Friday, June 23, 2017

The Ankeny Apartments Saga, Continued

In April, HFO wrote a blog post detailing the herculean effort developer Landon Crowell has put into getting his 17-unit apartment development on SE 11th and Ankeny approved. After going before the Design Commission five times only to have his project rejected, he appealed the decision to the Portland City Council. In April, the Council delayed giving an opinion, ultimately stating that a final decision would be made May 11th. No decision was made at that time, but this week the net-zero energy, transit oriented development was presented to City Council once again.

On June 22, Crowell presented the Council with a new plan, which incorporates input from the local neighborhood. The new plan eliminates two units, reduces the height of the building, and increases setbacks from neighboring properties. In response, the City Council expressed concerns that he didn't make enough changes, while also arguing that the changes should have gone before the Design Commission prior to being presented to City Council. The Council plans to continue the hearing August 9th, over a year and a half after the developer first requested a pre-application conference in January 2016. Read more.

Thursday, June 22, 2017

Demand for Apartments Projected to Stay Strong as Supply Struggles to Keep Up

New studies by the National Multifamily Housing Council (NMHC) and the Joint Center for Housing Studies at Harvard University predict that demand for apartment housing will stay strong due to population increases, delayed marriages, and the lack of affordable owner-occupied homes. The NMHC study projects that developers must build 325,000 apartment units per year to keep up with the current demand, well above the 2012-16 average of 244,000 units per year. Over the last four years, 1 million new renter households were formed, bringing the total number of renter households to 39 million in the U.S. Along with the increase in demand, high prices for rental housing are exacerbated by the sharp rise in costs for land and construction. Read more.

Sen. Rod Monroe Proposes Amendments to HB 2004

The Portland Tribune reports that Senator Rod Monroe, an East Portland landlord and hold-out vote on HB 2004, has proposed amendments he believes will balance tenant protections with landlord realities.

On the tenant protection side, Monroe proposes:

  • Limiting rent increases to once per year
  • Requiring leases be a minimum of 6 months
  • Requiring landlords to notify tenants at least 90 days before the end of a lease of a rent increase, or of the intention not to renew a lease
  • Requiring tenants to inform landlords of plans to stay or move 45 days prior to the end of a lease

Monroe also proposes limiting the situations in which relocation costs are paid, and removing a ban on no-cause evictions. His proposed changes include:

  • Landlords with more than 5 units would only be required to pay relocation costs if evicting 50% or more of tenants in a multifamily complex in the first year after the landlord has purchased the property
  • Landlords with fewer than 5 units would not be required to pay relocation costs

John DiLorenzo of More Housing Now supports Monroe's amendments, arguing that they would target bad actors while still giving most landlords the option to use no-cause evictions when necessary. Read more.

Wednesday, June 21, 2017

Nike to Eliminate 2% of its Global Workforce

Nike announced it will cut 2% of its global workforce of 70,000 employees - or about 1,400 people. The company has been losing some market share to Adidas and Under Armour (which also have major offices in the Portland area) and is restructuring. Read more.

Laurelhurst is Latest Portland Neighborhood Seeking Historic Designation to Block Development

Laurelhurst has voted overwhelmingly for neighborhood association leaders who are in favor of designating the 425-acre neighborhood as a historic district. Laurelhurst, located in Northeast Portland, is following in the footsteps of Peacock Lane and Eastmoreland, two other upscale neighborhoods that have recently submitted historic designation requests. Residents of Laurelhurst like Mike Parrott hope the designation will "add one more barrier against my street becoming filled with duplexes and my corner lots becoming triplexes." The median home price in Laurelhurst is $750,000, but advocates claim a historic designation is the only way to keep the neighborhood "affordable" for residents. Groups like 1000 Friends of Oregon and the Homebuilders Association are in favor of the Residential Infill Project in Portland as well as HB 2007. They argue that historical designations put the burden of providing housing entirely on less wealthy neighborhoods, which don't hold as much political sway. Read more.

Tuesday, June 20, 2017

Neighborhood Coalition Gets Cash to Clean Up Trash

A coalition of NE Portland neighborhood groups received a grant from the city of Portland for up to $90-thousand dollars in cleanup funds. The year-long pilot project will contract to add a full-time employee to clean-up a 1-square mile area in the Elliot, Lloyd, and Central Eastside Industrial areas. Cleanup will include picking up trash and needles generated by the city’s homeless and heroin addicted. If successful, the Office of Neighborhood Involvement hopes to replicate the program throughout the city. Read more.

Report: U.S. Apartment Market = Full Despite Booming Construction

Axiometrics reports that the average national apartment occupancy rate has reached the statistically significant level of 95%, which was last reached in September, 2016. This is the level at which apartments are considered "full."

Year-to-date rent growth through May is pegged at 2.97%.  Read more.

Multifamily Marketwatch Podcast - June 20, 2017

This week: It's the economy -- higher interest rates, Oregon unemployment reaches a new record low and Amazon will create 1,500 new jobs in Troutdale by next summer.



Check out this episode!

Amazon to Create over 1,500 Jobs in Troutdale Next Summer

Amazon plans to open a $178-million warehouse facility in Troutdale by July 2018 that will create 1,500 new jobs, possibly more, The Oregonian/Oregon Live reports. Read more.

Thursday, June 15, 2017

Portland Tenants United Pressuring Sen. Rod Monroe on HB 2004

Portland Tenant's United (PTU) has been putting pressure on State Senator Rod Monroe to support House Bill 2004, as the bill is likely to fail without the Senator's support. PTU has been contacting Monroe's tenants, hanging signs on the freeway, and demonstrating outside of his church in hopes that he will support increased tenant protections in the state legislature. The group also brought a cardboard cutout of Monroe to a town hall meeting in Gresham that he chose not to attend. Senators Law Frederick and Ginny Burdick have questioned these tactics, calling the group's church demonstration particularly counterproductive. Since the Portland Mercury first reported the group's targeting of Senator Monroe on Tuesday, PTU has withdrawn its support from HB 2004 "in its current form." Read more.

