Thursday, July 18, 2019

Sold! N Interstate 6-Plex

HFO is pleased to announce the sale of this 6-plex in North Portland. Tenants of this building live within walking distance of a New Seasons and the MAX light rail. The property was very well maintained with many historical details including hardwood floors.

The apartment building was owner managed and rents were below market. HFO utilized its extensive network of investor relationships to secure a buyer with the wherewithal to close quickly on this unique property.

Tuesday, July 16, 2019

Yardi Matrix: Portland Year-Over-Year Rent Growth 1.2% in May

Yardi Matrix reports that Portland's rent growth has slowed in light of a high development cycle and dampening gains. Read more. 

Sold! 5 Units in SE Portland

HFO is pleased to announce the sale of the SE Gladstone Apartments. HFO was hired to market the sale of this property and it went under contract very quickly.

Interest was high for this asset and multiple offers were received. The transaction closed smoothly without any issues.

Monday, July 15, 2019

Recall: Universal Security Instruments Smoke & Fire Alarms

The US Consumer Product Safety Commission has recalled approximately 180,000 smoke and fire alarms that were sold by Universal Security Instruments between July 2015 and December 2016. People who have purchased these smoke alarms can test their alarms by pressing a test button on the device. Owners of broken alarms can contact Universal Security Instruments for a replacement. Read more.

Multifamily Marketwatch Podcast - July 15, 2019

This week: Home prices drop a bit in Seattle but are still up significantly in the past two years; The Portland City Council weighs gutting the power and influence of its neighborhood groups; Oregon house bill 5006 provides funding to support 2,100 affordable homes throughout the state, and house and senate democrats in the nation’s capital propose legislation that would restrict the ability of public housing providers to evict residents for criminal activity.

Listen to our latest podcast.

Thursday, July 11, 2019

Sold! 6 Units in Sellwood

HFO is pleased to announce the sale of this new 6-plex located in the desirable Sellwood neighborhood of SE Portland, Oregon. The property features high-end finishes and appliances, private decks and balconies, two secured vehicle garages and off-street parking. Through HFO's marketing, the seller received an all-cash offer from a California-based 1031 buyer and closed for more than $358,000 per unit - a benchmark high for new construction in SE Portland.

Tuesday, July 9, 2019

Sold! 20 Units in SE Portland

HFO is pleased to announce the sale of this 20-unit property in SE Portland. Interiors and exteriors of this asset were extensively renovated by the seller in 2016. The property was previously owner-managed for occupancy and its expenses did not align with the current market. HFO sold the asset to an exchange buyer looking to build a critical mass of units in the Portland metro area.

Oregon State Bar Landlord-Tenant Regulations Update

The Oregon State Bar held free landlord-tenant law update today. You can find the materials from the handout here. 

Monday, July 8, 2019

State of Oregon Spends $400k More in Limited Resources on Public Market Idea

The State of Oregon has pitched in an additional $400,000 of extremely limited resources into an idea that Portland needs a touristy public market similar to Seattle's.

The James Beared Public Market project has been on the drawing boards for over a decade. Proposed  and still remains basically in concept form after $250,000 in grant money from the State of Oregon's taxpayers in 2013. The project has received nearly $1 million in taxpayer funding that includes $312,000 from the City of Portland.

Read more in this week's Oregonian.

Tuesday, July 2, 2019

Sold! 12 Units in Beaverton, Oregon

HFO is pleased to announce the sale of this 12-unit townhome community in Beaverton. This property consists of 2-bedroom townhomes with private laundries, carport parking, and backyard patios. The seller had completed extensive updates to the property's exterior, including new roofs and siding. Most units had some interior updates.

Historical operations at the property were impacted by the renovations and a lack of management oversight. Vacancies were above market for the submarket and ongoing renovations limited the ability to lease apartments. HFO targeted investors with portfolios on the west side of the metro area, helping those potential buyers understand the management upside opportunity.

Monday, July 1, 2019

Senate Votes to Eliminate Single Family Zoning in Oregon Cities

Republican state senators returned to the capitol on Saturday, and on Sunday night voted to pass HB 2001, which eliminates single family zoning in cities with populations above 25,000 across Oregon. The bill passed in a 17-9 vote and heads to the governor's desk for a signature. Most of the law's provisions will not take effect until 2020, in order to give municipalities time to update zoning codes. Read more.

Multifamily Marketwatch - July 1, 2019

This week: Harvard's Joint Center for Housing Studies (JCHS) released its State of the Nation's Housing Report for 2019; companies in the Portland and Seattle Metro areas continue to announce positive hiring news; President Trump issued an executive order that creates a commission tasked with recommending ways to cut regulations in the housing market.


UPDATE: Oregon Republicans returned to the senate and passed HB 2001 late Sunday night. It heads to Governor Brown's desk for a vote.

Listen to our latest podcast.

Tuesday, June 25, 2019

Multifamily Marketwatch - June 25, 2019

This week: the Portland City Council approved Commissioner Eudaly's tenant screening and security deposit ordinances with a 3-1 vote; proposed changes to the US census could result in an undercount of over 4 million residents nationwide, including over 75,000 people in Washington and over 35,000 people in Oregon; Democrats vying for the 2020 Presidential nomination are facing pressure from voters to address housing affordability.

Listen to our latest podcast.

Sold! 36 Units in Beaverton, Oregon

HFO is pleased to announce the sale of this 36 unit property in Beaverton. The asset is walking distance to the WES commuter rail and Washington Square, Oregon's largest regional shopping mall. The property was well-maintained with newer windows and roofs, but the interiors had limited updates.

