Tuesday, December 29, 2020

Cascade Policy Institute: "Who Will Pay the Bills When the Pandemic Ends?"

"Who Will pay the Bills When the Pandemic Ends" is the topic of an article written earlier this month and published today by the Central Oregonian. The article was published initially by the think tank Cascade Policy Institute's VP of Research questions, Eric Fruits, Ph.D.  

Elected officials throughout the state and country have put themselves in an impossible position 

Recently, the U.K. became the first western nation to vaccinate its residents against COVID-19. The recipient, a 91-year-old retired shop clerk, voiced relief, "I can finally look forward to spending time with my family and friends in the New Year."

Despite the fanfare greeting the vaccine rollout, authorities warned that the vaccination campaign would take many months. They warned the tough restrictions that have rattled daily life and cratered the economy are likely to go on into spring.

While many of us dream the vaccine will bring a return to normal life, for many people post-pandemic life will be a nightmare. The end of pauses, freezes, shutdowns and lockdowns will mean the end of moratoriums on housing evictions, utility shutoffs and student loan payments.

During COVID-19, millions of Americans have racked up thousands — maybe tens of thousands — of dollars in unpaid rent, utilities and student loans. For example, information presented to the Oregon Governor's Council of Economic Advisors estimates unpaid rent in the state is between $250 million and $300 million. When the emergency ends, those bills will come due.

Elected officials have put themselves in an impossible position. If they allow masses of evictions and utility shutoffs, they will face torches and pitchforks from their constituents. If they try to pass laws wiping out the debt, they will face a revolt from some of their biggest donors. And, even worse, they will face years of constitutional challenges.

In Washington State, Only 85% of Renters Paid Full or Partial Rent in December

(Renton, Washington) – The Washington Multi-Family Housing Association’s (WMFHA) found 85% of statewide apartment homes made a full or partial rent payment by December 13, 2020. The data was collected from the association’s 267,000 professionally managed homes in the state.

This represents more than $212 million in unpaid rent across Washington state, is a 3.37 percentage point decrease in rent collections from the previous month of data collected, and a 4.21 percentage point decrease in collected rent from April 13, 2020. The data encompass a wide variety of market-rate rental properties across Washington state, which can vary by size, type, and average rental price.

 91% of the rent a tenant pays goes to mortgage holders, financial institutions, taxes, maintenance costs, payroll for staff, and utilities. Less than 10 percent goes back to the property owner. We urgently need a massive influx of rental assistance to help residents keep up with housing payments, avoid massive debt, and protect Washington’s fragile housing system.

WMFHA has been collecting local rent payment information from its members since the COVID-19 pandemic proliferated in March 2020. The numbers serve as an indicator of resident financial challenges and will track the recovery as well.

The survey has become crucial to local policymakers to understand the state of the rental housing industry. It helps to inform any legislation that is produced in city, county, and statewide jurisdictions.

Washington State Expected to Receive $507 Million of Rental Assistance Funds

The Washington Multifamily Housing Association (WMFHA) reports that funds to be managed by the state and counties are expected to approximate $507 million for the state. 

The United States Congress passed the Consolidated Appropriations Act of 2021 last week, which was signed by the President on Sunday. The Act provides for $25 billion in rental assistance to be distributed by the Department of the Treasury.

  • Rental assistance eligibility includes current or unpaid rent and utility payments (up to 9 months of rent arrears, and/or 3 months going forward) and other directly or indirectly incurred housing expenses because of the pandemic. 

    • Eligible households are those: 
      • With a household income below 80 percent of area median income (AMI); 
      • States should prioritize families with incomes below 50% of area median income (but no set percentage of funds distributed is required), as well as renter households who are currently unemployed and have been unemployed for 90 days.
      • With a demonstrable risk of experiencing homelessness or housing instability; and
      • Have one or more household members who qualify for unemployment benefits or experienced financial hardship due, directly or indirectly, to the pandemic.
      • Income eligibility is based on time of application and must be recertified every three months.

  • Administrative programs distributing rental assistance may use up to 10 percent of allocated funding for housing stability services, including case management and other services intended to keep households stably housed.

  • In Washington, the rental assistance is likely to be distributed in a similar manner to the $100 million in state rental assistance distributed earlier in 2020. 

  • The application process requires renters to apply for assistance from their administrative agency managing the program. Housing providers can also apply for rental assistance on behalf of the resident but must inform them and secure their consent.

  • Payments are sent directly to the housing provider.
The WMFHA provides links to local rental assistance programs on its website at:





Thursday, December 24, 2020

Washington Governor Plans to Extend State's Eviction Moratorium to March 31

Governor Jay Inslee has announced that he will once again extend a ban on evictions in that state to March 31st. Read more.

Wednesday, December 23, 2020

Tuesday, December 22, 2020

Landlords File Suit Against State in Federal Court, Seeking to Invalidate Eviction Ban

On Monday, the Oregon State Legislature extended a statewide eviction moratorium through June 30th.

Hours later, a handful of rental owners filed suit in U.S. District Court, calling the State of Oregon's extension of an eviction moratorium an unlawful state taking of private property without due compensation. They seek a federal injunction against the extension. Read more.  

The plaintiffs issued the following statement through their attorney, John DiLorenzo of Davis Wright Tremaine LLP:

Statement of John DiLorenzo on behalf of the plaintiffs in Farhoud, et al v. Brown, et al.

Late last evening, a lawsuit was filed in the Federal District Court naming Governor Kate Brown, the State of Oregon, Multnomah County and the City of Portland as defendants after the legislature failed to responsibly address the housing crisis which our state and local leadership created.   

According to Multifamily NW, Oregon renters are currently in arrears between $800 to 900 million in unpaid rent.  Yet, the state has opted to make available only a fraction of the overall need ($200 million) to benefit renters who reside in only certain types of housing owned by certain types of providers.  Sadly, the State had a chance to address this issue during the third special legislative session by taking up LC 881, a proposal designed to make it easier for all housing providers to provide rent forgiveness for existing tenants in exchange for credits against future Oregon income tax.  Instead, it adopted a new law (HB 4101) that fails to equitably address the growing crisis and simply kicks the can down the road, increasing the crushing debt that tenants who cannot pay rent will ultimately have to deal with in bankruptcy courts.  The state's latest response will require both renters and housing providers to wait in a very long line only to discover when they get to the window that the promised support is all sold out. 

Renters are in need of immediate support, unrestricted by artificial “tests” and unreasonable bureaucratic impediments.  The lion's share of renters want to pay rent and cannot because they have lost their livelihoods (either due to the Governor’s choice to close the businesses which used to employ them or because the Governor has closed the schools their children attend requiring them to provide all daycare for their children).  Governor Brown, the state, the county and the city determined that the COVID-19 crisis required those actions.  We are sympathetic to all who have been impacted by this horrible disease and are not going to second guess whether the government’s responses were necessary or appropriate.  But there is no doubt that the state’s choices and the choices of the city and county were the direct causes of the grave financial circumstances which renters and their housing providers are now experiencing.

