Salem Housing Authority approves plan to dispose aging public housing, sell 33 homes to Habitat and add veterans preference

The Housing Authority of the City of Salem on July 14 adopted Resolution No. 2316 approving its annual public housing agency (PHA) plan, associated Capital Fund plan and a Moving to Work supplement, and amended that plan to add a veterans preference for scattered-site home dispositions, staff and commissioners said.

Deputy Director Jessica Blakely told the commission the authority is seeking U.S. Department of Housing and Urban Development approval to reposition public-housing assets that are costly to maintain. "HUD is putting a lot of pressure on housing authorities to reposition their public housing assets," Blakely said, explaining the agency's decision to move forward on two aging multifamily buildings and a larger set of scattered-site houses.

The agency announced two multifamily properties earmarked for disposition: Shelton Village, at Fifth and Lee Street, which Blakely said is scheduled to go on sale in summer 2025; and Glen Creek Village on Orchard Heights Road, which the authority intends to demolish and replace with higher-density housing after resolving land-use and floodplain issues. Blakely said both buildings are roughly 50 years old and that HUD considers them obsolete for further federal capital investment.

The commission also moved forward on a plan for 79 scattered-site homes throughout Salem (Blakely said four of the units are in Keizer). The authority proposed dividing that portfolio into two groups: 33 homes to be sold at reduced prices to Habitat for Humanity and 46 homes to remain under the authority's control for other affordable homeownership strategies. "We have 33 homes that we intend to sell at a reduced price to Habitat for Humanity," Blakely said. She said Habitat may demolish some large-lot single-family dwellings and rebuild them as middle housing or renovate duplexes and triplexes to expand ownership opportunities.

For the remaining 46 units SHA described flexible homeownership tools, including "silent second" mortgages the authority would place behind a primary lender. Blakely described the silent second as a forgivable loan that could be forgiven on a 30-year schedule and potentially transferable to family members to support generational-wealth aims. She said Umpqua Bank is SHA's banking partner for the silent-second and down-payment assistance components.

Blakely told commissioners the authority vetted the plan with its Resident Advisory Board and community partners. The advisory group recommended adding a veterans preference, and commissioners amended the main motion to include that preference before approving the plan. Blakely said Habitat for Humanity has agreed to adopt the same preferences the housing authority uses for the 33-unit transfer.

Public commenters and partners spoke in support. Jerry Ambrice of Habitat for Humanity said volunteer labor and donated materials keep costs down and make projects sustainable. Lender Malia Sprague of Umpqua Bank described the bank's experience with similar affordable-homeownership financing in Oregon and said the products and down-payment assistance needed to support low-income buyers are available.

Commissioners asked about HUD timelines and legal limits. Blakely told the commission HUD is pressing housing authorities to "reposition" assets because capital funding for long-term recapitalization is declining; she said HUD can restrict use of federal capital funds for buildings judged obsolete. Blakely also noted the authority must submit the PHA plan to HUD by July 17 (staff said the submission deadline is imminent).

The commission approved the amended motion on a roll call vote. The amended motion (adding a veterans preference for the scattered-sites dispositions) and the underlying resolution were both approved by recorded vote, with Resident Commissioner Villegas noted as absent.

Next steps noted by staff include completing HUD submission paperwork, drafting a memorandum of understanding with Habitat for Humanity for the 33-unit transfer, and developing implementation terms for silent-second mortgages and deed restrictions on units that remain in the authority's control.

Why it matters: the plan shifts the Salem Housing Authority away from scattered-site and aging multifamily ownership toward options that the agency says are more sustainable and that could expand affordable homeownership. The authority also tied the change to anti-displacement goals and to a strategy that trustees called a possible path to generational wealth for some long-term residents.

Commissioners and staff said many implementation details remain to be written into MOUs, deed restrictions and loan documents, and some programs described (for example, the veterans preference and partnerships with community organizations) will be shaped by HUD review and later contract work.