Ombudsman investigation finds predatory towing harmed residents of low-income housing complexes

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Introduction 

In December 2023, the Ombudsman learned about allegations of predatory towing practices at several Cully neighborhood properties owned by Hacienda CDC in Northeast Portland. The complaints came from residents of five apartment complexes and clients of a Multnomah County community center and health clinic that cater to immigrants and refugees. Complaints included economic hardship that towing fees imposed on low-income, immigrant community members and allegations of unprofessional and illegal conduct by tow truck drivers. 

To determine the validity of the complaints, the Ombudsman conducted an investigation that included analyzing 2023 City towing data, reviewing Oregon towing law and City towing regulations, consulting with the Oregon Department of Justice and the State Board of Towing, making site visits, and interviewing affected parties. Because we also received complaints from County clients and staff, the Ombudsman reached out to the Multnomah County Ombudsperson, who has jurisdiction over the County facilities. Together, we held a community meeting in January 2024 to hear directly from residents. 

The investigation found that towing caused significant financial and emotional injuries to vulnerable, mostly Latino community members. A single tow costs nearly half of the monthly rent at a studio apartment at the Hacienda properties. On top of that, daily storage fees rapidly increase the cost of recovering the vehicle. If residents cannot afford the fees, their vehicles are auctioned off. Without transportation, they may be at risk of losing employment and eventually face eviction. 

Residents were also confused and frustrated about parking and towing rules. For example, signs are only in English. According to Hacienda, over half of its clients report Spanish as their primary language.   

Our review of City towing data also raised concerns that many of the tows were in violation of state law by a company that has been sued by the Oregon Department of Justice for unscrupulous towing practices. 

The City of Portland provided more than $16 million in construction loans for two of the five Hacienda-owned apartment complexes: Las Adelitas and the Clara Vista Townhomes.[1] The financial harm of towing runs counter to the City’s affordable housing policies and its equity goals. To reduce that harm, we recommend that the Housing Bureau work with Hacienda to investigate alternatives to towing as a primary punishment for unpermitted parking, install bilingual signage, and expand outreach to residents about parking rules. The five complexes are closely connected due to their physical proximity and are managed by the same property management company, which issues a parking permit to each unit. Because residents of the other three Hacienda apartment complexes face the same harms from current towing practices, the Housing Bureau should also urge Hacienda to adopt the same changes there. 

The Ombudsman’s recommendations are limited to parking issues at the apartment complexes. The County Ombudsperson is continuing to review the issues involving the parking spaces at the County community center and health clinic.

Background

The Housing Bureau’s Guiding Principles of Equity and Social Justice note that “people of color experience racism and encounter barriers to stable housing and housing resources at much higher rates than their white counterparts.” To further the City’s housing goals, the Housing Bureau “uses a variety of strategies to stabilize vulnerable renters and homeowners, especially in North/Northeast and East Portland.” Immigrants and refugees are among the priorities of Portland’s Housing Bond Policy Framework, which requires fostering the housing stability of tenants. The Framework states that management of the properties should foster tenants’ housing stability and independence. Portland has also enacted multiple policies to help immigrants feel welcome and safe in our city, including the New Portlanders Policy Commission and declaring Portland a sanctuary city. 

Hacienda’s most recent annual report states that 71 percent of its clients identified as Latino or Hispanic, with over half reporting that Spanish was their primary language. More than a third reported earning less than 30 percent of the area median income - or $33,840 for a family of four in 2023.

Hacienda contracts with a private company, Cascade Management, to manage the two apartment complexes that were constructed with the help of City funds, Las Adelitas and Clara Vista Townhomes, as well as the other three apartment complexes nearby: Villa de Clara Vista, Villa de Rosas, and Villa de Sueños. The units are clustered in proximity on both sides of Northeast Killingsworth Street, Cully Boulevard and Emerson Street. Although the complexes have separate parking lots, two share the same joint entrance with the County community center and clinic. 

