Friday, June 30, 2017

No-Cause Eviction Ban Could End Month-to-Month Leases

According to the Willamette Week, Portland Tenants United's Margot Black and John DiLorenzo of the Equitable Housing PAC find themselves on the same side of a tenant's rights issue this week. Though the two outspoken voices are generally on opposite sides of the housing debate in Portland, they agree that HB 2004 is likely to be a death knell for month-to-month leases. In its current form, the bill's restrictions on no-cause evictions only protect tenants who are on month-to-month leases. If it passes many landlords are likely to stop offering those leases, requiring instead that tenants sign a fixed term lease. A spokeswoman for Tina Kotek argues that tenants and landlords will both benefit from the stability created by fixed term leases, but Margot Black disagrees. She argues that there are many instances in which a tenant might need the flexibility of a month-to-month lease, and absent that option would have to pay lease-break fees in the event of a move. Read more.

Thursday, June 29, 2017

Portland Ranks #21 out of 50 Metros on Barriers to Apartment Construction Index

The National Multifamily Housing Council and the National Apartment association commissioned a report from Hoyt Advisory Services ranking the 50 metros based on how difficult it is to build new apartment units. Portland ranked #21 on the list, while Seattle ranked #7 and San Francisco #8. Austin fared much better - it ranked #35 out of the 50 metros. The metro area with the highest barriers to apartment construction was Honolulu. The data is compiled on the We Are Apartments website, where users can search for specific states or metro areas to learn more. For Portland, Hoyt predicts that the metro will add 47,000 new households by 2030, but only 33,230 units are likely to be built by that time. Read more.

Wednesday, June 28, 2017

HFO Sets Record With Oregon Sale

HFO Investment Real Estate has arranged the sale of Brentwood Estates Apartments in Springfield, Ore., for $40.5 million. That sum establishes a new record as the largest dollar figure in history for a Springfield multifamily property transaction.

The sale represents a price of $137,288 per unit and $116.34 per square foot. Read more.

Monday, June 26, 2017

Portland's Economy Booms But Risks Ahead

At this month's HFO Investor Roundtable, State of Oregon Employment Division Economist Christian Kaylor offered an update on Greater Portland's booming economy. While he doesn't see signs of recession ahead, his report included information on a some items items that pose the biggest risks to continued growth.

Friday, June 23, 2017

The Ankeny Apartments Saga, Continued

In April, HFO wrote a blog post detailing the herculean effort developer Landon Crowell has put into getting his 17-unit apartment development on SE 11th and Ankeny approved. After going before the Design Commission five times only to have his project rejected, he appealed the decision to the Portland City Council. In April, the Council delayed giving an opinion, ultimately stating that a final decision would be made May 11th. No decision was made at that time, but this week the net-zero energy, transit oriented development was presented to City Council once again.

On June 22, Crowell presented the Council with a new plan, which incorporates input from the local neighborhood. The new plan eliminates two units, reduces the height of the building, and increases setbacks from neighboring properties. In response, the City Council expressed concerns that he didn't make enough changes, while also arguing that the changes should have gone before the Design Commission prior to being presented to City Council. The Council plans to continue the hearing August 9th, over a year and a half after the developer first requested a pre-application conference in January 2016. Read more.

Thursday, June 22, 2017

Demand for Apartments Projected to Stay Strong as Supply Struggles to Keep Up

New studies by the National Multifamily Housing Council (NMHC) and the Joint Center for Housing Studies at Harvard University predict that demand for apartment housing will stay strong due to population increases, delayed marriages, and the lack of affordable owner-occupied homes. The NMHC study projects that developers must build 325,000 apartment units per year to keep up with the current demand, well above the 2012-16 average of 244,000 units per year. Over the last four years, 1 million new renter households were formed, bringing the total number of renter households to 39 million in the U.S. Along with the increase in demand, high prices for rental housing are exacerbated by the sharp rise in costs for land and construction. Read more.

Sen. Rod Monroe Proposes Amendments to HB 2004

The Portland Tribune reports that Senator Rod Monroe, an East Portland landlord and hold-out vote on HB 2004, has proposed amendments he believes will balance tenant protections with landlord realities.

On the tenant protection side, Monroe proposes:

  • Limiting rent increases to once per year
  • Requiring leases be a minimum of 6 months
  • Requiring landlords to notify tenants at least 90 days before the end of a lease of a rent increase, or of the intention not to renew a lease
  • Requiring tenants to inform landlords of plans to stay or move 45 days prior to the end of a lease

Monroe also proposes limiting the situations in which relocation costs are paid, and removing a ban on no-cause evictions. His proposed changes include:

  • Landlords with more than 5 units would only be required to pay relocation costs if evicting 50% or more of tenants in a multifamily complex in the first year after the landlord has purchased the property
  • Landlords with fewer than 5 units would not be required to pay relocation costs

John DiLorenzo of More Housing Now supports Monroe's amendments, arguing that they would target bad actors while still giving most landlords the option to use no-cause evictions when necessary. Read more.

