Oregon Housing and Community Services (OHCS) set a simple efficiency target: affordable‑housing projects should not cost more per square foot than the national average compiled by RS Means. In the past three years the agency has missed that benchmark by a wide margin.
Last year the agency paid an average of $318 per square foot, about 31% higher than the RS Means national average. That translates to every dollar above the target being a dollar that could have funded additional units for Oregon families.
Council member raises concerns
At the Oregon Housing Stability Council’s virtual meeting on Sept. 11, retired developer Ed McNamara broke the council’s usual practice of rubber‑stamping projects. McNamara, who joined the council in July, said he could not support a package of four proposed developments because two of them far exceeded the cost benchmark. He abstained while the other members voted yes.
One of the contested projects is a 72‑unit apartment building in McMinnville priced at $413.12 per square foot—well above the RS Means 2025 average and likely above the pending 2026 figure. Developer Bienestar’s housing manager Erica Calderon cited a concrete podium, two elevators, interior corridors, and underground parking as reasons for the higher cost, while insisting the project was “value‑engineered.”
Examples of lower‑cost projects
By contrast, a 168‑unit development in Corvallis was budgeted at just $172.80 per square foot. The project, built by the for‑profit Annex Group, relies on in‑house designers and general contractors to keep costs down and avoid conflicts with local code and zoning requirements.
Lawmakers demand accountability
State Sen. Dick Anderson (R‑Lincoln City) warned that the agency’s finite housing dollars must be used efficiently. “Every dollar wasted on an overpriced project is housing someone else doesn’t get,” Anderson told Oregon Journal‑Project. He urged OHCS to make cost variances a decisive factor in project approval and to require developers to publicly justify any large deviations from the benchmark.
OHCS spokeswoman Jessie Schirrick responded that while the RS Means average is a useful reference, it should not be the sole determinant. She noted that higher costs can stem from family‑sized units, rural locations, supportive‑services space, or durable construction—factors that align with the agency’s statutory goals.
Anderson rejected that explanation, emphasizing that the benchmark has existed since 2017 and the agency has repeatedly missed it. “If OHCS believes a project needs an exception, it should make that case publicly—with every dollar accounted for. Transparency is required,” he said.
Governor’s office weighs in
Governor Tina Kotek’s administration has made expanding the state’s housing supply a top priority since she took office in 2023, pledging to build 36,000 new units annually—a goal that remains far out of reach. Kotek’s spokesperson Hazel Tylinski said the governor expects state agencies, including OHCS, to administer programs in line with established benchmarks and performance measures.
OHCS publishes annual performance metrics, and the agency acknowledges that even with a biennial budget of $3.7 billion and a staff of more than 450, it has not met the growing demand for affordable rental housing. “The need for affordable rental housing units is significantly greater than the resources available through OHCS,” the agency wrote in a draft budget for the next fiscal year.
Looking ahead
The council’s recent dissent may signal a shift toward more rigorous scrutiny of project costs. With Oregon’s homelessness rate ranking second nationally, efficient use of public funds is essential to delivering more homes for families in need.
Stakeholders, including developers, lawmakers, and the governor’s office, will be watching how OHCS balances cost efficiency with the agency’s broader mission to provide safe, affordable housing across the state.
Original reporting: Homepage – Lookout Eugene-Springfield — read the source article.
