In April 2018, OHCS established an approval process for rent increases in certain regulated affordable housing projects in OHCS’ portfolio. A rent increase of any amount must be approved by OHCS and rent increases over 5% require an enhanced level of review and approval from the OHCS Finance Committee. In making these decisions, OHCS reviews the property’s financial viability and impact to current residents. It’s a delicate balance between the on-going viability of the development and the impact on residents.

OHCS staff presented recommended changes (see pdf pages 69-86) at the December 2019 Housing Stability Council (HSC) meeting to streamline processes, create a streamlined approval process for units at turnover, and enhance transparency.

They summarized initial feedback from a fall survey of property owners and management. Nearly 75% of initial survey respondents expressed that OHCS should not need to approve rent increases. While 40% indicated the rent increase was handled in an appropriate amount of time, another 30% felt it took too long and ten percent did not understand what their expectations on timeliness should be.  Over 90% of initial respondents expressed wanting clear rights to appeal any decision that is made regarding their rent increases.

Requests for rent increases are seen as critical to project operations with 84% indicating they only request the increase that is necessary to support their building operations. 85% of respondents expressed wanting a streamlined approach for allowing rent increases above 5 percent. Over half of respondents felt that affordable housing should use the same standards for rent increases as the market. This last point is in recognition of Legislative passage of SB 608 that restricted increases on market rate units older than 15 years to be seven percent above the annual change in consumer price index.

Based on feedback, OHCS summarized recommendations to HSC members including:

  • Defining expectations:
    • Lays out an updated time period for the evaluation to take place
    • Establishes clear rights to appeal decisions
    • Describes the core process and expectations for documentation
  • Clarifies criteria:
    • Solidifies that the financial sustainability of the project or portfolio operations will be the basis for any rent increase determination
    • Addresses how specific scenarios, such as combined resources (e.g. units with HOME or Project-Based Funding) or unapproved rent increases will be addressed
  • Streamlines processes:
    • Establishes a low-barrier path to requesting up to 5 percent increase on existing tenants and up to Oregon SB 608 standards for any unit being leased to a new tenant
    • Creates two different submittal forms with documentation needs up front for those requests within the new broader streamlined path, as well as for enhanced review

OHCS will conduct additional outreach this winter, with the focus of speaking with residents about the impact of rent increases. The Housing Stability Council will discuss this issue again at their January meeting and a decision will take place in early 2020.

For background information:

For more information please contact Rick Ruzicka  at rick.ruzicka@oregon.gov