A compromise has ended a legal fight over the future of a 264-unit affordable-housing complex, with upgrades and market rents for most units, but payouts for evictions and 44 units staying low cost for 30 more years.
PORTLAND — A housing compromise is expected to allow some rent hikes for a Portland affordable-housing complex, with a promise to pay low-income renters $7,500 if they are evicted.
The compromise ends a long-running legal fight over affordable housing in Portland, The Oregonian newspaper reported.
Lawyers on both sides have praised the deal, which secures the fate of the 264-unit apartment complex designated for low-income renters.
The settlement locks in cheap rents for 30 years for 44 units. But it allows the owners, led by Guardian Real Estate Services, to eventually kick out low-income tenants and rent remaining units at market rates.
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“We both figured that this was a win-win deal,” Guardian’s attorney, John DiLorenzo, said Wednesday.
“Were there times when I dreamed of better settlement? Yes,” said attorney Ed Johnson, who sued on behalf of low-income renters. “But I’m really happy with this. And I think it’s going to give people an affordable place to live for a long time.”
The convoluted history of the Rose City Village apartments stretches to 1991, when a developer secured more than $2 million from the federal Low-Income Housing Tax Credit program mandating that the project stay affordable for 30 years. But shoddy record-keeping and a change in ownership prompted state officials to try to lift those restrictions in 2005 after just 14 years.
An investment group including Portland-based Guardian bought the complex in 2006, expecting to rent out units at market rates. Guardian proceeded to evict tenants, renovate the apartments and raise rent for anyone wanting to return to the sprawling complex.
Johnson, director of litigation for the Oregon Law Center, filed a lawsuit in 2007 fighting to preserve the units for low-income Portlanders. Four years later, Johnson secured a victory from the Oregon Court of Appeals, and low-income renters began moving back in.
But Guardian kept fighting.
This past summer, the Oregon Court of Appeals reversed course and vacated the decision on a technicality. Then a Multnomah County judge delivered a blow to a second lawsuit, deciding that even if Johnson won, none of the units would have to be affordable beyond January 2021, the end of the original 30-year period.
That’s when settlement talks heated up, DiLorenzo said.
Instead of pushing to make all 264 units affordable for five years, the Oregon Law Center negotiated for an equivalent deal that preserves 44 units for 30 years. Rent for a two-bedroom affordable unit currently runs about $1,000 a month.
“It’s a victory,” Johnson said. “There will be 44 units of affordable housing out there for a long time.”
But the compromise means most of the 184 apartments currently rented by low-income residents will be lost over the next five years. Many are expected to move out through normal turnover, but Guardian also will be allowed to offer financial incentives to encourage low-income renters to leave more quickly.