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The city of Portland’s housing authority says its projected 2027 budget shortfall is worse than it originally believed.
Home Forward interim executive director Michael Buonocore wrote in an Oct. 26 email to staff of the state’s largest public housing agency that its budget deficit going into 2027 is $38 million—a higher number than initially projected.
“Our deficit situation is worse than we understood it to be this summer, which puts us in an even more difficult scenario for next year,” Buonocore wrote in the somber email.
Though Buonocore didn’t name responsible parties, his email suggested that prior leadership had severely miscalculated the current year’s budget deficit. (He joined as interim director in May following the sudden resignation of former CEO Ivory Mathews, after WW reported on her abundant travel spending.) This year’s shortfall, originally estimated at $13.8 million, has itself surged to nearly $38 million, Buonocore said.
“It is important progress for us that we’re uncovering these issues so we can have a clear picture of our finances and get back on track over time,” Buonocore wrote. “With that said, there’s no question this is incredibly frustrating, and not the direction we want to be moving.”
The current year deficit is expected to be narrowed by a $28 million bailout from the U.S. Department of Housing and Urban Development, a pot of money called “shortfall” funding reserved for housing authorities whose costs of distributing housing vouchers exceed HUD’s reimbursement rate. (That shortfall funding is not yet guaranteed.)
But Buonocore wrote in the email that Home Forward can’t rely on temporary measures to close structural budget deficits. For instance, Home Forward has been pulling from reserves to deal with increased costs like security, insurance costs and maintenance, but Buonocore called such tactics “not financially sustainable.”
He wrote that the agency is taking steps to close next year’s $38 million deficit—including layoffs, which will be announced Nov. 2; “dramatically reduced spending on administrative costs like training and travel”; increasing the portion of rent that subsidized tenants pay monthly; and furlough days for executive staff, including Buonocore, chief operating officer Ian Davie, and chief people and culture officer Kitty Miller.
Buonocore joined the agency as it was reeling from a wave of negative press that culminated in the resignation of Mathews in late April. WW’s reporting at the time showed that she spent more than $100,000 over three years on travel that sometimes blurred the line between work and play as her agency struggled to keep its units filled, its tenants safe from drug markets that had moved inside apartment buildings, and the organization inched closer to not being able to pay its monthly debts on time.
The Home Forward board of commissioners brought Buonocore on to stabilize the agency—a difficult task given the low morale across the organization, a presidential administration keen on gutting funding for affordable housing, and agency buildings in poor condition.
Buonocore’s biggest decision so far aimed at closing the budget gap has been unpopular among its tenants. He announced that most tenants in the agency’s subsidized housing and on housing vouchers would have to pay a higher portion of their monthly income on rent, which would lower Home Forward’s portion of the bill and in turn create an estimated $6 million in savings for the agency. Home Forward spokesman Rylee Ahnen previously told WW that an estimated 12,356 households would be affected by the change early next year.
“It has become clear to me in the past few weeks just how entrenched our deficit is,” Buonocore wrote in the email to staff on Monday—a problem he said consultants were helping the agency better understand. “We’re taking steps to improve the budget forecasting and development processes across the agency, so we have a clearer understanding of our finances, and we won’t continue to have shifts like this.”
He added that Home Forward is also exploring “a change” to its Moving to Work status, a federal designation historically given to high-performing housing authorities that Home Forward has had since 1999. That status allows the agency to more flexibly spend its federal dollars.
“The big reason to consider this possibility is because it would reset the baseline for our voucher funding, potentially bringing in a meaningfully higher level of funding,” Buonocore wrote. “It would not eliminate our overall deficit, but may give us some major, much-needed traction in that direction.”
