PORTLAND, Ore. (KOIN) — A scathing report from the Portland City Auditor said the Joint Office of Homeless Services “spent $850,000 over 16 months to provide apartments to veterans but allowed the property to deteriorate into unsafe, unsanitary housing.”
The “apartments” were actually rooms in a rundown motel on Sandy Boulevard in Northeast Portland, the Sandy Studios. A KOIN 6 News investigation in April 2021 found veterans living in squalor, with evidence of months-long deferred maintenance, such as leaking pipes in the bathroom ceilings, missing drywall, dysfunctional doors and broken heaters, among a laundry list of other safety issues.
Inspection reports viewed at that time by KOIN 6 News confirmed roach and bed bug infestations, electrical hazards, mold and water leaks. The city declared Sandy Studios dangerous and ordered the property owner to vacate the building.
“The Joint Office ultimately had to scramble to find alternative housing for the residents,” the city auditor’s report said.
Joint Office ‘plays conflicting roles’
The Joint Office of Homeless Services is a city-county entity.
KOIN 6 News learned in April 2021 the Joint Office of Homeless Services (JOHS) is a city-county entity. The JOHS pays $640,000 a year to the nonprofit Do Good Multnomah to manage programs and day-to-day maintenance at Sandy Studios. Do Good has a master lease agreement with the property owner, 3800 Param LLC, to rent the rooms to chronically houseless veterans. The nonprofit uses federal and local tax dollars to pay the company a flat rate of $44,732 a month to rent the entire property, according to their master lease agreement.
The auditor’s report, released June 7, 2022, said they found the Joint Office “plays two potentially conflicting roles with service providers: it is responsible for holding them accountable and supporting them as organizations. When Joint Office employees became aware of the maintenance problems at Sandy Studios in 2019, they did not act to put pressure on the landlord to remedy maintenance problems. Instead, they continued to pay rent, began talking about transitioning tenants to another facility, and helped Do Good Multnomah get funding for a new project.”
The auditor’s report said the Joint Office should have conducted a certified inspection of the property before paying the rent.
“The walkthroughs or the inspections were focused on — or should have been focused on — maintenance issues, or these walkthroughs that would be focused on addressing these issues didn’t take place,” said KC Jones, the director of the Audit Services Division.
On May 11, 2022, the Joint Office responded to city auditor’s Fraud Hotline investigation and said, in part:
“This was an occupied building when DGM took over Sandy Studios, part of an improvement plan spurred by JOHS. And at the time of transfer of the building and the program to DGM, JOHS directly oversaw a range of improvements to the rooms. As part of that work, there was an on-site open house that included visiting some of the rooms.”
The Joint Office also said the auditor’s report “minimized challenges such as the COVID-19 pandemic or the reality of landlord-tenant law.”
In her own statement, City Auditor Mary Hull Caballero said, “Providing housing during the pandemic was especially challenging. But that is no excuse for not having robust procedures to ensure that programs created to protect the wellbeing of vulnerable people are doing so effectively.”
Officials with the Joint Office acknowledged that people became more isolated and had behavioral health issues in the early phases of the pandemic. But some at Sandy Studios “went so far as to physically threaten staff who tried to enter their units to do repairs.” Since evictions weren’t happening, “maintenance issues went unaddressed.”
Joint Office of Homeless Services Interim Director Shannon Singleton said she didn’t want to “second guess the folks who were on the ground doing this work at the time. I think they were doing everything they could with the resources they had.”
The auditor’s report made 4 specific recommendations for the Joint Office of Homeless Services as a result of this investigation:
- Ensure staff are knowledgeable about contract requirements and prepared to enforce them.
- To address role conflicts, separate employees charged with contract oversight and enforcement from those responsible for advocating for and supporting non-profit providers who may be subject to enforcement.
- Develop compliance checklists and guidance to ensure oversight is comprehensive and includes prompts to review high-risk areas.
- Follow-up on problems identified by service providers in their quarterly performance reports and monitor action plans; document when they have been resolved.
In general, the Joint Office of Homeless Services agreed with these recommendations, the City Auditor’s report said, though they objected to some descriptions as “inflammatory.”
Singleton said they’ve added more resources to the team that works with contractors. They’ve identified a protocol for serious issues and, among other changes, the Joint Office has separated the teams that enforces its policies and the teams that build relationships with contractors.
“We can’t control necessarily what the property looks like over time,” she said. “But, when we do have issues that we know how to support our providers, and ensuring health and safety for the people that we serve.”
Dan White, a veteran who lived at Sandy Studios, told KOIN 6 News in April 2021, “There’s been an ongoing pattern of neglect here. This is a veterans-only housing complex and I expect better. They get paid $1,050 for a month of rent [per room]. And I want the people to know it’s being wasted here.”
As of April 2021, the 5-year master lease agreement at Sandy Studios earned the property owner, 3800 Param LLC, more than $2.5 million in taxpayer dollars.
“This is a colossal waste,” White said. “This is a problem for the American taxpayer.”
KOIN 6 News reporter Brandon Thompson contributed to this report