By Elliott Bochstein, Rural Community Assistance Corporation staff writer

In the heart of Oregon Coast’s dairy country, a quiet battle raged as residents of the Golden Eagle 2 Apartments – a lifeline for low-income seniors – faced the threat of displacement. Their fight, backed by the financial and strategic support of Housing Assistance Council and RCAC’s Loan Fund, ultimately preserved not just homes, but an essential piece of Tillamook’s community fabric.

TILLAMOOK, Oregon – Tillamook might be renowned for its namesake dairy products and windswept beaches. But beyond the tourist brochures and creameries, a quiet crisis has simmered—a growing shortage of affordable housing, escalating for years, has reached a boiling point, threatening the well-being of the community’s most vulnerable: its elderly and disabled residents.

The crisis came to a head in 2016, casting a shadow over the future of Golden Eagle 2 Apartments, a complex that has been a lifeline for low-income seniors and disabled individuals since 1975. Spread across two residential blocks, this community of seven buildings houses 33 families and individuals, most of whom rely on the apartments’ affordability to maintain their independence and quality of life.

Golden Eagle 2 was built under the U.S. Department of Agriculture’s Section 515 Rural Rental Housing program, a cornerstone of the agency’s efforts to address rural communities’ housing needs. Since its inception in the 1960s, Section 515 has financed thousands of affordable units across the nation, providing direct, low-interest, long-term loans to developers.

Yet, as properties age and loans mature, the program’s long-term sustainability seems increasingly uncertain. When loans are prepaid or expire, affordability restrictions can lapse, potentially displacing residents. Properties can also lose their project-based rental assistance when their original USDA contracts end or are not renewed. Declining federal funding and rising maintenance costs further threaten the sustainability of Section 515 properties.

Eviction looms

The threat of displacement became palpable in 2016 when new management took over Golden Eagle 2. The new owners’ seemingly benign plan to prepay the USDA permanent financing loan carried a menacing implication: removing the affordability restrictions that had long shielded the complex’s vulnerable residents.

Without these safeguards, rent increases would skyrocket, far exceeding many residents’ limited incomes. While some received USDA rental assistance, these vouchers offered scant protection against the impending surge in market rates. This bleak prospect threatened to displace residents, transforming their golden years into a frantic scramble for affordable housing in an increasingly costly region.

This scenario was tragically familiar in Tillamook. Market pressures had already decimated four federally assisted housing communities in recent years, leaving vulnerable residents with ever-shrinking options. The potential loss of Golden Eagle 2 threatened to exacerbate this crisis, further straining the region’s already overburdened social safety net.

Tillamook’s geography further complicated the issue. Hemmed in by the Pacific Ocean and sprawling farmland, the town has limited space for new development. Available land is often scarce, small or distant from the town center, an impractical location for seniors who value walkability and access to essential services. This lack of viable options perpetuates the affordable housing shortage.

Indeed, the plight of Golden Eagle 2’s residents mirrored a rapidly escalating national housing crisis. A 2021 report by the National Low Income Housing Coalition revealed that nearly half of rural renters are cost-burdened, spending more than 30% of their income on housing. As property values soar, wages stagnate and federal support for affordable housing wanes, the situation is intensifying a sharp disparity: the increasing difficulty of securing stable, affordable housing, particularly in rural communities.

Rural seniors, already disproportionately affected by poverty according to a 2018 report by the Center on Budget and Policy Priorities, increasingly face a brutal choice: remain in their lifelong communities and risk financial ruin, or relocate, abandoning the familiar for an uncertain future.

Residents and community unite to save their homes

Undeterred, residents rallied to defend their homes and explored every avenue to maintain affordability. This collective action marked a crucial first step in their fight to preserve the complex.

“The fact that they raised the alarm and declared, ‘We won’t let this happen to us’ is what truly sets this project apart,” said Jennifer McAllister, development manager at Housing Assistance Council, a national nonprofit with over 50 years of expertise in rural housing. “Preserving the Section 515 portfolio is essential for rural communities, as in many places, these apartments represent the only affordable housing options. Losing these properties means losing vital affordable housing in many areas.”

A powerful coalition formed to challenge the sale, including local service provider Tillamook County Community Action Resource Enterprises, or CARE Inc., which connected residents with legal advocacy groups. Alongside the Oregon Law Center and the National Housing Law Project, they successfully sued the USDA, arguing that the department failed to follow its own prepayment requirements when approving the owner’s prepayment application. They demanded the property be offered to nonprofit and public agencies for 180 days at its appraised value, as per department regulations.

Meanwhile, the Network of Oregon Affordable Housing, dedicated to preserving at-risk affordable housing properties statewide, actively sought a nonprofit purchaser for the complex. Despite initial interest from a Portland-area housing provider, no concrete agreement materialized. By late 2019, with legal challenges ongoing and the 180-day marketing period ending, no buyer had emerged.

