Oregon lawmakers consider spending $65 million to convert motels, hotels into shelters

A committee of Oregon lawmakers will decide Friday whether to give $65 million from the state general fund to help private groups buy motels and hotels around the state to serve as shelters for people experiencing homelessness, including as a result of wildfires.

“Recent wildfire displacement has further exacerbated the need for emergency shelter, and the Oregon Housing and Community Services Department … is now estimating the gap between needed and available shelter beds to be at least 10,000,” a legislative analyst wrote in a summary of the proposal. “As winter approaches, the demand for safe, warm shelter space will become acute.”

Supporters say the $65 million in state tax dollars could buy roughly 1,000 units across 18 to 20 hotels and motels, a plan they dubbed Project Turnkey. Homer Williams, a well-known Portland developer involved with the plan, said in an interview Thursday that it could be achieved quickly.

Williams’ Harbor of Hope nonprofit already conducted an analysis of appropriate motels and hotels in cities and counties around the state, and entered into nonbinding letters of intent to purchase some of the most promising. Williams said he has been exploring options to quickly add kitchens to each hotel or motel unit.

Harbor of Hope already operates a homeless shelter, the Harbor of Hope River District Navigation Center, in Portland.

“Now we need to see if the money’s gonna be available,” Williams said. “There’s no faster path to affordable housing that repurposing motels.”

The proposal would allow some latitude on how to use the money, which the state would give to the Oregon Community Foundation to distribute. For example, a legislative document says the money could “potentially provide some initial operating funding …”

Beyond that, there is little information in the legislative proposal about where the shelters would get money to operate in the long term. If the facilities stopped operating for their intended purpose, ownership would revert to the state.

Williams said the issue of operational funding should not deter decision makers from green-lighting the project. In the Portland metropolitan area, he suggested local governments could use money from Metro’s recently approved tax to fund homelessness services. In other areas, he said communities could tap into Federal Emergency Management Agency funding.

“Maybe I’m a little bit too much of a cowboy on this, but get the buildings and we’ll figure out the rest,” Williams said. “If we spend all the time trying to figure out everything then nothing will happen and that’s the worst thing that can happen.”

Williams, state lawmakers, representatives of county governments and community groups were working on the idea before the catastrophic wildfires that started around Labor Day weekend.

In August, Rep. Pam Marsh, D-Ashland, and Rep. Alissa Keny-Guyer, D-Portland, wrote an op-ed in support of Project Turnkey along with Ernesto Fonseca, chief executive officer of the Portland organization Hacienda Community Development Corp. At the time, they said the state could use $65 million from the federal CARES Act to pay for the project.

Marsh said in an interview Thursday that they had been working on the concept since July and initially sought to model it on a California program that used $500 million in CARES Act funding, plus a smaller amount of general fund.

But by the time Oregon supporters pitched their version, state leaders had already largely decided how to allocate the state’s more than $1 billion in CARES Act funding. That included $200 million for city, county and other local governments, which have so far mostly used the money to cover their payroll costs.

“We were just a little too far down the queue,” Marsh said.

She said they kept working on the idea and saw an opportunity to ask for state funding after the latest revenue forecast revealed a large increase in state tax revenues in the current budget. Revenues are still expected to fall short of the cost to continue existing state programs in the 2021-2023 budget.

Marsh said there is “a pretty solid stream of funding” for long-term shelter operations from both the state and federal governments and applicants for the funding would have to demonstrate they have an operational strategy.

Marsh said applications should come from the communities where the facilities would be located. “We very much need to root these projects in our communities because communities know what they need,” she said.

She said communities might decide to convert hotels or motels to longer-term housing, since rooms could essentially be turned into studio apartments.

Even as short-term shelters, she said the facilities would provide “a really good transition into more permanent housing.”

— Hillary Borrud: [email protected]; @hborrud

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