Wednesday, November 30, 2016

Developers Rushing to Get Projects Approved Before Inclusionary Zoning Takes Effect

With the inclusionary zoning proposal going before Portland City Council in December, many developers are trying to get projects approved prior to February, when the new requirements will go into effect if passed. Currently there are more than 14,000 units in the approval pipeline in Portland, a significant increase even from recent years. Many investors and developers are concerned due to a lack of transparency - though there has been some discussion of what the policy could look like, the specifics have not been nailed down. The Oregonian reports that developers will likely be required to set aside 20% of units for households making less than 80% median family income, but the incentives the city will ultimately be willing to provide are less clear. Incentives will likely include some combination of tax breaks, increased density, and waived parking requirements, but without specific details investors are wary of funding projects that might not be feasible. Read more.

Monday, November 28, 2016

Sold! 46 Units in Cornelius, Oregon

The Davis Street Apartments (circa 2004) was purchased in 2013 and efficiently managed by investors as they upgraded the property and brought rents to market. When listed with HFO, the property was near 100% occupancy with stabilized rents. HFO was able to quickly locate a buyer wanting a well-maintained asset with solid cash flow.

Oregonian Editorial Board Reacts to Eudaly's Proposed "Municipal Disobedience"

In a post published Sunday, the Oregonian Editorial Board chastised newly elected City Council member Chloe Eudaly for her suggestion last week that Portland should enact rent control prior to the removal of the statewide ban. They have cautioned Eudaly that she will need to shift from activism to governing, which will require coalition building and reaching out to constituents who may not have voted for her. The Editorial Board also pointed out that rent control is not a panacea, and it does not address many of the underlying causes of high housing costs. Read More.

Tuesday, November 22, 2016

Sold! 19 Units in Corvallis, Oregon

Rarely does an investment property come up for sale in the City of Corvallis, and when it does, it gets snapped up quickly, as was the case with the Beverly Ann. Built in 1977, the property was convenient to both downtown and Oregon State University. Through implementation of its comprehensive marketing platform, HFO generated multiple offers on this listing and the property closed over asking price within 45 days. The Beverly Ann sold for $1.205 million.

Sold! 8 Units in Milwaukie, Oregon

This 8-unit 4-duplex property on four separate tax lots is located in Milwaukie less than a mile from the Willamette River and a short walk from the Orange Line MAX terminus. HFO was able to promote the listing through its network of investors and achieve multiple offers on the property. Arista's buyer was in a 1031 exchange out of a single family home in California and the transaction closed quickly. The Arista sold for $1.275 million.

Sold! 22 Units in Rainier, Oregon

Vance Terrace was an older (1971) apartment building in the tertiary market of Rainier, Oregon. The location was a challenge for many investors, but pricing was also considerably lower than for properties in the Portland metro area. HFO was able to demonstrate the superior cash flow opportunity presented by the asset, and to facilitate the sale of the building to a Portland-based investor.

Sold! 16 Units in Gresham, Oregon

In the case of Cascade Firs (1971), the HFO broker team utilized the power of the HFO platform to connect buyer and seller, who were both participating in 1031 exchanges. Cascade Firs sold for $1,662,500 in an off-market transaction.

Sold! 36 Units in NE Portland, Oregon

With both buyer and seller participating in 1031 exchanges, HFO helped maneuver the intricacies required to ensure Shenandoah Garden got to the finish line on time. Shenandoah Garden sold for $3.7 million.

Sold! 18 Units in SE Portland, Oregon

HFO is pleased to announce the sale of Calico Townhomes. The buyer of this 2008-vintage asset was participating in a 1031 exchange and came to HFO in search of a a high-quality building. HFO connected the investor with this condo-quality property, which was a perfect fit for their needs. Calico Townhomes sold for $4.15 million.

Eudaly Urging City of Portland to Enact Rent Control without State Approval

While Tina Kotek has proposed overturning Oregon's rent control ban in order to let cities across the state create their own policies, recently elected Portland City Council member Chloe Eudaly does not think Portland should have to wait until next year to begin a city-wide rent freeze. She is urging what she refers to as "municipal disobedience," or in other words enacting rent control now in Portland and fighting the lawsuits later. Read more.

