Wednesday, July 15, 2020
National Multi Housing Council Finds 12.4% of Renters Fail to Make Full or Partial Rent Payments by July 13
Monday, July 13, 2020
This week: The Oregon Court of Appeals ruled that Portland’s relocation ordinance does not conflict with the state ban on local rent controls; A new report finds that if Washington State enacts rent control, the result would be less housing, investment, and less tax income. Meanwhile, in Washington DC, a proposed law would ban evictions nationwide through March 2021.
Friday, July 10, 2020
Thursday, July 9, 2020
Tuesday, July 7, 2020
In May, the House of Representatives passed the HEROES Act, which included housing relief measures of $100 billion for emergency rental assistance.
According to Forbes Magazine, the HEROES act "currently sits in the Republican-controlled Senate where it was initially labeled 'dead on arrival'. But one of the provisions of the Act is to extend the $600 federal unemployment payments through January 31, 2021. That would provide a full six months for the economy to recover from the economic fallout of COVID-19."
Another proposal – and one more likely to gather bipartisan support – is the Worker Relief and Security Act. Proposed by Don Beyer (D-Virginia), it’s a more complex proposal, offering tiered benefit provisions.
Monday, July 6, 2020
Released in June, the study found rent control could reduce more than a year's worth of housing construction activity. The study is based in part on the findings of a 2019 Stanford study on rent control in San Francisco, which found the policy resulted in a 15 percent reduction of rental housing supply.
The study found that rent control could reduce housing built over the next decade by 15,000 units, with more than 75 percent of that loss in the central Puget Sound region. Read the study here.
Podcast host Jennifer Shuch interviews Derek Merrill, Co-Founder & CEO of LeaseLock, a lease insurance company that allows rental housing providers to accept renters without requiring a security deposit. LeaseLock currently insures more than $300 million in leases.
Tuesday, June 30, 2020
Some markets will see growth this year, including Indianapolis which is forecast to see rents rise 3.20%. Tampa, Florida is also expected to see rents rise 2.80%.
Seattle had been expected to see rents increase by 3.80% this year but that forecast is now +0.90%. Las Vegas' predicted 2.40% increase now appears more likely to decline by 5.40%.
Portland, Oregon had been forecast to see a slight rent increase by year's end, and that has now changed to a decrease of 1.60%. Read more.
Monday, June 29, 2020
in our post on Friday, the Oregon legislature has extended an eviction moratorium through September 30, 2020.
Multifamily NW is providing additional analysis of what that means.
NOTE: This is not intended as legal advice. Please obtain the advice of an attorney for any policy change or decisions regarding your individual residential and commercial Landlord-Tenant matters, as well as laws that impact your local jurisdictions.
On June 26, 2020, the State of Oregon passed HB 4213 which added new restrictions limiting Landlords’ ability to enforce the right to rent payments, among other things. The new laws became effective upon passage. Consequently, you need to familiarize yourself with them immediately and adjust any policies or procedures accordingly. This legal update addresses these changes as they relate to residential tenancies only.
a. Governed period of time
The law creates protections based upon three different time periods that are interrelated:
• April 1, 2020 through September 30, 2020 (the “Emergency Period”);
• October 1, 2020 through March 31, 2021 (the “Grace Period”); and
• April 1, 2020 through March 31, 2021 (the “Regulated Year”).
b. Defined terms
‘Nonpayment’ is defined as “the nonpayment of a payment that becomes due during the emergency period to a Landlord, including payment of rent, late charges, utility or service charges or any other charge or fee as described in the rental agreement or ORS 90.140, 90.302, 90.315, 90.392, 90.394, 90.560 to 90.584 or 90.630.” It seems to include any debt incurred during the emergency period (4/1 – 9/30).
‘Nonpayment Balance’ is defined to “include all or a part of the net total amount of all items of nonpayment by a Tenant.”
‘Termination Notice Without Cause’ is defined as “a notice delivered by a Landlord under ORS 90.427 (3)(b), (4)(b) or (c), (5)(a) to (c), or (8)(a)(B) or (b)(B).” This includes:
- Terminations without stated cause for month-to-month tenancies in the first year of occupancy.
- Non-renewals without stated cause of fixed-term tenancies in the first year of occupancy.