The plaintiffs are private sector housing providers who the defendants have required to provide services without compensation.  Moe Farhoud is a respected housing provider in the Portland Area.  Mr. Farhoud immigrated to Oregon from Lebanon in 1985, fleeing a war that claimed members of his family.  He has dedicated much of his life and his business to creating safe, good quality rental housing.  Mr. Farhoud helps individuals get a second chance at finding stable housing, working with clients who have past infractions.  A brief video about Mr. Farhoud and the business he has built is linked here:  http://moefarhoud.com/

The Sherman family are local housing providers in the mid-Willamette Valley who have invested 18 years of their lives to build their business. Crystal and Tyler have renovated dozens of distressed properties into rental homes that have provided a safe space for hundreds of families. They are proud of the business they have built together and the opportunity it has provided them to give back to their community.

The plaintiffs allege that the actions of the defendants violate the Contracts Clause of the United States Constitution, the prohibition on takings without just compensation in the Fifth and Fourteenth Amendment to the United States Constitution and the prohibition against seizures of property in the Fourth and Fourteenth Amendments to the United States Constitution.  The plaintiffs request that the Federal District Court either declare the Moratorium declarations, executive orders and laws invalid and void or, in the alternative, require the state, City and County to design and implement a plan to adequately compensate all private housing providers for their losses incurred in addressing the consequences of the governments’ response to COVID-19.

Congressional COVID Relief Bill Includes Rental Assistance and Extension of Federal Eviction Moratorium

The CRE Finance Council Reports:
Relief from Troubled Debt Restructuring until January 1, 2022, rental assistance, and a one-month extension of the CDC’s eviction moratorium are included according to summaries of the agreement. The bill also includes an additional $300 per week in unemployment insurance through March 14, and direct payments of $600 for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year, as well as a $600 payment for each child dependent. 

Small businesses receive $325 billion, including $284 billion for first and second forgivable PPP loans, dedicated set-asides for very small businesses, and expanded eligibility to 501(c)(6) nonprofits. Low-income communities also receive $20 billion for new SBA grants. It also provides funding for vaccine distribution, food assistance, tax breaks, and money for education and child care. This agreement also includes $15 billion in dedicated funding for live venues, independent movie theaters, and cultural institutions.

What’s Out
The agreement does not include a liability shield for businesses and direct financial aid for states and cities that are facing pandemic-related budget shortfalls.

What Matters Most to Commercial Real Estate
TDR Relief Extended – CREFC has been advocating for months to extend the CARES Act’s temporary suspension of generally accepted accounting principles (GAAP) requirements for the Troubled Debt Restructuring (TDR) classifications on loans so that banks and life insurance companies can continue to work with their CRE borrowers. 

Sec. 541 extends temporary relief from TDRs under the CARES Act for an additional year, to January 1, 2022. The legislation also clarifies that insurance companies are included in this relief. This is a major win for CREFC members. Read a summary of the financial services provisions. 

Rental Assistance – Sec. 501(b) sets up a $25 billion rental assistance program to be distributed by state and local governments with populations of 200,000 or more. Each state shall receive no less than $200 million. Funds may be used for direct financial assistance, including current and past-due rent, utilities and home energy costs, utilities, and home energy costs. Eligible households may receive up to 12 months of assistance, plus an additional three months if necessary. The relief is targeted to households that are at or below 50% of the area median income, or where one or more members of the household has been unemployed for 90 days or longer. Landlords may apply on behalf of tenants or tenants may apply directly for this assistance. Read more about rental assistance. 

Eviction Moratorium – Sec. 502 extends the rental eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) through January 31, 2021.

CECL Relief – Sec. 540 extends temporary relief to financial institutions from complying with Current Expedited Credit Loss (CECL) accounting standard through January 1, 2022. 

Landlords Should Support LC-881 - The Emergency Bill Offering Tax Credits for Unpaid Rent

A bill being introduced by Oregon Senator Betsy Johnson (D-Scappoose) in the 2021 regular session needs the advance support of landlords. Here's why:

Highlights of LC881

  • Rescues tenants because all rents in arrearage are forgiven
  • It adequately compensates landlords by converting the arrearages to tax credits, which can be taken over three years.
  • It does not require a current funding source because future revenues fund it
  • It minimizes or eliminates the State’s exposure to lawsuits.

Additional notes regarding Oregon Sen. Betsy Johnson’s proposal: LC881

  • It provides tax credits to the landlord, which can be taken against future Oregon income tax over three years if the landlord forgives the tenant’s past due rental obligations.  The credits will be in the amount of rent forgiveness. 
  • The tenant must be a current occupant paying current rent for the landlord to avail itself of this option.
  • A landlord may sell and assign credits to other Oregon taxpayers if the landlord is not in a position to make beneficial use of the credits.

Advantages for all parties:  

  • The State avoids takings claims as the rent the State has prevented the landlord from collecting becomes so old as to be worthless. 
  • The landlord recovers something in exchange for having provided services to tenants without cost during the duration of the emergency. 
  • The tenant receives debt relief and peace of mind knowing there will be no obligation to pay thousands in back-due rent or suffer bankruptcy. 
  • The State will be able to accomplish the preceding by use of future rather than current revenues.

Read the complete draft of this 10-page bill here.

Write to your Oregon representatives in support of this legislation. Find out who your legislators are by clicking here.


Monday, December 21, 2020

HFO Multifamily Marketwatch Podcast - December 21, 2020

This week: Oregon’s special legislative session will consider $200 million in relief funds for landlords and tenants; Moody’s Analytics estimates that renters nationwide could owe billions in back rent by next month.



Listen to our latest podcast.

December in Washington State: Hundreds of Millions in Unpaid Rent

In a survey of 267,000 professionally managed homes in Washington State, the Washington Multi-Family Housing Association found that $212 million in rents went unpaid. Read more

Thursday, December 17, 2020

Senate President Peter Courtney Plans to Introduce By-Right Development Bill in 2021

An under construction building with a concrete foundation and some metal structural elements in place.

The Portland Business Journal reports that Oregon Senate President Peter Courtney plans to introduce a bill in the 2021 legislative session that would make affordable housing development a "by-right use" on all residential land within urban growth boundaries. Affordable housing developers would be required to meet some safety, health, and infrastructure provisions but local officials would not be allowed to impose additional standards. Read more.

Multnomah County Eviction Moratorium Will Now Expire July 2021

The I-205 bridge over the Columbia river with Mount Adams in the background

Multnomah County commissioners voted unanimously to extend the county's eviction moratorium through July 2, 2021. Tenants will still have a 6 month grace period to pay back any rent owed. This is the fourth extension of the county eviction moratorium since March. County Commissioner Sharon Meieran is urging state legislators to find a way to compensate landlords for missed rent payments. Read more.

Bipartisan COVID-19 Relief Bill Provides $25 Billion in Rental Assistance for States and Localities

The coronavirus relief bill introduced Monday provides financial assistance for tens of millions of Americans potentially facing eviction in the new year. It offers $25 billion through the Coronavirus Relief Fund to states and localities and extends the national eviction moratorium through January 31, 2021. Read more. 

Wednesday, December 16, 2020

Thurston County's Eviction Resolution Program Offers Resources to Tenants and Landlords

 Thurston County's Dispute Resolution is part of a new pilot program providing resources and support to renters at risk for eviction, and to landlords experiencing financial hardship as a result of COVID-19. Read more. 

