A Portland Apartment Complex Became a Refuge for Immigrants. Its New California Owner Is Offering Them Quick Cash to Get Out.

For the past 18 months, the Portland City Council has gone to extraordinary lengths to protect people like Rath Sok.

Its efforts are not enough.

Sok, 62, fled Cambodia in 1977, after most of her family—including her parents, husband and son—was murdered by the Khmer Rouge.

She found safe haven in a Southeast Portland apartment complex. Sok and her second husband raised three sons in a two-bedroom apartment in the Creston-Kenilworth neighborhood.

But earlier this month, a letter arrived from her landlord. It offered Sok and her 81 neighbors thousands of dollars, if they agreed to vacate the complex.

"We are offering a voluntary program with options for early move-out," the letter said. "Rent increases will be applied to our updated units."

Sok feared that the offer of money was the first step in eviction from her $704-a-month apartment.

"I got the letter, my God. I couldn't sleep. I couldn't eat," she says.

She decided to take the offer—$5,200—and leave the complex, called Holgate Manor.

The money the new owner is offering matches the moving costs landlords are required to pay in a no-cause eviction, under landmark tenant protections passed by the Portland City Council last year—plus an extra $1,000 for leaving within a month.

The landlord, a California investor, is following the law—even going above and beyond what it requires.

If every tenant accepts the cash offer, it will cost the new owner, a company run by Fred Kleinbub, upward of a quarter-million dollars. But the market is strong enough for Kleinbub to absorb the $300,000 expense to empty his building.

The buyout at Holgate Manor marks the largest reported effort in at least a year to remove tenants from a single building. It's the first big event to measure new city policies that seek to slow a wave of mass evictions.

Related: Chloe Eudaly forces landlords to pay moving costs for many evicted tenants.

To be sure, renters are better off today because of the city's efforts. But what's happening at Holgate Manor shows that Portland's renter protections are not enough to keep some of the city's most vulnerable residents in their homes.

The effect of Kleinbub's buyout will be to scatter people from a place that had become a refuge from the terror and trauma of war zones.

At least half the apartments at Holgate Manor are occupied by immigrants and refugees who speak little or no English. Many of them saw the notice and believed the offer was mandatory.

Thirteen have already accepted. Some hope to return; five know they won't.

Kleinbub's property management company has taken the unusual step of hiring one of the city's top public relations firms, Gallatin Public Affairs, to handle talking to tenants and the press.

"We are not clearing anyone out of anything," says Gallatin's Felicia Heaton. "We are using the city's relocation ordinance as a base for how we design this program to make the transition as easy as possible."

In 2016, WW reported on a spate of so-called "no-cause" evictions forcing low-income Portlanders out of the city. Before and after that story, the Portland City Council passed a series of unprecedented rules: a 90-day notice for rent increases and no-cause evictions, followed last year by an ordinance requiring landlords to pay moving expenses after many evictions and rent hikes.

Related: What it's like to be evicted, and not know why.

Local officials also championed a $258 million bond, passed by voters in November 2016, designed to build and preserve low-income units.

It's unclear how many landlords have changed their plans because of the new tenant protections. The bond money is mostly untapped. But a construction boom has eased upward pressure on rents. For the first time in five years, the average rent in Portland increased less than 5 percent last year: It rose only 2 percent.

But that relief doesn't help many Portlanders at the bottom of the economic ladder.

Portland Housing Bureau data shows that for lower-income residents, the city is getting even less affordable.

Four years ago, figures show, a family making $39,720 a year could afford a two-bedroom apartment in half the neighborhoods in Portland. Last year, no neighborhood west of 82nd Avenue met that standard.

Consulting firm ECONorthwest estimates that in the past three years, 24,000 apartments in the metro area saw rent increases—to more than $840 for one-bedroom, and $1,009 for two-bedroom apartments—that moved them out of the reach of moderate-income families. "It's going to be fewer and fewer in Portland," says senior economist Mike Wilkerson.

"If you're being displaced from your existing place to live on a very limited income, it's very scary," says Laura Golino de Lovato, executive director of Northwest Pilot Project, a Portland nonprofit that helps find housing for very low-income seniors. "That's impossible in Portland unless you're seriously blessed with a landlord that's giving you a really, really good deal."

That renders the offer to pay moving costs all but meaningless: Recipients of the money would struggle to stay in Portland without public assistance.

Kam Mang, 70, sought refuge in the United States from the Khmer Rouge in Cambodia. He's moving in with his son for now.

"I looked around," he says. "Expensive."

Holgate Manor looks preserved in amber from an earlier time in Portland's history. The one- and two-story buildings, decorated with tan siding and brick trim, are clustered around U-shaped driveways. It's the kind of shabby, modest apartment complex that has defined the inner eastside for half a century.

But it's also unusual: For decades, its landlord ran it as a landing pad for immigrants and refugees.

Reuben Newsom bought the property more than 40 years ago. He was an evangelical Christian minister who served as superintendent of the Union Gospel Mission in Old Town.

"He wanted to keep rents low and help people," says his daughter, Carolyn Newsom. "He did the handyman stuff himself."

People arrived from Vietnam, Cambodia, Russia and Ukraine.

After Newsom suffered a stroke in the late 1990s, his children gradually took over running Holgate Manor.