- Terminations without cause by live-in Landlords at a property with two dwellings or less (e.g. duplexes or homes with ADUs).
- ”Qualifying Landlord Reason” (QLR) termination notices. These include:
- Termination for plans for demolition or conversion
- Termination for plans to repair or renovate
- Termination because Landlord or Landlord’s family intends to move in
Note: Termination notice without cause does not apply to “3-strike” non-renewals so long as the underlying notices of violation are not based upon “nonpayment.” as described above.
a. Prohibited Conduct. The Regulated Year Restrictions (April 1, 2020, to March 31, 2021)
During the Regulated Year (April 1, 2020, to March 31, 2021), Landlords may not do or threaten (orally or in writing) to do any the following:
- Deliver a termination notice for Nonpayment Balance (4/1/2020 – 9/30/2020 debts);
- Initiate or continue an eviction action based upon notice of termination for nonpayment delivered after April 1, 2020;
- Take any action that would interfere with a Tenant’s possession or use of a dwelling unit based on a Tenant’s nonpayment balance;
- Assess a late fee or any other penalty on a Tenant’s nonpayment (4/1 – 9/30 debts); or
- Report a Tenant’s nonpayment balance as delinquent to any consumer credit reporting agency.
Practice Tip 2: Ensure that your procedures or automated actions do not violate these restrictions. For example, if your software automatically sends cases to collections you should ensure that any agent, including a collection agency, is not reporting “nonpayment balances” to credit reporting bureaus.
b. Application of payments during Regulated Year (4/1/2020-3/31/2021)
Landlords shall apply payments in the following order, to:
- Rent for the current rental period
- Utility or service charges;
- Late rent payment charges; and lastly to
- Fees or charges owed by the Tenant under ORS 90.302 or other fees or charges related to damage claims or other claims against the Tenant.
During the Emergency Period, Landlord may give Tenants written notice stating that Tenants continue to owe any outstanding rent. However, if a Landlord elects to send such notice, it must include a statement that eviction for non-payment is not allowed before September 30, 2020.
d. Prohibition on delivery Termination Notice Without Cause during the during the Emergency Period (4/1/2020 – 9/30/2020)
During the Emergency Period, Landlords may not issue a Termination Notice Without Stated Cause or file an eviction action based upon one. For any tenancy in which the first year of occupancy has or will end during the Emergency Period, the law extends the first-year occupancy for a period of 30 days after the Emergency Period (i.e. until October 30, 2020).
e. Prohibited Conduct during the Grace Period (October 1, 2020, to March 31, 2021)
Tenants have until March 31, 2021 to pay Landlord any outstanding Nonpayment Balance.
On or after October 1, 2020, Landlords may give written notice to Tenants that substantially states:
The date the Emergency Period ended (Sept 30, 2020);
- That if rents and other payments that come due after the emergency period are not timely paid, the Landlord may terminate the tenancy;
- That the nonpayment balance that accrued during the emergency period is still due and must be paid;
- That the Tenant will not owe a late charge for the nonpayment balance;
- That the Tenant is entitled to a six-month grace period to repay the nonpayment balance ending on March 31, 2021;
- That within a specified date stated in the notice given under this subsection that is no earlier than 14 days following the delivery of the notice, the Tenant must pay the nonpayment balance or notify the Landlord that the Tenant intends to pay the nonpayment balance by the end of the six-month grace period described in HB 4213 Section 3, subsection (6);
- That failure of a Tenant to give notice to the Landlord of utilization of the grace period described in HB 4213 Section 3, subsection (6) may result in a penalty described in subsection HB 4213 Section 3, subsection (10); and
- That rents and other charges or fees that come due after the emergency period must be paid as usual or the Landlord may terminate the tenancy under ORS 90.392, 90.394 or 90.630.
If Landlord delivers the notice described above, the Tenant must notify the Landlord by actual notice of their intent to use the Grace Period to pay the Nonpayment Balance by the deadline in the notice. “Actual notice” means communicating the request verbally, by leaving a voicemail, by written notice given personally, left at the rental office, by fax, posted to the Landlord’s residence, or by fist class mail, by electronic means, or any other method permitted in the lease.