Oregon Interim Committees Holding Public Hearing Thursday on Item of Serious Concern to Rental Owners - Get Involved

The Oregon Interim Committee on the Third Special Session of 2020 will hold remote meetings on Thursday, December 17 at 6 pm and Saturday, December 19 at 10 am. Among other things will be accepting public testimony of LC-18 relating to residential tenancies. 

There will be the opportunity to provide written or oral testimony to the following two remote hearings in Salem tomorrow,  Thursday, December 17th, 2020, at 6 pm and Saturday, December 19th at 10 am. 

LC-18 is of serious concern to rental owners for the following reasons: 

Rental Owner Objections to LC-18

The concept under discussion is flawed because:

  1. It does not rescue tenants from ultimately having to file bankruptcy or eviction.
  2. It does not come near to compensate landlords for orders which required them to provide services for free.
  3. It requires a current funding source that does not exist.
  4. It exposes the State to significant takings claims in court.

View the Agendas and the full 40 pages of the draft of LC-18 here

How to register to testify by video, by phone, or send testimony by email:

Watch the Livestream events. 

KUOW: As Governor Inslee Considers Extending Washington Eviction Ban, Some Tenants and Landlords Slip Through the Cracks

Both Landlords and tenants alike are struggling in Washington State, as KUOW radio in Seattle reports. 


Tuesday, December 15, 2020

Gov Brown to Call Special Session for COVID and Wildfire Relief

The Oregon State Capitol in Salem, OR
Governor Kate Brown is convening a one-day special legislative session on Monday, December 21st in order to address the needs of Oregonians who have been impacted by wildfires and COVID-19. Legislators expect to discuss a package of four bills during the session. These bills include $200 million in relief for landlords and tenants, aid for bars and restaurants including legalization of to-go cocktails, COVID-19 liability protection for schools, and a $600 million transfer to the state's emergency fund. Read more.

Monday, December 14, 2020

Washington County Announces $2 million for Cash-Strapped Low-Income Landlords

The Washington County Community Development Department announces its Landlord Economic Relief Program for Multifamily Affordable Rental Housing.

Washington County is offering an expedited application process to assist owners of multifamily affordable rental housing projects located in the County that have been impacted by the loss of rental revenue associated with the Covid-19 pandemic. The purpose of this funding is to provide relief to landlords, provide relief to tenants who have not been able to fulfill their rental obligations due to the pandemic, and to stabilize subsidized housing projects so that they can continue fulfilling the mission of providing quality housing to Washington County households with modest incomes.

For a property to be eligible, it must be located in Washington County, consist of five to 300 units, have deed restrictions enforcing an affordability period of fifteen years or more, and there is a demonstrated net loss in rental income due to the Covid-19 pandemic from March 1, 2020, through December 30, 2020, once other assistance has been applied to offset the loss.

Eligible applicants include nonprofit and for-profit entities and the Housing Authority of Washington County. Applicants may submit applications for multiple properties. If the property owner is a Limited Partnership, the applicant must be the Managing General Partner or an equivalent.  In the case that the Housing Authority may be a Special Limited Partner for the purpose of tax exemption only, the Housing Authority may not be the applicant. 

Properties serving the following populations disproportionately impacted by inequities exacerbated by COVID-19 will be prioritized:

  • Black, Indigenous, Latinx, and people of color
  • Families with children

Funds received through this program must be applied toward back-due rent, and the payments must be credited to the accounts of tenants who are behind in their rent. Properly documented modifications related to Covid-19 and occurring March 1, 2020, through December 30, 2020, may receive secondary consideration if sufficient funds are available. Decisions regarding awards for modifications and delayed maintenance and repair costs will be made at the sole discretion of the County and are dependent upon eligibility and funding availability.

The maximum award for rental economic relief per project is $300,000. If an applicant submits multiple projects, the maximum award per applicant for all projects submitted by that applicant is $500,000. Awards may be reduced prior to making the final payment should rental payments by an outside entity (such as Community Action) be conveyed to the owner between December 1, 2020-January 15, 2021. Washington County will verify prior to making payment. This is to ensure that any payments in transit are validated as non-duplicating.

[Note that these funds are restricted to low-income housing or properties with existing deed restrictions.] 

If you have a question about the program, you can contact: cdbg@co.washington.or.us

UPDATE:  

Click here to apply for this program

Learn more about Washington County's CARES Act Fund allocations

HFO Multifamily Marketwatch - December 14, 2020

This week: Oregon’s legislature undecided on a pandemic special session; Washington’s Governor announces COVID-19 restrictions to January 4, and The Atlantic publishes a piece predicting the future for cities in 2021 and beyond.



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Tuesday, December 8, 2020

Economist Takes Heat for Implying that Banks & Landlords Sort Out Rent Defaults in Bankruptcy

University of Oregon economist Tim Duy is an expert on macroeconomics and the Federal Reserve and writes for Bloomberg News. Duy was on a recent phone call with Governor Kate Brown as part of her Council of Economic Advisors. A recent federal study showed Oregon faces $250-$350 million in rental arrears, which Brown asked would make sense as an investment for the state in the short term. Duy indicated that he would probably let the bankruptcy courts and banks deal with it. 

Multifamily NW followed up with a letter to the governor. 

Duy stated later that he meant to imply that federal officials should pay for a solution, but they have not, leaving the banks and courts to deal with the results. The Portland Business Journal recounted the events in this article

 

Monday, December 7, 2020

City of Portland to Distribute 4,000 More Debit Cards for Pandemic Assistance on Thurs. Dec. 10


The City of Portland Housing Bureau has announced it will allow Portlanders struggling from health or financial impacts of COVID-19 the opportunity to apply for $500 in cash assistance. The funds can be used for food, dependent care, medicine, rent and utilities, and transportation. 

Applications will be accepted online at www.pdxassist.com on Thursday, December 10, from 3pm to 6pm. The application window will remain open for three hours and all applications submitted during that time will be accepted. Once the application window has closed, applicants will then be selected from the applicant pool at random using a lottery system.

The total value of the 4,000 cards being made available at this time is $2 million. The money is part of the $38 million in housing relief measures by the City of Portland and Portland Housing Bureau in response to COVID-19, including $19.5 million for rent assistance and $1.6 million in housing stabilization support. 

According to a release from the City of Portland, most of the funding is being distributed in collaboration with more than 30 culturally specific community organizations. 


Washington Post: Millions Heading Into Holidays Unemployed and with $5k in Back Rent

Nearly 12 million renters will owe an average of $5,850 in back rent and utilities by January, and families with children are especially at risk. More federal aid will be needed.

HFO Multifamily Marketwatch - December 7, 2020

An Oregon support fund for landlords could begin accepting applications in January; counties in Washington State are distributing $120 million in federal rent assistance despite fears it will not be enough.



Listen to our latest podcast.

Friday, December 4, 2020

"Let Landlords File Bankruptcy"? Multifamily NW Sends Urgent Letter to Oregon Governor Kate Brown Regarding Pandemic Rent Crisis

 

Dear Governor Brown,

On behalf of Multifamily NW, which represents more than 2,500 members who provide over 270,000 rental units in Oregon, I am reaching out to share our concerns related to statements made during the last meeting of your council of economic advisors. In this letter, we also provide a series of policy proposals that can alleviate the state’s potential inability to allocate the necessary amount of emergency rental assistance.

