ARH Portfolio Financial Reporting Analysis

Executive Summary

Oregon Housing and Community Services (OHCS) analyzed the financial performance of affordable housing properties in the state’s portfolio from fiscal year (FY) 21 to FY24 to identify trends in operating expenses and understand the current reality of affordable housing property performance. Per-unit operating costs rose from $6,278 in FY21 to $8,198 in FY24, an overall rise of 31%, significantly outpacing revenue growth of 19% and inflation of 13% over the same period. This increase is driven most sharply by increases in property insurance, security, bad debt and payroll. Property insurance increased 24% since FY23, and 87% since FY21.

Portfolio performance indicators show mixed results. Vacancy loss reached 6%, influenced by conditions in the Portland Metro area. However, debt coverage ratio (DCR) improved modestly, aligning with patterns observed in national affordable housing performance studies.

Key Insights

1. Rising operating expenses (OPEX): OPEX rises 8% from FY23, to $8,198 per unit
2. Property insurance increases: Property insurance increases 24% from FY23
3. Vacancy pressure intensifies: Higher vacancies in the Portland Metro area
4. DCR improves statewide: DCR increases from 1.34 in FY23 to 1.47 in FY24

Operating expense growth eased slightly, rising 8% in FY24 compared with increases of 9% and 11% in the prior two years. Property insurance, however, continues its steep upward trend and has nearly doubled since FY21, reaching $654 per unit in FY24 versus $349 per unit in FY21.

The rise in vacancy loss alongside an improvement in DCR reflects mixed performance. Although some markets saw weaker occupancy in FY24, overall rent growth outpaced both vacancy impacts and operating cost increases, raising net operating income (NOI), and with senior debt service remaining stable, this higher NOI translated into a stronger DCR.

Introduction

Why are we doing this study

OHCS is committed to the long term sustainability and affordability of housing across the state. This analysis highlights trends in operating expenses and key financial metrics to give property owners, developers, investors, and policymakers actionable information for budgeting, planning, and decision making.

Affordable housing properties operate with tighter financial constraints than market-rate developments. They are underwritten with the expectation of “normal” operating conditions and have fewer levers to pull when costs rise faster than revenues. Tracking how operating costs change over time is critical to maintaining property stability and protecting long-term affordability for tenants. This analysis enables OHCS and its partners to better anticipate challenges, strengthen asset management strategies, and uphold Oregon’s commitment to preserving affordable housing across the state. Sustainable growth in new housing depends on the ability to maintain and preserve existing properties.

In 2025, the OHCS Affordable Rental Housing (ARH) Division completed a comprehensive portfolio analysis of operating expenses and key financial metrics, focusing on annual financial reports from FY21 to FY23. This study builds off that work by adding FY24 data, streamlining internal processes, and incorporating additional metrics. Prior to these analyses, the last major portfolio-wide financial analysis, conducted by the Housing Development Center (HDC) in partnership with Meyer Memorial Trust, examined reports from FY13 to FY15 and found an average per-unit-per-year (PUPY) operating expense of $5,200.

Data Collection

OHCS ARH adopted ProLink as its system of record in FY20. By FY24, ARH portfolio staff entered the first full set of annual financial reports for the entire portfolio into ProLink, using data from the FY23 reporting year. In FY21 and FY22, staffing limitations left some gaps in data entry, requiring a few updates to be deferred.

The following types of properties are required to submit financial reports to OHCS on an annual basis:

• Properties with 10 or more units funded with: Low-Income Housing Tax Credit (LIHTC), Local Innovation and Fast Track Program (LIFT), conduit bonds
• Properties regardless of number of units: Risk Share, Tax Credit Assistance Program (TCAP), 1602 exchange, Elderly and Disabled (E&D), Home Investment Partnership Program (HOME), properties with operating agreements

If a property is financed solely by OHCS funding resources not on this list, they are not required to submit a financial report. Financial submissions are due within 90 days of a property’s fiscal year end; properties are required to submit annual financial reports starting a year after their placed-in-service date. This analysis is a portfolio-wide analysis of all OHCS properties required to submit financial reports. It does not follow a set cohort of projects from year to year, as each year sees properties coming in and out of service. Properties file reports based on their fiscal year, which often aligns with the calendar year, particularly for LIHTC-funded properties.

ARH staff review and verify each submission before uploading it to ProLink. Each submission includes the ProLink standard template, structured to align with U.S. Department of Housing and Urban Development’s (HUD) chart of accounts, along with supporting documents such as the independent auditor’s packet, internal profit and loss statement, balance sheet, trial balance, and records of any casualty loss expenses.

Methodology

This study only includes reports that OHCS has reconciled and approved to ensure high-quality data. A few other notes on how OHCS cleaned and analyzed the reports:

• Analysts removed a small number of outliers– those exceeding three standard deviations from the mean – as these often indicate data entry errors or unique circumstances that could skew the report’s findings.
• Note: For FY24, analysts removed about 3% of reports from the dataset
• Since assisted living facilities (ALFs) operate under financial models that differ significantly from other property types, analysts exclude them from most analyses.
• Unless otherwise specified, all reported averages reflect means.
• Financials are all in nominal dollars, reflecting the face value of money as recorded in the financial system and without any adjustments for inflation. Any comparison to inflation is from the annual consumer price index (CPI) for the US Western Region.
• CPI, West Region – Dec. 2022
  
• CPI, West Region – Dec. 2023
  
• CPI, West region – Dec. 2024
  
• All years represent fiscal years.
• Totals may differ from the sum of individual line items by up to $1 due to rounding.

Some FY21–FY23 figures differ slightly from last year’s analysis because a small number of reports were corrected after initial submission. For example, FY23 operating expenses were $7,621/unit in the study last year, and $7,610/unit in our study this year. These adjustments are not material – there are 23 reports from FY21-3 that have updated expense numbers since last year.

OHCS is committed to keeping this analysis current by adding an additional year of data on an annual basis. For precise definitions and calculation methods used in this report, refer to the appendix at the end.

Key takeaways: Not all properties with OHCS funding are required to submit financial reports, and OHCS removed blanks, outliers, and assisted living facilities when calculating average (mean) values.