The Mid-Willamette Valley Community Action Agency in Salem converted this ARCHES Lodge into a shelter and transitional housing. Projects like these could get a boost in funding and resources under a new statewide homeless shelter framework that was sent to the House on Tuesday. (Courtesy of Oregon Community Foundation)

The legislation cleared a budgeting committee Tuesday after lawmakers balked at the state’s fiscal outlook and declining revenue

 

Gov. Tina Kotek’s statewide homeless shelter support program advanced Tuesday out of a budgeting committee to the House floor, despite widespread dismay that Oregon’s latest attempt at combatting homelessness is falling short.

Kotek’s shelter program, and much of the rest of her more than $800 million recommended homelessness budget, took a haircut amid decreasing revenue from economic uncertainty due in large part to trade wars and President Donald Trump’s ongoing tariffs.

Those dynamics have prompted cuts across the board for agencies such as the state’s Housing and Community Services Department. The $2.6 billion department budget lawmakers recommended on Tuesday includes almost $205 million for a signature statewide shelter project Kotek and Rep. Pam Marsh, D-Ashland, have worked to develop over the past year.

“A mental health dollar is not what a mental health dollar was five years ago — it’s much more expensive,” said Rep. Tawna Sanchez, D-Portland, co-chair of the Joint Committee on Ways and Means, at a Tuesday hearing. “We will have a lot of conversations and a lot of opinions, I’m sure, about how we can manage the resources of our state. But I will tell you we are in a different place than we were sometime ago.”

The allocation falls short of the requests made by Kotek in her December proposed budget, which recommended a total of $217 million for a statewide homeless shelter system. The past two-year budget slashes the department’s funding by more than $1 billion in comparison to the 2023-25 biennium, cutting back on tenant services and emergency rent assistance but including $204.9 million for a statewide shelter effort. Half of that allocation will be ongoing until 2034.

Kotek told reporters Monday that she is still reviewing agency budgets, but said: “I wish we were in a different funding environment.”

“I feel good about the fact that the Legislature has focused on remaining and staying committed to what we have said around shelter and rehousing,” she said. “And frankly, we just need to be doing more on the housing side, and so that’s what I’m looking for as the rest of the budgets finish up.”

How the shelter funding works

The funding would also build on previous programs addressing homelessness that Oregon has implemented in the past few years, including Kotek’s 2023 declaration of an emergency regarding homelessness. Qualifying shelters must be available every day of the week throughout the day and in various seasons or weather conditions.

The proposed money would go toward helping the department divide the state into different regions with various shelter programs, allocating funding through contracts, 70% of which must go to low-barrier shelters aimed at harm reduction and getting people into housing without stringent requirements. The rest of the funding could go to recovery-based shelters that are “client-driven and support social integration,” according to the legislation.

Republicans on the committee opposed motions supporting the Housing and Community Services Department’s funding and the statewide program’s own bill, which is funded under the department’s budget.

Sen. Dick Anderson, R-Lincoln City, said Tuesday that he was unsure whether the funding would address the root causes of the state’s homelessness crisis.

“We decide to continue to fund shelters at a higher and higher stage and are not taking care of new production to the level that we need to in order to get off of our fixation with shelters and rent relief,” he said. “I just raise that question of, do we really want to solve housing and get ourselves out of the housing crisis?”

Homelessness and evictions have been on the rise in Oregon in the past few years. The amount of people experiencing homelessness from 2023 to 2024 grew 13.6%, according to the U.S. Department of Housing and Urban Development, with nearly 23,000 of Oregon’s roughly 4.2 million residents counted as homeless.

More than 60% of those individuals — 14,191 — were unsheltered. This year also clocked in at a record number of evictions filed in court, more than 27,000, according to the nonprofit Oregon Law Center, a number that research suggests vastly underestimates the total amount of evictions in the state given that many don’t go through the courts or a mediator.

Under the budget for the department and statewide system — included in House Bill 5011 and House Bill 3644 — officials would need to adopt rules to implement the shelter program by the beginning of next year, and regional coordinators would be selected by May. The proposed budget directs the department to return to the committee in February with recommendations for funding shelters, addressing evictions and creating homelessness prevention programs.

House Minority Leader Rep. Christine Drazan, R-Canby, called the shelter program’s legislation “the most abysmal public policy that I have seen in front of me today.”

“This assumption that the people need access to our shelters and 70% of them are not on the road to recovery and would not welcome the opportunity to be in a shelter where people are not actively using is concerning to me,” she said Tuesday.

Sanchez, however, disputed that characterization, arguing that the 30% of funding set aside would be more than enough to support families, who are often “the very first to have access” to housing if they have children. She also contested another claim Drazan made that the statewide program would sunset in 10 years; in fact, it would last for eight.

“We’ve got to dig ourselves out of this thing,” Sanchez told her colleagues. “And it’s going to take more time than we want.”