Monday, February 17, 2020

Multifamily Marketwatch Podcast - February 17, 2020

This week: the Seattle City Council approved a ban on wintertime evictions, including for nonpayment of rent; the Portland City Council met with BPS staff to determine which Residential Infill Project amendments deserve further study; a California-based newspaper asked presidential candidates what they would do to solve the state's housing crisis.

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The Seattle City Council approved a new ordinance that restricts evictions during colder winter months. Before passing the law, the Council made substantive changes, including shortening the duration of the yearly moratorium. Originally, evictions would have been banned from November 1st to April 1st. As passed, the eviction moratorium will run each year from December 1st to March 1st. Prior to the law’s passage, Mayor Jenny Durkan had stated she intended to veto it. But the law passed in a 7-0 vote, and just 6 votes are needed to override a veto. The law is limited to low- and moderate-income tenants, and only applies to rentals within Seattle city limits. The law does not protect tenants whose evictions are due to criminal or nuisance activities, which may endanger their neighbors. Landlords will still be able to evict tenants during winter months, but if a tenant appears in court citing the moratorium, a judge can ask the landlord to refile or delay the eviction until March. The tenant will still be responsible for paying rent during the moratorium, and can accrue fees relating to lease violations. Critics of the law argue that it will prevent landlords from being able to keep up with their own bills, for necessities like mortgages and property maintenance. Some have also pointed out that it could drive low-income renters deeper in debt.

Seattle Times – Seattle City Council Oks Ban on Wintertime Evictons; Here’s How It Would Work for Renters, Landlords

As the Federal Government prepares to allocate funds to shore up Portland’s at-risk levees, some residents of the Bridgeton neighborhood in North Portland are pushing back on the plan. Many residents of Bridgeton live in floating homes, which would be particularly susceptible to Columbia River flooding. The Army Corps of Engineers believes the risk of such flooding is increasing due to climate change, and if the city chooses not to improve its levee system, residents in the flood plain will no longer qualify for federally subsidized flood insurance. Residents’ concerns focus primarily on the plan to build a 3 foot retaining wall down the middle of Bridgeton’s main street, which lies on top of a levee. Some parts of the street would also be walled off, due to instability. Tom Hickey, chairman of the Bridgeton Neighborhood Association, believes this plan would destroy the fabric of the community and substantially lower property values. But Corky Collier, director of the Columbia Corridor Association, believes the city cannot afford to do nothing. While the plan being proposed by the Army Corps of Engineers would cost roughly $158 million, the federal government would pay for approximately two thirds of the cost. Michael Jordan of Portland’s Bureau of Development Services believes that many of the concerns brought by residents and environmental groups are manageable, while the risks of damage from a flood like the one that devastated the Vanport neighborhood are too high to ignore.

Willlamette Week – Federal Officials Fear Devastating Floods along the Columbia River. Residents Fear a Wall through Their Neighborhood

The Portland Business Journal reports that regional home prices and sales have climbed rapidly since the Recession. And despite the slowdown in the number of closed home sales in recent years, the median price of a home in the Portland Metro Area continues to grow. In 2009, the region saw fewer than 19,000 sales, and a median home price of $247,000. Sales activity began to pick up in 2011, and median prices began increasing in 2012. The number of home sales peaked in 2015, when over 33,000 homes sold. The median price at that time was $308,000. Within just two years, by 2017, the median home price had grown to almost $380,000. Sales activity began to cool in 2018, and in 2019 just under 30,000 homes sold – below the 2015 peak but still well above the number of sales that took place during the recession years. The regional median home price as of 2019 was $410,000. While sellers are benefiting from strong increases in home values, the market is becoming more challenging for first time buyers. As prices increase, the amount of time homes spend on the market is also going up, a sign that many Portland residents are being priced out of home ownership.

The Portland City Council held a hearing with Bureau of Planning and Sustainability staff on Wednesday to determine which proposed amendments to the Residential Infill Plan warrant more study. Since the public hearings last month, BPS has been working on a number of amendments based on resident feedback. While the meeting on Wednesday did not include public testimony, city council members had the opportunity to debate the merits of these proposals. Among the amendments that will be studied further are a plan to allow only up to two units on lots in neighborhoods with un-maintained streets; a proposal for an affordability bonus that would allow developers to build up to 6 units if half are priced for households making 60% MFI; and a penalty for the demolition of historic resources. Throughout the hearing, Commissioner Fritz found herself alone on a handful of issues, particularly those that would limit the scope of the Residential Infill Plan. She spoke out against the deeper affordability bonus, due to an increase in height allowance from 30 to 35 feet, and advocated for an amendment that would limit buildings with three or more units to R2.5 zones. With regards to the latter proposal, she argued that because the 2035 Comprehensive Plan laid out where the city wanted more housing to be built, specifically in transit corridors, upzoning should be limited to those areas. R2.5 zones only make up 10% of single family zoned land in the city, and Commissioner Hardesty questioned why the Council would want to limit where middle housing could be built. Hardesty pointed out that increasing density will enable to city to expand transit options in the future. Commissioner Eudaly and Mayor Wheeler both agreed that this proposal is inconsistent with HB 2001. The public record has been reopened for the Residential Infill Plan and these amendments, and a public hearing is scheduled on the amendments for March 12th at 2pm.