Monday, November 21, 2016

Op-Ed: "Portland is at a crossroads on its way to becoming a true metropolis"

Jean-Pierre Veillet, founder of Siteworks Design | Build penned an op-ed asking for "a permitting process designed to encourage good development," and asking city bureaus to "align on their policy requirements." Read the op-ed here. 

Jean-Pierre was a recent featured guest in an installment of HFO-TV.

Friday, November 18, 2016

Illegal Short-Term Rentals Could Face Hefty Fines from the Bureau of Development Services

Portland's Bureau of Development Services is looking to remove the 30-day grace period for owners who have failed to get the proper permits before renting their homes or apartments on a short-term basis. Additionally, the BDS proposes fines ranging from $1,000 to $5,000 per day depending on whether the owner has been charged with a previous violation.  This is a sharp increase from the $707-$1,414 monthly fine that currently exists under Portland's rules governing short-term rentals. Read more.

Tuesday, November 15, 2016

HFO Exclusive: Washington State DOH Recommends Mandating Lead Testing For All Rentals Built Before 1960

In response to a directive issued on May 2nd by Washington State Governor Jay Inslee, the Washington State Department of Health yesterday provided the governor with a report of their recommendations. In addition to recommending testing for schools, and child care facilities the program includes the following recommendation for rental housing.

“Determine the viability and potential policy changes associated with developing a Lead Rental  Inspection and Registry Program, to require residential rental properties built before 1978 to register and complete a lead inspection and demonstrate safety at each change of occupancy.”

DOH concluded creating a statewide rental registry and inspection program is not viable based on the indeterminate costs to the public health system. However, lead in older homes poses the greatest risk of exposure to children; therefore, DOH recommends the primary prevention approach of assessing pre-1960 rental units for lead hazards. Municipalities are positioned to adopt comprehensive rental inspection programs that address not only lead, but also other health risks found in homes.

Based on U.S. Census data, the Washington Department of Health estimated there are about 225,000 pre-1960 rental homes in Washington. According to its report, research on lead hazards in homes indicates estimates that 55 percent of those -- 123,522 units -- would have lead hazards.

In Rochester, New York, the average cost of complying with policies to reduce lead in rental housing was $1,700. In Washington, the total cost for landlord compliance would be approximately $382 million.

DOH recommends the Legislature:
  • Amend the Residential Landlord-Tenant Act to require lead assessment of all rental units built before 1960 to determine if there are lead hazards present, and to require remediation if a hazard is identified.
  • Direct DOH to work with municipalities and stakeholders to explore development of a state-supported training program for cities to increase participation in rental inspection programs.
  • Create a remediation fund for landlords providing low-income housing.
Download the report and its executive summary here. 

Tigard Voters Authorize Design & Construction of Light Rail

In an extremely close vote, it appears that the City of Tigard has voted to authorize the municipal government to go ahead with plans for light rail connecting Tigard, Tualatin, and Portland. As of 4pm Monday, 50.28% of voters had approved the measure. The city is continuing to count votes, and another update is expected Thursday afternoon. Read more.

Monday, November 14, 2016

Life To the South of Us: California Cities Confront Housing Crisis

In a NY Times article, Google's hometown of Mountain View and its housing crisis is explored. According to the article, "Everyone [in California] knows housing costs are unsustainable and unfair, and that they pose a threat to the state’s economy. Yet every city seems to be counting on its neighbors to step up and fix it." Interestingly, instead of adding more housing for the thousands of workers at Google and Facebook, the mayor calls the pace of job growth there "unhealthy." Read more.

Friday, November 11, 2016

Portland City Council Holding Additional Evening Hearing on Residential Infill Project

The Portland City Council will be holding an additional public hearing on the controversial Residential Infill initiative on Wednesday, November 16th at 6:00 pm. The proposal limits the size of single family houses that can be built on a lot, and allows small multifamily developments to be built on two thirds of parcels currently zone for single family residential buildings. The new meeting is being held due to a large number of people who were unable to testify at the first meeting because of a loss of quorum after 3 hours of testimony. Read more.

