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Q&A with Victor Merced:
Director, Oregon Housing and Community Services
Editor's Note: Victor Merced served as Director of OHCS from 2006-2011.
What is your primary charge as Director of OHCS?
The Oregon Housing and Community Services is a housing finance agency (HFA) that finances all low-income and affordable housing in the state of Oregon. In addition to being the state’s HFA, we’re also the state’s anti-poverty agency – that’s where the community services come in. We provide funding for all community action agencies, food banks and social service agencies throughout the state that help low- and very low-income people.
We provide not only financing for development of low-income housing, but we also provide services. That’s what makes us unique among the other HFA’s across the nation. Most of them are primarily funders and financiers.
I have a staff of 166 and a biennial budget of $2.2 billion. In state government, we’re considered an “other fund” agency because less than 1 percent of our total budget comes from the state’s general fund. We receive funds through the sales of tax credits and bonds, from federal sources, state sources, such as the Document Recording Fee, and through profits from services we provide.
The general fund dollars that we do have are directed toward community action agencies throughout the state to address hunger and homelessness. State and federal tax credits are allocated to sponsors or developers that want to build affordable housing. The developers’ role is to get a buyer for those credits, and we receive a fee from these types of transactions. We also sell bonds that provide us with a point spread. Funds from the spread help to finance agency operations. Lastly, we have a contract with the U.S. Department of Housing and Urban Development to inspect all the Section 8 multi-family housing in the State of Oregon.
What are your top priorities?
Preservation is a top priority. All the multi-family Section 8 properties in the state have private owners. About 20-30 years ago, they entered into a contract with the federal government to provide subsidized housing for low-income people. Under Section 8, renters are only required to pay 30 percent of their annual income toward housing costs. The federal government pays for the rest, and that’s how landlords make their profit. Many of those contracts are about to expire in the next five years, however, and the owners can decide to either sell the property or continue to operate the units as affordable housing. We’re working on preserving those housing units to keep them affordable to low-income people who can’t afford market-rate housing. We work to encourage the owner to either keep the units affordable or sell to another entity that would maintain affordability of the units for another 20-30 years.
We currently have approximately 4,000 units that might convert to market-rate housing in the next three to five years. We work with the federal government and private investors to put a financing package together for new owner to preserve the units’ affordability. If we don’t strive to preserve these units, the new owners can raise the rent, and the people living there can no longer afford the cost, putting them at risk of homelessness.
In many cases, preserving affordable units is cheaper than building new housing. Often, all that’s required is upgrading the apartments with new appliances or kitchen sinks.
Another priority of ours is preventing hunger. We allocate funds to food banks and other social service providers. This is an economically difficult time for Oregon, and our funding for hunger-prevention programs will be cut. It’s unfortunate because with the recession continuing, people are going hungry at the same time that our ability to help is fast declining. Part of my job is to look at other sources of funds to continue these programs – from the federal government, nonprofits and foundations.
Preventing homelessness is also an important priority. We provide funding for many of the shelters and permanent supportive housing. Shelter services typically provide a bed or a cot for the night and maybe even a hot meal. In the morning, people in shelters have to leave. They get a place to sleep at night, but we don’t end their homelessness. With permanent supportive housing, people not only get a permanent home, but they also get the services they need to become stable. Those services might include addiction recovery or job training, or both.
What are some of the trends you’re seeing in the industry?
There’s an increase in the number of foreclosures. There are a variety of reasons homeowners become at risk for losing their homes. One of the top reasons is job loss. Underwater mortgages are a problem in some areas of the state, where declining property values are contributing to the crisis.
We’re also seeing a growing trend of “rental creep.” With the foreclosure crisis, more and more people are looking for rental housing. With greater demand, we can anticipate that rents will start to increase, and it will be difficult for some people to get affordable housing.
How have the priorities of your department changed in recent years?
The foreclosure crisis has been the biggest game-changer for us. In early December, we kicked off the state’s new Mortgage Payment Assistance (MPA) program, the first program under the Oregon Homeownership Stabilization Initiative. Struggling Oregon homeowners can take an eligibility test and apply online at www.oregonhomeownerhelp.org through Jan. 14, 2011.
The MPA program is the largest of the four programs created to administer $220 million in Troubled Asset Relief Program (TARP) dollars Oregon received from U.S. Treasury after being identified as a “Hardest Hit” state because of our high rate of unemployment.