In the summer of 2018, a large portion of the siding was replaced and repainted, delaying full marketing of the property. The property was managed for occupancy and rents trailed the market. HFO was key in positioning the property against its historical operations with low rents and high expenses for a successful sale.

Thursday, June 20, 2019

City of Portland Announces Traveling Helpdesk for Landlords and Tenants

The Portland Housing Bureau Rental Services Office announced today it will begin a traveling helpdesk service on Saturdays throughout the summer. The plain is aimed at helping renters and landlords navigate the complex web of recently enacted rental housing regulations. Landlords and tenants can have their questions answered by the experts visiting a neighborhood library on select dates. Click here for the traveling helpdesk schedule.

Portland, Ore. Council Approves Sweeping Tenant Screening Ordinance

As reported in The Oregonian, Portland's city council approved significant restrictions on landlords' ability to screen tenants. Official rules will be drafted by the Portland Housing Bureau in the coming months and will take effect next March.  Read more.

Sold! 89 Units in Aloha, Oregon

HFO is pleased to announce the sale of this 89 unit building in Aloha, Oregon. This property was owned by the same owner/manager for more than 10 years. Although well maintained, the asset was purchased for its value-add opportunity. A portion of the units had been updated with washer/dryers. The new owner plans to upgrade unit interiors to market standards.

Tuesday, June 18, 2019

Portland City Council Likely to Adopt Screening & Security Deposit Ordinances Weds. June 19

Following a final reading at 4:15 pm Wednesday, the Portland City Council is expected to pass Commissioner Eudaly's proposed screening and security deposit ordinances. Last week, the council passed nine of 10 proposed amendments.

A final adopted version will be available relatively soon after the meeting.

Sold! 40 Units in NW Portland, Oregon

This 2018-property features a diverse mix of units including some studios -- a rarity for suburban apartments. All flats include a private deck and an in-unit washer/dryer. The site has ample off-street parking. This highly desirable Washington County location is one mile north of Tanasbourne Town Center and adjacent to Portland Community College's Rock Creek Campus.

The asset was taken to market after completion and management companies were switched during lease-up, which resulted in limited historical operations and a longer timeline to full occupancy.

HFO successfully found a buyer seeking new product that was able to offset the impact of the property's limited financials.

Monday, June 17, 2019

Multifamily Marketwatch Podcast - June 17, 2019

This week: The Portland City Council appears poised to adopt a proposed renter screening ordinance that some argue will only serve to increase homelessness; Oregon House Bill 2001 moved forward in the state legislature, the bill would legalize duplexes, triplexes, and fourplexes in single-family neighborhoods in all cities with more than 25,000 residents; and a new report finds that tech workers from some of the most expensive cities on the West Coast are viewing Portland as a more affordable alternative.

Listen to our latest podcast.

Multifamily NW: Portland's New Tenant Screening Will Likely Lead to Increased Homelessness

In an op-ed, Multifamily NW stated that Portland will likely see homelessness rates increase as a result of additional evictions caused by the reduction in rent-to-income ratios.

For decades, many landlords and banks have held firm to the standard that a person should not rent a unit or buy a home that is more than 30% of gross income. The new standard set by Portland would be 50% of gross income. For people living paycheck to paycheck, any bump in the road in terms of a medical emergency, job loss or other emergency situation could lead to there not being enough savings to avoid eviction. Evictions follow a renter around for three years, which will make re-renting even more difficult for someone in that situation.

Read the op-ed piece here. 

Thursday, June 13, 2019

Sold! 197 Units in Portland's Bethany Area

This 2002 asset was originally built as condos with oversized two-and three-bedroom floor plans. Amenities include private decks, a full-sized washer/dryer, gas fireplace, HVAC, and master bedrooms with vaulted ceilings. A road improvement project impeded rental income for over a year. HFO worked with potential buyers to highlight the assets' typical stabilized operations along with a long-term exit strategy.

Wednesday, June 12, 2019

Report: U.S. Tech Workers Migrating to Portland as "Affordable Alternative"

The online data service Apartment List reports that Portland is seen as an affordable alternative to San Francisco and Seattle. The company compiles data on user searches to determine where people are looking to make their next home. Read more in Rental Housing Journal online.  

Report: Portland Rent Growth Cools to 1.9% in 2019

The software and data firm Yardi Matrix reports that rent growth for the Portland multifamily market will cool to an estimated 1.9% in 2019. The company says rents are remaining flat due to the delivery of more than 5,000 units in 2018.

“The metro added 27,500 positions in 2018, a 2.4% year-over-year employment growth rate. The construction boom taking place in the metro is supported by the office sector, which has more than 2.4 million square feet of space under construction,” the Yardi Matrix report says.

“With more than 9,320 units underway and some 6,900 units expected to be delivered this year, there are major concerns about oversupply, but a strong occupancy rate is indicating that there is a rapid absorption of new deliveries and demand for housing outpaces supply. The high occupancy rate and steady rent growth are drawing investors to the metro.

“With demand high, we expect rents to rise 1.9% in 2019,” the report says.

Read more.

Tuesday, June 11, 2019

Sold! 9 Units in SW Portland

Built in 1902, this asset consists of spacious one-, two-, and three-bedroom units. The remarkable archecture was designed by A.E. Doyle, known for his work on the Multnomah County Central Library and the Benson Hotel in downtown Portland.

This apartment building was owner-managed and rents were significantly below market. Utilizing our extensive network of investor relationships, HFO secured a buyer with the wherewithal to close on this unique property.