With just 12 days remaining, Northwest Coastal Housing, a nonprofit with over 200 affordable units in neighboring Lincoln County, stepped up.

“This property may be little but it’s important… these folks are a representation of community,” NWCH executive director Sheila Stiley told Tillamook Headlight Herald. NWCH stepped in and made a successful offer, bringing new hope into the fight for Golden Eagle 2.

Financial and collaborative efforts gain momentum

NWCH’s efforts to preserve GE 2 gained momentum in 2020, as various allies secured critical funding, including a 9% Low-Income Housing Tax Credit allocation, state grants and expanded rental assistance for all 32 units. The tax credits mandated that NWCH maintain affordable rents for residents earning 60% or less of the area’s median income for the next 60 years. The acquisition was finalized on Dec. 28, 2021, with $1.7 million in new Section 515 financing and rental assistance secured.

However, a significant funding gap remained. HAC stepped in with a crucial $7.8 million lead loan, bridging the gap between the LIHTC and other committed funding and enabling redevelopment to move forward. The timing couldn’t be better.

“HAC’s lending had fallen off in the mid-2010s, but new leadership in 2017 began to rebuild our lending team,” explained McAllister. “Our portfolio grew from $18 million to $54 million. This $7.8 million loan was our biggest to date.”

“Tillamook is a beautiful area and with so many other units becoming Airbnbs, preserving this Section 515 property was essential,” she added.

Rural Community Assistance Corporation’s Loan Fund, a Community Development Financial Institution, also played a crucial role. Unlike for-profit lenders, RCAC’s mission aligns with projects that benefit marginalized communities. RCAC’s $3.9 million participation in HAC’s loan bridged the remaining funding gap, ensuring NWCH had the necessary financial backing to move forward.

RCAC’s participation loans are essential in preserving affordable housing in regions like Tillamook. This strategic financial assistance empowers projects like GE 2 to overcome significant funding gaps that might otherwise derail crucial housing initiatives. By offering these loans, RCAC directly supports the creation and maintenance of affordable, secure and accessible housing options for marginalized populations, fostering stability and resilience in rural areas facing increasing housing insecurity. This support reflects RCAC’s broader mission to empower rural and Indigenous communities across its service region to be vibrant, healthy and thriving.

The partnership between HAC and RCAC was crucial to the project’s success. HAC handled the financial and legal reviews, approved the loan and managed the construction finances. RCAC’s participation in managing the loan, including periodic disbursements, ensured a smooth and financially stable redevelopment process.

A Renewed Community

Together, these efforts not only preserved Golden Eagle but transformed it into a model of sustainable and affordable housing in Tillamook. The comprehensive renovation included new water supply lines, flooring, cabinets, appliances, ventilation, walkways, lighting and other upgraded infrastructure, ensuring the apartments are comfortable, modern and environmentally friendly. Despite these extensive upgrades, rents remain affordable.

Beyond bricks and mortar, the RCAC-HAC partnership did more than preserve housing; it fortified the heart of the community. By ensuring that GE 2’s residents could continue to call Tillamook home, the partnership fostered a sense of belonging and security for a demographic often overlooked and marginalized. The collaboration is a testament to the power of collective action, showcasing how nonprofit organizations and communities can join forces to protect their most vulnerable members and uphold the fundamental right to safe, affordable housing.

“RCAC is definitely one of our closest, most trusted and longest-term partners serving the Western states,” McAllister said. “We, and the people of Tillamook, are fortunate to have such a strong and impactful partnership.”

Source:
HAC. March 2022, Rural Research Brief: Rural America is losing affordable rental housing at an alarming rate
USDA, March 2023, Fiscal Year 2023 Multifamily Housing Annual Occupancy Report

**Photos taken by: Jennifer McAllister, Development Manager, HAC

Also in this issue of Network News:

RCAC joins forces with Economic Recovery Corps to revitalize rural Northern California
Rural Community Assistance Corporation announced that Carissa Patrone Maikuri has been selected as a fellow with the Economic Recovery Corps to work alongside RCAC’s Building Rural Economies team. This exciting partnership aims to breathe new life into Northern California’s rural economies through strategic community economic development, planning and technical assistance.

Building Bridges with RCAC: An interview with Economic Recovery Corps Fellow Carissa Patrone Maikuri
RCAC Network News sat down with Carissa Patrone Maikuri, an Economic Recovery Corps (ERC) Fellow, who has joined forces with RCAC’s Building Rural Economies team to bring fresh energy and ideas to the team and several rural communities. For the next two and a half years, Carissa will work alongside Plumas County to focus on revitalizing the local economy through community-driven projects and strategic development initiatives.