STATE OF OREGON - Secretary of State Jeanne Atkins

SALEM — Oregon Housing and Community Services has failed to provide adequate leadership in addressing the state’s housing crisis, according to an audit released Tuesday, Dec. 6, by the Secretary of State’s Office.

OHCS’s role is to preserve affordable housing by administering an IRS tax credit program that provides one of the largest sources of funding for affordable housing in the state. The agency also provides loans and grants to private and nonprofit housing developers who can use the money to maintain affordable housing.

The audit found that the agency has placed existing affordable housing inventory at risk as a result of inadequate data tracking, poor communication with employees and housing partners and a lack of strategic planning.

“We can’t help address Oregon’s housing crisis if we lose existing affordable housing,” Secretary of State Jeanne Atkins said in a statement Tuesday. “The loss of even a single rental unit could mean one or more Oregon families may not be able to find a home.”

In multiple instances, auditors found the agency failed to monitor contracts for pricing and results.

For example, since 2003, OHCS has continuously renewed a contract with Neighborhood Partnerships of Portland without putting the contract out to bid. The contract is for managing individual development accounts, a matching savings system that helps low-income families build financial management skills and save toward homeownership.

Low vacancy rates and a growing population have driven up home values across the state by 12.5 percent since 2015, while rents have climbed by nearly 7 percent per month, making it increasingly challenging for low-income families to find housing.

Auditors found that OHCS has failed to complete a required annual statewide housing plan that would identify and find ways to meet needs, largely because the agency has not kept an accurate inventory of affordable housing around the state. Outdated data systems have contributed to barriers the agency faces in completing an accurate and comprehensive inventory, the audit noted.

“Partnerships with housing developers, funders, advocates, and others in the housing community, are a crucial part of preserving low-income affordable housing,” Atkins said. “However, the audit found that OHCS needs to improve its relationships with stakeholders through better communications and transparency.”

Auditors recommended that the agency boost planning efforts for housing preservation projects and work with the Legislature to increase the availability of funding for housing developers to promote more housing units in the state.

“Our auditors found that crucial communications between OHCS leadership and the Housing Stability Council are lacking, and that the council needs clarity about its role,” Atkins said. “I urge the Legislature to work with the council and agency leadership to help define this essential relationship.”

The agency also faces organizational problems, including poor communication with employees, inconsistent staffing and workloads, and inadequate policies and procedures, the audit found.

Gov. Kate Brown hired Margaret Salazar, formerly of the U.S. Department of Housing and Urban Development, in late September to direct OHCS and steer improvements at the agency. Less than a month after starting her new job Nov. 1, Salazar responded to the audit’s preliminary findings.

In her response, Salazar said she is working to address the shortcomings found in the audit.

“While I am new in my role as director of OHCS, I have come to quickly understand the need to address these critical issues,” Salazar wrote in her Nov. 29 response.

The agency is in the process of updating its computer systems and plans to have a new system for tracking multifamily housing finance data installed at the agency by the end of 2017.

“The age of the systems and … workarounds make it difficult for staff to extract information,” the audit states. “Only a few staff have the long-term knowledge and expertise to do so.”

The agency also plans to debut its first housing plan in many years, Salazar said.