Wednesday, June 14, 2017

Fed Raises Interest Rates by a Quarter Point

The Federal Reserve raised its rates today for the second time in 2017, despite inflation that is lower than the normal target rate. The new range for the Fed's benchmark is 1-1.25%, up from 0.91%. Inflation is currently expected to be 1.6% for the year, below the normal target of 2%. Read more.

Tuesday, June 13, 2017

Multifamily Marketwatch Podcast - June 13, 2017

This week: Lawmakers in Oregon and Washington consider real estate tax increases; Oregon's rent control saga; Amazon to bring 1,500 new jobs to Troutdale; wages vs. rent; and across the country - slowing rent growth.



Check out this episode!

Friday, June 9, 2017

Washington County Housing Summit Addresses Development & Affordability Challenges

A housing summit held in Beaverton last week addressed housing-related issues such as increasing demand for low income housing as well as single family homes in the area. The meeting was organized by Westside Economic Alliance, which aims to encourage economic development in Washington and Clackamas counties. Jerry Johnson of Johnson Economics emphasized that increasing supply will help bring housing prices down, but Brenner Daniels of Holland Development cautioned that developments are facing headwinds such as a restricted land supply, increasing labor costs and development fees, and lengthy permitting processes. U.S. Senator Merkeley spoke at the summit, and assured attendees that he would try to protect federal affordable housing programs from proposed budget cuts. Read more.

Thursday, June 8, 2017

Oregon Senate to Vote on Bill that Could Raise Property Taxes on New & Renovated Properties in Multnomah County

Oregon House Bill 2088 unanimously passed out of committee and now heads to the Senate floor. The bill gives cities the ability to use city-specific rather than county-specific averages to calculate tax values of new and renovated property, and applies only to counties with greater than 700,000 residents (Multnomah County). Currently, the taxable value of new homes is calculated based on "the average difference between assessed value and market value countywide." Proponents of the bill argue that this calculation causes inequity, as new construction in Multnomah County is taxed at 53% of its assessed value, while most older homes in Gresham are taxed at 75% of their values. New homes and homes that undergo a renovation valued at $10,000 in one year or $25,000 over five years would be affected. Cities would have to vote to enact the new system. Initially the Oregon State Association of County Assessors came out against the bill due to the potential costs associated with implementing a new system for assessment, but after the bill was amended to ensure counties would be reimbursed the Association took a more neutral stance. If adopted by cities in Multnomah County, the new assessment method would apply to residential, commercial, and industrial properties. Read more.

Wednesday, June 7, 2017

National Year-Over-Year Rent Growth Decelerates For Third Consecutive Month

In its monthly rent survey, Yardi Matrix reports that May, 2017 was the third consecutive month of rent deceleration in its survey of 121 markets. The company reports 36,000 units will come online in 2017 in addition to the 281,000 new units added in 2016.  According to the report, Portland metro's year-over-year average rents increased about 5%. Yardi Matrix forecasts Greater Portland will see rent growth in 2017 of 2.5% and job growth at 2.2% Meanwhile, vacancy rates among their surveyed properties increased 0.2% between March and April, from 5.2% to 5.4%.


Tuesday, June 6, 2017

Attention Washington Residents and Owners: State Considers 7% Capital Gains Tax, B&O Tax Increase, and Graduated Real Estate Taxes

In order to balance the state budget, the House Democrats & the Governor introduced HB 2186/SB 5929, new state capital gains tax of 7% and other tax increases to include:

1.    New State Capital Gains 7% Tax:
  • Sale of real-estate, commercial, industrial and residential rental (exempts your home, certain pensions, agricultural land and property)
  • Sales of stocks and bonds, gold and silver, other precious metals
  • IMPACTS: Sale of business, real-estate property and stocks and bonds, etc. It’s taxing your investment pension.
2.    B&O Tax Increases: 20% increases – 1.5% to 1.8%
  • 1.50: Services: property management, realtors, architect, accounting, window washers, legal, janitorial, and engineers, etc.
  • 0.471: Retailing: contractors, restaurants, clothing, Costco, Nordstrom, etc.
  • 0.484: Subcontractors, wholesale and manufacturing, etc.
  • 1.63: Private Nontribal Gambling: “Contest of chance” (card rooms)
3.    New: Graduated Real Estate Excise Taxes (Now 1.28%):
  • 0.75: Selling price is less than 250K
  • 1.28: Selling price is $250K to $1 million
  • 2.0: Selling price is $1 million to $5 million
  • 2.5: Selling price is $5 million and above
You're invited to contact your two house of representative members and one senator (call and follow-up with an email) to let them know your position on HB 2186 and SB 5929.

You can locate your lawmaker at the following “District Finder” link:
http://app.leg.wa.gov/districtfinder

You can find their contact information at the following: 
http://app.leg.wa.gov/Rosters/Members/Househttp://app.leg.wa.gov/Rosters/Members/House

Courtesy: Manufactured Housing Communities of Washington 1-(800) 345-5608

Multifamily Marketwatch Podcast - June 6, 2017

This week: Rent control appears dead in Oregon legislature (but is it? stay tuned!); a second bill requiring local governments to allow duplexes, ADUs and small multifamily projects in single family neighborhoods may be moving forward.


Check out this episode!

Friday, June 2, 2017

Oregon and Washington Have Fastest Growing GDP in the US

Washington and Oregon ranked #1 and #2 in GDP growth among US states for 2016, with 3.7% and 3.3% growth respectively. According to Amy Vander Vliet of the Oregon Employment Department, this is the eighth time in 18 years that Oregon has cracked the top five. Durable goods manufacturing and construction were top contributors to Oregon's growth in 2016. Other states with at least 3% GDP growth include New Hampshire, Utah, Georgia, and Florida. Read more.

