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.



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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.



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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

Thursday, April 18, 2019

Tenant Screening Ordinance Vote to Be Delayed Two Weeks

Portland Commissioner Chloe Eudaly's office announced that it will be delaying the vote on its tenant screening and security deposit reform proposals. Public testimony was April 3rd and 4th, and the vote was originally scheduled for April 25th. According to Eudaly's office, the Commissioner plans to take an additional two weeks to rework the proposal. In response, Deborah Imse of Multifamily NW stated, "We share the goal of reducing barriers to housing, but Portland needs to ensure the rules are not so onerous that rental housing providers decide to give up and get out." Read more.

Portland Releases New Draft of Better Housing by Design Code Amendments for Multifamily Projects

The City of Portland has released its revised proposed draft to design code amendments for multifamily projects.

The Bureau of Planning and Sustainability is holding a work session on April 30th at 5pm. A recommended draft will be formed thereafter and forwarded to the City Council for a public hearing and vote. The public hearing and testimony period will be the next opportunity for citizens to provide testimony on the proposals.

Monday, April 15, 2019

High Rents a Growing Problem Throughout Oregon

The Portland Tribune reports that a shortage of housing across the state is leading to more Oregonians spending more than 50% of income on rent.

The most rent burdened city in Oregon is Corvallis, where 40% of households pay more than half of all income on rent. Eugene has 38% of households that are rent burdened, while the number in both Ashland and Grants Pass is 33%. Read more. 

Multifamily Marketwatch Podcast - April 15, 2019

This week: San Francisco plans a final vote this week on legislation giving local nonprofits first right of refusal over the sale of multifamily buildings. Now entering its third year, Portland’s inclusionary housing policy has resulted in just 422 housing units being permitted – with only a handful finished and available for rent. And the Portland Mercury examines the potential impacts of Portland’s Residential Infill Plan



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Friday, April 12, 2019

Tenant Screening Ordinance Could Get Overhaul

The Willamette Week reports that Mayor Ted Wheeler plans to propose significant changes to Commissioner Eudaly's proposed tenant screening ordinances. Wheeler's spokesperson Eileen Park said the Mayor's "primary concerns are those raised in public testimony...including the rent to income ratios, the look-back period on criminal activity, potential support for small landlords and their ability to apply certain requirements, and also the impact on how we can continue to encourage housing development in our entire city." It is unclear whether the Mayor's vote is needed to pass the policy. Read more.

Wednesday, April 10, 2019

Majority of Landlords Testify: Screening Ordinance Unnecessary

The Rental Housing Journal offered a thorough summary of multifamily owners' testimony before the city council in an article this week. The vote on the proposed ordinances is scheduled to take place until Thursday, April 25th. Read more.

Tuesday, April 9, 2019

San Francisco Considers Right of First Refusal for Nonprofits on Multifamily Sales

San Francisco Supervisor Sandra Lee Fewer has sponsored a proposal that would give nonprofit groups the right of first refusal to buy any buildings with more than three units. If the law passes, landlords wanting to sell their buildings would need to notify qualified nonprofit groups of their intent to sell. The groups would have five days to express interest and an additional 25 days to structure a deal with tenants in the buildings. Thereafter, nonprofits would have the opportunity to match any offer received from a private buyer. Read more.  

Monday, April 8, 2019

Portland's Inclusionary Zoning Policy Isn't Producing Enough Units, Housing Bureau Working on Changes

The Daily Journal of Commerce reports that the city has received permit applications for 66 projects that would include 422 affordable units to Portland since inclusionary zoning went into effect in 2017. But city officials believe a total of 23,000 units affordable to low- and moderate-income residents are needed. Tim O'Brien of Urban Asset Advisors says he was able to make his projects work by counting bedrooms rather than units, but he was only able to get financing from local investors willing to agree to an ROI of 5.2%. In response to the program's less-than-optimal results, the Housing Bureau is working to draft changes to the policy, including writing separate rules for apartments and condos. Read more.

Multifamily Marketwatch Podcast - April 8, 2019

This week: ongoing multifamily deliveries in the Seattle market are expected to keep rents flat there for the next several months; Portland's Rockwood neighborhood remains hopeful that its opportunity zone designation will bring much-needed development, and new health survey has found that a large number of renters are putting off medical care in order to pay rent.



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Friday, April 5, 2019

Vote on Tenant Screening Reform in Portland Tentatively Scheduled for April 25th

The Portland City Council heard roughly six hours of testimony over two days this week relating to proposed tenant screening and security deposit reforms. Among the 50 residents who testified were renter advocates, landlords, and property managers. The vote on the proposed ordinances is not scheduled to take place until Thursday, April 25th, though that vote could be pushed out if amendments are introduced. Read more.