In reviewing a recent session of the Governor’s Council of Economic Advisors, you correctly underscored that by intervening in the private market for housing the State has created an enormous unfunded liability. You quoted that one estimate of rental arrearages in Oregon at $250-$300 million, and you asked the group “does that make sense in terms of an investment in the short term for the state to step up and pay that?”

Oregonian renters and housing providers would be angered and disheartened by the response you received from economist Tim Duy, and your apparent agreement with his statement: “I don’t know that it’s possible for the state to make that investment, it’s probably too big, and I would probably let the bankruptcy courts deal with it and let the banks deal with it....you are going to have to accept that there are going to be costs to this pandemic that cannot be dealt with effectively by the state.”

We find it extremely concerning that a member of your economic advisory council could make this statement without acknowledging the state’s role in generating the hundreds of millions of dollars in back due rent.

Throughout the pandemic, you have mandated that housing be provided free of charge, regardless if the renter has faced a financial hardship related to the COVID-19 virus. Due to your mandate many property owners, market and affordable, have gone without rent since April 2020.

Put another way, the question posed to your council of advisors could also have been “does that make sense in terms of an investment in the short term for the state to step up and preserve Oregon’s rental housing supply?”

In response to the council’s assertion that all financially imperiled housing providers should seek relief in bankruptcy, we are happy to offer alternative solutions that don’t result in a tenant losing housing or families losing their life savings.

Here are four concepts, in order of efficacy, that could be implemented as an alternative to letting Oregon housing inventory and small business community fall into bankruptcy:

  • Design systems to distribute Rental Assistance efficiently and impartially across the state. If necessary, borrow to ensure that the rental assistance adequately covers the need. Note that the potential losses to housing providers is far more than the $250 – 300 million cited above.
  • Design a short-term loan program for households that cannot afford rent, with flexible repayment terms. (Note: Landlords are effectively being forced to act as an interest free lender to tenants.)
  • Pass LC 881
  • Design a State Income Tax Credit to substantially defray pandemic legislation-related losses using future, rather than present revenue.
  • Consider Property Tax Relief for Property owners who have been subject to state takings.

Proposed legislative concept 18 does not address the root issues presented by HB 4213 and the eviction moratorium. It will further deepen the eviction and bankruptcy crisis for both housing providers and their residents.

Multifamily NW remains committed to finding a workable resolution that addresses the vulnerabilities of both renters and housing providers. We hope that you and legislative leadership will reinstate a tenant and landlord workgroup to address the housing issues presented by COVID-19.

Sincerely,

Deborah Imse Executive Director

Multifamily NW



Wednesday, December 2, 2020

Washington State Senate Committee Hears Presentation on Potential Impact of Rent Control

The Washington Multifamily Housing Association reports that yesterday, December 1st, the Washington Senate Committee on Financial Institutions, Economic Development & Trade received a presentation on the impacts of rent control on private investment in residential housing. The presentation focused on housing industry effects if the legislature implements rent control.

Those effects include:

  • A loss of 11% of new homes over the next 10 years
  • A decrease in state revenue, including $200 million in property taxes and $301 million in sales tax
  • A reduction in available housing options for those that choose to call Washington home

Review the report Rent Control in Washington State - The Impact on Housing Affordability here. You can also view the video of yesterday's presentation here. The presentation ends after roughly 36 minutes. 

For more information about the impact of rent control on Washington state, visit the Partnership for Affordable Housing's website. The Washington Multifamily Housing Association is a founding member of Partnership for Affordable Housing, a nonprofit formed out of a shared interest to create fresh ideas and solutions to providing a wide range of housing options for all Washingtonians. 




Apartment List Report on Seattle Metro: Rents Decline in Seattle, Rise in the Suburbs

Apartment List reports the following year-over-year declines in rent as of November:

  • Seattle - 12.2 percent
  • Bellevue - 7.8 percent
  • Redmond -6.9 percent
  • Kirkland -3.6 percent
Year-over-year effective rent increases

  • Auburn + 3.6 percent
  • Lakewood +2.7 percent
  • Tacoma +2 percent
  • Kent +1.6 percent
  • Lynnwood +0.7 percent

Areas where rents remain flat year-over-year

  • Bothell
  • Renton
  • Everett
  • Federal Way

  • Apartment List Report: Rents in Flux in Portland Metro, Increase in Eugene and Salem

    Apartment List has released a report indicating that Portland rents declined by 1.6 percent over the past month, and 6.5 percent year-over-year, the eighth straight month of rent decreases. Portland's rent drop has not been nearly as severe as in San Francisco, Boston, and Los Angeles. 

    Despite these metro-wide decreases, many outlying suburban areas have had rents rebound to pre-pandemic levels. For example, the report indicates that rents in Beaverton, Hillsboro have remained relatively flat year-over-year while rents in Gresham have increased by 2.4 percent.  

    The report indicates that rents in Eugene are up 3.4 percent year over year while Salem rents have increased by 3.8 percent.

    Friday, November 27, 2020

    HFO Director of Operations Receives Women in Real Estate Award

    Donna Brunner, HFO Director of Operations
    Donna Brunner

    HFO's Principal Broker Donna Brunner has received a Connect Media Commercial Real Estate 2020 Women in Real Estate Award for the Seattle/Northwest region. Brunner was one of six women in the Pacific Northwest recognized for talent, drive, and fresh ideas. Connect Media received nearly 500 nominations from all sectors of the commercial real estate industry.

    Donna Brunner brings more than 27 years of real estate experience to the HFO Investment Real Estate team. She is well-versed in multifamily and commercial leasing, residential sales, and new development.

    She previously managed a portfolio of more than 15 apartment communities exceeding 1,000 units. She has also spearheaded the construction of a major shopping mall, including lease negotiations with anchor tenants. Prior to joining HFO in 2015, Brunner had spent nine years as an Operations Manager for Marcus & Millichap in Portland.

    "These are just a few of the reasons we chose Brunner as one of the 2020 Women in Real Estate Award winners in Seattle & Pacific Northwest. Connect Media’s Women in Real Estate Awards honor the achievements and inspirational stories of women who have reached respected positions of leadership and play key mentorship roles for others." -- Connect Media

    Brunner is always on the lookout for ways HFO can improve, and better serve its clients and staff.

    Wednesday, November 25, 2020

    Oregon Supreme Court to Review Portland Relocation Ordinance

    A case involving an appeal to invalidate Portland's relocation ordinance has been granted review before the Oregon Supreme Court. 

    Read more.

    Oregon's Eviction Moratorium Proposal Draws Ire of Both Renters and Landlords

     

    The Salem Statesman Journal reports that a draft bill to extend the eviction moratorium through June of 2021 has both tenants and landlords angry that the state is not providing enough relief. 

    The extension proposal as well as providing funds for relief will not be taken up unless the legislature calls a remote special session in December. 

    Read more.