Figure 1. The five Hacienda apartment complexes are located in close proximity

To ensure parking is available for residents, Cascade issues one parking permit to each unit at the five complexes. Vehicles without permits face towing by a private tow company under contract with Cascade. Tow trucks may also remove vehicles that take up more than one space or are parked in prohibited areas such as fire lanes. Signs warn that unauthorized or improperly parked vehicles will be impounded or issued a non-compliance notice. The signs at the apartment complexes are in English only. 

The County community center and clinic lease space from Hacienda in a building between the apartment complexes and the offices of Hacienda and Cascade. Parking spaces at the building’s lot are set aside for County clients and employees. The warning signs are in English and Spanish and include an illustrative graphic. 

In 2022, Cascade put a pause on towing. It resumed towing in mid-2023 in response to tenant complaints that vehicles without permits were taking up parking spaces from residents who had permits. The result was dramatic: 178 vehicles were towed between June 13 and December 28, 2023. No other apartment building in Portland had more tows in the same time frame. 

Figure 2. A total of 178 vehicles were towed between June 13 and December 28, 2023

The Portland Bureau of Transportation sets rates and signage requirements for towing from private parking lots and allows vehicle owners to appeal tows they believe failed to comply with the rules. 

The initial cost of a tow is $268, which includes a $50 City service fee. The drop fee for a car that has been hooked up to the tow truck is also $268. Once a car has been towed, the fee per mile to the storage facility is $5, and storage is $32 per day. After five days, a lien fee of $47 to $99 is added depending on the value of the vehicle. 

The City also regulates companies that patrol private parking lots, which some private parking lot owners use as an alternative to tow companies. The owners of about 175 private parking lots in Portland contract with companies that patrol their lots multiple times a day and issue $44 penalty notices to vehicles that park without permission or beyond a lot’s time limits. Penalty notices can be waived for first-time offenders and in cases of financial hardship. Towing is used as a last resort to address egregious or chronic conduct.

Figure 3. Towing charges start at $268 and can increase quickly with daily storage and lien fees

Residents expressed concerns about towing

The City Ombudsman and the County Ombudsperson conducted a community meeting in January 2024. Through a Spanish-English interpreter, residents of the Hacienda-owned apartment complexes mentioned the following concerns as they discussed the financial and emotional toll of the towing of their vehicles. 

• Financial hardship. Residents whose vehicles were towed said they spent at least $300 each to recover them, depending on how long it took them to gather the money to pay. One resident reported paying a total of $1,018 because their vehicle was towed on three separate occasions. A couple said they had to work extra shifts for two months to cover the cost. Other residents lost their vehicles because they could not afford to pay the towing and storage fees. 
• Unprofessional/illegal conduct. Residents said drivers laughed at them, were rude and aggressive, and sometimes smelled of alcohol. One resident said that a tow truck driver made them pay more than $500 to release their vehicle. That amount exceeds the allowed drop fee by at least $232. 
• Minor violations. Several residents said they had parking permits but were towed because they were too close to the white line designating the parking spaces.
• Arbitrary tows. Residents said they came home to find vehicles parked that didn’t have permits. But the tow company would usually only tow one vehicle and not return. This led some residents to feel like they were being targeted or that some residents were receiving favoritism.
• English-only signage. It was noted that the tow warning signs in the apartment complexes were in English while the signs at the County lot were in both English and Spanish with an illustrative graphic. An outreach worker familiar with the community told us that many of the apartment residents have difficulties understanding English. 
• Confusion about rules and resources for residents. Each apartment in Las Adelitas is assigned a parking permit, but many residents did not know that there are not enough parking spaces for each permit holder. Residents said Cascade Management staff were either unavailable or unwilling to address concerns about parking or accommodate special or temporary circumstances. While Hacienda has residential counselors available to consider such concerns, several residents said they were unaware of this resource.