Tenant’s failure to timely give the required noticed entitles Landlord to receive 50% of one month’s rent following the Grace Period (i.e. on April 1, 2021).
f. Landlord penalties
If Landlord violates any of the provisions of the law, including those summarized herein, Tenants may obtain injunctive relief to recover possession or address any other violation. In addition, Tenants may cover up to three month’s periodic rent plus any actual damages.
g. Waiver not applicable to acceptance of partial payments
The new law limits the application of waiver by acceptance of partial payments. Specifically, “ORS 90.412 does not apply to a Landlord that accepts a partial rent payment.”
III. Sunset Clause
The laws described above are automatically repealed on March 31, 2021.
IV. Tolling of Statute of Limitations
The new law tolls Landlords’ claims for Nonpayment or Nonpayment Balance until March 31, 2021. Normally, residential Landlords only have 1 year to commence an action from the date of lease violation. Exactly how much time a Landlord has after March 31, 2021 to file a claim will depend on the underlying facts of the claim and the interpretation of when HB 4312’s tolling date commences.
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NOTE: The above is not intended as legal advice. Please obtain the advice of an attorney for any policy change or decisions regarding your individual residential and commercial Landlord-Tenant matters, as well as laws that impact your local jurisdictions.
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The Portland Business Journal reports that approximately one-third of worldwide office and industrial sales moved forward on schedule in May, while around 28% were put on hold, and 17.6% were canceled. Portland-based commercial real estate broker Mark McFarland says that while he has seen Portland-area transactions slow down, they have not come to a halt. He cautions that employers in the tech sector, which has been booming in Portland, may begin rethinking how their companies utilize office space. Typically, tech companies lease space in downtown areas where the price per square foot is high. But if the pandemic causes a shift toward remote work, these companies may re-evaluate whether the cost of renting prime office space makes sense.
Meanwhile, in Portland-area residential real estate, home sale activity started bouncing back in May. While there were fewer pending sales last month compared with May 2019, they were up 52.5% since April. In the Portland Metro Area, prices are up 1.2% year over year, and inventory is around 2.3 months.
- Portland Business Journal – Nearly a Third of Real Estate Deals Moving Ahead in Portland and Elsewhere, Office and Industrial Realtors Say
- Daily Journal of Commerce – Residential Real Estate Market Rebounds in May
Washington Governor Jay Inslee announced last week that masks or facial coverings will be required statewide. The Governor’s order mandates that anyone over the age of 5 must wear face coverings when utilizing indoor or outdoor public spaces. In Yakima County, which has 6,435 reported cases of COVID-19, businesses will not be allowed to operate unless all customers wear face coverings. Companies that do not comply could lose their licenses. Washington residents who are at home with their family members, outside in places where they can maintain at least 6 feet of distance, or alone in their vehicles do not have to wear face coverings. People who are communicating with someone who is deaf or hard of hearing are also exempt from the mask requirement. Unlike the mandate in 7 Oregon counties, Washington’s mask mandate will be enforceable by police. Violations are classified as a misdemeanor, though Governor Inslee emphasizes that he would prefer not to enforce it.
The Oregon Legislature convened a special session last week to address the state’s pandemic response as well as issues with police brutality. While the session will not address budget issues, the Governor has indicated that she may call for an additional session once a clearer picture of federal aid emerges. The majority of the pandemic response measures are currently housed in an omnibus package, though an extension of Governor Brown’s eviction moratorium was broken out into a separate bill, HB 4213. Governor Brown’s initial order barring evictions during the pandemic is slated to end June 30th, but HB 4213 would extend the moratorium until 90 days after the Governor ends the state of emergency. A proposed amendment to the bill would set September 30th as the end of the moratorium, and March 31st, 2021 as the date at which missed rents would come due. As in the Governor’s original moratorium order, landlords will be prohibited from charging late fees. The police accountability bills include provisions that would prevent arbitrators from overturning discipline against a police officer. The laws would also ban chokeholds, establish a database of officers who have been disciplined, and empower the Oregon DOJ to investigate police use of force cases. Further, officers would be required to intervene when they witness a colleague engaging in illegal misconduct. Finally, they would restrict the use of tear gas and other “less lethal” crowd control methods.