    Oregon Landlords Working to Extend Eviction Moratorium Through June

     

    The Oregon legislature has proposed extending the state eviction moratorium through the end of June with a $100 million allocation of general fund money to support rental assistance programs and a new fund for landlords. Read more. 

    Oregon Landlords Feel the Strain of Eviction Moratorium

     

    Oregon landlords are trying to keep their head above water even as the legislature considers extending the eviction ban an additional six months. Read more.

    Monday, November 23, 2020

    Multifamily Marketwatch - November 23, 2020

    Oregon's unemployment rate has dropped to 6.9%, but legislators fear recent lockdowns could spur a new round of layoffs; the state of Oregon will provide free debris cleanup to all homes and businesses, including mobile home parks, in areas impacted by this year's fires; investors nationwide are buying up student housing from struggling universities and converting it into market rate units for young professionals.



    Listen to our latest podcast.

    Oregon’s unemployment rate fell to 6.9% in October, down from a high of 14.9% in April. But a sudden spike in COVID-19 cases statewide prompted Governor Kate Brown to announce a temporary freeze for bars, restaurants, museums, and other non-retail businesses, which some fear could result in another round of layoffs. 54,600 Oregonians have been out of work for at least six months, and restaurant industry jobs are down 20% from last year. A federal program that provided an extra $600 per week in unemployment benefits expired at the end of July, and the Pandemic Unemployment Assistance Program is slated to expire at the end of December. Oregon House Speaker Tina Kotek is calling on Governor Brown to convene a special legislative session under the catastrophic disaster provision, which was passed in 2012. She believes the state should spend $100 million to, quote, “keep Oregonians housed and stabilize the rental market.” But Senate President Peter Courtney believes the spike in COVID cases has made it too dangerous for legislators to return to the Capitol at this time. Governor Brown issued a statement that she would convene a session if lawmakers could agree on a list of priorities. Along with rental assistance, Kotek and Courtney both believe the state should do more to help businesses that are struggling due to the pandemic. 

    Oregonian – Oregon’s Unemployment Rate Falls to 6.9%, but Coronavirus “Freeze” Could Bring Fresh Layoffs

    OPB – Oregon Lawmakers Considering First-Ever “Catastrophic” Special Session Next Month 


    Shortly after Governor Brown announced that there would be a full statewide freeze to control the spread of COVID in Oregon, Governor Inslee of Washington announced his own plan for a temporary shutdown. Since January, 2,500 Washingtonians have died of COVID-19, and like in Oregon the number of new cases across the state is beginning to spike. There were 2,286 new COVID cases reported the week ending November 13th, double the number of cases recorded two weeks prior. Much of that spread is due to community transmission rather than a single superspreader event. Governor Inslee’s order went into effect November 17th and will last until December 14th. Indoor bar and restaurant services are prohibited, though outdoor dining is still permitted. Inslee also shut down indoor movie theatres, museums, zoos, and acquariums and capped all retailers, including grocery stores, at 25% capacity. Religious organizations, offices, and personal services providers are also included in the 25% cap. The Governor’s order prohibits indoor gatherings with people from outside of one’s household and limits outdoor gatherings to 5 people. Childcare facilities, schools, and colleges do not fall under the order, and should continue using specific state guidance for schools. Inslee plans to direct $50 million to businesses that have been impacted by the pandemic.

    OPB – Indoor Gatherings, Dining Banned in Washington as COVID-19 Cases Spike


    Portland State University released new preliminary data showing that Oregon’s population continues to grow, though at a slower rate than in years past. Between 2019 and 2020, Oregon’s population grew by 0.7%. Deschutes is still the fastest growing county in the state – it saw a 2.1% increase in its population over the past year. The population continues to decline in some of the state’s most rural counties, and the number of deaths exceeded the number of births in 21 counties statewide. Washington County saw the highest population growth in the Portland metro area, at 1.1%, followed by Multnomah at 1% and Clackamas at 0.7%. Columbia County, just northeast of Portland, also saw its population increase by 1%. Harney County in Southeastern Oregon saw the biggest population decrease statewide at -1.1%. The state experienced net migration of more than 28,000 people over the past year.

    Willamette Week – Oregon Still Growing but at a Slower Rate, New Portland State University Numbers Show

    PSU Population Research Center 

    The State of Oregon announced last week that it will provide free debris cleanup to all homes and businesses that have been impacted by this year’s wildfires, including mobile home parks. While the clearing of hazardous debris was already free, home and business owners have been left to deal with ash, rubble, burned vehicles and mobile home bases, damaged or fallen trees, and other difficult-to-clear objects. The state estimates that the full clean up effort will cost $621 million, but FEMA will cover most of the cost. Commissioners in Jackson County had written to the state asking for such a program, specifically urging state leaders to cover mobile home parks, which make up a large portion of the area’s affordable housing. Home and business owners must opt into the program, but will not be charged any up-front costs. In addition, contractors performing the work will not seek payment from insurance companies. To opt into the program, property owners must complete a Right of Entry form with their county. More information can be found on the state’s 2020 Oregon Wildfire Recovery website.

    Oregonian – Oregon Wildfire Debris Cleanup Will Be Free for All; FEMA Extends Aid Application Deadline 


    Oregon’s Occupational Safety and Health Administration issued new rules for employers to protect workers and customers from COVID-19. Most of the rules went into effect last Monday, though some will be phased in over time in order to give employers sufficient leeway for implementation. The rules are separate from Governor Brown’s temporary lockdown orders. Employers are now responsible for informing employees within 24 hours of a work-related infection, and must ensure that all employees, contractors, and customers wear a mask or other face covering. In addition, employers must provide masks to employees free of charge. If an employee chooses to wear a face covering where it would not normally be required, employers are not allowed to prohibit them from doing so. Employers are also required to incorporate employee feedback by December 7th in order to determine risks of exposure. They must also create an infection control plan by December 7th, and provide information and safety training to workers by December 21st.

    Oregonian – What Oregon Workers, Employers Need to Know about New COVID-19 Safety Requirements Monday 


    Despite recent setbacks for the SW Corridor MAX Line, Portland’s Bureau of Planning and Sustainibility still plans to move forward on upzoning SW Portland to prepare for future growth. TriMet General Manger Doug Kelsey believes the MAX project could still come back in the future, though the agency plans to suspend work on the project after the conclusion of the Final Environmental Impact Statement. But BPS will still be accepting public comments on its upzoning plan for the West Portland Town Center until December 3rd, and the Portland City Council will vote on the plan in the Fall of 2021. West Portland Town Center is the area surrounding the Barbur Crossroads, at the intersection of Barbur Boulevard, Capitol Highway, and Taylors Ferry Road. The Crestwood Neighborhood and part of the Multnomah Neighborhood fall within the boundaries of the Town Center plan. James Peterson, Land Use Committee Chair of the Multnomah Neighborhood Association, believes the upzoning project should be put on hold until funding is found for the MAX line project. Marianne Fitzgerald, vice president of the Crestwood Neighborhood Association points out that the area lacks critical infrastructure beyond the proposed MAX line – including stormwater systems, bike lanes, sidewalks, and adequate bus service. The plan would allow for multi-story apartment buildings, mixed use businesses, and retail hubs, and the city hopes that it will bring more affordable housing to the area.

