Portland passes $56M housing plan using unspent money
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Illustration: Aïda Amer/Axios
Portland city councilors made their first steps this week toward spending $56 million in housing funds that were discovered unspent over the last several months.
Why it matters: The city is simultaneously in a housing crisis and a budget crisis, so the money — accumulated over years — represents a rare windfall.
The latest: The council approved the $56 million proposal on an 8-4 vote after it was moved unanimously through the newly formed Housing and Permitting Committee the day before. It includes:
- Nearly $22 million to create a new loan fund for housing construction, preserve affordable housing and create government-owned social housing.
- Roughly $9 million for rent assistance and another $9 million to pay down the debt of affordable housing landlords in exchange for them lowering rents or improving security at their properties.
- $8.6 million to the city's general fund.
Catch up quick: A series of discoveries over the last few months revealed $106 million of unspent funds in the housing bureau that had accumulated over several years, but was never budgeted.
- Due to restrictions on how that money can be spent, the council was left with around $56 million to put toward new housing initiatives as of Wednesday.
Between the lines: In a February memo, city administrator Raymond Lee spelled out how the funds were collected but never spent.
- Some of the funds came from fees on short-term rentals, money allocated to programs that no longer exist and funding for risk mitigation, all under the umbrella of the Housing Investment Fund.
How it happened: Under Portland's previous form of government, where city commissioners also oversaw city bureaus, information was siloed and there was a lack of accountability, Frankline Muthomi, a public administration professor at Portland State University, told Axios.
- The scale of the unspent funds likely grew because revenue collection systems were in place, but the city lacked clear plans, authority or coordination to spend the money.
- "Each bureau was managed by a council member who was both a policy maker and also a policy implementer," Muthomi said. "So it's very hard to hold yourself accountable."
What we're watching: The city's new form of government has separate branches of government — with a city council that has oversight authority — along with a city administrator, who Muthomi said appeared to be "setting up a strong central budget office."
- Muthomi said he hopes to be proven right in the years to come and that the unspent funds were "a systemic issue of the past."