Thursday, June 1, 2017

HB 2004 Will Go to Senate Floor without Provision Allowing for Rent Control

In a 4-1 vote on Wednesday, the Senate Committee on Human Services approved changes to HB 2004, including the removal of the provision allowing cities to impose rent stabilization policies. Instead of limiting the amount by which landlords can raise rent, the new language limits the number of times a landlord can raise rent to once per year. HB 2004 still limits the circumstances under which a no-cause eviction can be issued, and requires landlords to pay a month's rent to tenants who face an eviction without cause. The dissenting vote was Senator Tim Knopp, R-Bend, who voted against the bill because it does not address land use restrictions that make it difficult for developers to build affordable housing. The bill will now head to the Senate floor for a vote. Read more. Meanwhile, the Portland Mercury reported yesterday "A Proposal to Allow Rent Control in Oregon is Probably Dead."

Wednesday, May 31, 2017

Portland Development Fees to Rise, Effective July 1

The Daily Journal of Commerce reports that the Portland City Council approved an increase in development fees last week. The new fees are set to take effect July 1, 2017. Costs for a type II development review would increase 4.3% to $1,617 (currently $1,551); type III master plan review costs will rise 4.3% to $13,351 (currently $12,801); the pre-application conference fee will increase by 4.2% to $1,150 (currently $1,104); and early assistance meeting fees would rise 3.9% to $632 (currently $608). Read more.

Record Number of Active Construction Projects in Central City

A new report by the Portland Business Alliance outlines the projects currently under construction in the central core of Portland. According to the report, the citywide occupancy rate is 94.6%, and rent growth is 4.2%. 5,000 new residential units have been built since 2010, and an additional 3,000 residential units are under construction, not including projects outside of the downtown core such as the Conway Blocks in NW Portland and Jefferson Flats in Goose Hollow. Projects located just outside of the Central City represent an additional 14,000 units proposed or under construction. According to the Portland Tribune, Portland will also see a 40% increase in hotel rooms over the next few years, positioning the city as an ideal location for vacations, business conferences, and large conventions.

Read the full report.

Friday, May 26, 2017

Bend is the 6th Fastest-Growing City in the Nation

According to a new report by the US Census, Bend is the 6th fastest growing city in the nation. Bend's population has grown 4.9% since July 1, 2016, and now stands at 91,122. This is the second population boom in recent memory for Bend - the city's population doubled during the 1990s. Bend is one of the few cities on the Census's list that is not in the South, and no cities in the Northeast made the top 15. Bend's rapid growth has contributed to soaring housing prices in recent years. An urban growth boundary that remained unchanged since 1981 limited new supply in the area, and developers have only recently started bringing new product online. Read more.

Southern Cities Growing Quickly [Source: U.S. Census Bureau]

Wednesday, May 24, 2017

Tenant Shoots Apartment Managers in Portland

HB2004 prevents landlords from evicting dangerous tenants quickly—putting good tenants in jeopardy.


Tell the Oregon State Legislature to vote NO! Contact numbers and email addresses below...

Senate President Peter Courtney
503-986-1600
sen.petercourtney@oregonlegislature.gov

Senate Majority Leader Ginny Burdick
503-986-1700
Sen.GinnyBurdick@oregonlegislature.gov

Multifamily Marketwatch Podcast - May 24, 2017

This week: Portland's budget, school district levy, Oregon's robust economy, and where, oh where are the inclusionary zoning projects? We return after Memorial Day on June 6th.



Check out this episode!

Tuesday, May 23, 2017

Bureau of Planning and Sustainability Seeks Input for Better Housing by Design Project

The Portland Bureau of Planning and Sustainability will be hosting two open houses in June for community members to learn about and provide input on the draft code concept for the Better Housing by Design project. The open houses will be Thursday June 1, 5:30-7:30 pm, and Saturday June 3, 10 am-12 pm.

The Better Housing by Design (BHD) project aims to improve the design of multifamily housing outside of the central core of Portland. It covers all multi-dwelling zones (R3, R2, R1, and RH), and aims to strengthen requirements for outdoor spaces, encourage a range of housing that includes "missing middle" structures, and improve walkability. Bureau of Planning and Sustainability staff are expected to release the final Code Concept Report in the Summer of 2017. Read more.

Wednesday, May 17, 2017

Portland School Bond Passes, Adding to Portland Property Tax Bill

The $790 million Portland Public School (PPS) bond passed with 66% of the vote in Tuesday's special election. The bond will cost property owners $1.40 per $1,000 of assessed value for the first 4 years, and then will cost $0.68 per $1,000 of assessed value annually for 30 years. Portland homeowners are still paying for the 2012 PPS bond, which cost $1.10 per $1,000 for the first 8 years, and $0.30 per $1,000 annually for the next 12 years. In PPS bonds alone, Portland property owners will be paying $2.50 per $1,000 of assessed value for the next few years.

Supporters of the new PPS bond point out that Portland school buildings are 77 years old on average, and many have health and safety issues including high lead levels. The bond will provide the funding needed for projects such as improving water quality, removing asbestos and lead-based paint, improving fire alarm and sprinkler systems, and ADA/accessibility improvements. In addition, Benson, Madison, and Lincoln high schools and Kellogg middle school will be rebuilt and renovated. Read more.

Tuesday, May 16, 2017

Multifamily Marketwatch Podcast - May 16, 2017

This week: Portland Mayor says housing trumps need for parking; conflict continues in the Eastmoreland neighborhood and the Portland Development Commission is now Prosper Portland. Our podcast returns next Weds 5/24.