Thursday, November 10, 2016

National Survey: 1 of 10 Multifamily Executives Say They Would Allow Renters to Airbnb

A feature story in this month's Multi-Housing News indicates that while 74% of apartment execs fear home sharing could affect the quality of life in their communities, a full 10% would allow it if it were allowed in their jurisdictions. Read more.

Wednesday, November 9, 2016

Chloe Eudaly, Running on Rent Control Platform, Defeats Steve Novick in Surprise Upset

The Oregonian reports that in a City Council race that ended up being tighter than anticipated, newcomer Chloe Eudaly has defeated incumbent Steve Novick.  Novick had bested Eudaly in the primary by 28 percentage points, but conceded last night when the polls closed at 8 pm, at which point it was clear that Eudaly had received enough votes to win the race. Eudaly's signature platform is rent control and tenant protections, and she has written and spoken extensively about Portland's affordability crisis. Read more.

Monday, November 7, 2016

Will City's Inclusionary Zoning Ordinance Halt Apartment Construction in Portland?

HFO broker Lee Fehrenbacher discusses the current status of multifamily development in Portland and the potential impact of the City's proposed inclusionary zoning ordinance.

HFO Recognized as Top Corporate Philanthropist

The Portland Business Journal has named HFO Investment Real Estate among Portland's top philanthropic corporations for the eighth straight year. The recognition was announced recently at the Business Journal's annual celebratory banquet at the Hilton Hotel.  HFO ranked 12th in its category overall. Total cash contributions for HFO and its 17 full time workers was $36,750. HFO is pleased to support numerous charities throughout the year, including Big Brothers/Big Sisters, Oregon Food Bank and Habitat for Humanity, among others.

"We're grateful to our clients for putting their trust in us," said HFO marketing director Aaron Kirk Douglas. "Their ongoing support of our business makes it possible for us to continue growing our philanthropic contributions in the communities we serve."

Friday, November 4, 2016

Developers Deterred by Inclusionary Zoning Proposal in Portland

Developers are starting to react to Portland's proposed Inclusionary Zoning law, with some starting to turn away from the Portland market despite the fact that the law has yet to pass. Vanessa Sturgeon of TMT Development estimates that to off-set costs, developments would have to be bigger than anything previously seen in the Portland area. Read more.

Landlord/Tenant Coalition & Manufactured Housing Groups Gearing Up for Fight Against Rent Control, No-Cause Evictions

The Portland Tribune reports that Landlord/Tenant coalitions representing both apartment buildings and manufactured housing parks are at an impasse as a result of proposals to end the ban on rent control and stop no-cause evictions. Landlords advocating for a stronger voice in the debate have selected John DiLorenzo as their representative, and made it clear that they are against eliminating no-cause evictions. As a result, tenant representatives have walked out of both groups. Read more.

Tuesday, November 1, 2016

News Roundup: Portland Examiner & Tribune on Housing Zoning, Density Issues

The Portland Tribune reports on 'The Rezoning Struggle' on the cover of today's paper, setting the stage for upcoming public hearings on the issue on November 9th and November 16th.

The Southeast Examiner has two articles, one arguing "Mid Scale Housing Needed in Portland" and another "Dramatic Density Increase Proposed for Eastside."

Census: Portland Vacancy Rate Estimated at 5.6%

The U.S. Census Bureau has released it's 3rd quarter rental vacancy report for 2016. Its Portland MSA vacancy rates are as follows:

Quarter 1: 6.6%
Quarter 2: 4.9%
Quarter 3: 5.6%

Of the top 75 U.S. metros, Greater Portland's vacancy rate was ranked 20th, in a tie with Detroit and Nashville. The cities stood at roughly the mid point of all cities ranked, which ranged from 1.0% in Cape Coral-Fort Myers, Florida to 17.1% in Birmingham-Hoover, Alabama.

The Census Bureau's vacancy estimate is higher than both the recent MultifamilyNW estimate, which placed Greater Portland's multifamily vacancies at 3.71%, and other recent third-party estimates of around 4.5%.

Census estimated the average U.S. rental vacancy rate at 6.8%.