Wednesday, June 21, 2017

Nike to Eliminate 2% of its Global Workforce

Nike announced it will cut 2% of its global workforce of 70,000 employees - or about 1,400 people. The company has been losing some market share to Adidas and Under Armour (which also have major offices in the Portland area) and is restructuring. Read more.

Laurelhurst is Latest Portland Neighborhood Seeking Historic Designation to Block Development

Laurelhurst has voted overwhelmingly for neighborhood association leaders who are in favor of designating the 425-acre neighborhood as a historic district. Laurelhurst, located in Northeast Portland, is following in the footsteps of Peacock Lane and Eastmoreland, two other upscale neighborhoods that have recently submitted historic designation requests. Residents of Laurelhurst like Mike Parrott hope the designation will "add one more barrier against my street becoming filled with duplexes and my corner lots becoming triplexes." The median home price in Laurelhurst is $750,000, but advocates claim a historic designation is the only way to keep the neighborhood "affordable" for residents. Groups like 1000 Friends of Oregon and the Homebuilders Association are in favor of the Residential Infill Project in Portland as well as HB 2007. They argue that historical designations put the burden of providing housing entirely on less wealthy neighborhoods, which don't hold as much political sway. Read more.

Tuesday, June 20, 2017

Neighborhood Coalition Gets Cash to Clean Up Trash

A coalition of NE Portland neighborhood groups received a grant from the city of Portland for up to $90-thousand dollars in cleanup funds. The year-long pilot project will contract to add a full-time employee to clean-up a 1-square mile area in the Elliot, Lloyd, and Central Eastside Industrial areas. Cleanup will include picking up trash and needles generated by the city’s homeless and heroin addicted. If successful, the Office of Neighborhood Involvement hopes to replicate the program throughout the city. Read more.

Report: U.S. Apartment Market = Full Despite Booming Construction

Axiometrics reports that the average national apartment occupancy rate has reached the statistically significant level of 95%, which was last reached in September, 2016. This is the level at which apartments are considered "full."

Year-to-date rent growth through May is pegged at 2.97%.  Read more.

Amazon to Create over 1,500 Jobs in Troutdale Next Summer

Amazon plans to open a $178-million warehouse facility in Troutdale by July 2018 that will create 1,500 new jobs, possibly more, The Oregonian/Oregon Live reports. Read more.

Thursday, June 15, 2017

Portland Tenants United Pressuring Sen. Rod Monroe on HB 2004

Portland Tenant's United (PTU) has been putting pressure on State Senator Rod Monroe to support House Bill 2004, as the bill is likely to fail without the Senator's support. PTU has been contacting Monroe's tenants, hanging signs on the freeway, and demonstrating outside of his church in hopes that he will support increased tenant protections in the state legislature. The group also brought a cardboard cutout of Monroe to a town hall meeting in Gresham that he chose not to attend. Senators Law Frederick and Ginny Burdick have questioned these tactics, calling the group's church demonstration particularly counterproductive. Since the Portland Mercury first reported the group's targeting of Senator Monroe on Tuesday, PTU has withdrawn its support from HB 2004 "in its current form." Read more.

Wednesday, June 14, 2017

Fed Raises Interest Rates by a Quarter Point

The Federal Reserve raised its rates today for the second time in 2017, despite inflation that is lower than the normal target rate. The new range for the Fed's benchmark is 1-1.25%, up from 0.91%. Inflation is currently expected to be 1.6% for the year, below the normal target of 2%. Read more.

Friday, June 9, 2017

Washington County Housing Summit Addresses Development & Affordability Challenges

A housing summit held in Beaverton last week addressed housing-related issues such as increasing demand for low income housing as well as single family homes in the area. The meeting was organized by Westside Economic Alliance, which aims to encourage economic development in Washington and Clackamas counties. Jerry Johnson of Johnson Economics emphasized that increasing supply will help bring housing prices down, but Brenner Daniels of Holland Development cautioned that developments are facing headwinds such as a restricted land supply, increasing labor costs and development fees, and lengthy permitting processes. U.S. Senator Merkeley spoke at the summit, and assured attendees that he would try to protect federal affordable housing programs from proposed budget cuts. Read more.

