The state purchased the homes in 2021, with most of them intended to rebuild Royal Oaks Mobile Manor in Phoenix, which was destroyed in the 2020 Almeda Fire. Families who lost their homes in the fire were prioritized for housing.
But last summer, the homes were found to be unfit to live in, due to mold, water leaks and other issues. There are unresolved questions about why the homes had defects.
Now, OHCS has announced it will auction off the defective homes in an effort to recoup some of the approximately $24 million dollars it says it spent on them.
Caleb Yant, deputy director of OHCS, said buyers will be informed about their quality.
"We're very intentionally disclosing everything that we know, so there's notices going out to all potential buyers of the different inspections that we've had, the code violations, the reports that we've done, had experts do on water intrusion, those sorts of things. So potential buyers know exactly the status of the units," he said.
He said buyers will also have access to hundreds of photos of the units, and there will be an opportunity for buyers to inspect the units themselves and "bring whatever professionals that they need in order to really understand the current status of the units."
After the homes were found to be defective, OHCS said in August 2023 that it planned to rebuild them with a different manufacturer. But in March, it changed tactics and announced it would replace the homes instead. A new manufacturer is currently building long-awaited new homes for Royal Oaks.
Originally, move-in for fire survivors was slated for September 2023. The new batch of modular homes could now be ready for move-in in April 2025.
OHCS says these auctions will occur in coordination with the state's Department of Administrative Services (DAS) Surplus and a third-party service called GovDeals, which DAS regularly uses to sell state-owned equipment.
"We know that there is a number of parties who are interested in purchasing the homes and repair them," OHCS said in a statement.
But it's unclear how much these defective modular homes will sell for.
"It's challenging to predict what the price point will be," Yant said. "I don't think that we're expecting to recoup the entire amount [we spent on them]."
Meanwhile, OHCS and Oregon's Department of Justice are in ongoing legal proceedings related to why the original batch of modular homes had defects, according to OHCS. Yant declined to comment on that litigation but said the auctions are not the only way OHCS is working to recoup funds.
Some have wondered if the state was negligent in caring for the original modular homes in the period between construction and installation. It took time to find a suitable location for them, so they were left sitting for months. OHCS said the problems were not due to the homes being unoccupied for so long but because of problems with the manufacturing.
The first two-week auction will begin on Oct. 29 and will include 33 homes. The next auction will begin on Nov. 7 and will include 35 homes. Those 68 homes are all currently being stored in Medford. There are also 72 additional homes that the state purchased from the manufacturer, Nashua Builders in Boise, that are still in Idaho. Yant says they will be moved into Oregon and auctioned off in the spring of 2025.
Anyone who would like to register to participate in the auction can do so .
