Monday, February 17, 2020

RentCafe January 2020 Oregon Rent Report finds Rents Mostly Flat, but Down in Bend and Aloha

According to RentCafe's January 2020 rent report for Oregon, last month saw rents stay mostly flat across the state. Keizer saw this biggest rent increase at 0.5%, followed by Lake Oswego, Happy Valley, and Portland. Lake Oswego still boasts the highest average rent in the state, at $1,689. Aloha saw the biggest month over month decrease at 1.6%, followed by Bend at 1.2%. Rents in Eugene and Springfield were down 0.8%. Nationally, rents are up 3% year over year. Read more.


Multifamily Marketwatch Podcast - February 17, 2020

This week: the Seattle City Council approved a ban on wintertime evictions, including for nonpayment of rent; the Portland City Council met with BPS staff to determine which Residential Infill Project amendments deserve further study; a California-based newspaper asked presidential candidates what they would do to solve the state's housing crisis.


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The Seattle City Council approved a new ordinance that restricts evictions during colder winter months. Before passing the law, the Council made substantive changes, including shortening the duration of the yearly moratorium. Originally, evictions would have been banned from November 1st to April 1st. As passed, the eviction moratorium will run each year from December 1st to March 1st. Prior to the law’s passage, Mayor Jenny Durkan had stated she intended to veto it. But the law passed in a 7-0 vote, and just 6 votes are needed to override a veto. The law is limited to low- and moderate-income tenants, and only applies to rentals within Seattle city limits. The law does not protect tenants whose evictions are due to criminal or nuisance activities, which may endanger their neighbors. Landlords will still be able to evict tenants during winter months, but if a tenant appears in court citing the moratorium, a judge can ask the landlord to refile or delay the eviction until March. The tenant will still be responsible for paying rent during the moratorium, and can accrue fees relating to lease violations. Critics of the law argue that it will prevent landlords from being able to keep up with their own bills, for necessities like mortgages and property maintenance. Some have also pointed out that it could drive low-income renters deeper in debt.

Seattle Times – Seattle City Council Oks Ban on Wintertime Evictons; Here’s How It Would Work for Renters, Landlords

As the Federal Government prepares to allocate funds to shore up Portland’s at-risk levees, some residents of the Bridgeton neighborhood in North Portland are pushing back on the plan. Many residents of Bridgeton live in floating homes, which would be particularly susceptible to Columbia River flooding. The Army Corps of Engineers believes the risk of such flooding is increasing due to climate change, and if the city chooses not to improve its levee system, residents in the flood plain will no longer qualify for federally subsidized flood insurance. Residents’ concerns focus primarily on the plan to build a 3 foot retaining wall down the middle of Bridgeton’s main street, which lies on top of a levee. Some parts of the street would also be walled off, due to instability. Tom Hickey, chairman of the Bridgeton Neighborhood Association, believes this plan would destroy the fabric of the community and substantially lower property values. But Corky Collier, director of the Columbia Corridor Association, believes the city cannot afford to do nothing. While the plan being proposed by the Army Corps of Engineers would cost roughly $158 million, the federal government would pay for approximately two thirds of the cost. Michael Jordan of Portland’s Bureau of Development Services believes that many of the concerns brought by residents and environmental groups are manageable, while the risks of damage from a flood like the one that devastated the Vanport neighborhood are too high to ignore.

Willlamette Week – Federal Officials Fear Devastating Floods along the Columbia River. Residents Fear a Wall through Their Neighborhood

The Portland Business Journal reports that regional home prices and sales have climbed rapidly since the Recession. And despite the slowdown in the number of closed home sales in recent years, the median price of a home in the Portland Metro Area continues to grow. In 2009, the region saw fewer than 19,000 sales, and a median home price of $247,000. Sales activity began to pick up in 2011, and median prices began increasing in 2012. The number of home sales peaked in 2015, when over 33,000 homes sold. The median price at that time was $308,000. Within just two years, by 2017, the median home price had grown to almost $380,000. Sales activity began to cool in 2018, and in 2019 just under 30,000 homes sold – below the 2015 peak but still well above the number of sales that took place during the recession years. The regional median home price as of 2019 was $410,000. While sellers are benefiting from strong increases in home values, the market is becoming more challenging for first time buyers. As prices increase, the amount of time homes spend on the market is also going up, a sign that many Portland residents are being priced out of home ownership.