As their father had done, they rarely refurbished apartments or raised rent substantially unless apartments turned over, the family and tenants recall.

The decision not to upgrade the apartments and instead wait for tenants to leave created an opportunity for an investor to swoop in with an upgrade and charge higher rents.

The Newsoms sold the property in January for $12 million.

To earn a return on an investment of that size, Kleinbub will raise rents significantly.

The changes may not affect the relative newcomers to the complex, who live in recently refurbished apartments and pay higher rent. Instead, the immigrants who have lived there for decades—and whose units weren't improved—are taking the biggest hit.

Some Newsom family members say they were surprised to learn from their former tenants what was happening to them.

"We didn't realize that," says Carolyn Newsom. "We didn't think that was going to happen."

Fred Kleinbub is known for his generosity.

He's a patron of the arts in California, treasurer of the board for San Diego's Timken Museum, and a philanthropist—he and his wife, Angel, recently pledged $1 million to a center that serves developmentally disabled adults.

A few years back, he tells WW, he decided to start investing in Portland real estate.

"We like the atmosphere," he says. "We fell in love with it. We're from California, where prices are absurd as far as an investor is concerned. We thought we'd try that."

He bought into a city where the rules are changing. Last year, the City Council, led by newly elected Mayor Ted Wheeler and Commissioner Chloe Eudaly, required landlords to pay moving costs after many evictions and rent hikes.

At Holgate Manor, Kleinbub's property management company, Princeton Property Management, tried something Portland has rarely seen before: using a cash offer across a whole building as an incentive to pry tenants out.

"They're trying to get us to self-evict, so they don't have to deal with any eviction problems," says tenant Sara Brassfield, 35.

Kleinbub's property management company even called the money they were offering tenants in their letter "relocation assistance," but made no mention of the fact that the city would require it anyway after an eviction or a significant rent hike.

The company says every tenant who is staying in the complex will get a notice next month of a 9.9 percent rent increase, the maximum that falls below the city's radar, to take effect in July.

Tenants who haven't moved out or moved into renovated units, where the rent could be more 50 percent higher, could be evicted.

There's no gentrifying city in America that's fixed the problem of pushing its less well off citizens to the margins or further.

"Nobody has been able to turn the curve on displacement," says Chris Schildt, senior associate of the Oakland policy nonprofit PolicyLink.

Related: These six cities are smarter than Portland about housing.

But Portland has moved slowly to secure vulnerable properties.

The city has so far purchased one property with the $258 million bond passed in 2016 (it's working on four others). The campaign sold that bond to voters in part as a measure "to prevent displacement" and "allow residents to remain in their home."

But no one at the city, at least no one tracking the issue of housing the vulnerable, had an inkling that Holgate Manor was up for sale or might include the vulnerable. The building was never officially listed for sale.

"Preventing displacement is a top priority for us in how we invest bond resources," says Portland Housing Bureau interim director Shannon Callahan. "We have been actively looking at purchasing buildings with vulnerable tenants living in them. In this case, this was not a building we had any knowledge of being on the market."

So Kleinbub snapped up exactly the kind of property the city told voters it would use the bond proceeds to buy. The sale price of $12 million equates to roughly $150,000 per apartment. The city is currently subsidizing new construction of affordable housing that will cost as much as $567,389 a unit to build.

Related: Blowing past a deadline, Portland's housing bond is beset by delays and doubts.

Tenant advocates want the city to be doing more and doing it more quickly.

"The city has a responsibility to protect affordable housing with communities of vulnerable tenants," says Anthony Bencivengo, an organizer with Portland Tenants United. "They need to intervene in support of tenants fighting to keep their community together."

(Portland Tenants United has been urging the city to require that notices to tenants be written in multiple languages and include information on renters' rights, including relocation payments.)

One other possible fix would be to create a system to give Housing Bureau officials advance warning when a building is being sold.

Eudaly's office is working on a policy that could alert the city to the sale of vulnerable properties. It would give tenants the right to purchase any property up for sale. But so far, officials don't have a way to fund it.

"The city of Portland needs to be flexible enough to step in when we have vulnerable tenants who are about to become homeless," says Eudaly's policy director, Jamey Duhamel.

Outside her apartment, on a brisk evening last week, Rath Sok was packing her white Toyota, preparing to leave Portland. She's grateful to have found a place to move. It's in the unincorporated community of Aloha, in Washington County.

The buyout from her landlord will cover five months of rent at the new place, where the rent is $950 a month. "I'm worried about paying the bills," she says.

Other residents will get to stay, but they also had their lives upended.

Nikolay Landya arrived at Holgate Manor with his wife, Anna, in 1993, after surviving six years in a Siberian gulag before fleeing Ukraine.

He found last month's letter alarming.

"He said he didn't want to move," Anna recalls, speaking through an interpreter. "He said, 'I'd rather die in my apartment.' And that's what happened."

On March 14, Nikolay Landya, 90, died. Anna, 91, buried him five days later in Lone Fir Cemetery on Southeast Stark Street.

Yet Anna may be able to stay in the complex, because she has a federal housing voucher.

As a former farm worker with no knowledge of English, she could still take the landlord's offer of money and get out. But advocates are working on helping her to stay.

"I understand the landlord needed to do the repairs and he needed us to move," she says, "but where would I move?"