A former motel on Third Street in Bend renovated into an apartment building will lift more than 75 people out of homelessness — and likely keep them off the streets for good.

Local managers are leaning on a body of research that shows giving people permanent housing, rather than shelter, is a key to squashing homelessness.

“It really is designed to be the first permanent housing placement for a lot of folks experiencing unsheltered homelessness, so they can move on to market-rate housing after they have stabilized,” said Erik Nelson, housing specialist with the Central Oregon Intergovernmental Council, which is administering the project.

“That’s what makes them such a game-changer for communities,” he said. “You’re building units that the vast majority of people will then no longer be homeless. They will remain housed for their future.”

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The new Old Mill Apartments, converted from the Old Mill Inn and Suites, provides 76 studio-sized units. It will prioritize the area’s most vulnerable populations: people of color, specifically Indigenous and hispanic populations, LGBTQ youth and people with medical conditions, Nelson said.

Tenants exiting homelessness will receive on-site case management support from various local providers while paying a federally-adjusted rent through varying levels of subsidies from federal programs as well as HB 5019, a massive housing package passed by the state Legislature in 2023 that provided $4.6 million in rent subsidies for the Old Mill Apartments. Project funding also comes from Gov. Tina Kotek’s executive orders on homelessness.

Old motel gets new life

The intergovernmental council partnered with Fortify Holdings, a developer with increasing experience in multifamily apartments and redeveloping old motels. The company is familiar with private-public partnership from its work renovating old motels in Medford to house people displaced by the 2020 Almeda Fire.

Fortify bought the Old Mill motel in 2021. Construction delays pushed the project opening nine months past an original target date.

The age of the building, built in the 1960s, meant much of the infrastructure needed an overhaul to meet code requirements, said Emily Wagoner, construction manager for the project.

“Every wall we took down, another thing came up,” Wagoner said. “We pretty much redid everything.”

Each unit is complete with new heating and cooling systems, a bathroom, small kitchen, freshly painted white walls and new flooring, while the outside has a new coat of black paint.

“The building was really, really run down,” said William Buscher, property manager for Fortify Holdings. “It’s cool to see these old buildings get a new lease on life.”

The ‘housing first’ model

Since the COVID-19 pandemic pummeled business for old hotels and motels, the buildings have become an increasingly viable option to create housing for people experiencing homelessness.

The city of Bend bought the old Rainbow Motel on Franklin Avenue in 2022 and converted it to use as a shelter. Redmond’s Bethlehem Inn, formerly the Greenway Motel, reopened as a transitional shelter earlier this year.

But the new Old Mill Apartments provide a unique type of housing not yet available in Central Oregon, said Molly Heiss, housing stabilization director with NeighborImpact, a community resources nonprofit. Unlike shelters, the permanent housing gives tenants a lease and allows them to build rental history, a key piece to getting stable housing long-term. At the same time, the level of case management won’t be as intense as other permanent supportive housing, Heiss said.

“We’re taking folks that need a little bit lighter touch,” she said.

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As the region’s coordinated entry provider, NeighborImpact is responsible for managing homelessness data and pinpointing which people qualify to be immediately rehoused.

Heiss said the Old Mill opening will be crucial as service providers focus on rehousing people from homeless encampments facing removal in the next 18 months, including thousands of acres at Juniper Ridge.

Still, it will only make a small dent in the roughly 1,800 people experiencing homelessness on a given day in Central Oregon, according to a 2024 count.

But Heiss hopes the project will show successes that other parts of the region can emulate.

It follows the “housing first” principle — that providing stable housing without heavy strings attached is the most effective way to get people out of homelessness. The U.S. Department of Housing and Urban Development cites “overwhelming” evidence that housing first programs decrease rates of homelessness, and can shorten stays in hospitals while reducing strain on other services.

“Projects like this are the real thing,” said Nelson. “When we talk about ending homelessness in Central Oregon, projects like this, they’re the future.”