Monday, June 10, 2019

National Multifamily Housing Council Unveils Housing Affordability Toolkit

Washington, D.C. - The National Multifamily Housing Council (NMHC) announced the release of an all-new Housing Affordability Toolkit, which is intended to help guide discussions regarding specific housing affordability policies, tools, and incentives.

A growing number of families – at all income levels – are working to find housing they can afford. As such, communities across the U.S. are seeking solutions to solve our nation’s housing crisis. To help meet this demand, federal, state and local governments must come together to reduce barriers to developing more rental housing.

"There isn’t a universal solution to solving the affordability problem," said Doug Bibby, NMHC President. "It requires a multi-faceted approach and I’m thrilled our Housing Affordability Toolkit will help communities, lawmakers and industry stakeholders nationwide explore various approaches."

Developed in partnership with HR&A Advisors, the Housing Affordability Toolkit is divided into six sections and each section delves into a specific component of addressing the affordability challenge. The Toolkit also includes case studies of eight different markets around the country to paint a diverse geographic and economic picture of how affordability challenges can differ from jurisdiction to jurisdiction. Each part can stand alone or be combined with others to bolster the recommendations within the Housing Affordability Toolkit to guide housing affordability discussions.

To download the Toolkit, visit

Final Vote Expected Wednesday at 10:30 am on Portland's Proposed Tenant Screening, Security Deposit Ordinances

No public testimony will be taken on the draft ordinances at this reading, but a vote may be taken. You can read the proposed tenant screening ordinance amendments along with the ordinance itself by clicking here.  

Meanwhile, Willamette Week obtained a copy of the City Attorney's analysis of the ordinance, which determined that the possibility of the ordinance being invalidated in court as "low to moderate." Read that story.

Multifamily Marketwatch Podcast - June 10, 2019

This week: Portland’s tenant screening ordinance moves forward to a possible vote by city council this Wednesday at 10:30 am at City Hall; Portland-area developers are bypass the City’s inclusionary housing requirements by constructing assets with fewer than 20 units, and a study finds that the migration of younger people into cities is more than a passing trend.

Listen to our latest podcast.

Portland City Council Will Vote on Tenant Screening Ordinances This Wednesday

The Portland City Council plans to hold a vote on proposed tenant screening and security deposit reform ordinances Wednesday, June 12th at 10:35 AM. A public hearing on the newly revised ordinances was held at the end of May. While the revisions were intended to address concerns raised by the City Attorney's office, few substantial changes were made. Rent-to-income ratios would be capped at 2.5 times rent for units affordable to residents making 80% of AMI or less, while more expensive units would have a cap of 2 times rent. Read more.

Thursday, June 6, 2019

Sold! 24 Units in SW Portland, Oregon

This 24-unit property is located in the Goose Hollow neighborhood of downtown Portland. The asset's 24 two-bedroom townhomes average 967 square feet. The unique garden-court townhomes with off-street secured parking make it an attractive investment.

Units include a full-sized washer/dryer set, vaulted ceilings plus decks in select units. The property is within walking distance of Portland State University and the city's financial and cultural districts.

HFO was able to demonstrate management upside and long-term demand for this rare townhome product. The asset was purchased by an exchange buyer from California actively seeking to build a portfolio of properties throughout metro Portland.

Tuesday, June 4, 2019

Bill Prohibiting Landlords from Considering Past Marijuana Convictions Heads to Gov. Brown's Desk

Senate Bill 970 passed the Oregon House last week, and will now go to Governor Brown's desk for a signature. The bill prohibits landlords from considering past convictions for the use or possession of marijuana when screening prospective tenants. A second bill, Senate Bill 420, would enable Oregon residents to set aside past convictions for marijuana-related offenses that are no longer illegal. Read more.

Sold! 12 Units in SE Portland

Ash Street Apartments
The seller of this property wanted to move the equity out of Portland and enlisted HFO to help achieve the sale. We brought an offer to the table that was accepted and the transaction went smoothly and closed quickly with a buyer in a 1031 exchange.

Monday, June 3, 2019

OPB Report: Portland Wants to Reduce Income-to-Rent Ratios - Landlords Push Back

At a public hearing last week, landlords pushed back against the City of Portland's proposed mandate that landlords accept renters as qualified if they show 2.5x rent as monthly income. The proposed reduction from the generally accepted income standard of 3x rent was not well received by many housing providers who are concerned the change will lead to more evictions. An eviction record could make it difficult for a tenant to rent in Portland for up to three years. Read more. 

Multifamily Marketwatch Podcast - June 3, 2019

This week: The City of Portland renter and tenant security deposit ordinances progress to a second reading on June 12th; Seattle rent rates are back on the rise, and the City of Tacoma is in the news as the nation’s hottest housing market.

Listen to our latest podcast.

Thursday, May 30, 2019

Portland Unreinforced Masonry Owners Prevail in Fight for Preliminary Injunction Against City of Portland

Unreinforced masonry owners have been granted a preliminary injunction against the City of Portland's placard ordinance pending trial. 