Check out this episode!

Multifamily Permit Applications Still Down, PHB Looking to Increase IZ Incentives

Since the City of Portland's Inclusionary Zoning (IZ) requirement went into effect February 1, the number of applications for multifamily permits has stalled. The Portland Tribune estimates that a valuation of $270 million worth of development could be eliminated by the IZ program. The Portland Housing Bureau claims that the slowdown in development is due to a softening of the market, a tariff on Canadian lumber, and increasing interest rates rather than the IZ program itself. The bureau is offering incentives to projects that were vested prior to February 1 in hopes of getting more affordable units built in the city. In January, the city received 20 permit applications valued at $74.7 million. Since February, there have been only 6 permit applications for developments with more than 20 units, the threshold for the IZ requirement. Four of those projects are being developed with assistance from PHB. Read more.

Friday, May 12, 2017

Esco Decommissioning 15 Acre NW Portland Site to Allow for Redevelopment

Just north of NW Vaughn Street and two blocks west of NW 23rd Avenue, the Esco Corporation plans to decommission a 15 acre site that was previously home to its main plant. The northern portion of the Northwest neighborhood of Portland has seen a flurry of development activity, including the new Slabtown redevelopment project and the currently under construction George Besaw Apartments. The neighborhood's walkability and access to transit have attracted new residents and developers alike. City zoning for the Esco site would restrict the possibilities for development, however. The site is zoned for "mixed employment," which would allow for office or industrial use, but not residential development. Read more.

Wednesday, May 10, 2017

Federal Housing Assistance Goes to Homeowners, Even as Renters Become Increasingly Cost-Burdened

PBS reports that of the $200 billion per year the United States government spends on housing assistance, 70% goes to subsidizing homeowners. Since the 2007 recession, however, an increasing percentage of the population has become renters, with many unable to purchase a home. As of 2015, over 11 million households spent more than 50% of their income on rent, up from 8.9 million in 2007. Andrew Aurand, president of research for the National Low Income Housing Coalition, attributes this phenomenon largely to the decline in federal investment in public housing and housing assistance vouchers, which occurred at the same time as demand for rental housing surged. Read more.

Tuesday, May 9, 2017

Multifamily Marketwatch Podcast - May 9, 2017

In this episode: newspapers worldwide reporting on Oregon's battle over rent control; a zoning bill in Salem causes uproar in Multnomah Village and Portland Mayor Ted Wheeler proposes financial support for a Portland startup website to help renters.


Check out this episode!

Monday, May 8, 2017

Website to Help Renters Find Home With One Application, One Fee, Plans Launch This Fall

KGW reports on a new app that the City of Portland will spend $125,000 helping to launch this fall. The website will charge a single $35 fee for a background check that will tell applicants which apartment communities they qualify for. Read more.

Thursday, May 4, 2017

U.S. Census: Portland Rental Vacancy Rate Climbs to 3.9% - Nation's 8th Lowest

The U.S. Census Bureau reports that the rental vacancy rate for the Portland-Vancouver- Hillsboro metro area was 3.9 percent for the first quarter of 2017. Census data indicates an increase in Greater Portland's vacancy rate from 3.1% in Q4 -- but down significantly from the 6.6% vacancy rate reported for the first quarter of 2016.

Seattle Vacancies Nation's 3rd Lowest
Census estimated Seattle-Tacoma-Bellevue's vacancy rate at 1.9% vacancy rate, making it the nation's third lowest. Metro areas with lower vacancies than Seattle were Sacramento (1.2%) and Cape Coral-Fort Myers, Flordia (1.8%).

After Seattle (#3) the remaining lowest vacancy rates were:

Allentown-Bethlehem-EAston, PA-NJ (3.0%)
Charlotte-Concord-Gastonia, NC-SC (3.1%)
Los Angeles-Long Beach-Anaheim, CA (3.6% (TIE)
San Diego-Carlsbad, CA (3.6% - TIE)
Salt Lake City, UT (3.8%)
Grand Rapids-Wyoming, MI (3.9% - TIE)
Portland-Vancouver-Hillsboro, OR-WA (3.9% - TIE)

Average National Rental Vacancy Rate
The average national rental vacancy rate for Q1 2017 was 7.0 percent for multifamily dwellings of five or more units -- the same as one year earlier. Vacancy rates remained lowest in the western U.S. where it declined from 5.1 to 4.7%.

Click to Enlarge

U.S. Homeownership Rate Continues to Fall
U.S. Homeownership rates have fallen from a recent high of 65.1% at the end of 2013 to an estimated 63.6% in Q1 2017. Homeownership rates in the Western U.S. has been on the upswing since reaching a 26-year low during 2016. The current homeownership rate in the west crept up 0.3% over the past year.

Click to Enlarge




Wednesday, May 3, 2017

Do You Need a Helipad? Adding Value in the Age of Amenities Wars

From helipads to breweries to concierge services that can just about read a resident’s mind, amenities have been a hot topic in the apartment industry for years, and the bar just keeps getting higher. For apartment owners and operators who have neither the capital nor even the demand for these over-the-top features, there are plenty of ways to increase their communities’ appeal through amenities, many of which are simple to implement and require little up-front investment. This report seeks to identify top amenities in their communities nationwide and in 11 selected cities, at both the community and unit level, and which ones have the greatest impact on revenue. Read the full story.

Multifamily Marketwatch Podcast - May 2, 2017

In this week's episode: Oregon economist Josh Lehner says he expects homeownership to grow relative to renting in the years ahead; a new expert report says inclusionary zoning has a near zero effect on increasing affordable housing.



Check out this episode!

