The Dark Money of Affordable Housing: Why Oregon’s Secrecy is a Recipe for Disaster

The recent surge in low-income housing spending in Oregon has left many perplexed. With $1.4 billion spent over the past five years and dozens more projects lined up for an additional $850 million, one might expect a corresponding decrease in homelessness rates. However, Margaret Van Vliet, former director of Oregon’s state housing agency, notes that “for all the public money we’re spending, it seems we’re digging a deeper hole.”

The issue lies not with the amount of money being spent but rather how it’s being allocated. A 1997 state law has exempted low-income housing project finances from public disclosure, making it impossible for researchers and journalists to examine their costs. This secrecy is particularly puzzling given Oregon’s dire homelessness crisis, which has led leaders to tie affordable housing directly to its solution.

Oregon is not alone in this practice; California has faced criticism for its own opaque subsidized housing finances. A 2020 investigation by the Los Angeles Times revealed that some low-income housing units in California were costing over $1 million each, driven in part by government rules that pushed construction prices higher. Researchers from the University of California, Berkeley, have shown that California was spending a staggering $300 million per year just on development fees for subsidized housing – enough to finance another 1,250 apartments annually.

Excessive costs are driving up the price tag of affordable housing projects, leading to fewer units being built. Economist Jason Ward notes that if California had Colorado’s production costs, it could have built four times as many rent-subsidized apartments. However, in Oregon, such analyses are impossible due to a lack of transparency.

The 1997 exemption was originally passed when the state housing agency had a fraction of its current staff and budget. At the time, lawmakers were warned about the potential consequences of revealing project finances, including corporate takeovers or buyouts. However, this rationale has long been discredited as developers have since become more sophisticated in their accounting practices.

Today, Oregon’s sunshine committee is tasked with reviewing public records exemptions and identifying those that should be rolled back. Co-chair Charlie Fisher believes the committee should revisit the 1997 law. “When you’re just looking at how public funds are used,” he says, “there should be an incredibly strong bias towards transparency.” However, Ward notes that cost information about subsidized housing is typically public in other states – and Oregon’s exemption stands out as one of the most egregious.

Oregon’s secrecy not only hinders research but also undermines trust in government. As Van Vliet notes, “for all the public money spent on housing, we seem to be digging a deeper hole.” It’s time for Oregon’s lawmakers to revisit this outdated law and prioritize transparency over corporate concerns.

By shedding light on project finances, Oregon can begin to address its affordable housing crisis. Without radical change, however, the state risks repeating the same mistakes that have led to failures in other states. As the state continues to pour billions into low-income housing, it’s imperative that those funds be spent wisely – not locked away in secrecy.

Oregon’s residents deserve better than a system that prioritizes corporate interests over transparency and accountability. It’s time for Oregon’s lawmakers to take action and ensure that public money is used to benefit the people, not just developers’ bottom lines.