Beginning on page 49, Judge Acosta makes his final closing argument of his opinion as follows:
In this case, Plaintiffs readily satisfy the elements for a preliminary injunction. Plaintiffs have demonstrated a likelihood of success on the merits of their First Amendment claim on the placard and tenant notification provisions of the Ordinance. The court finds that Plaintiffs have demonstrated they likely will suffer ineparable harm if the Ordinance takes effect. Plaintiffs have demonstrated they will be injured beginning June 1, 2019, when they are required to provide a potentially factually inaccurate and misleading statement to prospective tenants in their lease applications. Harris, 772 F.3d at 583 ("[A] colorable First Amendment claim is ineparable injury sufficient to merit the grant of [preliminary injunctive] relief.") Mr. McMonies and Mr. Beardsley testified that if the Ordinance goes into effect, they will be forced to provide false, or at least inaccurate and misleading, information to prospective tenants that their buildings are umeinforced when their buildings have undertaken seismic upgrades. See Oregon v. Azar, Case No. 6:19-cv-00317-MC, 2019 WL 1897475, at 15-16 (D. Or. Apr. 29, 2019) (discussing that plaintiffs demonstrated ineparable injury because of massive cuts to Title X funding if the final rule went into effect). Defendants' contention that the effort for Plaintiffs to provide the URM disclosure in the lease applications is relatively modest in light of other disclosures already required by law, misses the point. The question for the court is not the severity of the harm, but whether the harm is ineparable. Here, Plaintiffs will be required to speak a government-drafted message that is misleading at best. Washington Post v. McManus, 355 F. Supp. 3d 272, 305-06 (D. Md. Jan. 13, 49 -2019) (granting preliminary injunction on First Amendment grounds). Clearly, this factor weighs in Plaintiffs' favor.
Furthermore, the Ordinance CatTies the risk of substantial fines for failing to comply, raising the risk for extraordinary harm. See Harris, 772 F.3d at 583 (finding the risk of criminal penalties for failing to comply with rep01iing requirement weighed in favor of granting preliminary injunction). Thus, the court finds that Plaintiffs are likely to suffer in-eparable harm without injunctive relief because if the Ordinance is permitted to take effect, it will violate Plaintiffs' First Amendment rights.
The balance of equities and the public interest also weigh in favor of granting the injunction, Insisting that URM building owners post a placard and inform tenants has not been shown to demonstrably increase awareness of seismic risk or inform the public about how to "drop, cover, and hold on." Requiring URM building owners to display and distribute a factually inaccurate message would permit Defendants to infringe on the speech rights of a handful of P01ilanders while failing to take steps to actually increase seismic awareness for all Portlanders. Thus, the significant public interest in upholding First Amendment principles is acutely on display in this case, and weighs in favor of an injunction. The Ninth Circuit "consistently recognize[s] the significant public interest in upholding free speech principles." Klein v. City of San Clemente, 584 F.3d 1196, 1208 (9th Cir. 2009) (finding "balance of equities and the public interest thus tip sharply in favor of enjoining" where plaintiff likely to succeed on merits of First Amendment claim); Innovation Law Lab v. Nielson, 342 F. Supp. 3d 1067, 1082 (D. Or. 2018) ("[I]t is always in the public interest to prevent the violation of a patiy's constitutional rights.") In summary, Plaintiffs have satisfied each of the requirements for a preliminary injunction.
Because the court concludes that Plaintiffs have demonstrated colorable First Amendment violations pertaining to the placarding and tenant notification provisions and that a preliminary injunction should issue on that basis, the comi consequently enjoins enforcement of the acknowledgment provision of the Ordinance. The acknowledgment provision requires URM building owners to document their compliance with the placarding and tenant notification provisions on a BDS form. P.C.C. 24.85.65(E). The court is enjoining enforcement of the placard and tenant notification provisions, therefore practically speaking, there is no compliance to acknowledge.
Similarly, because Plaintiffs have demonstrated colorable First Amendment violations, the court declines to address Plaintiffs' argument that the Ordinance also violates the Due Process Clause under the Fourteenth Amendment.

City Council Hears From Landlords, Tenants, in Extended Public Hearing

The City of Portland’s public hearing on Chloe Eudaly’s proposed tenant screening and renter deposit ordinance was held last Wednesday. The council heard nearly three and a half hours of testimony from both renters and landlords. Written comments are being accepted through June 12th, when last week's proposed amendments will be voted on. Both ordinances may be headed for a second reading and a vote the week of June 17th. Only three votes are needed for approval, and it appears the council has the votes to pass both measures at this time.

Sold! 56 Units Near Portland State University

The Westfal's downtown Portland location adjacent to MAX light rail and its proximit to PSU made it an attractive acquisition. Some units had minor updates but the building required significant upgrades, which were factored into the purchase price.

HFO focused its marketing efforts on locating a buyer familiar with bricker buildings seeking to acquire a critical mass of units in downtown Portland. The building was sold to a value-add syndicate based in Colorado.

Although built in 1910, The Westfal is not unreinforced masonry construction

Tuesday, May 28, 2019

Vox: One Expert's Seven Principles for Solving America's Housing Crisis

In a recent The Weeds podcast by Vox, senior correspondent Matthew Yglesias sat down with Jenny Schuetz, a housing economist and David Rubenstein fellow at the Brookings Institution, to explore an issue that’s resurfaced on the national agenda for the first time in a couple of generations.

Yglesias summarized Schuetz' key ideas as follows:

  1. There are two only partially overlapping housing affordability crises in America, one that affects low-income households in all parts of the country and another that affects a larger share of households in a minority of markets (mostly in coastal metro areas) that suffer from an acute shortage of housing.
  2. To help low-income families, we should make housing assistance an entitlement — like SNAP or Medicaid — that’s available to every family that meets the income eligibility standards.
  3. We probably shouldn’t tie housing assistance to local housing costs, because high local housing costs reflect housing scarcity, which means extra subsidy will be captured by landlords. Instead, we should tackle the shortage.
  4. In California, the Northeast Corridor, Greater Seattle, Greater Portland, and, to a lesser extent, Greater Denver and many college towns, there is simply not enough housing being built to meet the demand to live in these areas, creating problems that no amount of subsidy or rent control can really solve.
  5. Many of these supply-constrained metro areas do in fact feature building booms in select areas — downtown or in gentrifying neighborhoods — but the vast majority of urban and suburban land is generally set aside for single-family homes and has almost no construction happening in it.
  6. The most socially and economically valuable place to build new housing would be in the most expensive, most affluent neighborhoods and suburban towns — but to make that happen, state governments will have to override local zoning regulations.
  7. Federal policymakers hoping to incentive more house-building need to look beyond funds from the Department of Housing and Urban Development, which are not a very strong carrot, and consider using transportation money as a lever to influence state and local policy.