Tuesday, May 2, 2017

HB 2007 Faces Opposition from SW Portland Neighborhood Groups

The Oregon House of Representatives is currently working on HB 2007, which aims to increase housing production by:

  • Requiring affordable housing projects to be approved in 100 days
  • Blocking cities from denying housing development applications due to failing to meet discretionary standards
  • Prohibiting local governments from adopting standards that would discourage needed housing
  • Stopping local governments from reducing density of housing applications if the application meets zoning requirements
  • Requiring local governments to allow detached affordable housing on properties zoned for non-residential places of worship

According to the Portland Tribune, both 1000 Friends of Oregon and the Oregon Home Builders Association support the bill, which is sponsored by 6 legislators from Portland and Southern Oregon. Supporters argue that increasing the supply and type of housing (including "missing middle" housing) would increase overall affordability. 

Neighborhood groups in areas like Multnomah Village in SW Portland strongly oppose the bill, however. These groups are worried that adding multifamily developments would "destroy the character of existing neighborhoods." Read more.

Monday, May 1, 2017

New Market Rate Housing Essential for Overall Affordability

In San Francisco-based marketing blog Art + Marketing, California State Senator Scott Wiener lays out the case for increasing the supply of market rate housing to increase affordability. He argues that while affordable housing projects subsidized by state and federal governments are badly needed, those projects will not provide enough units to house the vast majority of rent-burdened citizens, particularly middle class renters who do not qualify for subsidies. In an argument that will be familiar to Portland developers, Wiener suggests that excessive zoning restrictions and an overly complicated housing approval process have contributed to a shortage of new units as well as skyrocketing rents in California. He argues that the problem is not an overabundance of "luxury" housing, but rather a scarcity of units that has caused housing to be a luxury. Read more.

Thursday, April 27, 2017

Forecasting Future Rental Demand in Portland

The Portland Tribune reports that Josh Lehner of the Oregon Office of Economic Analysis is forecasting that we are currently at "peak renter." He expects that as millennials enter their mid- to late-thirties, homeownership rates will increase. Since the recession, however, far fewer single family homes have been built both locally and nationally. The resulting shortage of owner-occupied housing units has been driving up prices, making many homes unaffordable for first time buyers. Portland's population is also expected to increase by 35,000 people each year, which will continue to drive apartment demand for the foreseeable future. Read more.

Tuesday, April 25, 2017

Homebuilders Worried about 20% Tariff on Canadian Lumber

The announcement Monday night of a new set of tariffs on Canadian softwood lumber imports has resulted in falling stock prices for large homebuilders in the U.S., and concern among industry experts that building costs will increase sharply. Granger MacDonald of The National Association of Homebuilders (NAHB) told The Hill that NAHB is "deeply disappointed" and that the new tariffs will "negatively harm American consumers and housing affordability." Approximately 95% of lumber imports to the U.S. came from Canada last year, and lumber costs account for approximately 8-12% of the price of a new home. Read more.

Multifamily Marketwatch Podcast - April 25, 2017

This week: Oregon's jobless rate reaches historic low; Metro mulls process changes for expanding urban growth boundary; apartment projects in downtown Vancouver, Washington.


Check out this episode!

Thursday, April 20, 2017

UD+P Pays $200,000 in Relocation Fees to Renovate Fairmount Hotel

According to the Daily Journal of Commerce, Urban Development + Partners is the first company to pay relocation fees to tenants as a result of a new city ordinance aimed at discouraging no-cause evictions. UD+P purchased the Fairmount Hotel in NW Portland with the aim of renovating it, but decided to let tenants stay until construction began. To issue no-cause evictions to 65 units, the company paid $199,800. UD+P had planned from the outset to offer relocation assistance to existing tenants, though not as much as the $2,900-$4,500 required by the new law. According to principal Eric Cress, most tenants were able to quickly find a new place to live. After it is rehabilitated, the Fairmount will have 80 units, a new roof, and modernized electrical and plumbing systems. Read more.

Developer Tom Brenneke Discusses Roadblocks to New Housing in Portland

The Portland Tribune sat down with developer and landlord Tom Brenneke of Guardian Real Estate Services to discuss his resignation from the Portland Housing Advisory Committee, as well as his views on the state of housing in the City of Portland. Brenneke expressed frustration with a system that delays rather than expedites the delivery of new, much needed housing in the city. He also stated that the Housing Bureau and City Council rarely asked the Housing Advisory Committee to weigh in on relevant issues, including the Housing State of Emergency and inclusionary zoning. On the issue of development, Brenneke is frustrated by delays caused by neighborhood associations, the Portland Design Commission, and the Historic Landmark Commission. He believes projects go more smoothly when more specific community design standards apply, as they are much easier to understand and meet. Guardian Real Estate Services recently opened NAYA Generations in Lents, which will place foster children with grandparents in a cooperative setting run by the Native American Youth and Family Center. Read more.

Wednesday, April 19, 2017

How Portland's Design Review Process is Exacerbating the Housing Crisis [Exclusive HFO Content]

by Jennifer Shuch, HFO Research Analyst. 

Half a block East of the 5-way intersection of SE Ankeny, Sandy, and 11th, an empty and unused plot of land could become something unique.

The developer, Landon Crowell, has worked with YGH Architecture to design a unique 6 story structure with photovoltaic panels, triple pane passive house windows, and highly insulated walls and roof - the kind of forward-thinking structure Portland should be proud of. And yet, the plot of land still sits empty, despite the fact that discussions with the city started 16 months ago -- in January 2016.

The project went before the design commission five times between October 2016 and February 2017. During the hearings, Crowell agreed to reduce the size of the building by 8%, from 26 units to 18. At the third hearing on January 5, 2017, a staff report and recommendation to the Design Commission recommended that the project be approved. However the Design Commission felt it did not meet "subjective" criteria, despite meeting the standards required by the Portland Zoning Code.