Portland Tribune – Legislative Session Focuses on Police Conduct, Pandemic After-Effects
Activists in Seattle’s Central District are calling on the City to keep its promises to the Black community and to work more proactively to increase rates of Black land ownership in the City. In a speech earlier this month, K. Wyking Garrett, president and CEO of the Africatown Community Land Trust argued that the City has a responsibility to fulfill its promise to turn Fire Station 6 into the William Grose Center for Enterprise and Cultural Innovation. Although the City committed to this plan in 2016, since then, the station has sat vacant – it is primarily used as a place to park law enforcement vehicles. Spurred by sustained activism in the aftermath of the murder of George Floyd in Minneapolis, the City of Seattle announced on June 12th that it would transfer the fire station to the Africatown Community Land Trust. Garrett and a group of like-minded activists from the community have also established a campaign called “King County Equity Now.” They are calling for the county to hand over several vacant lots as well as a nursing home to the Black community. They are also advocating for a $500 million anti-gentrification land acquisition fund to increase wealth and opportunity for Seattle’s Black residents. Since it was established in 2016, the Africatown Land Trust has found that to fund projects, it has had to partner with white-led nonprofits and development companies. The Trust hopes to move away from these partnerships to better promote Black land ownership in the City.
CityLab – In Seattle, Protests over Racial Equity Turn to Land Ownership
Earlier this month, Oregon Governor Kate Brown announced that Multnomah, Clackamas, and Washington Counties would be considered a single region by the state as it determines when they can move into the next phases of reopening. This would delay the move to Phase 2 for both Clackamas and Washington Counties, which moved into Phase 1 before Multnomah County. These counties are now pushing back against the Governor’s announcement, arguing that they should not have to wait for Multnomah County to move into the next phases of reopening. Clackamas County is now eligible to move into Phase 2, having entered Phase 1 over 3 weeks ago. After the Governor’s announcement, the Clackamas County Commission voted 3-to-2 to submit the county’s Phase 2 application. Board Chair Jim Bernard was one of the two “no” votes. He points to the recent spike in cases in Union County as an example of why they need to slow down reopening plans. Washington County has also voted to move forward with the reopening, and 13 business organizations located in the two counties have sent a letter to the Governor opposing her plan to treat the Metro area as a single entity.
Portland Tribune – Brown’s COVID-19 Region Opposed in Clackamas and Washington Counties
King County Assessor John Wilson announced that his office will be re-evaluating how private golf courses are taxed to raise the tax base and take some of the burdens off of homeowners and commercial landlords. They have effectively been subsidizing golf courses. According to the Seattle Times, land in the most affordable Seattle neighborhoods is taxed at a rate approximately 71 times the rate of these private golf courses. Also, tax rates are determined by dividing local government budgets by total appraised property values. Because private golf courses are assessed at such low amounts, in many cases, they are being paid for by people who aren’t able to utilize the courses. There are 28 private golf courses in King County, and appraised land value per square foot for these courses ranges from 13 cents to $2.50. In all cases, these rates are significantly below the estimated land value of single-family homes in the same zip codes. The Broadmoor Golf Course in Seattle has an appraised value of 76 cents per square foot. Single-family homes in the same zip code are appraised on average at over $141 per square foot. In Fall City, the Twin Rivers Golf Course is valued at 13 cents per square foot. It is in one of the most affordable areas of King County, where single-family homes are typically appraised at around $5.58 per square foot – nearly 43 times higher. Even public golf courses are assessed at a higher rate than private ones – Seattle’s four public golf courses are valued at between $12.50 and $62.50 per square foot. Local officials hope that increasing the taxes on privately run golf courses will generate more money for county programs and much-needed affordable housing.
The Seattle Times – Are Seattle’s Exclusive Private Golf Courses Getting a Huge Break on Property Taxes? Critics Say It’s Time to Recalculate
A new survey commissioned by the campaign of Mayoral Candidate Sarah Iannarone finds that while a large number of Portlanders have not yet made up their mind about the race, among those who have Iannarone and incumbent Ted Wheeler are running neck-in-neck. 35% of the 992 Portlanders who were surveyed between June 17th and 18th said they are not sure which candidate they will ultimately support in November. But of the 65% of voters who have made up their minds, 33% plan to vote for Wheeler while 32% back Iannarone. The survey showed that Iannarone’s biggest hurdle will be name recognition, while Wheeler’s most significant weakness may be likeability (or lack thereof). 41% of respondents disapprove of Wheeler’s job performance while only 30% approve. But while just 15% of those surveyed have an unfavorable opinion of Iannarone, 61% said they are not sure. In the same poll, Iannarone’s campaign asked potential voters about efforts to defund the Portland Police Bureau. 63% of respondents support reallocating funding from the police to communities of color. Just 22% are opposed.
