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In recent years, some of Portland’s largest nonprofit providers of supportive housing have begun to face a remarkable new expense: They effectively had to start self-insuring their properties after insurance companies backed away amid surging costs to repair units that had been burned, flooded or left in disarray.
The dynamic underscores the interconnected nature of Portland’s mental health, drug addiction and housing problems—and the challenges of the “housing first” model implemented by Multnomah County, which prioritizes permanent housing over getting people into treatment or sobriety.
Nonprofit leaders discuss the matter gingerly.
Among the tenants who need housing are people with high-acuity psychiatric and addiction disorders, and those are oftentimes the people who cause the most damage to units.
“They’re not ready to be housed yet,” Cascadia Health CEO James Schroeder tells WW in an interview. “They need some preparation to get there so that we don’t have things like this happen.”
When someone lights a fire in a unit, Schroeder explains, that’s bad for them—they’ll probably face eviction—but it is also bad for other people at the property trying to get their lives on track.
Schroeder confirmed to Portland city councilor Steve Novick during a Sept. 9 work session that the issue jeopardizes housing providers’ finances as property insurers bow out.
In 2023, Cascadia Health says its property insurance deductible jumped from $10,000 to $100,000, though the figure had fallen to $25,000 as of August 2026.
Another major provider of housing for high-acuity residents in the Portland area, Central City Concern, tells WW it had a $10,000 per-incident deductible in 2020 compared to a $100,000 per-incident deductible as of July this year.
Despite the fact that this means CCC is taking on greater risk itself, spokesperson Laura Recko says that the nonprofit’s insurance premiums have also risen fast.
In an email, she said the insurance provider CCC once used decided to reduce its coverage in Oregon, meaning CCC had to seek a new insurer at a time when there is “reduced market interest in covering affordable housing in general, and in the Portland market specifically.”
A recent CCC presentation drawing on Medicaid and other data found that nearly half of the actively homeless people in the Portland metro area fall into the “High Acuity Behavioral Health cohort”—those with psychosis or addictions to stimulants or opioids, or some combination.
This population is relatively small but exceedingly difficult and expensive for the state to support.
Take the health care realm, for instance. Health Share of Oregon, which manages most Medicaid plans in the Portland area, estimates people in this high-acuity group make up about 9% of the local population on Medicaid while drawing 29% of Medicaid costs and 39% of inpatient Medicaid admissions. Health Share says those who have both a stimulant use disorder and psychosis are roughly 10 times more likely than the average adult to show up at the emergency department, and as much as 15 times higher when their housing is insecure.
And the costs show up in housing, too. Nonprofit supportive housing providers say they are having to respond to acuity that their units were not designed to hold. And they report operating expenses rising far faster than inflation.
Generally, housing operators like Cascadia and CCC don’t decide who gets permanent supportive housing; they are assigned tenants by Multnomah County, which prioritizes people based on various factors for the scarce supportive housing available in the community.
The question, of course, is where people should go if, as some believe, they are not ready for permanent housing.
With the state’s highest-level psychiatric facility, the Oregon State Hospital, completely full, Schroeder believes the city needs more intermediate spaces for people to get stabilized and engaged with treatment and care when they are, say, leaving the hospital, or spiraling out of control in their apartment.
The settings, which could function in the continuum as both “step-up” and “step-down” forms of care, are rarer here than they are in other places, he says. But he says their function is to buy time and space to work with people so they don’t have to go to “a housing setting where they’re going to potentially disrupt the other folks, cause damage, and then ultimately have that failure of being evicted, which is what we’re trying to prevent.”