We have allotted $100 million to the MPA program, which will help approximately 5,000 homeowners pay their mortgages for up to one year or to a maximum payout of $20,000, whichever comes first.
How does your work impact communities of color?
People of color tend to be disproportionately represented in the lower rungs of the socioeconomic scale. Because we finance affordable housing for low-income people, our projects tend to have a significant impact on individuals and families of color. Also, a higher percentage of these families are facing foreclosure and we are making sure to reach out to them by providing materials in Spanish, Russian and Vietnamese to help them know about foreclosure prevention programs.
I‘ve made it a priority in this organization that we continue to look for ways to support minority-run community development corporations (CDCs). We fund programs and services offered by a number of community development groups that serve people of color, such as Hacienda CDC, Casa of Oregon, Farmworker Housing Development Corporation, African American Homeownership Coalition, and others.
What do you find most challenging about your work?
The job is different every day; there’s always a new challenge. Running a big agency is not just about giving speeches or going to meetings. There’s a lot to pay attention to internally. We have a very good relationship with our staff union, and we work on ensuring we have a healthy work environment for our staff.
Heading up a large state agency is a lot of work, but there are many rewards. Getting to know the people we’re helping is one of those rewards. Recently, I attended an opening of a property we built in Klamath Falls. The project is dedicated to workforce and low-income housing, and the townhomes are simply beautiful. One of the new residents came up to me, an elderly woman who was so proud of her new home. She then started to tell me the story of her life: how she left Cuba in 1966 to flee the Castro regime and became a U.S. citizen in 1977. I told her I’m Puerto Rican and that I spoke Spanish – and that’s when we started talking in Spanish. She told me how proud she was that there’s a Latino in this position: someone who can relate to the kinds of issues she has faced in her life.
Why did you decide to focus your professional life in affordable housing?
I grew up in New York City in one of the poorest neighborhoods in the entire United States: the South Bronx. During the 1970s, poverty, drug wars and crime all contributed to a devastated community. There were a lot of abandoned buildings and blighted housing, and the city was not providing basic services. I saw a lot of community deterioration, and I became a lawyer to develop a better environment for our community.
A group of friends and I started a nonprofit that acquired abandoned apartment buildings and turned them into co-operative apartments. We received funding from the city, the federal government and foundations to get the work done. The co-op model meant that community members were owners of the apartments. Not only was it a housing program, but we also provided skills training for the residents in carpentry, plumbing and other trades. It was a great way to build community, get people working together and give them a sense of ownership.
Throughout the years, I’ve learned the best thing for success is the right group of people working together. It’s crucial to have a good team of people who are moving forward and doing the things that they are supposed to do. In leadership, it’s the people around you that really make or break a project. It helps to have financial and technical resources, but you need the right people to maximize those resources. That’s a hard lesson to learn and over the years I’ve developed much patience and temperance around those issues.
To help me do my job, I have a six-member executive team that’s made up of the administrators of each division of OHCS.
I am appointed by the Governor. It’s an appointment that could change with every new election for Governor.
What do you find most rewarding about this work?
I feel as if I have been preparing for this job all my life. I have a bachelor’s degree in housing and urban development and a law degree. I developed affordable housing while running a nonprofit when I was only 21. In the 1980s, I worked as Executive Director of Oregon Council for Hispanic Advancement and I have also served as a Senior Program Officer with the Meyer Memorial Trust, focusing on housing issues. I was board Chair for the Housing Authority of Portland.
For me, this job is the culmination of all the skills and everything I’ve learned over the years. Heading up housing development and anti-poverty work aligns very well with my experience and expertise.
How does your cultural background impact your leadership approach?
I was the eldest of a family of seven: a close-knit family. My father passed away when I was 15. I have great admiration for my mother’s strength and resolve to keep the family together. For her, family came first, and that is in large part due to her cultural upbringing as a Latina. Maintaining the cohesiveness of our family became her top priority.
When my father died, I told my mother that I planned on dropping out of school to work full-time. We had a big family to support. She said, “You’ll do a lot of good if you stay in school and get your education. We’ll survive. Don’t worry about it.”
That was a big thing for her to say to her eldest son who wanted to contribute to the family’s finances. But she had the long-term vision to put a very high premium on education.
That life experience has guided me through my career. Keeping the family together is important to me, and that’s why I value my strong executive leadership team. We’ve been working together for more than four years, and we operate just like a family.
Colors of Influence || Winter 2011
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