The decision was appealed to the City Council, with a hearing scheduled for April 5th. The council delayed the hearing until April 12th, with no publicly stated reason given for the further delay of a badly needed housing project in a centrally located, transit-heavy neighborhood.

At the meeting on April 12, it became clear that nearby neighbors are the biggest roadblock. One neighbor, William Phillips, is quoted as saying the project is a "monstrosity." Priscilla Sturges, a resident who has lived in her house for over 40 years claims the project amounts to "elder abuse" because, in her opinion, the development will only serve "wealthy short-termers." In response to complaints from residents, Bob Zimmerman of YGH pointed out that the parcel is zoned EXd, and there is barely any residential housing in the neighborhood. After three hours of testimony on a 17-unit project, it was determined that a final decision will be delayed until May 11, 2017.

According to the Portland Tribune, Amanda Fritz was prepared to vote against the project, while Commissioners Fish and Eudaly were undecided (Commissioner Saltzman was absent). These are the same commissioners who have:
  • been complaining that we are having a housing crisis;
  • increased renter protections, and;
  • declared a housing emergency because of underbuilding.

Developers have continuously pointed out that needless delays and extended timelines for the design review process adds significant expense, preventing delivery of units at the lowest cost possible (and hence the lowest rents possible). In this case, the developer has had to pay $160,000 in additional city fees -- $9,411 per unit -- through the end of March.

Project Development/Roadblock Timeline:
  • The initial request for a pre-application conference for this project was in January of 2016. 
  • The first design review request was in June, but the project did not go before the Design Commission until October, 2016. 
  • The Design Commission reviewed the project five times between October 2016 and February 2017, when it was ultimately denied.
  • The project was appealed to the City Council April 5th, and postponed to April 12th.
  • Now, a final decision is scheduled for May 11th. 

In the End -- More Delay May Mean More Units, Even Unhappier Neighbors
Ironically, Landon Crowell has the option of holding off until next year in order to apply to  build a significantly larger structure in the exact same spot when new comprehensive plan takes effect and raises the parcel's height limit from 75 to 125 feet.

Read more:
NextPortland - Ankeny Apartments Denied by Design Commission
Portland Tribune - Ankeny Apartments: Part 2 of 2 Redlined and Denied
Daily Journal of Commerce - Multifamily Project Hearing Rescheduled
Portland Tribune - Update: Council Kicks Ankeny Apartments Back to Developer, PDC
Daily Journal of Commerce - Ankeny Apartments Project Appeal Extended

Tuesday, April 18, 2017

Multifamily Marketwatch Podcast - April 18, 2017

In this episode: the release of Multifamily Northwest's apartment report for greater Portland; a surge in the number of homes for sale in Portland, and the Portland Tribune weights in on pending rent control legislation. 



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Monday, April 17, 2017

Portland Tribune to Legislature: Fix House Bill While There's Still Time

The Portland Tribune editorial board opined this past week that after hosting a 90-minute discussion with renters and landlords it was clear that elected leaders need to get both sides to the table to craft a better solution than HB 2004-A which was adopted by the house earlier this month. "Talking -- and listening -- to landlords who disagree with their proposal will make for better policy." Read the editorial.

Wednesday, April 12, 2017

HFO Announces Philanthropic Contributions to Affordable Housing Nonprofits

At the close of each brokered apartment sale, HFO makes a contribution in honor of the client(s) represented to a charity of their choosing. In addition to the thousands of dollars distributed in this manner each year, HFO matches those contributions in a separate account from which it makes several additional larger year-end contributions. 

This year, the HFO team felt strongly about focusing its charitable dollars on nonprofits serving families and children with affordable housing. HFO's distributions from its 2016 charity account were as follows (includes year-end 2017 contributions):

Human Solutions - $7,500
Habitat for Humanity - $3,250

“Each of us at HFO thoroughly understands the dynamics behind increasing rents. No one is more aware of the market influences at play. We call on our elected leaders to take whatever steps necessary to encourage the development of additional affordable housing in our community," said marketing director Aaron Kirk Douglas. "Economists agree: trying to micromanage the local rental market through rent control is not the answer."

Other nonprofits receiving cash funding from HFO throughout 2016 included: Big Brothers Big Sisters Columbia Northwest, Providence Cancer Research Institute, Doernbecher Children’s Hospital, Friends of the Children, the Oregon Humane Society and Outside In.

Tuesday, April 11, 2017

Multifamily Marketwatch Podcast - April 11, 2017

In this episode: status of Oregon House Bill 2004-A allowing rent control, Portland's new committee oversight on affordable housing, and a new 220-unit apartment building slated for the South side of the Burnside Bridgehead.



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Important News for Owners of Unreinforced Masonry Buildings

As you may be aware, the City of Portland is planning to adopt mandatory seismic upgrades for unreinforced masonry (URM) buildings.  

The final meeting of the URM Building Policy Committee is Wednesday, April 19th, from 3-5 PM at CH2M Hill, 2020 SW 4th Ave, Portland, OR 97201.
  • The requirements are intended to protect brick buildings from collapse in the event of an earthquake.
  • The policy will go before the City Council for a vote this summer.
  • Roughly 1,500 properties in Portland will face mandatory reinforcement over the next 10-25 years. You can see whether your building is on the list by clicking here.
  • Seismic upgrades are expensive. Costs are estimated at $50+ per square foot. This plan may pass without any subsidies to help owners pay for these improvements.
Failure to comply with the new ordinance would result in stiff fines and, ultimately, the revocation of a building’s occupancy permit. If you own an URM Building and did not receive our email blast with additional information, please contact our offices at (503) 241-5541 or email service@hfore.com. 

Seattle Creates 15-Member Renters' Commission

This spring, the Seattle City Council created a renters' commission that will begin meeting this summer to talk about pushing laws to cope with numerous things including soaring rents, displacement, zoning, transportation and access to open space. The City announced that members will be appointed by the council and mayor and will consist of people living in an array of rental housing types including students, low-income renters, LGBTQ renters, people with past felony convictions and those living in subsidized housing. Read more.