Concordia University in Northeast Portland abruptly announced last week that it will close at the end of the Spring semester. The announcement came as a surprise to students, donors, and Portland Public Schools, which partners with Concordia in a program at Faubion Pre-K-8 known as “3 to PhD.” On Wednesday, the Oregonian reported that the shutdown will result in a loss of 1,518 jobs. The Northeast Portland campus only serves 1,200 students, and many of the lost jobs may be part time, but it is still devastating news for the surrounding community. Meanwhile, a Concordia student hired an attorney to draft a class action law suit arguing that the school misled students about its financial situation, and is failing to do enough to help ensure current students are able to continue their education elsewhere. As of February 12th, over 50 students had joined the suit. Prior to the announcement on February 10th that the university would close, university leaders had not spoken publicly about financial struggles. In fact, a February 4th gala had raised $355,000 for scholarships and the 3 to PhD program. It is unclear how the money will be spent, though the University plans to continue accepting donations to assist with the closure process. Other local universities including Portland State, Corban University in Salem, and Western Oregon University in Monmouth have all offered to help Concordia students. WOU is pledging that current Concordia students and any students who have received a letter of acceptance will be automatically admitted if they complete an application. Concordia’s accelerated nursing program will be absorbed by Concordia University Saint Paul in Minnesota, and current students will be able to complete their studies in Portland. The future of the 24 acre campus remains unclear. According to the Portland Business Journal, the property is zoned Campus Institutional 1 with an Aircraft Landing Zone overlay, and redeveloping it to accommodate uses outside of a school or hospital would require a comprehensive plan map and zoning map amendment.

Next City reports that activists in Los Angeles are urging the city to preserve privately owned affordable housing units through eminent domain. Thousands of apartments throughout the city are seeing their affordability requirements expire, and landlords who have kept rents low are now beginning to raise them. At Hillside Villa in the city’s Chinatown neighborhood, rents could increase from $850 to $2,500 per month, potentially displacing longtime residents. A local council member had tried to work out a deal with the property’s landlord, leveraging a $5.4 million loan that the developers received from the city when the project was built, but the landlord and city council were unable to reach an agreement. The council member, Gil Cedillo, filed a motion at the end of January to initiate eminent domain proceedings. Properties seized through eminent domain must be used for a public purpose, and the city must offer “just compensation” for the property. But the landlord of Hillside Villa does not want to sell, and he attributes his decision to turn down the city’s deal to continued protests at the property. He does not believe the LA Tenants’ Union would back down if he agrees to another 10 years of affordability. Jacob Woocher of the Tenants Union believes the city must take drastic action to prevent displacement at the property. While he acknowledges it is unrealistic, he believes the city should use eminent domain to preserve 11,000 units across LA that are at risk of becoming market rate. The proposal to use eminent domain to purchase Hillside Villa will go to the City Council’s housing committee prior to going to a vote before the entire council.

The Portland Mercury reports that on the 10 year anniversary of the City of Portland’s adoption of the Bicycle Plan for 2030, bike advocates believe the city has a lot more to do in order to meet the program’s lofty goals. Emily Guise of bicycle advocacy organization Bike Loud PDX believes the city is demonstrating a lack of urgency regarding the plan, which aims to increase bicycle use to 25% of all trips by Portlanders. The plan’s pie-in-the-sky goal of building 681 new biking miles in the city was accompanied by a more realistic goal of ensuring that 80% of city residents live within a quarter mile of a safe and accessible bikeway. This second goal would require only 327 new bikeway miles. The city has built or funded approximately 58% of that goal and is on track to meet it by 2030. At the same time, however, there has been an increase in bike and pedestrian fatalities on Portland streets, and the city has failed to lower carbon emissions. As of 2017, just 6.3% of all trips in the city were by bike, the lowest level since 2007. But PBOT spokesperson Dylan Rivera believes the 25% mode share goal will be achieved by 2035. Guise argues that the lack of protected bikeways is a major hurdle to getting more people on bikes in the city. She also believes that programs that encourage bike ridership, such as Sunday Parkways, could increase comfort levels among residents who are still afraid to go by bike.

Finally, Palm Springs, California-based newspaper the Desert Sun asked Democratic presidential candidates what they would do to improve the state’s housing crisis. The candidates’ answers focused largely on restrictive zoning codes, a lack of federal investment in affordable housing, and the expansion of existing programs like Section 8 housing vouchers. Senator Elizabeth Warren, whose platform includes three separate housing plans, believes she can lower rent nationwide by 10% by addressing the under-supply of affordable housing as well as state and local land use laws that increase the cost of building new units. She plans to invest $500 billion over 10 years to build, preserve, or rehab 3.2 million low income housing units. Mayor Pete Buttigieg plans to invest in new affordable housing, Housing Choice vouchers, and programs that help low-income households afford to buy a home. He also plans to require cities that receive federal housing funds to create an affordable housing strategy. Businessman Tom Steyer argues that housing affordability is primarily a consequence of wage stagnation, though he also pledges to invest $47 billion per year in affordable housing. Senator Bernie Sanders argues that housing is a human right, and pledges to invest $2.5 trillion over 10 years to build 10 million affordable housing units. He also plans to enact a tenant bill of rights, which includes a national rent control standard. Senator Amy Klobuchar’s plan includes ensuring that every American who qualifies for a Section 8 housing voucher receives one, as well as creating a new federal tax credit to encourage investment in building new homes in distressed neighborhoods. Former Mayor Michael Bloomberg did not lay out plans for increased investment in affordable housing programs or development, focusing instead on encouraging cities to loosen zoning rules.

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