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One year ago, City Commissioner Dan Ryan promised a gift to the 11 families who live in a Southeast Portland mobile home park: The city would spend $3.5 million so a nonprofit could purchase the land beneath their homes and save the residents from displacement.
That was welcome news to the residents of Kelly Butte Place, located along Southeast 112th Avenue. Four years ago, a developer and the property’s future owner had pulled permits to construct 26 single-family houses on the 1.5 acres on which the manufactured homes stand. The residents own their homes but not the land under them.
A purchase using city dollars would eliminate that threat, preserving what’s known as naturally affordable housing—that is, places to live that remain cheap because they’re so modest.
One problem. A real estate appraisal commissioned by the city this spring suggests Ryan offered to pay the landowner $2 million more than the property is worth.
That appraisal, never previously reported, has thrust the deal back into limbo—along with the residents of not just one mobile home park in Southeast Portland, but two.
City Commissioner Carmen Rubio now oversees the city’s housing strategy, and she’s refusing to pay $3.5 million for land appraised at $1.5 million without ensuring more protections for the second mobile home park involved in the deal.
“When using precious taxpayer-paid housing funds, it’s an ethical and moral imperative to get the most long-term affordability for residents that is within our power to do,” says Rubio’s chief of staff, Jillian Schoene. “It’s the city’s responsibility to make sure that we get this right, and that’s exactly what we are doing now.”
Ryan says his deal would have protected all 35 families at the two mobile home parks from losing their homes. The fate of the two parks is linked because Ryan entered into a joint negotiation with two property owners who were seeking to redevelop them.
“I did the best I could and literally saved the property by working directly with the developer and appealing to his humanity,” Ryan tells WW, adding that he supports Rubio’s renegotiations. “Sometimes you do what is right—and it’s not about numbers on the page.”
Myrna Brown and her husband have lived at the second of those parks, Strawberry Acres, for 25 years—and learned two weeks ago that their home might be in jeopardy. She doesn’t care which city commissioner is in the right.
“I felt betrayed. We worked so hard to do what we’re supposed to do in the American world. You work, you buy a house, you raise a family, you work hard,” Brown says. “This is a crock of crap.”
Brown works in housekeeping and her husband receives disability checks. Strawberry Acres lies in the working-class Powellhurst-Gilbert neighborhood, but the tall blackberry bushes that girdle the park make Brown feel safe.
She began to suspect something was amiss three weeks ago, when the owner of Strawberry Acres, Mark Perkins, began showing up at the park frequently to do small projects, like clean out the drains or promise to repaint the mailboxes.
“He had left me a message on the phone saying he needed to talk to me, saying it was urgent. He said, ‘You’re going to hear some things, and my intent was never to sell Strawberry Acres,’” Brown recalls. “But then we keep digging a little bit more, and we were just kind of slammed with it, boom!”
Brown learned the fate of her mobile home was tied to years of negotiations among Perkins, the city of Portland and the owner of Kelly Butte Place.
In August 2018, Portland amended its code so that mobile home parks could not be rezoned for redevelopment without significant scrutiny. The change aimed to protect naturally affordable housing from being razed for redevelopment.
But Strawberry Acres and Kelly Butte Place had just slipped under the wire. Adam Hoesly, a developer purchasing Kelly Butte Place from Perkins, had applied for permits to build single-family homes at both.
WW wrote about the residents of Kelly Butte and their uncertain future (“Move Your Home,” Feb. 17, 2021). Soon afterward, Commissioner Ryan sprang into action.
He began negotiating with Hoesly, who at that point had purchased Kelly Butte from Perkins for $3.3 million, and with Perkins, who still owned Strawberry Acres, where Hoesly had also applied for development permits. Ryan’s aim: get Hoesly to withdraw permit applications so none of the residents had to leave.
As Ryan negotiated, nine residents of Kelly Butte sued the two property owners in Multnomah County Circuit Court. The parties agreed to settle last year, if the city agreed to provide the money for a nonprofit to purchase the property.
Finally, in November 2022, Ryan inked a letter of intent with Hoesly and Perkins. Price: $3.5 million for Kelly Butte, so long as the permit applications at both parks were canceled. The Portland City Council—including Rubio—had greenlighted applicable funding in the spring.
Two months later, though, Mayor Ted Wheeler would reshuffle the city’s bureaus, handing Housing to Rubio.
Rubio’s staff balked when they saw the terms Ryan had negotiated.
Their first objection: No one had conducted an independent appraisal of the land. So Rubio approved one this spring. Real estate company CBRE determined that the land, in its developable state, was worth $1.5 million—$2 million less than Ryan offered.
Their second problem: Other than revoking the permits for Strawberry Acres, Rubio believed Ryan had not negotiated strong enough affordability protections for the park—like limiting the income of future homeowners—so that it would remain available to low-income residents in the long term.
Not everyone is convinced Ryan cut a lousy deal. Margot Black, a longtime housing advocate, says Ryan’s letter of intent protected Strawberry Acres residents just fine because all they needed was for the construction permits to be canceled—that meant they could stay. At a tense town hall meeting hosted by Rubio’s office earlier this month to explain the situation to park residents, Black pointedly told city staff: “It was Rubio’s office that came back and said, ‘We want more conditions.’ We had everything we needed. We didn’t have to knock on these doors and terrify these folks.”
No matter: Rubio’s office withdrew Ryan’s tentative offer, which technically expired in March, and presented Hoesly and Perkins with three new options this fall.
The first offered Hoesly $1.6 million for Kelly Butte, but included no protections for Strawberry Acres. The second offered Hoesly $2.6 million for Kelly Butte while canceling permit applications for Strawberry Acres.
The third choice, which Hoesly appears to prefer, offers $3.5 million for Kelly Butte Place so long as the permit applications for Strawberry Acres are withdrawn and the residents and Perkins agree to a 30-year income restriction that ensures only prospective homebuyers making less than 100% of the area’s median income can move in.
Black tells WW that the income restrictions Rubio’s office is seeking are at best irrelevant and at worst limit how much Strawberry Acres residents can sell their homes for in the future.
“The only thing it does is restrict the value of their asset,” Black says.
Jonathan Singer, an attorney representing both Hoesly and Perkins, says his clients hope a deal is “close at hand.” He also argues the CBRE appraisal is inherently faulty; “however well-intentioned, [it] didn’t identify any truly comparable properties—underscoring the unique value of the Kelly Butte property.”
Meanwhile, the lawsuit filed by Kelly Butte residents remains ongoing, pending the city’s final deal. And for the fourth consecutive year, homeowners in two parks feel uncertain about their future.
“There cannot be any reason good enough to demolish and develop,” says Gerilynn Ellis, who lives in Strawberry Acres. “There’s not a single one of us that has an option. Isn’t that awful?”