The Portland City Council held a hearing with Bureau of Planning and Sustainability staff on Wednesday to determine which proposed amendments to the Residential Infill Plan warrant more study. Since the public hearings last month, BPS has been working on a number of amendments based on resident feedback. While the meeting on Wednesday did not include public testimony, city council members had the opportunity to debate the merits of these proposals. Among the amendments that will be studied further are a plan to allow only up to two units on lots in neighborhoods with un-maintained streets; a proposal for an affordability bonus that would allow developers to build up to 6 units if half are priced for households making 60% MFI; and a penalty for the demolition of historic resources. Throughout the hearing, Commissioner Fritz found herself alone on a handful of issues, particularly those that would limit the scope of the Residential Infill Plan. She spoke out against the deeper affordability bonus, due to an increase in height allowance from 30 to 35 feet, and advocated for an amendment that would limit buildings with three or more units to R2.5 zones. With regards to the latter proposal, she argued that because the 2035 Comprehensive Plan laid out where the city wanted more housing to be built, specifically in transit corridors, upzoning should be limited to those areas. R2.5 zones only make up 10% of single family zoned land in the city, and Commissioner Hardesty questioned why the Council would want to limit where middle housing could be built. Hardesty pointed out that increasing density will enable to city to expand transit options in the future. Commissioner Eudaly and Mayor Wheeler both agreed that this proposal is inconsistent with HB 2001. The public record has been reopened for the Residential Infill Plan and these amendments, and a public hearing is scheduled on the amendments for March 12th at 2pm.


Concordia University in Northeast Portland abruptly announced last week that it will close at the end of the Spring semester. The announcement came as a surprise to students, donors, and Portland Public Schools, which partners with Concordia in a program at Faubion Pre-K-8 known as “3 to PhD.” On Wednesday, the Oregonian reported that the shutdown will result in a loss of 1,518 jobs. The Northeast Portland campus only serves 1,200 students, and many of the lost jobs may be part time, but it is still devastating news for the surrounding community. Meanwhile, a Concordia student hired an attorney to draft a class action law suit arguing that the school misled students about its financial situation, and is failing to do enough to help ensure current students are able to continue their education elsewhere. As of February 12th, over 50 students had joined the suit. Prior to the announcement on February 10th that the university would close, university leaders had not spoken publicly about financial struggles. In fact, a February 4th gala had raised $355,000 for scholarships and the 3 to PhD program. It is unclear how the money will be spent, though the University plans to continue accepting donations to assist with the closure process. Other local universities including Portland State, Corban University in Salem, and Western Oregon University in Monmouth have all offered to help Concordia students. WOU is pledging that current Concordia students and any students who have received a letter of acceptance will be automatically admitted if they complete an application. Concordia’s accelerated nursing program will be absorbed by Concordia University Saint Paul in Minnesota, and current students will be able to complete their studies in Portland. The future of the 24 acre campus remains unclear. According to the Portland Business Journal, the property is zoned Campus Institutional 1 with an Aircraft Landing Zone overlay, and redeveloping it to accommodate uses outside of a school or hospital would require a comprehensive plan map and zoning map amendment.


Next City reports that activists in Los Angeles are urging the city to preserve privately owned affordable housing units through eminent domain. Thousands of apartments throughout the city are seeing their affordability requirements expire, and landlords who have kept rents low are now beginning to raise them. At Hillside Villa in the city’s Chinatown neighborhood, rents could increase from $850 to $2,500 per month, potentially displacing longtime residents. A local council member had tried to work out a deal with the property’s landlord, leveraging a $5.4 million loan that the developers received from the city when the project was built, but the landlord and city council were unable to reach an agreement. The council member, Gil Cedillo, filed a motion at the end of January to initiate eminent domain proceedings. Properties seized through eminent domain must be used for a public purpose, and the city must offer “just compensation” for the property. But the landlord of Hillside Villa does not want to sell, and he attributes his decision to turn down the city’s deal to continued protests at the property. He does not believe the LA Tenants’ Union would back down if he agrees to another 10 years of affordability. Jacob Woocher of the Tenants Union believes the city must take drastic action to prevent displacement at the property. While he acknowledges it is unrealistic, he believes the city should use eminent domain to preserve 11,000 units across LA that are at risk of becoming market rate. The proposal to use eminent domain to purchase Hillside Villa will go to the City Council’s housing committee prior to going to a vote before the entire council.


