Wednesday, February 28, 2018

"Landlords and Tenants Gear Up For the Biggest Fight Yet"

Today's Portland Mercury reports that the fight over relocation fees and the disagreements between renters and landlords has now taken on the tone of an all-out war. The face-off starts today at Portland City Hall at 3 pm. Read more.

Sold! 11 Units in Outer SE Portland


This 11-unit building was constructed in 2003. The seller reached out to HFO through its national advertising platform. The HFO team found that rents were significantly below market which meant any buyer would need to make a large down payment due to the low rents. Despite that fact, HFO began marketing the property in mid-July, immediately generating multiple offers. The property sold for $1.25 million.

Tuesday, February 27, 2018

Portland City Council to Discuss Rental Registration System, Relocation Fee Law

The Daily Journal of Commerce reports that Portland's City Council will consider on Wednesday whether to allocate $400,000 to create a citywide rental registration system. This decision will be part of the council's efforts to make the city's relocation fee ordinance permanent. Earlier this month, two members of the Rental Services Commission resigned after Mayor Wheeler came out in support of ending the exemption for landlords who own just a single rental unit. A rental registration system would require landlords to provide policymakers with data on rents, evictions, and vacancies, which would impact decisions on future housing regulations. Professor Gerard Mildner of Portland State University warns that the registration system appears to be the first step toward implementing rent control. Read more. Note: Subscription required.

Minneapolis Hesitating to Enact IZ because of Portland's Example

The city of Minneapolis is considering an inclusionary zoning policy, but the recent news about the program in Portland is causing city leaders to hesitate. The MinnPost published an article detailing the city's history with inclusionary housing, as well as important takeaways from programs in other cities, including Portland. Meanwhile, economist Joe Cortwright points out in City Observatory that in 2016, Minneapolis was cited as one of the cities with an IZ policy that Portland could replicate. In fact, at that time the city only had a voluntary density bonus for developers who chose to include affordable housing units. Similarly, New York's so-called "mandatory" program only applies if developers seek up-zoning. Read more.

Monday, February 26, 2018

Comments due March 19 to City of Portland on Proposed Changes to City's Multifamily Zoning Requirements

The City of Portland wants comments on its proposed Better Housing by Design plan by Monday, March 19th.

The plan calls for rezoning that:
  • Better defines multifamily allowances to encourage affordable and diverse housing
  • Includes outdoor spaces and green elements
  • Outlines specific building design and scale items
  • Includes specific requirements for East Portland.
Download a PDF of the discussion draft, or July 2017's draft proposal, and then comment using this link to submit your thoughts online. Of course, you can always submit comments in writing the old fashioned way, in writing, to the Bureau of Planning and Sustainability, Attn: Better Housing by Design Project, 1900 SW 4th Avenue, Suite 7100, Portland, OR 97201; or via email at betterhousing@portlandoregon.gov.

Multifamily Marketwatch Podcast - February 26, 2018

This week: Seattle follows Portland's lead in the effort to require seismic retrofits for unreinforced masonry buildings; local developers come out against proposed inclusionary zoning rules for condo developments; the potential for a democratic supermajority in the Oregon legislature begins to take shape--can rent control be far behind?



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Sold! 12 Units in N Portland

The Bridgepointe Apartments (1973) is a 12-unit apartment complex near the downtown main street of St. Johns in North Portland. Consisting of two- and three-bedroom units, the property offers unparalleled views of the iconic St. Johns Bridge. HFO's marketing garnered multiple offers, and the property ultimately traded at $1,925,000 -- $160,417/unit -- a record high for this product type in St. Johns.

Friday, February 23, 2018

Sold! Bradley Commons - 12 New Units in NE Portland

HFO put Bradley Commons into contract during the early stages of lease-up, and helped guide the transaction to a successful close. Bradley traded at $2,875,000 ($239,583/unit) at a 5.15% cap rate.

Wednesday, February 21, 2018

Sold! Springwater Place - 20 Units in SE Portland

Built in 2003 this complex consisted of two-story condo-style buildings, featuring 3-bed and 2 ½ baths with garages, individual gas hot water heaters and gas forced air furnaces. The property was being owner-managed with rents significantly under market. Utilizing our relationships, we secured a buyer with the wherewithal to close on the property with its low, in-place income.









Monday, February 19, 2018

Multifamily Marketwatch Podcast - February 19, 2018

This week: the Portland Bureau of Planning and Sustainability released a 12-month study of Portland's Inclusionary Housing requirement, recommending that the city modify the policy; the Portland Business Journal ranked the top 35 elementary schools in Oregon and SW Washington; and developers of low-income housing are trying to make up for funding shortfalls resulting from the corporate tax cut.