Towing from Hacienda properties impacted County staff and clients 

In addition to impacting residents, we learned that towing from Hacienda properties was also affecting clients and staff of the County community center and health clinic. Several women have dropped out of domestic violence and mental health programming because they consistently can’t find a place to park and are afraid of getting towed if they park outside the County lot. In December, we received a complaint from a County physician who had to pay a $268 drop fee and a $6 fuel charge to prevent their vehicle from being towed from a Hacienda parking lot. We facilitated an appeal through the Bureau of Transportation, which determined that the hook-up was illegal, and their money was refunded.

We were also informed about an incident when a pregnant woman receiving services from the clinic couldn’t find a space and parked in a resident spot. When she got out, her car was hooked to a tow truck. She had to pay a drop fee to keep it from being towed. 

Figure 4. Bilingual signs with graphics, like those at the County community center and clinic, would increase resident understanding of parking rules at the Hacienda apartment complexes

Towing may have violated towing laws

Oregon law (ORS 98.854) prohibits towing a vehicle from a private parking lot without contacting the owner of the parking facility or the owner’s agent at the time of the tow and receiving their signed authorization. One exception (ORS 98.853) is for vehicles parked without permission in the parking lot of an apartment complex in which there are more residential units than parking spaces, and the landlord has issued parking tags or other devices that identify vehicles that are authorized to park. 

Four of Hacienda’s Cully apartment complexes have at least one parking space per unit, according to Cascade Management. Each of the tows from these properties would have required signed authorization from Cascade at the time of the tow. Yet 88 percent of the 92 tows from these four lots occurred between 11 pm and 7 am, when it seems unlikely that signed authorization would have been provided. Cascade did not respond to questions about whether they have staff on duty between those hours and whether staff provided signed authorization before each tow. 

State law also requires that a tower with more than one lot take the vehicle to the closest lot available that has space. Our review found that just 42 of the 178 tows (24 percent) were taken to the nearest lot. We did not investigate whether closer lots had space. 

Cascade Management contracted with two tow companies in 2023. One of them, Retriever Towing, was sued by the Oregon Department of Justice in January 2023 for violating state towing laws. The ongoing lawsuit alleges that Retriever towed vehicles without getting signed authorization prior to towing, which has been required since 2018. According to the Department of Justice, in the 20 years before the lawsuit was filed, complaints against Retriever made up approximately 25 percent of all towing complaints the Department received. 

Conclusion                      

Towing from the Hacienda properties during the second half of 2023 took a significant toll on a population that identifies as primarily Latino or Hispanic, reports Spanish as their primary language and includes a significant percentage of economically vulnerable community members. To place the financial impact in context, a single tow costs nearly half the $559 monthly rent of a studio apartment at Las Adelitas. The 178 vehicles towed cost their owners nearly $51,000 in towing and mileage fees alone, undermining the residents’ ability to pay rent, buy food and support their families. Potential evictions due to towing costs would not only harm the individual but place an additional burden on City resources to help them find a new place to live. 

Some County clients lost out on critical mental health services to avoid having their vehicle towed when the only available spaces were in the residential lots.

Two aspects of the towing raised significant red flags about their legality – whether signed authorization was provided as required for more than half of the tows, and whether tows were deliberately not taken to the nearest lot. Our investigation was unable to confirm those concerns. 

Recommendations

In its equity principles and in the Housing Bond Policy Framework, the Housing Bureau has set goals of fostering the stability of vulnerable tenants and addressing housing obstacles that immigrants face. To ensure that the Bureau’s investments in the Hacienda properties continue to contribute to these goals, the Ombudsman recommends that the Bureau work with Hacienda to make the following changes.   

• To reduce the economic and emotional harm of illegal and predatory towing, look into contracting with a company that writes penalty notices instead of towing vehicles, and craft a patrol plan to reduce parking by unpermitted vehicles. Safeguards should be put in place to avoid incentivizing predatory ticket-writing, such as issuing warnings for first offenses and prohibiting the issuance of penalty notices for minor violations. 
• To reduce confusion, install bilingual English/Spanish signs with graphics. 
• To make sure all residents are aware of the new rules, conduct outreach to residents and ensure that they are aware of the services of Hacienda’s residential counselors.