    Portland Tribune – City Plans for SW Portland Growth Despite MAX Line Failure 


    In April of this year, Massachusetts enacted one of the first and most far reaching temporary eviction moratoriums in the nation in an effort to keep residents housed during the pandemic. Cities and states around the country followed suit, but in October Governor Charlie Baker allowed the moratorium to expire, stating that the longer the moratorium was in place the deeper in debt tenants and landlords would become. In anticipation of the moratorium’s October 17th end date, state legislators Mike Connolly and Kevin Honan introduced the Housing Stability Act, which would have extended the moratorium until the end of 2021 and provided economic support for tenants and landlords. But the bill languished in committee for months and was never brought to the floor for a vote, despite input from groups representing tenants and small landlords. The Housing Stability act was one of the boldest and most far reaching plans proposed in any state – it included a rent freeze that stabilized rents at pre-pandemic levels, a ban on foreclosures for homeowners and owner-occupant landlords, a mortgage deferment program for small landlords, and a state relief fund for landlords who owned 15 properties or fewer. But the bill faced significant headwinds both from some landlord lobbying organizations and from legislators opposed to the expansion of welfare programs. In addition, just before the eviction moratorium expired, Governor Baker announced a plan for a $171 million eviction diversion fund that would increase funding for the Rental Assistance for Families in Transition program. Still, state experts believe that without the moratorium between 60,000 and 100,000 Massachusetts residents could face eviction in the coming months.

    Shelterforce – Massachusetts Showed States How to Create an Eviction Ban. Now It’s Backpedaling


    Finally, the New York Times reports that over the past few years real estate investors have been purchasing student housing complexes from struggling universities and converting them into traditional market-rate units. In 2016, Pebb Capital purchased a housing property for students attending Yeshiva’s Cardozo Law School in Manhattan. Pebb renovated the former dormitory into furnished apartments and in 2020 sold the renovated building for nearly double what they had paid for it. A number of colleges and universities nationwide were already facing financial struggles prior to the pandemic, and the last several months have greatly exacerbated the problem. Experts expect that an increasing number of universities will choose to sell off assets, including student housing, in order to stay afloat. This year alone, Pebb has renovated two more student housing projects – The Cadence in Tuscon, Arizona and Monarch Heights in Manhattan. A large number of smaller colleges and universities have been forced to close over the past few years, and developers are now turning these properties into mixed-use campuses with housing and other amenities. Patrick Sentner, executive vice president at CBRE, argues that while occupancy is low due to the pandemic, marketing former dorms to young professionals is a smart financial move, because these tenants are more able to pay rent and less likely to cause wear and tear on a unit than typical student occupants.

    NYTimes – As Occupancy Dwindles, College Dorms Go Beyond Students

    Saturday, November 21, 2020

    Call to Action for Oregon Rental Owners for Legislative Hearing Monday, November 23


    Multifamily NW has issued a call for immediate action for Oregon Rental Owners.

    At 10:00 am on Monday, November 23rd, the House Interim Committee on Housing has an informational hearing to review Speaker Kotek’s housing assistance proposal, which aims to extend the eviction moratorium and change several aspects of Oregon Landlord-Tenant law. This proposal was drawn up by a small group of individuals and advocates, with limited housing providers' input. No public testimony will be accepted at this meeting, which is why we need your voices to be heard by emailing your legislators and leaders of the House Interim Committee on Housing.
      
    We are urgently asking you to send an email to your legislators [click here to find yours] as well as Chair Fahey, Vice-Chairs Rep. Meek, and Rep. Zika no later than Monday, November 23rd, at 8 am.
      
    Please copy and paste the following text and send it to Rep.JulieFahey@oregonlegislature.gov, Rep.MarkMeek@oregonlegislature.gov, Rep.JackZika@oregonlegislature.gov, & [your Senator and Representative].
      
    BEGIN TEMPLATE LETTER
      
    Dear Legislators,
      
    On Monday, November 23rd, the House Interim Committee on Housing has an informational hearing to review Speaker Kotek’s housing assistance proposal.  The proposal contains many components that will be harmful to the housing industry and fails to guarantee adequate rental assistance. Please consider the following points:
      
    • Without adequate emergency rental assistance, this proposal simply pushes the problem out another six months and deepens the tenants and housing providers' financial stress.  
      
    • The proposal provides that a tenant can decline to pay rent until July 1, 2021, by merely signing an “attestation” of hardship. The proposal continues to permit deferral of rent for virtually any reason, even if it is not causally related to the COVID-19 Pandemic or the Governor’s executive orders. There is no due process or legal mechanism to evaluate the validity of attestations.
      
    • The proposal re-writes other sections of the landlord/tenant law unrelated to the pandemic. Any proposal to resolve the moratorium should focus on pandemic specific issues, not unrelated agenda items.
      
    • The proposal includes wildfire-related issues which are being addressed by FEMA. Those displaced by wildfire should receive support but should not be addressed in this proposal.
      
    • Oregon anticipated the need to utilize private property under a state of emergency when it passed ORS 401.192 (3). That law would include protections and reasonable compensation if the real or personal property was utilized for the State's emergency actions. HB 4213 and this proposal sidestep existing law, putting the moratorium's burden on housing providers.
      
    We encourage you to direct funding towards the emergency rental assistance system and target those households at risk of eviction.
      
    Thank you,
      
      
    [YOUR NAME]
      
    END TEMPLATE LETTER

    Shared by your HFO Team.

    Wednesday, November 18, 2020

    State of Oregon to Provide Free Fire Debris Cleanup for Homes and Businesses

    A road leading into a mobile home park, with homes on either side

    The State of Oregon announced Monday that it would provide free fire debris cleanup for all homes and businesses, including mobile home parks, in areas impacted by wildfires. The state estimates it will cost $621 million to provide this service, and a large portion will be covered by FEMA. Businesses and homeowners must opt in to the program by completing a Right of Entry form with their county. More information can be found on the state's 2020 Oregon Wildfire Recovery website. Read more.

    Monday, November 16, 2020

    Multifamily Marketwatch - November 16, 2020

    Oregon Governor Kate Brown issues orders a pause for all Portland metro area counties; Planetizen reports on potential impacts of Biden win; federal unemployment benefits will expire at year end, and it appears unlikely that Congress will take action before then.



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    Both Oregon and Washington have seen record spikes in the number of new COVID cases over the last few weeks, and leaders in both states are weighing options for controlling the spread of the disease before the holidays. In Oregon, Governor Brown has ordered a two week “pause” for the counties with the highest infection rates, including Multnomah, Clackamas, Washington, Baker, Union, Marion, Jackson, Umatilla, and Malheur. During the pause, capacity at restaurants, bars, gyms, bowling alleys, and museums will be limited to 50 people, including staff. The Governor is also asking residents to keep social gatherings to 6 people or fewer. The counties included in the pause all have infection rates of at least 200 per 100,000 residents, except for Washington and Clackamas Counties. The Portland Metro’s suburban counties had case counts just under the threshold, but Governor Brown expressed concern over their high daily case counts. Tricia Mortell, Washington County Public Health Manager, issued a statement urging the public to cooperate with the new rules. She emphasized that area hospitals are, quote, “on the verge of becoming overwhelmed.” Cases are also spiking in the Puget Sound region of Washington. The state health agency believes the recent surge is part of a trend that started in King, Snohomish, and Pierce counties in mid-September.

