Audit finds problems with Oregon housing agency

PORTLAND – Amid a housing shortfall that political leaders say is a priority to address, Oregon’s lead state agency on affordable housing is falling short on its responsibility to help guide policymaking to reduce homelessness and keep residents in homes.

That’s according to Secretary of State Jeanne Atkins’ office, which released an audit Tuesday that described problems with Oregon Housing and Community Services, which handles state and federal subsidies and is the go-to agency for housing policy.

The audit found a lack of valuable data, poor internal and external communication, low staff levels and high workloads, among other issues.

The agency doesn’t have a complete inventory or plan for statewide affordable housing, despite a 1991 state law requiring that level of tracking, the audit said.

“The statute clearly states the state housing plan should include an inventory of affordable housing, and information on market and inventory conditions, population trends, household composition and housing conditions,” the audit said, adding the tracking that the agency has done “falls short of a comprehensive plan as described in the statute.”

At a time when lawmakers and Gov. Kate Brown are pushing to expand the role of the agency amid a statewide housing crisis, Atkins’ report highlights areas that should be improved to help get public subsidies into the hands of developers who are looking to build and preserve housing for low-income renters.

The audit also included a dire assessment of rental vacancy in Central Oregon. The report said vacancy rates in Deschutes, Jefferson and Crook counties are as low as 0.5 percent, and rental housing costs are climbing rapidly statewide.

“OHCS falls behind other states in providing funding developers need to make projects viable,” Atkins wrote in the audit. “OHCS is supposed to lead on housing policy and serve as the central source of affordable housing data, training and technical information. We found that OHCS is not achieving these expectations.”

In response to the critical audit, Margaret Salazar, the agency’s new director, said work is being done to address many of the issues identified.

“The good news is, in the areas involving data management and integrity, the agency was aware of those problems and began addressing them even before the audit began,” Salazar wrote in her response to the secretary of state.

The agency has suffered from communication issues both internally and with the developers and nonprofit groups that receive tax credits and grants that allow them to provide housing that’s affordable for Oregonians making 60 percent of median income or less, the audit said.

Technology is partly to blame for issues at the agency, the audit said, noting that the secretary of state’s team couldn’t verify agency figures on housing because of problems with the Housing Division’s data systems.

Also, while Housing and Community Services inspects properties that get federal tax credits from the Internal Revenue Service every year, “a database that records properties at risk of deterioration was still being developed during our audit.”

The agency was created in 1971 to be the state’s leader on housing. It has become a central focus within the Legislature in the last two years, as lawmakers have moved under pressure from an unprecedented housing crisis to expand its role and increase funding for affordable housing projects.

Three in every four Oregonians making less than $25,000 a year spends more than 30 percent of their income on housing, and Brown and lawmakers from both parties have made developing policies that spur more affordable housing building a top ticket item in the past two years.

The report comes at a time of transition within the agency. In September, Brown appointed Salazar, former director of the Portland office of the U.S. Department of Housing and Urban Development, as the new director.

Salazar replaced Margaret Van Vliet, the agency’s director since 2011. The audit says Van Vliet restructured the office several times, partially amid pressure from the Legislature. Van Vliet resigned in May while the secretary of state’s office was conducting the audit.