Friday, April 7, 2017

Arguments Regarding Portland Relocation Ordinance Presented to Multnomah County Judge

Attorney John DiLorenzo argued on Thursday that Portland's new tenant protection rule is illegal under Oregon's ban on rent control, and that the rule violates a statute in Oregon's Constitution that prohibits passing laws that change existing contracts. Judge Henry Breithaupt questioned whether the relocation fee constituted a form of rent control, asking if landlords truly cannot raise rents. DiLorenzo has stated that he will not withdraw his suit if the rent control ban is overturned by the Oregon Legislature. Similarly, Judge Breithaupt does not plan to dismiss the case if Oregon's housing rules change. City Commissioner Chloe Eudaly spent Thursday lobbying lawmakers in Salem to repeal the rent control ban. Her office has stated that if the ban gets repealed, she will begin working to create a rent stabilization policy in Portland. Read more.

Wednesday, April 5, 2017

Legislation Lifting Rent Control Ban, Eliminating No Cause Evictions Passes OR House

House Bill 2004 passed the Oregon House of Representatives 31-27 on Tuesday. The bill does not establish any specific rent control policies, but would allow local municipalities to enact rent ceilings. It also bans landlords who rent more than four units from issuing no-cause evictions to month-to-month tenants after their first 6 months of renting. Rep. Bill Kennemer of Oregon City described the bill as "well-intentioned" but also noted that it "does not build a single apartment unit." It will now go to the Senate, where it is expected to get a hearing. Read more.

Tuesday, April 4, 2017

Multifamily Marketwatch - April 4, 2017

In the headlines this week: Oregon House Bill 2004-A allowing rent control and ending no-cause evictions moves out of committee; Portland Mayor Ted Wheeler plans a new city department to license and monitor landlords; news outlets reporting that some recent market data shows rents starting to flatten in Portland.



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Monday, April 3, 2017

Portland Metro Area Underbuilt by 27,000 Units Over Last 10 Years

The Willamette Week reported over the weekend that according to the Oregon Office of Economic Analysis, a lack of new housing construction has been a major contributor to rising housing costs in the Portland Metro Area. Since 2006, the ratio of housing permits per population change has remained below the 1980-2004 average almost every year. The article notes that at the high end, rents are beginning to come down as new developments come online. At the lower end of the market, however, both renters and aspiring homeowners are feeling the effects of building trends that have not kept up with population growth. Read more.

Thursday, March 30, 2017

Zumper Report Shows Rents Flattening in Portland

According to Zumper's April 2017 National Rent Report, Portland dropped to #19 from #17 on the list of most expensive cities for renters in the US. Rents for a one-bedroom apartment in Portland have decreased 1.5% in the past month, and year-over-year have only increased by 0.8%. On average, two bedroom units cost 0.6% less than they did a year ago. The two cities where rents increased enough to overtake Portland were Philadelphia and Minneapolis. Read more.

House Bill to Lift Rent Control Ban & Require Relocation Fee Approved by Committee

The Oregon State House Human Services & Housing Committee voted 5-4 to approve a revised bill that lifts the statewide ban on rent control and imposes relocation fees for no cause evictions. Now that the bill has been finalized in committee, it will proceed to the House floor for a vote. Revisions made by the committee include an exemption of units less than five years old from any local rent control measures, as well as a reduction in the amount of relocation assistance landlords are required to pay to the equivalent of one month's rent, rather than three months. Read more.

Wednesday, March 29, 2017

Possible Changes Ahead for Housing Choice Landlord Guarantee Fund

According to an article in the Portland Mercury, the Housing Choice Landlord Guarantee Fund is running out of money, and state legislators and landlords alike are worrying about the consequences. The fund was created in 2013 in conjunction with a law that banned discrimination against tenants based on source of income, as a way to insure that landlords would be compensated if damage caused by a tenant was more than the tenant could afford to repay. As of January, the fund only had $115,000 remaining. Oregon Speaker of the House Tina Kotek is blaming the shortfall on "abuses" by landlords. She has introduced House Bill 2944, which requires landlords to prove to a judge rather than a clerk that they are owed the damages they seek. Read more.

Tuesday, March 28, 2017

Multifamily NW Proposes Immediate Statewide Rental Assistance for up to 40,000 Families [Video]

Multifamily NW has proposed a renter assistance program that would eliminate the need to create massive government infrastructure to monitor and enforce rent controls at various cities and counties who might adopt such a plan. The Multifamily NW program could be easily enacted right away and would serve up to 40,000 families with proven need at minimal cost of oversight and implementation.


Multifamily Marketwatch - March 28, 2017 [Podcast]

In this episode, we discuss the latest news and stories of interest to owners of multifamily property and rentals in the Portland, Oregon and Vancouver, Washington metro area.

Thursday, March 23, 2017

Multnomah County Property Tax Appeals Process Favors Assessor

According to a report today in the Portland Tribune, Multnomah County Board of Property Tax Appeals (BOPTA) hearings favor the county assessor. Critics of the process argue that frequently there is no representative from the assessor's office present at hearings, and property owners are not given supporting documents for the assessor's opinion until they walk into the hearing. Mike Vaughn, who replaced the previous assessor in July 2016, is working to improve the process. Previously, property owners had to request a copy of the county's report, which they paid 25 cents per page to view. Under Vaughn's new leadership, appellants are given a free one-page summary of the assessor's recommendation. Scott Phinney, a former Oregon Department of Revenue employee who now helps clients with property tax appeals throughout the state, says it is unusual that the assessor is not present at hearings. He also claims that the Multnomah County BOPTA panel generally only sides with his clients if the assessor's office concurs. Read more.