Opinion: City puts responsibility for housing crisis on those providing the housing

Rental owner Sue Scott's letter to the editor was published in today's Oregonian. Read the article online to read and respond to reader's comments. 

Sue Scott is a semi-retired fitness consultant and the owner of 25 rental units in two properties in Portland. She lives in Happy Valley.

by Sue Scott

The city is using legislation and threats of huge penalties, fines, and fees to put the housing crisis on the backs of those who provide housing.

The proposed regulations for tenant screening and security deposits are 40-plus pages of verbiage and mandate huge fines only to rental providers. This will greatly increase risks for landlords. It's not fair.

Worse, the new proposals hit small investors hardest. That's all wrong too. It is the mom-and-pop landlords who are consistently most flexible with tenants. The big out-of-state providers are already here, and evictions are part of best practices for them in protecting their investors and bottom lines.

There are no risks here for the city. It makes the rules and dictates fines. It doesn’t offer to share the risk and gives us little or no respect Senate Bill 608, which imposed statewide rent control and prohibited landlords from ending most leases flew through all public hearings, and its legislative backers accepted no changes. While the proposed screening and security deposit regulations have had some small changes, it seems the policy as a whole is going down this same intractable path, which will only make the market worse for renters.

Portland City Commissioner Chloe Eudaly especially seems to enjoy pitting renters against the "evil" landlords that maintain the homes and safe places renters live in. We are apparently the biggest easy target. As landlords, we do not have enough political power or numbers. The us against them attitude needs to stop. A workable and sustainable solution needs to be a shared solution.

Writers of these regulations should include all sides. Tenants, housing providers (large and small), financial institutions, and non-profits. The changes must result in sustainable housing for our great city.

And what about property rights? The city now says we must accept applicants who may not be able to afford the rent or are felons in our properties.

Felons are not a protected class, like race, gender, religion, families with kids, sexual preferences, service dogs, disabilities, etc. etc. And tenants who are financially vulnerable are a great risk for any landlord.

As property owners, responsible for the debts and expenses related to those properties, we should have protected rights to assess the financial risk we are willing to take. We pay taxes, mortgages, repairs, legal and all other costs. It takes several years to break even on most properties. For most of us, the big financial rewards come only at the end of our careers and are part of our retirement.

There are more equitable, broader-based solutions that the city should consider.

Tacoma is Now the Nation's Hottest Housing Market

So far in May, the median home in Tacoma was on the market just eight days — the shortest period of any U.S. metro — while the supply of homes for sale is just 1.3 months, the lowest in the United States. Read more in the Seattle Times

Multifamily Marketwatch Podcast - May 27, 2019

Last week's planned public hearing on Portland's latest tenant screening ordinance draft was rescheduled to this Wednesday from 6-8 pm after council members publicly struggled over the city budget; four of Multnomah county's five commissioners come out in favor of the city's renter screening ordinance, and unreinforced masonry owners are hoping a federal judge rules in their favor this week by granting an extended injunction against the city of portland's placard requirement.

Listen to our latest podcast.

Sold! 31 Units with Commercial Space in Downtown Portland, Oregon

This mixed-use asset in the heart of downtown offers 31 units and four commercial spaces. Apartments feature spacious floor plans and a unique solarium window system overlooking the South Park blocks. Many units had been upgraded.

The purchase price of $8.2 million reflected numerous capital improvement projects scheduled to take place post-closing. The property amenities include underground parking.

Thursday, May 23, 2019

Tenant Screening Ordinance Hearing Postponed to 5/29 at 6:00 pm. After Council Bickering Blows Up Budget Talks [video]

Tensions among Portland Mayor Ted Wheeler and other City Council members erupted on Wednesday at a public hearing on the City's proposed budget.

Unable to take a final vote on the budget, the council was forced to reschedule the public hearing for the draft tenant screening and security deposit ordinances. Those issues are rescheduled to Wednesday, May 29th at 6:00 pm.

See the video of yesterday's discussion by clicking here.

Read the latest screening ordinance here.

Read the latest security deposit draft here.

This post was updated 05/23/19 at 3:54 pm with the date and time of the rescheduled hearing.
This post was updated again 05/23/19 at 7:15 pm with yet another date and time of the rescheduled hearing.

Sold! 28 Units in Gresham

The seller of this gated community was participating in an exchange. The asset offered a balanced unit mix of one- and two-unit apartments.

The property's operations requried adjustments for costs associated with capital improvements and owner management. HFO worked with investors familiar with the outer east side neighborhoods of Portland and Gresham to complete a successful sale of this asset.

Wednesday, May 22, 2019

Multnomah County Commissioners Support Eudaly's Tenant Screening & Security Deposit Ordinances

Four of Multnomah County's five commissioners sent a letter of support for Commissioner Eudaly's tenant screening and security deposit ordinances to the Portland City Council. The commissioners who signed the letter include County Chair Deborah Kafoury, as well as Commissioners Sharon Meieran, Susheela Jayapal, and Jessica Vega Pederson. In the letter they state, "This ordinance uses research-based criteria to identify low-risk characteristics that would help former offenders obtain housing and not be perpetually punished for long-past offenses." According to the Willamette Week, the letter was spearheaded by Commissioner Vega Pederson. Read more.