The Portland Mercury reports that on the 10 year anniversary of the City of Portland’s adoption of the Bicycle Plan for 2030, bike advocates believe the city has a lot more to do in order to meet the program’s lofty goals. Emily Guise of bicycle advocacy organization Bike Loud PDX believes the city is demonstrating a lack of urgency regarding the plan, which aims to increase bicycle use to 25% of all trips by Portlanders. The plan’s pie-in-the-sky goal of building 681 new biking miles in the city was accompanied by a more realistic goal of ensuring that 80% of city residents live within a quarter mile of a safe and accessible bikeway. This second goal would require only 327 new bikeway miles. The city has built or funded approximately 58% of that goal and is on track to meet it by 2030. At the same time, however, there has been an increase in bike and pedestrian fatalities on Portland streets, and the city has failed to lower carbon emissions. As of 2017, just 6.3% of all trips in the city were by bike, the lowest level since 2007. But PBOT spokesperson Dylan Rivera believes the 25% mode share goal will be achieved by 2035. Guise argues that the lack of protected bikeways is a major hurdle to getting more people on bikes in the city. She also believes that programs that encourage bike ridership, such as Sunday Parkways, could increase comfort levels among residents who are still afraid to go by bike.


Finally, Palm Springs, California-based newspaper the Desert Sun asked Democratic presidential candidates what they would do to improve the state’s housing crisis. The candidates’ answers focused largely on restrictive zoning codes, a lack of federal investment in affordable housing, and the expansion of existing programs like Section 8 housing vouchers. Senator Elizabeth Warren, whose platform includes three separate housing plans, believes she can lower rent nationwide by 10% by addressing the under-supply of affordable housing as well as state and local land use laws that increase the cost of building new units. She plans to invest $500 billion over 10 years to build, preserve, or rehab 3.2 million low income housing units. Mayor Pete Buttigieg plans to invest in new affordable housing, Housing Choice vouchers, and programs that help low-income households afford to buy a home. He also plans to require cities that receive federal housing funds to create an affordable housing strategy. Businessman Tom Steyer argues that housing affordability is primarily a consequence of wage stagnation, though he also pledges to invest $47 billion per year in affordable housing. Senator Bernie Sanders argues that housing is a human right, and pledges to invest $2.5 trillion over 10 years to build 10 million affordable housing units. He also plans to enact a tenant bill of rights, which includes a national rent control standard. Senator Amy Klobuchar’s plan includes ensuring that every American who qualifies for a Section 8 housing voucher receives one, as well as creating a new federal tax credit to encourage investment in building new homes in distressed neighborhoods. Former Mayor Michael Bloomberg did not lay out plans for increased investment in affordable housing programs or development, focusing instead on encouraging cities to loosen zoning rules.

HFO-TV: Asbestos in Multifamily Housing: Enforcement and Remediation in Oregon and Washington

The experts from J.R. Johnson talk with HFO Partner Greg Frick about the government's recent stepped-up enforcement of new regulations requiring testing multifamily units for asbestos before disturbing or demolishing suspicious materials. Appearing for J.R. Johnson LLC are President Clint Arp and specialist Jason Ramsey.


Monday, February 10, 2020

Seattle Votes to Ban Wintertime Evictions

The Seattle City Council has voted to limit when and how renters can be evicted.

The Seattle Times reports that Council member Kshama Sawant’s legislation would prohibit evictions from being carried out between Nov. 1 and April 1, with some exceptions. Sawant has called winter evictions cruel and inhumane.

Learn more.

HFO-TV: Tyrone Poole on Oneapp Rental Application Service

Tyrone Pools is the inventor of OneAppOregon.com, a new platform to connect renters directly with housing they qualify for through a simple interface that requires just one rental application. An informational event for owners will be held Thursday Feb. 20 from 3-6 pm at the Double Tree Lloyd Center.



HFO Partner Greg Frick Presents an Industry Update

A 2019 recap and 2020 forecast for the Portland/Vancouver MSA Apartment Market is presented in this presentation by HFO Partner Greg Frick.




Oregonian Editors: Don't Rush Homelessness Measure Onto May Ballot

Editors of The Oregonian/Oregon Live have this to say to Metro government criticize Metro government for "Magical thinking" and implore: "Don't do it." Read more.

Rent Control, Criminal History Bills Dead in Washington

According to the Washington Multifamily Housing Association, proposals that have not yet had a policy committee hearing or vote are considered dead for this legislative session in Olympia. The rent control bill, HB 2779, had a first reading on January 21st and was referred to the Civil Rights and Judiciary Committee. That committee did not hold a hearing on the bill, so it will not move forward this legislative session. Another bill, Senate Bill 6490, would have prohibited landlords to consider criminal history in tenant screenings. According to WMFHA, this bill is also not going to move forward this legislative session because the committee did not bring it to a vote. Read more.

