agreement didn’t include any rent price guarantees. Tenants and local renter advocates have been calling on the county and state to intervene ever since.
On Tuesday, Washington commissioners unanimously approved a plan to purchase the Woodspring Apartments for $48.5 million and keep rents affordable. The cost is covered by a $19.5 million bank loan, a $4 million loan from the county housing authority, and a $25 million loan from the state housing authority, the Oregon Housing and Community Services.
At the Tuesday board meeting, County Commissioner Roy Rogers emphasized the importance of the state’s contribution.
“Washington County doesn’t have the money to do this,” said Rogers. “The only way we could do this is because the state authorized additional funds. As stewards of the public money we can only spend what we have, and we didn’t have it.”
Woodspring is the first big apartment complex in Oregon protected by the federal tax credit program to reach its 30-year expiration date. By 2030, Oregon is at risk of losing 4,189 units of affordable housing under this program, according to a state database. Three quarters of those units are in Multnomah, Clackamas and Washington counties. This deadline approaches as Gov. Tina Kotek is calling on state legislators to help address Oregon’s housing crisis by expanding the state’s affordable housing capacity.
On Tuesday, Washington County officials said they won’t be able to protect all other expiring low-income apartments in the area.
“We are not in a position to make commitments to preserve all of them but will sure keep making the effort,” said Komi Kalevor, director of the Housing Authority of Washington County.
His staff explained that the county is working with the state housing agency, housing nonprofits, and private developers to create a “preservation work plan” to prevent low-income tenants from facing similar rent hikes in the near future.
Several bills in the state Legislature are also attempting to chip away at the problem. State Rep. Ben Bowman, D-Tigard, has introduced a bill to limit rent increases for senior tenants in publicly supported housing after affordability restrictions expire. He’s also sponsored legislation to extend government affordability restrictions at a rental unit for at least three years after they expire.
Margot Black, a local tenant advocate who helped organize Woodspring renters, said she’s “over the moon” at the board’s decision to purchase the property.
“I feel like this is the most significant and remarkable victory of tenant organizing that I’ve been a part of,” said Black, who helped pass Portland’s renter relocation policy and Oregon’s rent control law. “It’s absolutely a testament to the power of organizing. And it’s a testament to what can happen when public agencies work together and decide not to just stand by and watch when they could help.”
The Washington County board room erupted in applause and shouts of “thank you” after commissioners voted to buy Woodspring Tuesday.
“I would like to express the gratitude of the tenants of the Woodspring Apartment for the actions that have been approved today,” said Woodspring tenant Coy Lay, addressing commissioners after the vote. “This has been a really difficult time for us and we look forward to going back to dealing with our lives without this cruel burden.”
If the purchase goes as planned, Washington County should have full ownership of the property by July. It’s not yet clear if the county will make any adjustments to current rental rates.