Federal Judge Unimpressed With City of Portland's Argument Justifying Unreinforced Masonry Placards

Closing arguments on the City of Portland's ordinance requiring placards on unreinforced masonry building took place yesterday, and the judge appeared skeptical of the City's reasoning.

Judge Acosta spent much of the City Attorney's time asking questions, offering his counter-argument, and expressing concern over the City's ever-changing ordinance.

A ruling is expected in the case by the end of next week.

In a two-day trial last week, unreinforced masonry building owners learned in testimony by Mike Haggerty how buildings were placed on the City's "official" URM list.

  • From 1990 to 1993 the City of Portland had a total of 3 Portland State University students conduct the survey over the course of three summers 
  • The students were not the same students each summer and conducted their official survey on foot 
  • The areas only included downtown and the exact perimeter is unknown
  • The city did not survey buildings on the east side, Multnomah Village, St. Johns or other areas
  • The students eyeballed a building and checked a box 
  • They did not know that the list would be used 27 years later as the City of Portland's official list, and they did not know that by accidentally checking the wrong box they could impact real people 
  • They had no significant training for the job and there was no field manual 
  • Their work was "spot checked" by an actual engineer
  • The project had no budget
Shelly Duquette, a Structural Engineer at the City of Portland Bureau of Development Services was integral in the update and maintenance of the old URM database according to the city's website, She previously provided the public with this information about the city's unreinforced masonry list.
"The URM database was established in the mid-1990s.Trained City staff, in collaboration with Portland State University (PSU), surveyed all commercial buildings in the City of Portland using procedures developed by American Technology Council (ATC) to identify different building types. This survey was based on site visits and visual inspections of building exterior combined with research of existing building records and permit history. Based on this survey of buildings, buildings that were identified as URMs were listed in a URM database." ~ Shelly Duquette
In addition, during trial testimony, the City revealed it is developing a new version of retrofit standards for 2021-2023. 

Tuesday, May 21, 2019

City's Proposed Screening Ordinance Remains Substantively Unchanged From Prior Iteration

A close analysis of the February and May draft renter screening ordinances by HFO researchers revealed a fairly large surprise: despite Mayor Ted Wheeler's claim to "push for significant changes" and the City Attorney's office's concerns about possible legal issues with the screening requirements, the final draft remains virtually unchanged in its latest iteration.

And as commissioners and staffers are patting themselves on the back for collaborative work and building a good product, an individual working closely with the rental services commission bluntly confirmed: "It's not that different at all." 

The only change we noted aside from clearer wording was this single item cited in Willamette Week: 

Instead of requiring landlords to set the minimum income required for an apartment at two times the rent, the new policy will benchmark the requirement to apartments affordable to 80 percent of area median income: above that, landlords will be required to accept income that's twice the rent; below that the requirement will be 2.5 times the rent.
A hearing on the draft tenant screening ordinance is Thursday, May 23rd at 3 pm at Portland City Hall.

Note: this article updated May 22nd at 2:54 pm with a draft screening criteria that was updated on the City of Portland's auditor website after 7:34 am on Monday, May 20th. 

Sold! 8 Units in Gresham

This 8-plex required adjustment for costs associated with capital improvements and owner management. With high demand for smaller plex properties, HFO worked with investors familiar with the outer eastside neighborhoods of Portland and Gresham to complete a successful sale.

Monday, May 20, 2019

Multifamily Marketwatch - May 20, 2019

Smart Growth advocacy group up for growth released a report criticizing Portland's inclusionary zoning policy, and the Mayor is requesting $150,000 for an independent review of the program; a US magistrate judge heard from building owners and city officials as the lawsuit against placarding signs for unreinforced masonry buildings moved forward; and Vancouver, BC continues to face a tight housing market despite efforts to upzone and new taxes on foreign buyers.

Listen to our latest podcast.

City Council to Hold Hearing on Revised Tenant Screening & Security Deposit Ordinances Thursday, May 23rd

The Portland City Council plans to hold a hearing on Commissioner Eudaly's newly revised tenant screening and security deposit ordinances at 3 PM on Thursday, May 23rd. Mayor Wheeler has been working with Eudaly's office to bring the ordinances in line with legal standards laid out in a memo from the City Attorney's office. According to the Portland Tribune, the ordinances have been simplified but still place significant restrictions on landlords. Read more.

Revised Tenant Screening Ordinance

Revised Security Deposit Ordinance

Note: this article updated May 22nd at 2:54 pm with a draft screening criteria that was updated on the City of Portland's auditor website after 7:34 am on Monday, May 20th. 

Friday, May 17, 2019

Portland City Attorney Warns City Council about Legal Issues in Tenant Screening & Security Deposit Ordinances

According to the Portland Tribune, the Portland City Attorney's Office sent a legal memo to City Council outlining potential legal pitfalls for Commissioner Eudaly's proposed tenant screening and security deposit ordinances. While City Attorney Tracy Reeve declined to release the memo to the public, Mayor Wheeler indicated that the memo ranked legal challenges from "low" to "high." The Mayor said that Eudaly's office is working to overcome these legal problems prior to the next hearing. Read more.

Thursday, May 16, 2019

Washington State Enacts Graduated Real Estate Excise Tax

The Washington State legislature voted to enact a change in the real estate excise tax law on April 25th. As of May 16th, the bill is awaiting the governor’s signature but is expected to be signed shortly.

