Home Forward: Unavailable Vancancies (03/12/25)
Welcome back to Multifamily Market Watch. I’m Michael Pierce, senior data analyst at HFO Investment Real Estate. Today’s episode is about a phrase that sounds like a riddle. But it’s turning into a real policy and financial problem in Portland. When vacant doesn’t mean available, Willamette Weekly recently has been digging into Home Forward, Portland’s housing authority. Home Forward owns about 7000 affordable apartment units and administers housing vouchers for many more households.
The headline issue is operational. It took Home Forward an average of 185 days to fill empty apartment units in 2025. However, the latest reporting makes a second point that should make every multifamily finance person sit up straighter. Those vacancies don’t just represent housed or unhoused outcomes. Instead, they also hit the ability to pay lenders. So, let’s walk through what’s happening, why it matters, and what questions we should be asking next.
Operational bottleneck
First, let’s discuss the operational bottleneck. It’s been reported that, in 2025, Home Forward took an average of 185 days to release a vacant unit, despite long waitlists. Home Forward has said publicly that the timeline is too long. The agency points to repairs, marketing, and waitlist processing. To be clear, public housing turnover is not the same thing as turning over a market rate unit. Some units need major rehab and some have compliance steps that do not exist in the private market. That part is real.
However, the story is not just this is slow, it’s this is slow in a way that compounds. Every month a unit stays offline is a month with no tenant rent, reduced subsidy flow, and continued operating expenses.
Moreover, when you scale that across 1000s of units, vacancy becomes a financial stressor rather than just an operational one. Home Forward finances much of the new affordable housing construction with loans. Then it pays those loans using back rent and federal subsidies that augment the rents.
The key metric is the debt service coverage ratio, or DSCR. It’s basically, do you bring in enough net operating income to cover debt payments with a cushion.
The dismal DSCR
It’s been reported that Home Forward’s overall DSCR across its portfolio was 1.14 in 2024. This is down sharply from 2.36 in 2020. That’s not a mild decline, that’s a cliff. Many lenders typically require a 1.1 or 1.15 as a minimum. The Home Forward spokesperson says that the agency projects a 1.12 DSCR for 2025. Though the number is not yet finalized. So, if you’re listening as an owner, lender, developer, broker, here’s the translation. Home Forward is hovering near minimum coverage, and the direction of travel has been wrong for the last five years. Now, let’s talk about what Home Forward is assuming going forward. In its proposed 2026 budget, the agency estimates portfolio will generate 32 point 5 million in rent revenue and incur only 2.5 million in vacancies. This excludes tax credit buildings. But what is of note is that the revenue figure depends on two stated goals. These are keeping occupancy above 94% and having most tenants regularly pay their rent.
And there is literally nothing in Home Forward’s recent track record that suggests either of these things will happen. Why? Because the story reports that Home Forward said 3335 tenants were more than 30 days delinquent on rent at the close of last year. That implies that it’s close to half the portfolio being late. On top of that, Home Forward said that it for went $8.4 million in rent revenue across 2025 because of vacancies. So we’re looking at a system where vacancies and delinquencies are both pulling the agency in the same direction. There’s another layer here that has less to do with leasing. Instead, it has more to do with governance.
Funding and Budgeting
Home Forward receives much of its funding from HUD. Its board members must be confirmed by the city council. However, the board independently approves the agency’s budget and has operated with limited city oversight in recent years. That matters because if performance is called into question, there’s no clear mechanism for the city to step in and demand answers. If you’re a policy maker, that’s the part that keeps you up. If you’re a lender, it’s the part that makes you ask, who is accountable for fixing this operational machine. One of the most revealing details is how Home Forward is keeping some properties afloat. The agency made 20 interagency loans to cover expenses at struggling properties.
Some examples include about half a million dollars to the Yards, $483,472 to the Luisa, and $649,202 to Pearl Court. This is the affordable housing version of shuffling cash between pockets to make the bills come out even. It can be a temporary bridge. However, it’s also a sign of stress spreading across the portfolio.
About two thirds of Home Forward’s operating revenue comes from HUD, primarily through vouchers. Home Forward says federal voucher funding is expected to remain relatively flat.
At the same time, the cost of providing vouchers has increased sharply. This has contributed to an estimated $30 million budget deficit in the current fiscal year.
Rising Operational Costs
And there are also rising operational costs, like insurance, plus increased spending on tenant services, and unpredictable rent payments, that are the driving force behind lowering the SCR. So, the story is not vacancy is the only problem. The story is vacancy and slow leasing amplify every other problem. One of the things that the agency is doing is freezing raises for top executives. However, it also reports that CEO Ivory Matthews’ salary rose $342,000 in 2025 up from $215,000 in 2022. The other top executives saw large increases over the same period.
Home Forward’s defense is that a pay equity study led to changes, including raising employees’ base wages, and that leadership has navigated difficult conditions while serving a record number of low-income Portlanders. Whether you think that’s persuasive or not, the practical point is this: in a crisis, compensation becomes part of the credibility equation. So, what do we do with all of this? For multifamily professionals, Home Forward is not just a public agency story. In fact, it’s a Portland housing supply story. If Home Forward’s portfolio slides towards distress, it’s not only residents who feel it. Lenders, contractors, service providers, and the broader affordable pipeline will feel it too. So, the two questions that we’d like you to keep on the dashboard are one, what concrete operational changes reduce that 185 day average lease up timeline? Because faster turns don’t just help households, they stabilize cash flow, and two, does DSCR stabilize above lender minimums or keep drifting downwards? Because once you start crossing the wrong threshold, the fixes get more expensive, and the options narrow fast. That’s it for this episode of Multifamily Market Watch. I’m Michael Pierce, and thanks for listening.
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