Reach Community Development, one of Oregon’s largest landlords focused on affordable housing, has finalized a significant transaction worth $12.6 million to sell 66 homes.
This strategic move aims to address cash flow challenges and provide tenants with the opportunity to become homeowners.
In collaboration with Minneapolis nonprofit Brick By Brick Housing Corp. and the national Housing Partnership Network, Reach has established Rose City Fund LLC.
The newly formed LLC will work diligently over the next two years to make necessary repairs and sell the scattered site single-family, duplex, and multiplex homes to new buyers, many of whom are current tenants.
According to Reach CEO Margaret Salazar, about one-third of the units in this portfolio currently stand vacant, and many require extensive repairs to meet the standards for mortgage approval.
Without this sale, Reach had projected needing to undertake additional debt to finance repairs, leading to potential rent increases to offset the new financial burden, or continuing to wait on city subsidies that have been sought through the Portland Clean Energy Fund.
Unlike the bulk of Reach’s 2,700-unit affordable rental portfolio, these scattered site rentals are not subject to the same rent-restriction regulations.
Salazar emphasized, “It’s one thing to fix some plumbing in a kitchen.
It’s another thing to really get into the home and make system upgrades.”
For the occupied homes, around 22 tenants have expressed interest in purchasing the properties and will receive mortgage counseling services covered by Reach, provided through the Portland Housing Center.
The sale prices are expected to range from $350,000 to $600,000, varying based on whether a buyer opts for a home in its current condition or after renovations.
Current tenants will be granted the first opportunity to purchase the homes, followed by first-time homebuyers and those from households with incomes up to 120% of the area median income.
According to the latest data from the Portland Housing Bureau, the median income for a four-person household is approximately $124,100, thus setting the threshold for eligibility at just under $149,000.
To reach potential buyers, Reach is collaborating with local organizations such as Proud Ground, Portland Housing Center, the Urban League of Portland, and the Native American Youth and Family Center.
Scott Fergus, CEO of Brick By Brick, stated that his organization has a history of working with communities nationwide to maintain affordability and enhance access to homeownership, highlighting their commitment to bringing this experience to the Portland area.
Concerns among residents surfaced earlier this year, as they expressed worries about potential displacement resulting from the sales, a subject first reported by Willamette Week.
Addressing these concerns, Salazar acknowledged the difficulties that change can bring, stating, “We know it won’t be the right fit for everyone.
We’re not trying to sugar coat this.
Change is hard for folks.”
For residents unable to afford to purchase, Reach will offer relocation assistance, providing either $12,000 if they vacate by the end of January 2026, or $7,200 if they leave by the end of June 2026.
Those who choose to buy can utilize the $12,000 toward their down payment.
In correspondence to residents regarding the sale to Rose City Fund LLC, Reach confirmed that its staff will continue to manage property communications and maintenance.
“For over four decades, REACH has owned and managed these scattered-site homes,” the letter conveyed.
“With repair costs increasing and limited preservation funds available, this change allows us to create new opportunities for residents to become homeowners, while also reinvesting funds back into REACH’s affordable multifamily rental housing so that families across Portland can remain stably housed.”
The increasing strain on affordable housing providers, partner organizations noted, has been exacerbated in the wake of COVID-19, with skyrocketing operating and insurance costs leading to challenges in sustaining revenue.
As these entities find ways to address financial strains and manage long-standing assets needing repairs, the possibility of further cuts to housing portfolios remains open, although not currently planned, as Salazar indicated.
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