Monday, May 11, 2020

HFO Multifamily Marketwatch - May 11, 2020

Oregon Governor Kate Brown faces complaints about her extension of Oregon’s state of emergency through July 6th; as activists across the country call for rent forgiveness, others are urging municipal governments to buy distressed properties.


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Governor Kate Brown announced on May 1st that she is extending Oregon’s state of emergency to July 6th. The extension allows the Governor to end statewide closures earlier if needed, but it gives the state room to implement a more gradual, incremental reopening of businesses and other services. Brown’s spokesman Charles Boyle emphasizes that the state’s plans for allowing people out of their homes will be based on science and data. But not all state leaders are supportive of Brown’s decision. The mayors of the Clackamas County cities of Molalla, Oregon City, Canby, Gladstone, and Sandy are urging the Governor to move more quickly. Brown’s benchmark for reopening rural counties requires these areas to create a workable system for testing, tracing, and treating COVID-19. The earliest she expects some rural counties to open is May 15th. The Mayors argue that reopening should be up to local jurisdictions, not just counties as a whole. At the mayors’ press conference last week, Oregon City Mayor Dan Holladay called on churches to reopen as an example for the rest of the state. Sandy Mayor Stan Pulliam believes that only the elderly are at risk in Oregon, and argues that this is not enough of a reason to keep businesses across the state closed. University of Oregon economics professor Tim Duy disagrees. Duy argues that state and federal safety nets are insufficient to meet this moment and says a second wave of the pandemic is likely, necessitating an additional future lockdown.

The Oregon Legislature released its rental assistance funding last week, to help low-income Oregonians who have been impacted by the COVID-19 pandemic. The state allocated a total of $12 million to address housing and homelessness – including $8.5 million for rental assistance, and $3.5 million for homeless services. The rental assistance funding was distributed to nonprofit and government housing agencies last week. In addition, Oregon Housing and Community Services is expecting $14.9 million from the federal government that is earmarked for housing vouchers, rental assistance, and utility payments. The $3.5 million set aside by the legislature for hotel vouchers and homeless services has not yet been distributed. A large portion of this funding will go toward housing for migrant and seasonal farmworkers, and the state has little experience administering this type of accommodation. The state is instructing Oregonians who think they qualify for rental assistance to call 211 for more information. Oregonian – Oregon Releases $12 Million in Housing Funds: Here’s What It’s for and How You Can Benefit

As the May 19th Oregon primary approaches, the Willamette Week reports that in Portland, political outsiders are attracting more individual donors than incumbents. Sarah Iannarone, one of the frontrunners in Portland’s mayoral race, has close to 3,000 donors – the most of any city candidate. These donations are eligible to be matched through Portland’s Open and Accountable Elections program. Ted Wheeler, the incumbent in the race, is not participating in the public financing program. He has received donations from just 354 individual donors in this election. The candidates for City Council who have attracted the highest number of donors are Carmen Rubio, who is running for Position 1, Margot Black for Position 2, and Mingus Mapps for Position 4. While Rubio has attracted around 370 more donors than her closest competitor, Candace Avalos, the other races appear tighter. While 805 donors have given to Margot Black, 717 have contributed to Dan Ryan’s campaign. In the race for Position 4, Mingus Mapps has 981 donors – just 13 more than Sam Adams. It is important to note, however, that the number of individual donors does not necessarily mean these candidates are frontrunners in their races. It will be up to each campaign to ensure that these donations can be translated into actual votes. Willamette Week – Political Outsiders Are Gathering the Most Individual Contributions in Their Bids for the Portland City Council

ABC News reports that as of May 1st, over 30 million Americans have filed for unemployment assistance since the COVID-19 pandemic began. Also, several workers have been furloughed or had their hours cut. To mitigate this sudden widespread loss of household income, many cities and states have implemented short-term eviction moratoriums for nonpayment of rent. These moratoriums allow vulnerable residents to stay in their homes during the ongoing emergency, but once stay at home orders are lifted, rents are set to come due even if the economy has not fully recovered. According to the University of Buffalo urban and regional planning professor Henry Louis Taylor Jr, this is likely to lead to mass evictions and permanent displacement in cities with low vacancy rates and high demand for rental units. Also, some smaller landlords may end up needing to sell their units, reducing the overall supply of rentals. And while the federal government has issued a moratorium on foreclosures for properties backed by federal loans, only 12.3 million of the nation’s 43.9 million rental units are federally financed. Emily Benfer of Columbia University’s Health Justice Advocacy Clinic agrees with Professor Taylor and argues that federal and state governments have not done enough to ensure housing stability. She believes that leaving renters and landlords to deal with this on their own will create a more significant economic crisis. The patchwork of protections and subsidies for renters and landlords is insufficient for the current level of need. It will likely exacerbate housing crises in cities and states that were already struggling with affordability issues before the pandemic. ABC News – “Mass Evictions” on the Horizon as the US Confronts Coronavirus Housing Crisis: Advocates