Portland Tribune – Survey Shows Tight Race for Portland Mayor
Finally, The Atlantic reports that without policy intervention, the US may be heading toward a second Great Depression. Although there have been some signs that allowing businesses to reopen has boosted retail sales and let some people get back to work, these small rays of hope are unlikely to be enough to get the economy back on track in the near term. Atlantic Staff Writer Annie Lowrey predicts that the recovery will look more like the Nike “swoosh” logo than the V-shape some optimistic prognosticators were hoping for. The Congressional Budget Office has revised down expectations for economic output over the next decade by $8 trillion, indicating that a full recovery may be delayed until the 2030s. Economists are bracing for several consequences of the pandemic-related shutdowns, including a massive wave of business closures, state and local budget shortfalls, the ongoing health crisis, and a fiscal cliff that many households are already rapidly approaching. In March alone, nearly 40% of low-income workers lost their jobs. While the increased unemployment benefits and $1,200 stimulus checks provided a boost to a large number of families, they were not nearly sufficient for providing long-term stability in the face of a historic economic downturn. Between March and May, a total of 40 million people lost their jobs, while just 2.5 million jobs were added back last month. When increased unemployment benefits run out at the end of July, those most affected by it will be the households that can least afford it. Most high-income jobs can be performed remotely, and wealthier households have seen few layoffs. But poor and immigrant workers, who were shut out from federal stimulus, will be unable to feed their families or pay their rent without additional federal intervention. Also, this will occur at the same time that the number of COVID cases nationwide is surging, compounding the effects on businesses. Lowrey argues that the federal government must act now to prevent an economic catastrophe by extending unemployment insurance benefits, providing additional help to businesses, sending cash to low-income families, and providing financial support to state and local governments.
The Atlantic – The Second Great Depression
Friday, June 26, 2020
Thursday, June 25, 2020
Statewide, the number of renters failing to make full rent payments increased from 11.8% to 15.1%. The July rent survey results are anticipated some time the week of July 6th.
Monday, June 22, 2020
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Governor Kate Brown announced last Wednesday that Multnomah County could enter Phase 1 of the state’s reopening plan on Friday, June 19th. Multnomah County is the last county to begin phased reopenings – county officials expected to reopen businesses on the 12th, but a spike in cases led the Governor to put a 7 day hold on pending applications. Starting on June 24th, residents of Multnomah, Clackamas, Marion, Polk, Hood River, and Lincoln counties will be required to wear face masks for all indoor activities, with the exception of bars and restaurants. But state officials have not issued guidelines for how this new face covering mandate will be enforced. Under Phase 1 rules, indoor gatherings of up to 25 people are allowed, provided social distancing is possible, and restaurants, bars, hair salons, and gyms are allowed to open. Multnomah County health officer Dr Jennifer Vines warns that cases are likely to go up, and residents should not view the reopening as a return to normal. Last Tuesday, 278 new cases were announced – a one-day record for the state. The day before there were 184. Around 43% of the cases reported on Tuesday were tied to an outbreak at the Lighthouse United Pentecostal Church in Union County. Oregon is one of 20 states where cases have been on the rise. According to state epidemiologist Dr Thomas Jeanne, the state hasn’t been able to identify the source of 35% of infections.
- Oregonian – Multnomah County Will Reopen in Phase 1 Starting Friday; New Face Covering Requirements for 7 Counties
- Oregonian – 278 New Cases of Coronavirus in Oregon on Tuesday, a Record High
- Fast Company – Ithaca, New York, Is the First US City to Say It Will Cancel Rent During the Pandemic
- NextCity – Will Ithaca’s #CancelRent Resolution Actually Cancel the Rent?
- Oregonian – US Retail Sales up a Record 17.7% in Partial Rebound amid Coronavirus Crisis
- Oregonian – When Multnomah County Reopens, Will Portlanders Risk Returning to Normal During Coronavirus?