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Oregonian Headline: "Apartment Construction Drying Up" Because of IZ Program; Portland Housing Bureau Responds Program is "Operating as Expected"

The Oregonian published a follow-up article to the 12-month review of Portland's Inclusionary Zoning policy, interviewing developers and city officials to find out why permitting activity has slowed so abruptly. Tim O'Brien of Urban Asset Advisers explains how the math has changed for development in the city, with rising construction costs, development fees, taxes, and land prices all contributing to higher price tags for developments. Urban Asset Advisers is currently working on two smaller developments subject to IZ requirements, which are being financed by local investors who are willing to accept a smaller return rather than larger REITs or financial institutions. Other developers, such as Cairn Pacific, are staying away from new housing projects due to the difficulty in securing a construction loan. According to the Oregonian, Shannon Callahan of the Portland Housing Bureau is not surprised by the drop-off in permitting activity, and the program is "operating as expected." Mayor Wheeler is planning to offer developers with projects in the permitting pipeline the opportunity to opt-in to the program in exchange for a 10-year tax abatement, but the city has yet to propose a plan that would bring new projects into the pipeline. Read more.

Sold! Ventura Park - 20 Units in SE Portland

Ventura Park (1966) is a 20-unit property in outer SE Portland. HFO brokers had a pair of clients participating in 1031 like-kind exchanges, and the particulars of this property made the transaction work for both parties in an off-market transaction. Ventura Park sold for $2.85 million.

Thursday, February 15, 2018

Sold! 34 Vintage Units in Downtown Portland

This vintage property in downtown Portland was owned and operated by a student housing provider. The mechanical systems have been updated over the last 20 years. The challenge was finding a buyer who understood seismic updates and financing hurdles. With HFO’s extensive understanding of the market, we easily identified a nonprofit buyer with the ability to get funding and close the transaction.

Monday, February 12, 2018

Multifamily Marketwatch Podcast - February 12, 2018

This week: Jobs are up in Oregon and employment gains are expected across all industries in 2018; more than 3,500 people responded to the City of Portland's call for comments on the Residential Infill Project; Metro is planning for two upcoming bond measures for affordable housing and transportation projects.



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Bureau of Planning and Sustainability: Development Pipeline Represents Just 18-24 Months of Potential Activity

Tyler Bump, Senior Economic Planner at Portland's Bureau of Planning and Sustainability, issued a memo on Friday summarizing  a twelve-month review of Portland's Inclusionary Housing requirements. According to the memo, there are only 10,000 units across 81 projects remaining in the development pipeline, with half of those currently under review or approved. The current development pipeline represents only 18-24 months of potential projects, and between February 2017 and February 2018, only 17 projects subject to IH requirements have been submitted. Only 12 of these were privately financed. The memo also summarized feedback from focus groups and interviews with development professionals, many of whom cited uncertainty and lack of available financing as major roadblocks resulting from the IH requirements. Read more.

Wednesday, February 7, 2018

Surprised? Portland's Traffic Ranked Nation's 12th Worst

Surprise! Portland's traffic ranks 12th worst in the nation, according to a study by a data firm called Inrix. The company's most recent study found Portland drivers spend 50 hours in rush-hour crawl on average each year. Read more.

Portland Mayor Wheeler Supports Strengthening the City's Relocation Fee Ordinance

The Portland City Council plans to vote on whether to make the city's relocation fee ordinance permanent next month, and Commissioner Chloe Eudaly has been advocating for the removal of the exemption for landlords who own only one rental unit. A recently released study concluded there could be approximately 24,000 units in the city that fall under this exemption, adding some fuel to the debate. Previously, Wheeler had previously said he needed more data before deciding whether to eliminate the loophole, but his spokesman Michael Cox told the Willamette Week on Tuesday that the Mayor now supports keeping the loophole in place only for owners of granny flats and owner-occupied duplexes. Along with the mayor and Commissioner Eudaly, Commissioner Fritz has also come out in favor of requiring relocation fees for all landlords. Read more.

Monday, February 5, 2018

Portland's Renter Confidence Survey: A's for Recreation and Transit; Low Marks for Commute and Affordability

Probably no surprises in the annual Portland Renter Confidence Survey conducted by Apartmentlist. Those surveyed gave Portland a B-grade overall. Read more.

Multifamily Marketwatch Podcast - February 5, 2018

This week: Portland mayor Ted Wheeler will introduce incentives next month in an attempt to offset the stagnant response to Portland's year-old inclusionary zoning requirement; Oregon companies go on a hiring spree; and apartment rents increased again last year with west coast cites leading the pack.



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Thursday, February 1, 2018

Mayor Wheeler Weighing Additional Incentives to Encourage Multifamily Development

Building permit applications have fallen off a cliff since inclusionary zoning requirements went into effect in February 2017. Now, the Portland Mercury reports that Mayor Ted Wheeler is planning to introduce an ordinance in March that would offer additional incentives to developers to encourage more building, particularly in the center city. Only 12 buildings subject to inclusionary zoning are currently being planned in the city, and none of those are west of the Willamette River. Commissioner Nick Fish argues that it is too soon to say whether the slowdown in permitting activity is due to inclusionary zoning, as other factors may be impacting Portland's development market, but professionals involved in development such as Kurt Schultz of SERA Architects argue that the sudden drop off in activity is highly unusual. Wheeler has indicated that his incentive proposal could include height and density increases as well as tax breaks, but the details of the plan have not yet been released. Read more.