Thursday, April 4, 2019

Judge Rules City of Portland Violated Court Restraining Order on URM Placards

Oregon District Court Judge John V. Acosta has ruled that the City of Portland violated a restraining order with a recent letter sent to owners of unreinforced masonry buildings in Portland. The Judge ordered the City to send another letter with corrections. 

Tuesday, April 2, 2019

Multifamily NW in Portland Business Journal: Portland Needs a Tenant Screening Process That Would Truly Make Housing More Accessible to All

The Portland Business Journal published an opinion by Multifamily NW Representatives Maureen McNabb and Deborah Imse, in which they outline concerns over Commissioner Eudaly's tenant screening proposal. They also describe the work they have been doing with a grant from the Meyer Memorial Trust to develop screening criteria that would make housing more accessible to all applicants, by ensuring tenants understand their rights and know how to appeal a denial of housing. According to Imse and McNabb, Commissioner Eudaly's proposal would increase barriers to housing and could impact safety and affordability. The City Council plans to hold hearings on the tenant screening and security deposit ordinances this Wednesday and Thursday, April 3-4th. Read more.

Monday, April 1, 2019

Opinion: Beware the False Promise of Rent Control

by Ethan Blevins, Pacific Legal Foundation

Rent control does not work. That’s one of the most settled issues in economics, one widely accepted across the ideological spectrum. Yet politicians continue to peddle rent control with seemingly willful ignorance.

Oregon is the most recent state to embrace the rent control orthodoxy. The day after rent control prevailed in Oregon, marchers took to the streets in Olympia, demanding that Washington also succumb to a proven policy failure. But Washington should side with settled economic science, not naïve populism.

Rent control’s failure begins and ends with the most basic concept in economics: supply and demand. When politicians slap an artificial squeeze on prices, a shortage results. A lower price means more people want that good while fewer people produce it.

With rent control, that means less housing. Many landlords will either sell their property or put it to a different use. Meanwhile, inadequate housing supply and pressure for rent-controlled units spill out into the uncontrolled market, where prices escalate.

Even rent-controlled units will ultimately face inflated pricing. After all, under most rent control regimes, landlords can still reset the rent at the start of a new lease. Thus, the pricing of rent-controlled units leaps in fits and starts over time. This lack of predictability only makes it harder for tenants to find housing they can afford, encourages landlords to set short lease terms, and wreaks havoc with the housing market.

Because rent-controlled prices are locked into a lease, people tend to stay put longer, which reduces mobility and makes it harder for folks to find new housing when they change jobs or move to a new area. Worse, the people who slip into comfy rent-controlled housing and stay put are often wealthier than the people toughing it out in the open market.

Another bleak outcome of rent control is shoddier housing quality. Landlords saddled with rent control tend to cut back on maintenance to offset the loss and forego improvements because rent control deflates competition.

In short, rent control means homes are shabbier, pricier and harder to find. Yet rent control advocates, rather than face these uncomfortable facts, often resort to blaming landlords or developers for engaging in the exact behavior that economists predicted.

In response to this self-inflicted crisis, cities often double down with more regulations that exacerbate inflation. Thus, when rent control increases the eviction rate because landlords can’t raise the rent until a tenant leaves, the rent controllers slap on eviction limits. When landlords bow out of the rental market, rent controllers slap on fees to replenish a diminishing housing stock. When prices soar, they pump more money into myriad affordable housing programs. Blaming landlords and developers for this predictable spiral is like blaming the sun for climate change.

Proven methods for addressing a housing crisis do exist. Take California, for example, where the legislature commissioned a study to figure out why the Golden State has become so unlivable. The Legislative Analyst’s Office concluded that a primary cause was overregulation of the housing industry and that the path out was to build more housing. Governor Gavin Newsom has seized this issue, threatening to strip transportation funding to California cities that fail to meet targets for housing construction. Meanwhile, Oregon elects to stumble in a haze of blinkered science denial.

Policymakers in Washington state take heed – of your two neighbors to the south struggling with housing affordability, California is looking for real solutions aimed at more housing, while Oregon chases the failed orthodoxy of regulation and restriction. Science makes it clear which path Washington should follow.

Multifamily Marketwatch Podcast - April 1, 2019

This week: The Portland Mercury asks whether Oregon lawmakers should be backing a bill allowing local jurisdictions to set their own rent control policies; a Seattle news outlet finds that affordable condos in King County are being rented out or used as second homes; and we're seeing new scrutiny of the Oregon Department of Transportation's handling of data related to the Rose Quarter Freeway Expansion.



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