    Oregonian – Entire Portland Metro Area Placed on “Pause” amid Coronavirus Pandemic, Gov Kate Brown Announces

    Oregonian – Washington State Also Records a Spike in New Cases of COVID-19 


    The low inventory of homes for sale in the Portland Metro Area continues to drive prices up. The average sale price in the region jumped to $516,500 in October, a new high. And unlike in other years, October did not appear to be the start of a typical winter slowdown. During the first 10 months of 2020, the average sale price in the region was 6.5% higher than in the same period in 2019. The median price now sits at $460,000. Even higher-priced homes are seeing increased interest, due to a lack of inventory. And while there were 7.7% more homes listed in October than September, during the first 10 months of this year new listings were down 7.5%. October’s inventory was 1.1 months, a record low for the region. In addition, the wildfires that swept through the state earlier this fall destroyed 4,000 homes, driving up the number of people looking for a new place to live. Historically low interest rates are also likely driving up regional demand.

    Oregonian – Portland Homes Hit Highest Average Sale Price of $516,500 Due to Low Inventory, Pent-Up Demand


    Despite the ongoing pandemic, a number of Portalnd Metro Area companies have reported good news in the last few weeks. Portland-based tech company Puppet, which provides software for managing data centers and large computing networks, announced that it is aiming for an IPO in 2021. Puppet would be the first Oregon-based tech firm to hold an initial public offering since 2004. Puppet employs 450 workers, the vast majority of whom are based in Portland. In addition, another Portland tech company is showing signs of growth. Bumped, a marketing technology startup that is pioneering a credit card rewards program that gives users fractional corporate stock shares, announced last week that it has raised $16 million in investments from venture capital firms. In a funding round two years ago, the company raised $14 million. Bumped employs 37 Portland-based workers. In Vancouver, Washington, the recent purchase of an industrial park could signal future growth. New Blueprint Partners and Rabina purchased the Vancouver Technolgoy Center for $35 million. They plan to convert the campus into best-in-class flex, industrial, and office space. According to Rabina president Josh Rabina, the buyers were drawn to the property due to the area’s population growth and large talent pool.

    Oregonian – Portland Tech Company Puppet Sets 2021 Target for IPO

    Portland Startup Bumped Raises another $16 Million for Credit Card Rewards that Pay Companies’ Stock

    PBJ – Vancouver Campus Sells for $35 Million   

    Following Vice President Biden’s victory in the presidential election earlier this month, Planetizen published a summary of what his win could mean for land use, transporation, and climate policies. Biden’s housing plan emphasizes the impact of land use policies on housing affordability, explicitly calling out the racist history of exclusionary zoning. He supports the HOME Act of 2019, which would require states that receive Community Development or Surface Transportation Block Grants to develop an inclusionary zoning strategy. Compared with his bold housing plan, Biden’s transportation agenda is less clear. While he frames his priorities around environmental justice, social equity, and safety, he also calls for large-scale investment in repairing roads, bridges, and highways. Although this focus on road investment does not necessarily indicate a strong commitment to limiting carbon emissions, the President-elect does have a $2 trillion climate change plan that includes overhauls of the nation’s electric grid and transportation industry. Importantly, however, all of his plans would require support from Congress, which could be limited by Republican opposition in the Senate.

    Planetizen – What Biden’s Win Could Mean for Land Use, Transportation, and Climate


    The Oregon Employment Department announced earlier this month that it hopes to pay recipients of unemployment assistance “waiting-week” benefits by Thanksgiving. The federal CARES act provided funding to the state earlier this year in order to help pay benefits out to unemployed workers immediately, rather than requiring them to wait one week before filing for assistance. But Oregon has been extremely slow to pay out this benefit to residents who have been left without a job due to the pandemic. Oregon is the only state in the nation that has not yet paid waiting week benefits. According to Employment Department officials, this failure to pay can be traced to the state’s obsolete computer systems. Initially, the state was told that it would have to repay the funds to the federal government if they are not distributed to workers by the end of the year. Now, however, it appears the federal government may show more leniency to the state as it works to distribute the money. Since the beginning of the pandemic, 600,000 Oregon residents have applied for unemployment benefits, and 380,000 have received assistance.

    Oregonian – Oregon Hopes to Pay Jobless Workers’ Waiting Week Money by Thanksgiving


    The Portland Tribune reports on the potential impacts of Mingus Mapps replacing Chloe Eudaly on the Portland City Council. Mapps is the former director of Historic Parkrose, and this was his first time running for office. He defeated Commissioner Eudaly with 56% of the vote, and is just the fourth Black Portlander elected to the council in its history. While Eudaly ran in 2016 and again in 2020 as a progressive activist focusing on disability and tenants’ rights, Mapps billed himself as a moderate. His priorities include police reform, homelessness, the ongoing pandemic, and changing the city’s commission form of government. During the campaign, Mapps received support from the real estate and development communities as well as the Portland Police Association and a number of neighborhood groups. After his tenure as director of Historic Parkrose ended in 2018, he worked briefly for Portland’s Office of Community and Civic Life. Commissioner Eudaly is in charge of the office, which has received an unusually large number of personnel complaints over the past year. Mapps cited his experience at the OCCL as the catalyst for his run against Eudaly. While Mapps has done a number of interviews with press and local affinity groups, he has not presented many concrete plans to address his top priorities. He told the Portland Tribune that he is looking forward to working with the other council members on solutions.

    Portland Tribune – Mapps Win Shakes Up City Council


    Last Tuesday a group of 150 community members rallied in Laurelhurst Park to block the sweep of a homeless camp. In April, the Homelessness and Urban Camping Impact Reduction Program, or HUCIRP, announced that it would be following guidance from the CDC and limiting sweeps of homeless encampments. But in June, the program changed its policy to allow for the removal of camps with 8 or more structures. Laurelhurst Park is currently home to around 100 campers – so far 15 have been referred to shelters. HUCIRP attempted to coordinate its sweep of the park with the opening of the Mt Scott Community Center shelter. HUCIRP has been removing trash from the park and installed portable toilets in August, but spokeswoman Heather Hafer argues that many campers at Laurelhurst are not in compliance with HUCIRP’s guidelines. Homeless resident JJ says that people feel safe in the park, and that local authorities have not handled outreach to the homeless community well. He adds that sweeps often cause residents to permanently lose their only possessions.

