Monday, August 19, 2019

Multifamily Marketwatch - August 19, 2019

This week: Representatives of landlord and tenant groups question the Portland Rental Services Office's use of funds generated by the new rental services fee to pay OneApp Oregon for renter data; economic indicators are causing investors to worry about a potential recession; a report from the Terner Center for Housing finds that impact fees are negatively impacting housing construction in California.

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Wednesday, August 14, 2019

Funding of OneApp Oregon through Rental Services Fee Receives Criticism from Landlord and Tenant Groups

Since the city approved an annual $60 per unit fee on rental housing in Portland last week, critics have come forward questioning a line item in the Rental Services Office budget that funnels $128,000 per year to private company OneApp Oregon. According to the Willamette Week, Multifamily NW executive director Deborah Imse expressed concerns over OneApp's handling of data that landlords are not able to ask tenants for under the Fair Housing Act. She also said that landlords who have used OneApp have found that tenants who have been told they qualify for a unit frequently do not meet screening criteria. Meanwhile, Margot Black of Portland Tenants United, who does not often find common ground with landlord groups, expressed similar concerns. Black does not believe that OneApp has successfully met the needs it sought to address. She is urging the Rental Services Office to be more accountable, and to use its limited funding more wisely. Read more.

Monday, August 12, 2019

Multifamily Marketwatch Podcast - August 12, 2019

This week: The Portland City Council approved an annual $60 per unit fee on rental housing; Oregon Secretary of State Bev Clarno released a report on end-of-budget-cycle spending among state agencies, issuing 16 recommendations to improve transparency in state budgets; the National League of Cities' Housing Taskforce is calling on cities to work together to collect and share data in order to take on the nationwide housing shortage.

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Thursday, August 8, 2019

Minneapolis Rejects Single Family Zoning, But Is It Enough to Improve Affordability?

Bloomberg Businessweek reported last week on the adoption of the Minneapolis 2040 plan, which ended single family zoning in the city. While single family buildings are still permitted, now duplexes and triplexes can be built in these neighborhoods as well. Since the passage of the new zoning code, the state of Oregon passed its own ban on single family zoning in cities throughout the state (HB 2001). But while many Minneapolis homeowners believe that the 2040 plan will lead to the destruction of established neighborhoods, developers argue that the new rezoning does not go far enough. Steve Cramer of the MPLS Downtown Council estimates that developers will need to spend $3 billion in order to make up for a decade of underbuilding in the city, as well as an additional $1.3 billion per year to keep up with population growth. Duplexes and triplexes will not enable developers to efficiently bring enough units to market to meet demand. Read more.

Wednesday, August 7, 2019

Portland City Council Approves $60 Per Unit Annual Fee for Rental Housing

The Portland City Council voted this morning to approve a $60 per unit annual fee for rental housing, which will provide funding for the Rental Services Office. Commissioner Fritz was the only Commissioner of the four present to vote against the fee (Commissioner Hardesty was absent). Fritz indicated that she would have voted in favor of this fee last year, prior to the passage of recent local and statewide regulations impacting landlords. She also believes the flat fee structure is regressive, and that mobile home parks should have been exempted.

The city council passed the fee over the objections of landlords, who testified a week earlier that the charge was a tax that would be passed on to renters since all the services it supports were for renters. Read more. 

Multifamily Marketwatch Special Edition: Greater Portland, Inc.

HFO Partner Greg Frick discusses the challenges of recruiting businesses to Portland in the current environment with Larry Holt, Vice President for Greater Portland, Inc. Greater Portland Inc. provides support and services to companies seeking to relocate or expand in the Portland metro area.

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Monday, August 5, 2019

Developer Switches Lloyd Condo Development to Market Rate Rentals

The Oregonian reports that mere weeks before the slated opening of a 162-unit seven-story condo building in the Lloyd District, its developer has flipped it to market-rate apartments as the result of sluggish demand. Read More.

Despite Ongoing Construction, Seattle and Portland's Rental Vacancy Rates Remain Among Nation's Lowest

Greater Seattle has the nation's 6th lowest rental vacancy rate while Portland ranks 11th.

The U.S. Census Bureau reports that second-quarter 2019 rental vacancy rate for the Portland/ Vancouver/ Hillsboro metro area was 4.1%, a drop of 0.7% from one year earlier.

Seattle/Tacoma/Bellevue's metro area vacancy rate was listed at 3.3%, down 0.8% from a year ago.

The nation's lowest rental vacancy rates, by metro area:

  1. Cleveland, OH - 1.5%
  2. San Jose, CA - 2.0%
  3. Columbus, OH - 2.2%
  4. Boston - 2.9%
  5. Allentown-3.2%
  6. Seattle/Tacoma/Bellevue - 3.3%
  7. Akron - 3.6%
  8. Riverside, CA 3.7%
  9. North Port, FL - 3.9%
  10. Rochester, NY 4.0%
  11. Portland/Vancouver/Hillsboro - 4.1%
  12. Denver - 4.4%
  13. Salt Lake - 4.4%
  14. L.A. 4.5%
Average National Rental Vacancy Rate

The average national rental vacancy rate for Q2 2019 was 6.8 percent for multifamily dwellings of five or more units -- no change from one year earlier, despite continuous delivery of multifamily units throughout the national market.

Year-over-year vacancy rates in the Western U.S. decreased, from 5.1% to 4.8%.

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U.S. Homeownership Rate Falls
After falling to a 26-year low in 2016, the homeownership rate has rebounded but fell slightly over the past year to 64.1%. Homeownership in the West has also decreased from 59.7% in Q2 2018 to 59.3% in June 2019.
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