A legal summary of that change is on the following page. It indicates that the law enacts a new graduated rate scale for real estate. The flat tax of 1.28% will be replaced January 1, 2020, by the following rates:
  • 1.1% – Portion of selling price less than or equal to $500,000
  • 1.28% – Portion of selling price greater than $500,000 and equal to or less than $1.5 million
  • 2.75% – Portion of selling price greater than $1.5 million and equal to or less than $3 million
  • 3.0% – Portion of selling price greater than $3 million

Sold! 48 Units in NE Portland

This 48 unit property built in 2005 consists of units with private decks or patios overlooking green spaces between each building. The apartments include a full-size washer/dryer and gas fireplace with vaulted ceilings in the upper units. Siding and all decks were replaced prior to sale.

Historical operations were impacted by a broken water main. HFo worked to help investors understand the challenging historical operations and appreciate the asset's upside opportunity.

Tuesday, May 14, 2019

Sold! 13 Units in NE Portland

This garden-court property consists of two-bedroom, one-story duplex units with private entrances. The apartments feature in-unit washer/dryer and off-street parking.

Prior to sale, the property had new windows, roofs and siding. HFO worked with investors familiar with outer east side neighborhoods of Portland and Gresham to orchestrate a successful sale.

Update: Landlords, Tenants, and Marijuana Law in Oregon and Washington

Attorney Charles Kovas provides a 2019 update on marijuana laws as they relate to multifamily owners and renters in Oregon and Washington.

Monday, May 13, 2019

Hearings Begin Tomorrow in Federal Court as URM Owners Seek Preliminary Injunction Against the City of Portland, OR

Two days of hearings on a preliminary injunction against the placarding of unreinforced masonry buildings in Portland begin in Federal Court tomorrow.

In early April the City of Portland was found in violation of a temporary restraining order by attempting to enforce its placard ordinance. A few weeks later, the court found the City in violation of the restraining order a second time.

Attorneys representing owners of unreinforced masonry buildings had to send a letter demanding remedies for the second round of violations of the court's temporary restraining order, specifically for these violations:

  • The City illegally recorded contracts on titles.
  • The City illegally accepted contracts after the temporary restraining order date.
  • The City failed to remove enforcement language on websites.

The judge ordered the City of Portland to:

  • Remove the encumbrances off titles and deeds.
  • Return the contracts to building owners.
  • Refund the costs related to contract recording.
  • Update placard websites with a restraining order notice.
  • Follow a phone and email script approved by Judge Acosta.

Judge Acosta begins two full days of hearings Tuesday, May 14th and Wednesday, May 15th at 8:30 am in courtroom 11B at the Federal Courthouse located at 1000 SW 3rd, Portland, Oregon.

Unreinforced Masonry Owners are hoping to win this first round of hearings in order to move forward with a motion for a permanent injunction on the placard requirement.

Multifamily Marketwatch - May 13, 2019

A Portland economist reports on the two major factors contributing to rampant homelessness in our region; Prosper Portland announces its design choice for the 14-acre US Post office site downtown, and the Washington legislature budgets nearly 10 billion dollars for transportation spending in that state.

Listen to our latest podcast.

Jennifer Shuch on Greater Portland's Multifamily Housing Pipeline [video]

Jennifer Shuch, HFO's Research Analyst and host of the HFO weekly Multifamily Marketwatch podcast, discusses the methodology behind estimating the pipeline of multifamily units being delivered in the Portland/Vancouver metro area. She also provides an analysis of the lackluster results of Portland's Inclusionary Housing ordinance.

Friday, May 10, 2019

Meet J.R. Johnson's Co-President Clint Arp

HFO partner Greg Frick interviewed J.R. Johnson Co-President Clint Arp recently to learn more about the company and its work repairing and restoring multifamily buildings throughout the West. J.R. Johnson is a co-sponsor of HFO's investor events, newsletters, and the Multifamily Marketwatch podcast.

Thursday, May 9, 2019

Understanding Oregon's Rent Control Bill and Portland's Latest Landlord/Tenant Law Changes

Ball Janik Partners Adele Ridenour and Ciaran Connelly presented information on Oregon Senate Bill 608 (Rent Control) and updates on many new Portland ordinances affecting tenants and landlords inside the city limits of Portland.

New National Website Aggregates Information on the U.S. Housing Crisis

With more than half of American renter households paying more than 30% of their income on housing, the National Multifamily Housing Council is urging Federal, state and local governments to work together to tackle the cost of housing in our country. To help and provide detailed data, the NMHC has created a new website that provides information on a state-by-state basis. The website can be found at

Sold! 45 Units in East Portland, Oregon

This 1973 community is located along the MAX light rail in East Portland. The seller had completed extensive updates to the property exterior including new roofs, siding, and landscaping. Most units also had some interior upgrades.

HFO targeted investors with properties on the east side of the metro area, helping the potential buyers factor in management upside opportunity.

Washington State Housing Law Update with Charles Kovas

Attorney Charles Kovas provides an update on landlord/tenant legislation in Washington State.

Wednesday, May 8, 2019

2019 Mid Year Portland Economic Update from Oregon Workforce Economist Christian Kaylor [video]

State of Oregon economist Christian Kaylor studies on the Portland metro area extensively. In our annual mid-year interview, he covers trends in the local and national workforce. He also takes a look at national job growth, and the hottest cities for employment, and the fastest-growing industries for work in today's economy.