- Willamette Week – A Black Real Estate Developer Says the City Discriminated against Him Because of His Race
Monday, June 15, 2020
This week: new laws in Washington state impact tenant screening and rent payments; Oregon directs $55 million to landlords with low-income tenants; possible solutions to a looming eviction crisis.
Thursday, June 11, 2020
Wednesday, June 10, 2020
Monday, June 8, 2020
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Washington Governor Jay Inslee announced that he is extending the state’s eviction moratorium to August 1st. Also, Inslee’s order includes a handful of new tenant protections aimed at keeping people in their homes during this unprecedented pandemic and economic downturn. Specifically, the law prohibits retaliation against tenants who claim protection under the eviction ban and provides a defense for tenants who face lawsuits over nonpayment of rent in situations where it can be proved that the landlord failed to offer an adequate payment plan. Landlords can still evict tenants for other reasons, such as damage to the unit or if they plan to sell or occupy the property. Washington’s House Minority Leader, JT Wilcox, acknowledged the importance of keeping people housed but pointed out that the eviction moratorium is placing a significant burden on landlords. He argued that extending the ban could exacerbate the state’s housing crisis.
- Seattle Times – Inslee Extends Eviction Moratorium in Response to New Coronavirus, Issues Guidance for Library Curbside Pickup, Drive-In Theaters
Twenty-six Oregon counties have applied for Phase 2 of the state’s reopening plan, and an additional five are eligible. Governor Kate Brown has stated that unlike Phase 1, counties will likely remain in Phase 2 for a considerable amount of time. Her framework for moving into Phase 3 requires the availability of a reliable treatment or prevention method for COVID-19. Before moving to Phase 2, counties must be in Phase 1 for at least 14 days and show that they are adequately testing and tracking cases. Phase 2 allows for gatherings of up to 50 people indoors or 100 people outdoors, and restaurants and bars may remain open until midnight. Churches and movie theaters can also increase the number of people who can gather at one time. Under Phase 2 guidelines, the state still encourages those who can work from home do so, though a limited return to indoor workspaces is allowed. In contrast with previous statements from the Governor, state epidemiologist Dr. Dean Sidelinger says that counties that are approved to move into Phase 2 will not be required to pause or revert to Phase 1 if an outbreak occurs. The counties that make up the Portland Metro Area are not yet eligible to apply for Phase 2. Multnomah County is the only county in the state that has not entered Phase 1, though it expects to do so on June 12th.
- OPB – 31 Oregon Counties Could Enter Reopening Phase 2 as Soon as Friday
- The Oregonian – 26 Oregon Counties Apply for Phase 2 Reopening
King County has applied to enter a “modified” Phase 1 for reopening, as most counties in Washington have moved into Phase 2. Governor Inslee declined to extend the state’s stay at home order past the end of May, but as of that time, King County and the surrounding area remained in Phase 1, which bans all gatherings and requires non-essential businesses to stay closed. While the county is still not eligible to enter into Phase 2, it can apply to enter a modified Phase 1. This modification would allow some business activities to resume, including real estate, in-store retail, personal services, professional services, photography, pet grooming, and restaurants. For the real estate industry, indoor spaces would be capped at 25% occupancy, and indoor services would be limited to 30 minutes. Restaurants would only be able to operate at 50% capacity. Also, outdoor gatherings, recreation, and fitness would be allowed in groups of 5 or fewer people who do not live together. While the number of confirmed cases is highest in Seattle metro area counties like King, Pierce, and Snohomish, Yakima county has the second-highest number of cases in the state. In contrast, Benton, Franklin, and Clark counties still have hundreds of confirmed cases.
- The Seattle Times – King County Will Apply to Enter a Modified Phase 1 of Coronavirus Recovery. Here’s What That Means
- The Seattle Times – Which Phase Is Your County In? And What Can You Do under the Modified Phase 1 of Washington’s Reopening?