Wednesday, March 22, 2017

The PHB Doesn't Have Time to Review Data

After the Portland Housing Bureau (PHB) claimed in official budget documents that 400 apartment complexes in East Portland had outstanding code violations, the Oregonian double checked the numbers by comparing the city's list of code violations with a government database of multifamily properties. Reporters found that only 19 properties had code violations at that time. In response to a question about why the PHB had not reviewed the data themselves, top official Kurt Creager suggested that reporters have more time to perform reviews than housing officials do. On Tuesday, Creager told the Portland City Council, "we are committed to integrity in the data," but did not address how the PHB came up with the numbers in its budget request Read more.

Tuesday, March 21, 2017

The Impact of Rent Control on Oregon's Housing Market

This article is written by Gerard C.S. Mildner, PhD, Director of the Center for Real Estate at Portland State University.


The Oregon State legislature is considering House Bill 2001, sponsored by the Speaker of House Tina Kotek, which would override the state’s prohibition on local rent control ordinances. HB 2001 has three provisions: (1) limit rent increases statewide to 5% for 2017-18, (2) permit any local jurisdiction in the state to enact rent control, and (3) modify the inclusionary zoning legislation that was passed in 2016. The challenge in analyzing this legislation is that no details are provided regarding the nature of the rent control legislation that the local jurisdiction may implement. No limits have been placed on local governments’ rent control power, except that a “fair return” to landlords must be provided. Discussing the efficiency of rent control legislation that hasn’t been enacted is rather like commenting on whether a baby is beautiful while the mother is still pregnant.

The Speaker’s Office has circulated an argument that the rent control that will be implemented after this legislation is passed will be “second generation” rent control, as defined by Canadian economist Dr. Richard Arnott. According to Dr. Arnott, second generation rent control is typified by limits on rent increases (rather than a rent freeze), prohibition of rent control on new construction, allowances for larger increases with rehabilitation and major improvement, and allowances of decontrol between tenancies, none of which is included in HB 2001. I believe the differences between first-generation and second-generation rent control are largely semantic, and if there is a difference, it’s really a degree of the harm that the legislation will generate.

Monday, March 20, 2017

Metro to Decide on Designating Urban Reserves April 13

The Metro Council has stated it will delay the decision to designate 23,031 acres for urban reserves until April 13th. The inclusion of the hamlet of Stafford in the designated acreage has caused objections from the cities of Tualatin, Lake Oswego, and West Linn. If certified, the acreage would be open to development for the next 50 years. The Home Builders Association of Metropolitan Portland and Stafford Land Owners Association have endorsed the Metro Council's plans. Read more.

Friday, March 17, 2017

Using ADUs to Ease Housing Crunch

After last week's report that the permitting rate for Accessory Dwelling Units (ADUs) is reaching the rate for single family homes, it appears as if private and public groups are trying to use this new trend to help ease the housing crunch in Oregon.

According to the Willamette Week, Oregon lawmakers are considering a bill that would allow for construction of ADUs on land zoned for agriculture (HB 2937). Opponents have expressed concerns that the housing will not truly be affordable, and will likely be used for short term vacation rentals rather than permanent housing.

The Willamette Week also reports that Multnomah County is offering to build ADUs in the backyards of homeowners on the condition that they are used for 5 years to house homeless residents. After that time, homeowners would be able to use those units at their discretion, and would receive the added value of an additional unit on their property.

The Portland Business Journal reports that former head of the PDC Patrick Quinton is starting a company called Dweller, which will install prefabricated ADUs on land leased from homeowners, and would also pay the owners a portion of the rent collected from tenants. Dweller will take care of the permitting process and partner with Living Room Realty for sales and marketing.

Thursday, March 16, 2017

Commissioner Eudaly Plans Changes to Rental Housing Deposits

Portland Commissioner Chloe Eudaly announced she plans to call for reform of rental housing deposit regulations and is considering:

(a) limiting the deposit amount;
(b) requiring that it be held in an interest-bearing account; and
(c) clarifying the definition of reasonable wear and tear.

In an article published in today's Portland Tribune, Eudaly claims to have set up a stakeholder committee meeting of landlords, tenants and housing advocates. Upon learning of the commissioner's plans, Multifamily NW -- the state's largest association of housing providers -- asked Eudaly's office to be allowed to participate. The request was declined. Sources report Eudaly's stakeholders have already held one of three planned meetings to discuss the issue prior to recommending reforms.

Tuesday, March 14, 2017

HFO-TV: A Portland Economic Update with State Economist Christian Kaylor [Video]


Oregon state economist & research analyst Christian Kaylor gives a 2016 year end economic update for the Portland, Oregon metro area. Click to watch.


Multifamily Marketwatch - March 14, 2017 [Podcast]

Two apartment buildings in Portland's Sellwood and Moreland neighborhoods become the first proposed under the city's new inclusionary zoning law.


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Portland's Active Lifestyle Attracts Employers, Developers

National apartment market research company Axiometrics recently reported on the phenomenon of above average rent growth in cities with "active lifestyles." Portland is named along with cities such as Denver, Minneapolis, Atlanta, Salt Lake City, and Orlando as one of the top destinations for this type of activity. Because people are more likely to choose to live in "active lifestyle" cities, employers tend to relocate to such areas as a way of attracting top talent, positioning lifestyle as an amenity. This also keeps rents above the national average, which attracts investors and developers. Read more.

Monday, March 13, 2017

HFO Multifamily Marketwatch - February 28, 2017

HFO begins its weekly Multifamily Marketwatch podcast as Portland landlords take city hall to court over the relocation ordinance.


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HFO Multifamily Marketwatch - March 7, 2017



Oregon state legislators hold their first public hearings at the capitol on whether to allow local jurisdictions to enact rent control.



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