Mayor: City budget can't keep up big spending on homeless

Wheeler questions whether Portland can keep paying more for homeless services when other city commitments keep increasing, too

Portland Mayor Ted Wheeler says the city cannot continue to spend a record amount of general fund dollars helping the homeless.

"This is not sustainable over the long term," Wheeler said last Tuesday, during a City Council work session on the Joint Office on Homeless Services, a Portland-Multnomah County agency that funds, coordinates and evaluates homeless programs.

The session was attended by most council members, plus Multnomah County Chair Deborah Kafoury, County Commissioner Sharon Meieran, and city, county and joint office employees, including director Mark Jolin.

Requested by Commissioner Nick Fish to update the council on the office's progress since it was created in the 2016-2017 fiscal year, the session quickly turned into a discussion about whether the city can match its current $26.5 million commitment in next year's budget.

Wheeler signaled he might not recommend that much in the proposed 2018-2019 budget, which he will soon start drafting. A little more than 35 percent of this year's amount — $9.4 million — is one-time money that won't be available then.

"I don't think the current level is sacrosanct," Wheeler said.

Before the session ended, the council agreed to hold a joint work session with the commission this fall to "really drill down and determine what we're buying," as Fish put it.

More served, more homeless

The council's tone was surprising, given that Jolin was delivering mostly good news. Although the city's commitment to homeless services increased from $25.3 million during the office's first year, so had the number of people who were served. According to Jolin's presentation, during the fiscal year before the office was created, 11,116 people either stayed in their homes, moved from homelessness into housing, or were served in emergency shelters. After the office was created, that number increased to 19,560.

Altogether, the office oversaw the spending of $48.1 million last year, including $17.5 million in county funds and $5.3 million is state and federal funds. Most of the money was distributed through A Home for Everyone, an initiative of the city, county, Gresham and Home Forward (formerly the Housing Authority of Portland) created in 2013. Home Forward has a total budget of more than $144 million. Altogether, Jolin said 29,000 people received some form of assistance from all of the programs in the last fiscal year.

The budget for the Joint Office of Homeless Service was increased to $58.2 million in the current fiscal year, including $20.6 million from the county, $6.4 million in state and federal funds, and $4.7 million from a new real estate title tax. Although Jolin promised even more people will be served as a result of the additional spending, Wheeler remained adamant that the city's commitment is too high.

City Budget Director Andrew Scott followed Jolin and presented a list of future needs and liabilities, ranging from increased pay for city employees included in current contracts to helping shore up the aging levees holding the Columbia River back throughout North and Northeast Portland. Scott noted the council had already increased its commitment to homeless services 165 percent over the past five years.

Although the general fund has been growing in recent years, Scott said agencies that depend on it would need to be cut next year if the current spending on the joint office is maintained, including the Portland Police Bureau, Portland Fire & Rescue and Portland Parks & Recreation.

Fish also noted a political issue facing the council. Although more people received services last year, the number of homeless in the city and county also increased, according to the most recent Point in Time count, the federally required tally of homeless people. The number of visible homeless people seems to have increased even more since Portland first relaxed its camping ban under former Mayor Charlie Hales.

"You need to help us sell your success," Fish told Jolin, who explained the affordable housing crisis was greater than expected and is currently creating more homeless people than can be adequately served.

Bond funds come with strings

The tone of the discussion was also ironic because the council is preparing to approve a policy framework for spending the most city money ever on affordable housing, the $258.4 million bond approved by Portland voters last November. The council is scheduled to approve the framework on Oct. 11.

Money for homeless and affordable housing services comes from different sources, each with its own conditions. General fund dollars, largely derived from property taxes and business license fees, can be spent however the council sees fit.

Historically, the largest source of affordable housing dollars have come from urban renewal districts, and must be spent on construction in the district where the money was raised. Currently, 45 percent of all urban renewal funds from tax-increment financing — property taxes siphoned off for urban renewal — must be spent on affordable housing within the districts. Traditionally, the city has partnered with nonprofit organizations and private businesses on such projects and paid only a share of their total costs.

The bond funding comes with new restrictions. Because of a provision in the Oregon Constitution, the city cannot partner with private parties on the projects. The city must own and operate the projects when they are finished.

This gives the city more discretion over the location, size and style of the projects.

Spending recommendations

A 22-member Stakeholders Advisory Group met from April to mid-August to draft a policy framework to guide the spending. It recommends building or maintaining 1,300 units, as promised during the bond measure campaign. The group recommends the money should be spent outside of urban renewal districts and areas of high poverty, and should all be affordable to households earning 60 percent or less of the area median income ($3,735 monthly for a family of four). Almost half — 600 units — should be affordable for households earning 30 percent or less of the median income ($1,867 monthly for a family of four).

The group also made many recommendations about future tenants of the units. They should be the most vulnerable Portlanders, including the homeless, those at risk of becoming homeless, those who have been discriminated against, and people needing mental health and other services to retain their housing.

"The group wrestled with a lot of competing priorities that are all important and reflected in the plan," says Jennifer Chang, one of the Portland Housing Bureau's liaisons to the group.

The draft framework is scheduled to be presented to numerous community organizations throughout the month. The bureau also is conducting mail and online surveys. The group will meet again at the end of the month to finalize the framework before submitting it to the council.

You can learn more and take the survey at www.portlandoregon.gov/phb/74574.