Multifamily Marketwatch Podcast - February 10, 2020

This week: Oregon State Senator Shemia Fagan proposes a bill increasing enforcement of Fair Housing Laws in Oregon; Tacoma finds success with a program providing temporary rent vouchers for college students, and a new Harvard study provides details but few surprises on the status of Rental Housing in America.


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In response to complaints from minority community groups in Oregon, State Senator Shemia Fagan is introducing SB 1534, which would increase the enforcement of Fair Housing Laws. Labor Commissioner Val Hoyle is a vital supporter of the bill – she believes that the current complaint-based system is insufficient. Factors such as fear of retaliation and language barriers can keep renters from reporting violations. Renters may also be unaware that they are not being informed of move-in specials or that they are being asked to pay higher security deposits. According to the Fair Housing Council of Oregon, more than one in four prospective renters faced discrimination in their search for housing. SB 1534 would reinstate Oregon’s partnership with the US Department of Housing and Urban Development, which has not been active since 2015. After an initial investment of $299,000 from the state, the HUD would pay 90% of increased enforcement costs. The bill does not contain specifics on what the increased enforcement might entail.

TriMet has released new details on the path for the proposed Southwest Corridor MAX line. As initially promised, the line’s terminus will be Bridgeport Village transit center. TriMet is also proposing a transit center in Tualatin with 960 parking spaces, as well as a station on Hall Boulevard with parking for up to 100 vehicles. Additional safety improvements are planned for 72nd Avenue, to allow pedestrian access between the transit center and the Bridgeport Village shopping area. Tigard Mayor Jason Snider cautions TriMet from relying too heavily on the park-and-ride model. He explains that the city is planning significant development around essential transit stops, and he hopes that residents will take advantage of walking and cycling options for connecting with light rail. To that end, Jonathan Maus at the BikePortland blog points out that plans for the line include six miles of new cycling facilities. Between the Barbur Transit Center and Naito Parkway, TriMet’s plans include four miles of raised protected bike lanes separated from traffic by a “curb-protected furnishing zone.” The Southwest Corridor MAX line will run from downtown Portland along Barbur Boulevard, cross over I-5 at the Barbur Transit Center, and continue along 99W, Bonita Road, and 72nd Avenue to its terminus at Bridgeport Village.

Metro has released more plans for the homeless services measure that will appear on the May primary ballot in the Portland region. Rather than an increase in property taxes, the measure would include a tax on high earners, raising a maximum of $250 million. While the proposal is expected to be referred to the ballot on February 20th, a February 4th work session demonstrated that there is still a significant amount of work to be done to iron out the details. But Metro President Lynn Peterson is confident that her team is willing to put in the work to get it done in time. A poll released by HereTogether shows that 53% of voters support a tax on individuals earning more than $125,000 or families earning over $250,000. Metro’s ability to tax personal income is capped at 1%, though House Speaker Tina Kotek is reportedly working on legislation to increase that cap. HereTogether is studying a potential tiered income tax system that it plans to present to Metro this month. A handful of Metro Councilors are worried that the public’s goodwill regarding tax proposals could be running thin, potentially impacting the funding measure for the Southwest Corridor MAX line, which will be up for a vote in November. Along with that measure, voters will be asked to approve levies for Portland Public Schools, the David Douglas School District, and the Multnomah County Library. The gas tax will also be up for re-approval in November.

NextCity reports that a housing voucher program for college students in Tacoma appears to be having a positive effect on students at risk of homelessness. The Tacoma Housing Authority launched the Community Housing Assistance Program in 2014, and between 2014 and 2016 tracked the performance of students who received vouchers compared with those who were in similar financial situations but did not receive assistance. The disparities were significant – while just 16% of students who did not receive housing vouchers remained enrolled in school after two years, 60% of those who received vouchers through the CHAP program remained enrolled. GPA’s for those who received vouchers were higher on average as well – 3.05 compared with 2.75. The program is available for students at Tacoma Community College as well as the University of Washington’s Tacoma campus. In Tacoma, studio apartments typically cost $800 per month, but students who receive vouchers through the CHAP program pay between $400 and $800, depending on their income. The program includes a mix of project- and tenant-based vouchers. In one recently opened apartment building near the UWT campus, 63 of the building’s 152 small studio apartment units are subsidized. The Harvard Kennedy School’s Ash Center for Democratic Governance and Innovation named Tacoma’s CHAP program one of the top 25 Innovations in American Government in 2018. As the program continues, it is being monitored closely by Sara Goldrick-Rab of the Hope Center for College, Community, and Justice at Temple University in Philadelphia.