Harvard’s Joint Center for Housing Studies published an article by Senior Research Associate Daniel McCue arguing that the housing industry could help pull the US out of its current recession. While McCue acknowledges that this recession is unique in that it was caused by a pandemic, he points to the tightness in the housing market and evidence from previous downturns to make his case. After recessions in the 70s, 80s, 90s, and early 2000s, residential fixed income made up a significantly higher than average share of GDP growth. This share was particularly high after 1982 and 2001 when RFI accounted for roughly a quarter of GDP growth. Vacancy rates were extremely low for both owner- and renter-occupied homes as we entered the current recession. The vacancy rate for owner-occupied homes is 1.7 percentage points lower than it was in 2007, while the vacancy rate for renter-occupied homes is 3 percentage points lower. McCue also points out that unlike the last recession, there is not a substantial inventory of distressed and foreclosed properties that could have an impact on housing values. If states can lift bans on housing construction and tightness in the construction labor market softens, it could provide a boost for the economy.
As cities across the country begin to lift pandemic-related restrictions, customers and workers appear hesitant to go back to business as usual. In Oregon, the Governor lifted a ban on in-person retail sales last month. However, Portland shops are finding that even with extra precautions like curbside pickup, customers are still wary of venturing out. Pam Coven, the owner of Imelda’s and Louie’s Shoes, says revenue at her stores on SE Hawthorne and NE Alberta is down between 70% and 80%. She hopes that once bars and restaurants reopen and more foot traffic returns to the surrounding neighborhoods, her stores will get a boost. Sandra McDonough, CEO of Oregon Business and Industry, largely agrees with Coven. She has seen in other counties that once residents gradually start going out to bars and restaurants, they become more comfortable with different types of outings as well. Nationwide, retail sales were down 16.4% between March and April, though some businesses like bike shops and hardware stores have seen more robust sales. Also, an informal survey conducted by the Portland Business Journal finds that a large number of area workers are hesitant to return to their offices. Out of 1,261 responses, 48% said they would not feel safe returning to a shared office, 40% said they were ready to go back, and 12% were unsure.
- The Oregonian – Portland Retail Stores Continue to Reopen, but Customers Are Slow to Return
- The Portland Business Journal – Poll Results: Majority of PBJ Readers Are Not Ready to Head Back to the Office
Multi-Housing News reports that landlords in New York and Massachusetts have filed legal challenges to pandemic-related eviction bans. The New York lawsuit was filed by landlords in Westchester County against Governor Cuomo’s moratorium extension. In their suit, the landlords claim that the Governor’s action violates their due process rights and can be considered an improper taking of property. In particular, the lawsuit takes issue with the parts of the Governor’s order that extend the moratorium to August 19th and allow renters to use security deposits to cover rent payments. Meanwhile, two Boston landlords have filed an emergency petition to the state’s supreme court that seeks to nullify the statewide eviction ban in Massachusetts. The statewide ban prevents evictions except those for criminal activity or lease violations that directly impact the health and safety of other tenants. The filers, in this case, argue that Governor Charlie Baker’s order violates their constitutional rights and eviscerates the ability of landlords to evict tenants.
Amid the ongoing pandemic and deepening economic downturn, real estate companies have been in the news lately, with announcements about hiring, layoffs, and mergers. Portland-based vacation rental company Vacasa announced last week that it secured $108 million in new funding, which will allow it to recall some of the workers the company laid off in March. Meanwhile, real estate funding startup CrowdStreet has laid off 24 of its 110 employees due to the impacts of the COVID-19 pandemic. Before the downturn, CrowdStreet was on track to double its business, according to CEO Tore Steen. And the news is not limited to Portland-area businesses – Greystar Real Estate Partners announced last week that it has acquired the property management division of Alliance Residential for $200 million. Greystar was already the largest apartment manager in the nation, and this acquisition will add 130,000 units to its portfolio.