Thursday, June 8, 2017

Oregon Senate to Vote on Bill that Could Raise Property Taxes on New & Renovated Properties in Multnomah County

Oregon House Bill 2088 unanimously passed out of committee and now heads to the Senate floor. The bill gives cities the ability to use city-specific rather than county-specific averages to calculate tax values of new and renovated property, and applies only to counties with greater than 700,000 residents (Multnomah County). Currently, the taxable value of new homes is calculated based on "the average difference between assessed value and market value countywide." Proponents of the bill argue that this calculation causes inequity, as new construction in Multnomah County is taxed at 53% of its assessed value, while most older homes in Gresham are taxed at 75% of their values. New homes and homes that undergo a renovation valued at $10,000 in one year or $25,000 over five years would be affected. Cities would have to vote to enact the new system. Initially the Oregon State Association of County Assessors came out against the bill due to the potential costs associated with implementing a new system for assessment, but after the bill was amended to ensure counties would be reimbursed the Association took a more neutral stance. If adopted by cities in Multnomah County, the new assessment method would apply to residential, commercial, and industrial properties. Read more.

Wednesday, June 7, 2017

National Year-Over-Year Rent Growth Decelerates For Third Consecutive Month

In its monthly rent survey, Yardi Matrix reports that May, 2017 was the third consecutive month of rent deceleration in its survey of 121 markets. The company reports 36,000 units will come online in 2017 in addition to the 281,000 new units added in 2016.  According to the report, Portland metro's year-over-year average rents increased about 5%. Yardi Matrix forecasts Greater Portland will see rent growth in 2017 of 2.5% and job growth at 2.2% Meanwhile, vacancy rates among their surveyed properties increased 0.2% between March and April, from 5.2% to 5.4%.

Tuesday, June 6, 2017

Attention Washington Residents and Owners: State Considers 7% Capital Gains Tax, B&O Tax Increase, and Graduated Real Estate Taxes

In order to balance the state budget, the House Democrats & the Governor introduced HB 2186/SB 5929, new state capital gains tax of 7% and other tax increases to include:

1.    New State Capital Gains 7% Tax:
  • Sale of real-estate, commercial, industrial and residential rental (exempts your home, certain pensions, agricultural land and property)
  • Sales of stocks and bonds, gold and silver, other precious metals
  • IMPACTS: Sale of business, real-estate property and stocks and bonds, etc. It’s taxing your investment pension.
2.    B&O Tax Increases: 20% increases – 1.5% to 1.8%
  • 1.50: Services: property management, realtors, architect, accounting, window washers, legal, janitorial, and engineers, etc.
  • 0.471: Retailing: contractors, restaurants, clothing, Costco, Nordstrom, etc.
  • 0.484: Subcontractors, wholesale and manufacturing, etc.
  • 1.63: Private Nontribal Gambling: “Contest of chance” (card rooms)
3.    New: Graduated Real Estate Excise Taxes (Now 1.28%):
  • 0.75: Selling price is less than 250K
  • 1.28: Selling price is $250K to $1 million
  • 2.0: Selling price is $1 million to $5 million
  • 2.5: Selling price is $5 million and above
You're invited to contact your two house of representative members and one senator (call and follow-up with an email) to let them know your position on HB 2186 and SB 5929.

You can locate your lawmaker at the following “District Finder” link:

You can find their contact information at the following:

Courtesy: Manufactured Housing Communities of Washington 1-(800) 345-5608

Friday, June 2, 2017

Oregon and Washington Have Fastest Growing GDP in the US

Washington and Oregon ranked #1 and #2 in GDP growth among US states for 2016, with 3.7% and 3.3% growth respectively. According to Amy Vander Vliet of the Oregon Employment Department, this is the eighth time in 18 years that Oregon has cracked the top five. Durable goods manufacturing and construction were top contributors to Oregon's growth in 2016. Other states with at least 3% GDP growth include New Hampshire, Utah, Georgia, and Florida. Read more.

Thursday, June 1, 2017

HB 2004 Will Go to Senate Floor without Provision Allowing for Rent Control

In a 4-1 vote on Wednesday, the Senate Committee on Human Services approved changes to HB 2004, including the removal of the provision allowing cities to impose rent stabilization policies. Instead of limiting the amount by which landlords can raise rent, the new language limits the number of times a landlord can raise rent to once per year. HB 2004 still limits the circumstances under which a no-cause eviction can be issued, and requires landlords to pay a month's rent to tenants who face an eviction without cause. The dissenting vote was Senator Tim Knopp, R-Bend, who voted against the bill because it does not address land use restrictions that make it difficult for developers to build affordable housing. The bill will now head to the Senate floor for a vote. Read more. Meanwhile, the Portland Mercury reported yesterday "A Proposal to Allow Rent Control in Oregon is Probably Dead."