According to the New York Times, the movement to ban gas hookups in new homes is gaining momentum in cities nationwide. Berkeley, California was the first city to ban natural gas hookups in 2019, followed by Brookline, Massachusetts. Now several west coast cities including LA, San Francisco, and Seattle appear to be following suit. In some markets where a ban has not yet gone into effect, a handful of developers are already making the switch to all-electric buildings to meet self-imposed environmental goals. But not all developers believe the blanket bans are a good idea–home builders are concerned that their homes will not be as appealing without the option of gas stoves. Developer Aaron Fairchild of Portland- and Seattle-based development company Green Canopy has hired chefs to do cooking demonstrations to make potential residents feel more comfortable with the idea of cooking on an electric stove. And it is not just home cooks that are wary of banning gas – the restaurant industry has also come out against the idea. But in some parts of the country, the concept of all-electric homes is unlikely to be seen as particularly radical. 45% of homes in the Southeastern US are already all-electric. Climate change experts believe that switching from natural gas to electricity could be a critical step toward reducing carbon emissions, particularly in dense cities. The Global Carbon Project believes a large portion of the added emissions last year were due to an increase in oil and natural gas use.

Oregon Public Broadcasting published an article last week detailing the shift that has taken place over the past several years regarding the importance of housing policy at the state level. In 2013, Governor Kitzhaber had all but given up on Oregon Housing and Community Services, a bureau that at the time suffered from a lack of a coherent mission. But now housing and homelessness issues dominate conversations at the state legislature, and in 2019 the agency’s budget increased by $160 million. House Speaker Tina Kotek recently released a plan to declare a homelessness state of emergency across the country, arguing that many local jurisdictions have been unable to solve housing-related problems in their communities. But while everyone agrees that housing costs and homelessness are an issue statewide, some Senators believe that the state may be moving too quickly. Senator Betsy Johnson of Scappoose thinks the state should do more to ensure that the programs it invests in are providing positive outcomes, and delivering the most “bang for the buck” for taxpayers. Still, Kotek appears prepared to introduce several ambitious housing bills in this year’s short legislative session. Along with the state of emergency declaration, she hopes to approve $50 million for new affordable housing units and $20 million for the preservation of existing affordable housing. In addition, Kotek is working on plans to establish a statewide voucher program.

Opponents of the I-5 Rose Quarter Freeway Expansion in Portland have recently determined that the Mayor may be able to demand a review of the project due to its encroachment on the Eastbank Esplanade. The freeway expansion would turn the celebrated and much-used path along the river into a cave of sorts – the freeway would hang over the path blocking sunlight and increasing noise and pollution. According to federal law, the City of Portland must sign off on the encroachment for the freeway expansion to move forward. If the city does not sign off, the state would be required to make improvements and compensate the city. The Mayor could also instruct ODOT to perform a full environmental review of the project, which several local leaders have been calling for over the past several months. The Eastbank Esplanade is not the only sticking point for opponents of the freeway expansion – Portland Public Schools has been urging ODOT to conduct a review of the potential impacts to the recently re-opened Harriet Tubman Middle School. The Albina Vision Trust has also expressed frustration with ODOT, due to the agency’s waffling on plans to include buildable freeway caps.

Finally, Harvard’s Joint Center for Housing Studies released its 2020 report on America’s Rental Housing. The detailed, 40-page report finds that the number of low-cost rental units continues to decline, while the number of cost-burdened households has ticked up substantially. With low vacancy rates and new construction concentrated at the higher end of the market, rental property prices rose 150% between 2010 and the third quarter of 2019. Meanwhile, a lack of federal investment in housing programs has kept the number of households receiving assistance flat since 2008, despite an increasing need. Over 80% of households making under $15,000 per year are either severely or moderately cost-burdened, along with around 55% of households earning between $30,000 and $44,999 per year. Just under 50% of all renter households in the United States are moderately or severely cost-burdened. At the same time, the number of high-income renters has risen substantially over the past few years, driven by young, college-educated households. Nearly half of these upper-income renters are white, and around 44% are married. As of 2019, approximately 44 million households in the United States rent their homes, up from about 33 million in 2004.

Thursday, February 6, 2020