- The Oregonian – Vacasa, Buffeted by Coronavirus, Accepts $108 Million in New Funding
- The Oregonian – CrowdStreet, Portland Real Estate Funding Startup, Lays off a Fifth of Its Staff
- CoStar – In an Uncertain Market, Apartment Giant Doubles Down on Management
Finally, CityLab published an article by Brookings Institution Fellow Andre Perry, which is based on an excerpt from his forthcoming book Know Your Price: Valuing Black Lives and Property in America’s Black Cities. Perry details the experience of developer Brian Rice to illustrate the difficulties developers face when they try to invest in Black communities. Perry purchased and plans to revitalize nine buildings in Ensley, the largest neighborhood in Birmingham, Alabama. These buildings were once part of a vibrant commercial corridor that has become blighted after years of disinvestment. East Ensley is a low-income historically Black neighborhood that lost 81% of residents between 1970 and 2010, but Rice believes that the neighborhood has potential. He envisions a community filled with food carts, an outdoor patio, pop-up shops, and office spaces for nonprofits and mentoring programs. He believes that if he succeeds, the neighborhood could thrive once again. But Rice has faced significant hurdles when it comes it financing his vision – six months after he purchased the properties, he was only able to secure a single $50,000 loan. Appraisers have valued the buildings at $45,000 - $170,000 for land and property value, minus $125,000 for demolition costs. But Rice believes the appraisers used the worst possible comps for his property, some of which were not even within city limits. Perry attributes the barriers Rice is experiencing to disparities in how loans are distributed to Black vs. white businesses – over half of Black business owners who apply for financing are denied, a higher percentage than any other race or ethnic group. Rice points out that banks have chosen not to invest or establish branches in the Ensley neighborhood, though he is working to recruit banks and credit unions to the area. Perry points out that Black neighborhoods and Black-owned development and investment companies are also largely being left out of the Opportunity Zones program. Perry argues that local governments should do more to support developers like Rice. They see the potential in communities that have experienced systemic disinvestment and continue to suffer as a result.
Friday, June 5, 2020
Thursday, June 4, 2020
Washington, Oregon Post Updated Coronavirus Websites With Coordinated Reopening, Phasing, and Case Details
Visit the State of Washington Coronavirus information hub here.
These links have been added to our updated HFO COVID-19 information hub.
Wednesday, June 3, 2020
The new moratorium:
- Continues to prohibit the service of any notice where remedy may include eviction, except where the action is necessary to respond to a significant and immediate risk to the health, safety, or property of others created by the resident.
- Permits termination with 60 days' written notice of intent (1) to personally occupy the premises as a primary residence or (ii) to sell the property. Because of the timing, any termination under this section is likely to become effective August 31.
- Creates a defense to eviction if the housing provider failed to offer a reasonable payment plan.
- Exempts commercial properties from the rent control provisions where an automatic rent increase was agreed to and executed prior to February 29.
- Adds a retaliation provision for invoking their rights under any of the Governor's eviction Proclamation or other rights provided by the Residential Landlord-Tenant Act.
- Permits reasonable communications with residents to explore repayment plans.
Tuesday, June 2, 2020
Monday, June 1, 2020
More Than Half of Washington State Counties Get OK to Reopen; King County to Apply for Modified Phase 1
Meanwhile, County executive Dow Constantine announced Friday that King County will apply for approval to enter a modified Phase 1 reopening.
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According to the National Multifamily Housing Council, 90.8% of renters were able to make full or partial rent payments by May 20th, an improvement over April despite the continued economic downturn that has led to unemployment rates reaching nearly 15%. A survey of apartment owners in Oregon and Southwest Washington found that just 9.46% of households were unable to pay rent in May. In the city of Portland, over 94% of renter households made a payment last month. But industry experts warn that renters may be relying on the extra $600 per week the federal government is providing for unemployment to pay rent. This boost to unemployment benefits is set to end in July, which could mean landlords will see a drop off in rent collections in August or September. According to CoStar, institutional apartment investors are already seeing a sharp increase in the number of tenants requesting rent deferments or payment plans. Rent collections appear to be strongest at high-end and subsidized properties. Landlords and property managers are continuing to lobby state and federal legislators for increased funding for rental assistance. Last week the Seattle Times’ editorial board called on the Seattle City Council to provide monetary support to renters and landlords to ensure mortgages, utility bills, and property taxes continue to be paid, as well as to ensure housing stability for renters.
- CoStar – Apartment Renters Continue to Pay Up, and Owners Wonder: How?
- Daily Journal of Commerce – Rent Payments Mostly Arriving in Metro Area
- Seattle Times – Seattle City Council Should Help Rent Get Paid
- Seattle Times – More than Half of Washington State’s Counties Get OK to Move to Second Phase of Inslee’s Coronavirus Reopening Plan
- KATU2 – Tech Giants Are Embracing Remote Work. Others May Follow
- KATU2 – Facebook Says It Has Its Eyes on Portland
- Seattle Times – At Hotels for Houseless Seattleites, Fear and Frustration Outside but Comparative Calm Within
- OPB – Motel Rooms for the Homeless? Portland Leaders Balk at Price