Deal to preserve mobile home park has a catch

When the park owner inked a deal this spring to sell the rundown complex on Northeast Killingsworth Street to someone who planned to redevelop it, desperate residents won a promise of city funds to help them buy the complex instead.

Many of the units at Oak Leaf Mobile Home Park are dilapidated. Some are just RVs; others are occupied by squatters. October 27, 2016, (Jaime Valdez, Portland Tribune)
Many of the units at Oak Leaf Mobile Home Park are dilapidated. Some are just RVs; others are occupied by squatters. October 27, 2016, (Jaime Valdez, Portland Tribune)

PORTLAND, Ore. (PORTLAND TRIBUNE) — Oak Leaf Mobile Home Park residents should be able to avoid homelessness, but their hopes of controlling their own destiny have been dashed.

When the park owner inked a deal this spring to sell the rundown complex on Northeast Killingsworth Street to someone who planned to redevelop it, desperate residents won a promise of city funds to help them buy the complex instead.

With guidance from the nonprofit Community and Shelter Assistance Corp., residents formed a cooperative, which would let them keep their homes, put a lid on rent hikes, and run the 30-unit park themselves.

But the nonprofit, known as CASA of Oregon, backed out of the deal last week, blaming, in part, opposition to the co-op model from the city and Multnomah County.

There’s been a little bit of “paternalism” from public officials, that their “low-income brethren” can’t manage the park themselves, said Peter Hainley, CASA executive director.

The Portland Tribune is a KOIN media partner.

The city now vows to find a nonprofit to own and manage the complex. That could keep residents in place, but some fear they might lose control of their homes and wind up as tenants.

CASA has helped residents of nine other Oregon mobile home parks form co-ops, which prevent park owners from tossing residents from homes they own. But in a letter Hainley sent to the co-op board last week, he said the city’s intended use of federal block grant aid — instead of city construction excise tax funds as city Commissioner Dan Saltzman initially promised — made the buyout risky because of federal strings and higher costs.

The county also wanted to replace substandard units with new mobile homes, Hainley said. “When that happened, it suddenly changed the whole conversation.”

That would mean a significant upgrade of the complex, but tenants worried they couldn’t pay for new units.

Going to Plan B

Either a co-op or nonprofit could prevent a park closure and guarantee residents aren’t evicted, said Javier Mena, deputy director of the Portland Housing Bureau, which Saltzman oversees.

“The city’s impetus was to avoid displacement of the residents of the park,” Mena said. “As to the form it would take, it didn’t matter to us.”

CASA agreed to sign over its $1.25 million purchase agreement to a nonprofit. The city is in talks with St. Vincent de Paul of Lane County, which owns and operates five mobile home parks in Lane County, and one other nonprofit, Mena said.

Oak Leaf residents are disappointed but appear to be “moving on,” grateful the city is still willing to help preserve the park, said Cameron Herrington, anti-displacement coordinator for Living Cully, which is working closely with residents.

“The biggest concern is that the people would lose their homes and become homeless,” Herrington said.

Three residents on the co-op board declined interviews or did not return calls. A fourth, Larry O’Mara, said he’s still “up in the air” about the change in plans.

Changing funding source

Saltzman initially declared that money to save the low-income complex would be the first use of the city’s new construction excise taxes, newly allowed by the Oregon Legislature.

But City Hall insiders said privately that Saltzman spoke too soon.

The City Council took awhile to approve policies for the new tax, and even now there’s less than $10,000 collected from it, Mena said.

The city is offering $1.5 million — enough to buy the complex and fix storm drainage and other structural issues neglected by park owner Van Tran, who lives in California. The money would come from the federal Community Development Block Grant program.

CASA’s letter said the funding switch made the deal “too unwieldy (and perhaps impossible)” given the impending deadline to close the deal.

Mena said the city told CASA it might use federal grant money from the “get go.” Hainley said CASA didn’t know that for sure until Sept. 28, two days before the initial expiration of its purchase agreement. The agreement permits a couple one-month extensions, so the new deadline is in a few days.

Federal funding meant the co-op couldn’t set aside money for a reserve account to cover unexpected capital improvements, considered essential for residents who lack much disposable income. Construction labor also would cost more due to prevailing-wage requirements of the federal Davis-Bacon law, Mena said. In addition, federal grants require relocation costs to tenants who must move during construction — even for the squatters now occupying the park.

Shifting blame

“We have seen the co-op model works and that it’s still successful in other parts of the state,” he said.

However, he added, “Now that CASA has pulled out, I’m not sure there is another nonprofit that can organize a co-op at the Oak Leaf.”

Hainley’s letter indicated the city and county were reluctant to go with the co-op idea. “After a dozen meetings with various configurations of county and city staff, it became clear that neither the county nor the city were willing/able to provide funding to a cooperative. Furthermore, both the city and county determined a nonprofit-owned rental project was the only option,” he wrote.

The city and county’s preference for a nonprofit was no secret to Oak Leaf residents. Living Cully organized a Sept. 23 news conference at City Hall to pressure Saltzman and other city commissioners to meet their previous commitment to back the co-op.

Saltzman soon responded by posting a letter on his web page.

“Since my first meeting with Oak Leaf residents in May, I have been committed to helping them remain in the park and improve the infrastructure and living conditions there,” his statement read. “I have never once wavered on that commitment despite some misinformation that appeared online from those not familiar with what has been going on. The Portland Housing Bureau, at my direction, immediately provided the funds necessary to extend the residents’ lease to avoid eviction and was busy this month finalizing the city’s $1.5 million commitment toward the purchase and rehabilitation of the park for the residents to stay on-site in a co-op model.”

Advantages of a nonprofit

But sources say when city staff visited the Oak Leaf park, they were concerned the units don’t meet city codes. That would require home upgrades that low-income residents couldn’t afford under a co-op format.

County Commissioner Loretta Smith, who sought $1.7 million in additional funding for the project, said it’s up to the residents if they want to form a co-op or not.

But if a nonprofit owned the complex, Smith said, county money could help replace dilapidated mobile homes. Mobile home owners might not own their homes any more, but they could get Section 8 vouchers to cover their rent, she said, and they wouldn’t have to pay property taxes.

However, St. Vincent de Paul has found resources to bring in replacement homes at its Lane County mobile home parks that are owned by residents.

St. Vincent de Paul “could be a really good option,” Harrington said, “because they have experience owning and managing mobile home parks.”

Oak Leaf residents, he said, “are grateful the city is still committed.”