Director's Message
September 25, 2009

To:       Employees and Partners of Oregon Housing and Community Services

From:   Victor Merced

Re:       Director’s Bulletin

• Oregon Homeownership Needs Work
• Preservation as Priority
• Homebuyer Credit Boosts Sales

Oregon Homeownership Needs Work

This is no time to be defensive about Oregon’s dismal “C” grade on the
2009-10 Assets & Opportunity Scorecard.

Instead, let’s be ready to do something about it, specifically, from my point of view, jump-start homeownership when the time is right and promote foreclosure prevention now.

I stood with advocates to end poverty and hunger this past Monday, telling the press that Oregon can do better.

“We can do more to promote and preserve homeownership in Oregon,” I told assembled supporters and reporters, “particularly to sustain those struggling to remain in their homes at this time.”

The scorecard is published annually by the Corporation for Enterprise Development. CFED gave Oregon a C overall and reported our state is near the bottom of the pile, 46th, in the rate of people owning their own homes.

Homeownership, of course, has been seriously hurt by the collapse of the housing market, also triggering the worldwide recession of  historic consequence. Recession or not, fewer Oregonians own their homes proportionally than citizens of most other states.

CFED has put forth principles to boost Oregon’s score:

• Expand the refundable earned income tax credit to help low-wage workers afford food and other needs. Oregon should increase the value of the Oregon credit to 18 percent of the federal credit.
• Remove remaining asset limits for public benefits to encourage savings and employment. Oregon should remove restrictive asset limits in public benefit programs.
• Promote and preserve homeownership to increase homeownership rates and prevent foreclosures. Oregon should ensure access to foreclosure prevention services and safe, affordable mortgage products.

We’re working toward achieving the homeownership recommendation, which is within the OHCS purview. Our agency is anxious for the day we can initiate a bond sale to get first-time buyers into their first homes and help raise the Oregon score.  

Further, the OHCS strategy for implementation of the Housing Opportunity Bill includes rejuvenation of the Home Ownership Assistance Program.

Preservation as Priority

Preservation of federally subsidized affordable housing is a critical focus for Oregon Housing and Community Services because an  enormous challenge, and opportunity, confront us.

Oregon ranks third among the states in the percentage of expirations of federal low-income housing contracts anticipated to occur by 2013.

Thousands of Oregon’s low-income residents could lose their homes as federal rental assistance contracts expire and as private owners of assisted rental properties begin opting out of their federally subsidized housing assistance contracts.

The state also risks the loss of hundreds of thousands of dollars of federal housing subsidies.

This window of opportunity will not be open for many years to come, meaning rental properties expiring from their federally subsidized contracts will no longer be available for renewal, and the preservation opportunity will cease. Rents will then undoubtedly rise, driven upwards by the market.

In response, a coalition of partners representing the state and local government along with for-profit and not-for-profit organizations, are implementing strategies to preserve and improve housing for Oregon’s most vulnerable residents in every corner of the state.

The power of this collaboration is conspicuous:

• Some $35 million has been raised for preservation through contributions from foundations, public funds, and private lending resources to capitalize the Oregon Housing Acquisition Fund, a short-term preservation project acquisition loan program.
• Nearly $30 million has been allocated to preservation by the Oregon Legislature in the last two sessions, indicating the high level of political support, which has been cultivated.
• Since January 2008, more than 1,300 units of federally subsidized apartments have been preserved and another 1,500 units are targeted for acquisition and renovation over the next biennium.

The goal is to preserve 5,484 units over the next five years. A key strategy in carrying out this work was the creation of the Oregon Housing Acquisition Project.

OHAP is a collaborative initiative focused on preserving Oregon’s federally subsidized properties which house many of our lowest income and disabled citizens. 

This unprecedented public private partnership includes investment of over $10 million philanthropic organizations. Leading the way: Meyer Memorial Trust with in investment of over $5 million dollars.

The Collins Foundation and Oregon Community Foundation quickly committed their support as well. In addition, this past February, the internationally renowned MacArthur Foundation awarded $5 million to help fund the preservation initiative.

OHAP and its host organization, Network for Oregon Affordable Housing, launched the Oregon Housing Acquisition Fund in 2008 to provide short-term financing to acquire at-risk properties.

To date, eight properties located across the state have been acquired with loans from OHAF. These properties will soon be substantially renovated and permanently preserved through allocations of OHCS resources. 

OHAP has deployed several other strategies including the creation of a database of Oregon assisted housing properties which will serve as an early warning system alerting communities of the potential loss of units.

OHAP also promotes inter-agency coordination and provides technical assistance for prospective purchases and sellers of preservation properties.
 
We at Oregon Housing and Community Services, along with our many public and private sector partners, have sharp eyes fixed on the window of opportunity to preserve federally subsidized rental properties.

OHCS is working aggressively with the Network for Oregon Affordable Housing, the City of Portland, the Housing Alliance and key developers to avoid a potential crisis.  

Homebuyer Credit Boosts Oregon Sales

Thoughtful consumers are using the first-time homebuyer tax credit to purchase homes in Oregon.

A Treasury Department report released earlier this month indicates that more than 3,500 Oregonians have already amended their 2008 taxes to access the credit.

This is an $8,000 federal tax credit for first-time homebuyers intended to bring stability to the troubled housing market by creating new homeowners. This tax credit, which can be claimed when filing 2009 taxes or by preparing an amended 2008 return, will expire December 1 under current statute.

I have urged our lawmakers to extend and monetize this tax credit to expand the reach of this important program, as I have discussed in earlier bulletins.

Public opinion in this country is everything.

Victor Merced, Director
Phone 503.986.2005
Email: victor.merced@hcs.state.or.us
www.ohcs.oregon.gov

–30–