The Portland Business Journal reports that home services plan provider Frontdoor Inc.’s acquisition of Portland-based startup Streem is allowing the company to provide new tools to real estate and construction professionals who are practicing social distancing. Frontdoor is providing free access to an augmented reality tool developed by Streem to contractors and real estate agents to facilitate remote interactions. The augmented reality tool allows home repair professionals to remotely diagnose issues with plumbing or appliances to minimize the need for on-site services. The AR tool also allows real estate agents to conduct tours and facilitate inspections without needing physical access to the seller’s home. The device is being rolled out in select markets, starting with real estate brands owned by Realogy and Howard Hanna. PBJ – Portland AR Company’s Technology Made Available to Real Estate Agents, Home Contractors

Counties in Southwest Washington recently found out how much funding they will be receiving from the federal CARES Act, but questions remain regarding how that money can be spent. Clark County will receive $26 million from the federal government, while its largest city, Vancouver, will receive $5.5 million. Neighboring Cowlitz County will get $6 million, and the town of Longview expects $1.14 million. But this federal funding will be a drop in the bucket compared to what is needed, and the municipalities worry that they will not be able to use it to address some of the most pressing local needs. Vancouver is expecting a drop in revenue amounting to $45 million, primarily due to the sudden slowdown in construction activity and declining sales tax revenue. Clark County expects its revenues to drop by $13 million, while Longview is planning to lose $4 million. As the cities and counties wait for additional guidance from the federal government, they are forced to make tough decisions in the short term. At least 300 city workers in Vancouver found out last week that they will be subject to temporary pay cuts. Much of the federal aid is likely to be directed toward contact tracing initiatives, which public health experts argue is necessary for the reopening of local businesses and services. OPB – Struggling SW Washington Counties to Get Millions in Federal Aid for Coronavirus Costs

The State of Oregon has approved a land sale in Bend that will allow a large mixed-use project to continue moving forward. Late last month, the State agreed to sell a 382-acre parcel located within Bend’s urban growth boundary to California-based developer Lands Bend Corp. The plot is located at the intersection of Stevens Road and 27th Street on the eastern edge of the city of Bend. The $22 million sale was approved by Oregon’s Land Board late last year and is scheduled to close later this year, pending a due diligence period. The developer will conduct a master plan process to include input from the Bend community on the details. Still, the preliminary plan is for a, quote, “complete community with a mix of housing and employment types.” The state expects the development to generate $450 million in economic activity and over 800 jobs by 2028. DJC – Bend Development Plans Advance with Land Sale 

Finally, CityLab reports that some tenant advocates are expanding their calls for canceling rent into more significant ideas for more sweeping systemic changes. With sharply increasing unemployment and limited federal funding for rent subsidies, the idea of canceling rent has been brought into the mainstream, despite warnings from economists that it could have broader negative impacts on the economy. A new grassroots coalition, United for a New Economy, recently launched a platform called Our Homes, Our Health, which is advocating for lawmakers at all levels to suspend rent and mortgage payments for the duration of the emergency. The group has gained the support of progressive politicians, including Representatives Alexandria Ocasio-Cortez and Ilhan Omar. Chris Schildt, the senior associate for national research group PolicyLink, argues that it will not be enough to temporarily cancel rent and then go back to business as usual. In his words, the pre-pandemic “status quo was a perennial crisis.” To this end, the Our Homes, Our Health policy platform includes ideas for turning privately owned rentals into public housing. One part of the plan advocates for cities to use eminent domain to purchase AirBnBs and luxury housing. Also, the plan’s “Buy-Outs Not Bailouts” policy encourages public housing agencies to buy rental units from smaller landlords who are struggling with reduced income. Advocates believe these measures would prevent the corporate buyouts that were ubiquitous after the last recession. While these plans may have sounded like fantasies a few months ago, as more and more renter households find themselves in precarious situations, municipalities may become more open to drastic actions. CityLab – “Cancel the Rent” Could Be Just the Beginning

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