    Portland Tribune – Portland Activists Decry Campsite Sweep at Laurelhurst Park


    Finally, the New York Times reports that as expanded unemployment benefits and eviction protections expire at the end of the year, millions of Americans who have been thrown into poverty by the pandemic will be left without a safety net. 13 million Americans have been receiving payments through two temporary unemployment programs that are set to expire at the end of December, with no signs that the economy is likely to see significant improvement in the near term. As of October, 3.6 million people nationwide have been out of work for over six months. Expanded unemployment insurance, which provided an extra $600 to people who lost their jobs early on in the pandemic, expired in July. This benefit kept millions of people from falling into poverty, but since then many of those who were able to keep their heads above water are now facing tough choices about which bills to pay. And there are few signs that Congress will take action before the end of the year, despite bipartisan calls for more aid. As of mid-October, 9.3 million people were receiving support through the federal Pandemic Unemployment Assistance program, which will end after next month. But a number of Republican lawmakers have been hesitant to expand the program, due to a belief that unemployment assistance discourages recipients from seeking work. But there are currently very few jobs to apply for, and many people are being left without options. In addition, a large number of traditional stop-gap jobs in the retail and restaurant industries carry high risks of COVID infection. Aneta Markowska, chief financial economist at Jefferies, argues that a delay in benefits could cause irreversible damage to both workers and the economy.

    NYTimes – Millions Face Loss of Jobless Aid: “Without It, I’m Dead in the Water”


    New OSHA Rules Go Into Effect Today in Oregon

    The state of Oregon in blue with the text "State of Oregon 1859" and the state seal in yellow.

    Oregon OSHA has released new COVID-19 safety requirements that go into effect today for all employers statewide, though some of the new rules will be phased in. The rules are intended to protect employees and customers and limit the spread of the virus. The OSHA rules are separate from the temporary pause that goes into effect on Wednesday, November 18th. Under the new OSHA rules, employers must:

    • Notify workers within 24 hours of a work-related COVID infection
    • Require all employees and customers to wear face masks
    • Provide face masks to employees
    • Allow employees to wear face masks even when not required by law
    • Incorporate employee feedback in order to gauge risks
    • Create an infection control plan by December 7th
    • Provide information and training to employees by December 21st.
    You can read more about the new rules here.

    Friday, November 13, 2020

    Portland's Small Landlords Struggling Due to Eviction Moratorium

    a calculator with the word "rent" on its screen lying on a pile of paper.

     The Oregonian reports that local landlords in Portland are struggling to pay their mortgages and other bills due to eviction moratoriums at the local, state, and national levels. According to Multifamily NW, between 12% and 15% of renters have been unable to make full rent payments during the pandemic. A Portland State University survey found the situation more dire - 36% of the 460 tenants surveyed by PSU reported that they owed back rent. And the $60 million in renter assistance allocated by the state's Emergency Board has not been enough to cover the difference. Without additional assistance at the state or federal level, there could be widespread evictions at the beginning of 2021. Read more.

    Tuesday, November 10, 2020

    Voters Approve New Local Taxes in Oregon

    Information courtesy of Stoel Rives. Contributing attorneys: Chris Heuer, Kevin Pearson, Laura Gritz, Melissa Roberts, and Michael Such. www.stoel.com. 

    Portland-area voters approved several new local taxes in the November 3 election. Together with previously enacted taxes that either have become effective or will become effective in 2021, these new taxes will significantly increase the state and local tax burden in Oregon and especially the Portland area.

    Multnomah County Preschool for All Tax (Multnomah County Ballot Measure 26-214)

    Multnomah County voters approved a measure that imposes a new income tax on Multnomah County residents and non-residents with taxable income derived from sources within Multnomah County. The tax will become effective January 1, 2021, and initially will be imposed at a rate of 1.5% of taxable income over $125,000 for single filers and $200,000 for joint filers. This rate will increase to 2.3% effective on January 1, 2026. Individuals will also be subject to an additional 1.5% tax on taxable income over $250,000 for single filers and $400,000 for joint filers. When fully phased in, the aggregate top tax rate will be 3.8%. The proceeds of the tax will fund preschool services for qualified Multnomah County residents. The scheduled rate increase is subject to a “technical team” recommendation as to whether the increases are necessary to fully fund the planned preschool program.

    The new tax will apply to all taxable income of Multnomah County residents, regardless of source. For non-residents, only income derived from sources within Multnomah County will be subject to the tax.  A previously proposed version of the preschool tax indicated that sourcing income to Multnomah County would likely be determined by applying rules similar to the state income tax sourcing rules applicable to non-Oregon residents.  If that approach is applied, we would expect that income attributable to nonresidents' services in Multnomah county would be sourced to the county and would be subject to the tax. Income attributable to nonresidents' services outside the county would be sourced outside the county and would not be subject to the tax. Also, if rules similar to the state income tax sourcing rules are applied, it is possible that special rules would apply for persons providing managerial services as officers and executives of businesses located in the county and owners of businesses with pass-through income sourced within the county.

    Property Tax Measures

    Several new property tax measures were also approved by voters in the Portland area. These include measures that will impose additional property taxes to finance public school modernization, library renovations, recreational programs, and park services.  The public school modernization measure authorizes the Portland public school district to issue up to $1.2 billion in bonds for school facilities and education investments. The measure is expected to result in additional property tax liability for affected property owners of $2.50 per $1,000 of assessed value. The library renovation measure authorizes Multnomah County to issue $387 million in bonds to update, renovate, and construct libraries across the county. The measure is estimated to increase the property tax rate by 61 cents per $1,000 of assessed value. The recreation program and park services measure authorizes the City of Portland to impose a five-year levy to operate the city’s park system, including improving water quality and wildlife habitat, controlling erosion, and planting and protecting park trees. The levy will be imposed at a rate of 80 cents per $1,000 of the assessed value of affected property and is expected to raise approximately $48 million each year of the five-year period.

    Previously Enacted Changes

    The newly enacted taxes are in addition to taxes that were previously enacted and either have become effective or will become effective in 2021. These include the new Metro tax to fund services for people experiencing homelessness or at risk of experiencing homelessness. This tax will become effective January 1, 2021, and will be imposed at a rate of 1% on individual taxable income over $125,000 for single filers and $200,000 for joint filer per year. The tax also will apply to the “business profits” of any businesses with gross receipts of more than $5 million per year—the details of how this tax will operate remain to be determined. Metro has announced plans to adopt administrative rules in fall 2020 and has said that it expects the rules to be similar to administrative rules for Multnomah County’s personal income tax, which was in place from 2003 to 2005, and the Multnomah County Business Income Tax.

    Also, the Multnomah County Business Income Tax rate increased from 1.45% to 2.0% effective January 1, 2020. The new Oregon Corporate Activity Tax (CAT) also went into effect on January 1, 2020. The CAT generally is imposed at a rate of 0.57% on commercial activity from Oregon sources above $1 million. For a summary of the CAT, see Oregon Enacts New Corporate Activities Tax.

    These new taxes significantly increase the total tax burden on Oregon's individuals and businesses, particularly those in Multnomah County. With the passing of the preschool tax in addition to the recently passed measures, the combined top state and local income tax rate for Multnomah County residents who earn over $250,000 will be at or near the highest in the United States. It is also estimated that businesses in Multnomah County will be subject to a more than 20% increase in overall taxes due to the recent tax changes.

    New Metro Payroll Tax (Metro Ballot Measure 26-218) Defeated

    Voters rejected Metro Ballot Measure 26-218, which would have imposed a new 0.75% payroll tax on employers who employ individuals in the Metro areas (most of Washington, Multnomah, and Clackamas Counties) to fund traffic, safety, transit improvements, and transportation programs.

    Please contact one of the Key Contributors to this Alert if you have questions about the above taxes or any Oregon state and local taxes.