The sole elevator is out at the Astor Building, the tallest building downtown.

The Astor Building, which provides 48 units of low-income housing downtown, has opted to transition out of a federal program that subsidizes the units by next July.

The property owner maintains an annual contract with the Northwest Oregon Housing Authority for the units, which are subsidized through the U.S. Department of Housing and Urban Development’s moderate rehabilitation program.

The program provides project-based rental assistance for low-income families and can support people who earn up to 80% of the area median income. The amount of assistance varies, but it adjusts a household’s income so people only pay 30% toward rent.

The program, which was designed to upgrade the nation’s housing stock, was repealed in 1991, but the federal government has continued to fund and honor existing agreements.

Under the program, the subsidy is tied to the units, not the renter, and the units have a waiting list. If a tenant were to choose to move, the subsidy would not follow them. They would have to get on the housing authority’s housing choice voucher program waiting list to find new rental housing, which could take years.

When the contract at the Astor Building is terminated next July, residents will be able to remain in their units with tenant-based assistance from the housing authority as long as the unit continues to be offered as rental housing and there is no cause for eviction.

The owner can increase the rent and the difference will be covered, allowing tenants to continue paying 30% of their adjusted monthly income.

However, once the contract expires, there will be no obligation for the units to be rented to low-income tenants when they become available.

Some residents told The Astorian that there was panic and confusion over the Astor Building’s one-year notification letter and what it would mean for them come next July.

Paul Caruana, a contractor and designer who owns the building, said there are pros and cons to the program, but ultimately “all we’re doing is switching the payment that we use with HUD.” He said that has been the message communicated to residents.

“Everybody living in the building can stay in the building,” he said.

Prominent landmark

The Astor Building, formerly the historic John Jacob Astor Hotel, is the tallest building downtown and a prominent landmark.

The 14th Street building opened with subsidized one-bedroom and studio units in 1984 after sitting vacant for about two decades.

Caruana purchased the building with a business partner in 2008. He became the sole owner in 2015, and that same year approached the City Council for $150,000 in urban renewal funds to help restore the façade.

The City Council granted the request with the caveat that at least half of the apartment units remain for low-income tenants. Caruana said he has since paid off the funds, adding that the low-income provision was only a condition while the money was still owed.

The two-story lower portion of the building houses offices and retail shops and The Ruins, an event venue. The top six stories of the L-shaped building house 66 apartments.

Caruana said some of the units were converted to market rate before he purchased the building, and since then some more have moved out of the federal program for a variety of reasons.

In the past, Caruana said it could take months to get some of the subsidized units filled. Meanwhile, he said, people looking for market-rate housing at the building were being turned away.

He said the situation improved when he decided to give the housing authority a time frame for units and convert them out of the program the following year.

Caruana credits the infusion of more market-rate units with improving some of the behavioral problems the building experienced early on. He said providing subsidized housing was a learning curve.

Some people who were moving in were not fit to live on their own without support, he said. He later learned he could change the criteria for new tenants to ensure they could live on their own.

Over time, Caruana identified the criteria important to keeping the building safe and enjoyable for everyone. Now, he said, people cannot identify which tenants live in subsidized units.

The Astor Building won Coast Weekend’s 2020 Readers’ Choice award for best apartments and was runner-up in 2021.

While parking has come up as a concern for new development downtown, including a proposed workforce housing project at Heritage Square that was scrapped earlier this year, Caruana said parking has not been a problem at the Astor Building.

Tenants park on the street, he said, adding that many of the people who live downtown also work downtown and do not drive. He said some are students and others are retired.

Vacancies

While the issue of vacant units at the Astor Building has improved, Caruana said it still poses a challenge. The annual contract was renewed on July 1 for 48 units, but 41 are leased. Applicants are in the pipeline for all the vacant units, but it takes time.

When there is a vacancy, the housing authority is notified and calls families from its moderate rehabilitation program waiting list, which has 165 applicants. Eligible applicants are screened by the building and must meet the criteria.

“There are multiple steps and the staff at NOHA and Astor have been working together to help streamline the process and fill vacant units more quickly,” said Jim Evans, who has served as the housing authority’s interim executive director. “The time to complete the eligibility and suitability process varies between tenant.”

In some cases, Evans said, 30 days or less might be possible. In other instances, it may take 60 to 90 days to fill a vacancy.

Another challenge, Caruana said, is the program prevents the apartment building from keeping up with the market. He said over the years, the building has fallen substantially behind market rates.

Caruana sees the transition as a win-win.

“It doesn’t matter to me what someone’s income is,” he said. “If they qualify to be in the building, they’re welcome to live in the building. But the way the system is now, our rents are determined by NOHA and HUD.

“And it’s a historic building. It’s almost 100 years old now. We put a fortune in that building in maintenance and improvement and I can’t afford to do that if we have vacancies, No. 1, and we have rents that are 20% to 25% below market,” he said. “It just seemed like kind of an easy fix.”