Tuesday, May 7, 2019

Sold! 12 Units in Outer SE Portland

Fernhill is a 12-unit townhome community midway between Portland and Gresham, Oregon located near major manufacturing and technology employers. The seller approached HFO to list the property and it sold quickly with immediately nonrefundable earnest money in escrow.

Monday, May 6, 2019

Multifamily Marketwatch - May 6, 2019

This week: Developers are warning that Portland's inclusionary housing requirement is causing a construction slowdown that could exacerbate the city's shortage of housing; Portland commissioner Chloe Eudaly is exploring avenues for increasing city revenue, including a personal income tax on top earners and a vacancy tax on apartment buildings; and cities and states across the U.S. are looking to Minneapolis for creative ways to solve the housing crisis.

Listen to our latest podcast.

Friday, May 3, 2019

Sold! 110 Units in Vancouver, Washington

Built in 1971, Hampton Hills' exterior envelope had been replaced, and several units had been updated. Property amenities include a clubhouse, fitness center, and an outdoor seasonal pool. Nearly all apartments are one-bedroom flats.

Given the unique unit mix and property vintage, HFO worked to demonstrate possible upside through ongoing interior updates. Hampton HIlls was sold to a buyer participating in a 1031 tax-free exchange. 

Wednesday, May 1, 2019

Report: City of Portland "On the Right Track" on homelessness

The Oregonian/Oregonlive reports that "Portland Mayor Ted Wheeler on Monday cast himself and city partners as effectively tackling the city’s homelessness crisis and policing controversies." Read the story.

Report: Economic Growth Slowing in Multnomah County as Payroll Surges by 6.8%

The State of Oregon is reporting employment growth in Multnomah County slowed from 3.3% in 2015 to 1.8% in 2018, suggesting slowing economic growth. This change occurred even as payroll for Multnomah County surged by 6.8%. One possible explanation, according to State of Oregon workforce analyst Christian Kaylor, is that employers are raising wages to keep workers from leaving for better-paying jobs elsewhere. 

Tuesday, April 30, 2019

Sold! 20 Units in Vancouver, Washington

Creekside Manor consists of large 3-bedroom townhomes with washer/dryer hookups, separate entrances, and fenced backyards. The building envelope had recently been replaced. Operations required adjustment for costs associated with capital improvements and owner management.

HFO Investment Real Estate worked with investors familiar with Vancouver assets without stabilized historical operations to finalize a successful sale.

Monday, April 29, 2019

Report: Portland's Inclusionary Zoning Policy is Failing

"...annual permit issuance under the City of Portland's inclusionary housing program represents a 64% decrease relative to the 5-year average permit issuance level prior to the adoption of inclusionary housing, as measured from 2012-2017. Housing starts lag building permit activity, so unless Portland's inclusionary housing program is significantly restructured soon, we expect this trend line will lead directly to a further underproduction of housing in 2020, 2021 and 2022."  Read more. 

Despite dismal reports on the City's inclusionary housing policy City of Portland Housing Program Specialist Brett Eisenbrow responded to an HFO inquiry on potential revisions by saying "...there are no program changes scheduled... as we review and revaluate [sic] the IH program in the future..."

Multifamily Marketwatch Podcast - April 29, 2019

This week: The Portland City Council will vote May 23rd on screening and security deposit reform after Mayor Ted Wheeler called for significant changes to the proposals; a growing number of high-income households are renting instead of buying; and the New York Times reports that 2020 presidential candidates are working on strategies to help renters.

Listen to our latest podcast.

Developers Warn of Multifamily Construction Slowdown in Portland

Developers who have historically built many of the multifamily buildings in Portland are now saying the regulatory environment in the city is keeping projects from penciling out. An unusually high number of projects, particularly large projects in the central city, have received design review approval but not moved forward with building permit applications. The developers warn that the projected returns are too low for investors, and the city is likely to see a significant slowdown in the production of new units in 2020 and 2021. Read more.

Friday, April 26, 2019

Sold! 22 units in Vancouver, Washington

A majority of this 22-unit apartment community consists of one-bedroom flats--a portion of which had been updated. In arranging the sale of this multifamily asset, HFO worked with investors familiar with Vancouver properties without stabilized historical operations to complete a successful sale.

Wednesday, April 24, 2019

Sold! 8 Units in Vancouver, Washington

HFO sold the Whitman Apartments. These well-situated un its offer spacious backyards and off-street parking. Due to the aggressive demand for multifamily assets in Clark County and HFO's granular knowledge of the market, the Whitman Apartments had multiple offers.

Tuesday, April 23, 2019

Seattle's Apartment Boom Continues

According to the Seattle Times, "The Seattle area is filling up new apartments faster than any region in the country... not a great sign for tenants hoping landlords get desperate and drop rents."  Read more.

Monday, April 22, 2019

Multifamily Marketwatch Podcast - April 22, 2019

This week: The US Treasury Department issues long-awaited guidance on opportunity zones; new data pinpoints dramatic effects of climate change on Portland neighborhoods; and a Harvard Business Review study has found that in cities with increasing Airbnb listings, housing costs also rise.

Listen to our latest podcast.

Multifamily NW Spring 2019 Apartment Report Released

At this morning's Multifamily NW spring apartment report breakfast, it was announced that:
  • Rental vacancy rates in Greater Portland increased 55 basis points to 4.95%--but remaining relatively unchanged from one year earlier.
  • Rent rates increased 4% in the past six months and were up 7.7% on average from one year ago.
    • Note that these rent rates do not represent "effective" rent rates due to the offering of concessions, which are becoming more prevalent in the market.
Submarket rent rates were reported as follows:

Click to Enlarge