Thursday, February 27, 2020

Landlords Lose in Effort to Obtain Injunction Against Portland Rental Screening Law

Multifamily NW and additional parties have lost in their effort to obtain an injunction against the implementation of the City of Portland's rental screening and security deposit regulations. The new rules will take effect Sunday, March 1st, as scheduled.

Read more:
The Oregonian

The Crisis in Portland's Real Estate Market

In a recent article, Dr. Gerard Mildner of Portland State University outlines the way in which a booming economy and population growth led to a shortage of housing. Elected leaders' response has been more regulation. Dr. Mildner asserts that "...investment capital is mobile, and if the regulations are sufficiently onerous, housing supply will dry up and rents will rise to even higher levels."

Read the full paper here.
Mildner also announced that the Portland State University Center for Real Estate and Multifamily NW have entered into a partnership to analyze the results of local and state policy changes on the state and regional housing market. Students of the Real Estate Center will publish articles monthly on different aspects of these impacts. HFO will republish those articles. Watch this space.

Monday, February 24, 2020

Oregonian: $45 Million Homelessness Emergency Bill Advances in Oregon Legislature

The House Rules Committee has unanimously supported a bill to provide $45 million for homeless shelters regardless of zoning, planning and design rules. All rules would be waived in an effort to house some of the 6,000 Oregonians sleeping outdoors each night. The bill would override local laws to the contrary, with representatives noting that now is not the time to be quibbling about where housing will be located.

Read more about House Bill 4001.

City of Portland Sued by Multifamily NW Over Proposed Mandatory Screening Requirements

The City of Portland is being sued by Multifamily NW, and others, regarding its proposal to mandate new screening criteria and security deposit rules for rental housing owners. In their lawsuit filed on Friday, the group said the requirements are unconstitutional and should be barred from taking effect.

Read the details in these media reports:
Willamette Week
Oregon Public Broadcasting
The Portland Business Journal (requires paid account to access)

Multifamily Marketwatch Podcast - February 24, 2020

This week: The Portland Business Alliance released its Housing Affordability 2020 report, which showed that the Portland region has built 23,500 fewer units than needed over the past decade; Oregon's Department of Revenue is still working out the details of the new $1 billion business activity tax, leaving business owners unable to predict what they will owe in April; in his new book, author and journalist Conor Dougherty asks whether YIMBY groups and older, more diverse tenants rights organizations can work together to advocate for more housing.

Listen to our latest podcast.

Or if you prefer, here's a text version.

As part of its ongoing Value of Jobs series, the Portland Business Alliance published a report on Housing Affordability in 2020. According to the report, the Portland metro area has built 23,500 fewer homes than were needed to meet demand over the past decade. Since 2010, approximately seven homes have been developed for every ten new households. As of February 2020, 46% of renter households and 25% of owner households are cost-burdened, meaning they pay more than 30% of income on housing each month. In 2016 and 2017, the average one-bedroom apartment in Portland was affordable only to those households making 100% of the median family income. At the beginning of the decade, households making 60-70% MFI could afford the average apartment in the city. Purchasing a house has also become more difficult for Portland area households, including those making 100% MFI. In the four-county metro area, the median household income is $89,700 – a household spending 30% of income on a mortgage can afford a $385,000 home, provided they have saved for a down payment. There are few parts of the metro where the median home price would be affordable to such a household. However – these areas include much of Vancouver, Gresham, the I-205 corridor, and some parts of Beaverton and Western Washington County. The Portland Business Alliance warns that these trends are set to continue – housing production is slowing, mainly due to increasing construction costs, but the region’s population continues to grow. The Alliance calls for a more aggressive approach to housing production, requiring collaboration between a variety of real estate industry stakeholders and community groups. Portland Business Alliance – Value of Jobs 2020: Housing Affordability

The Portland Business Journal reports that real estate professionals are expressing disagreement over whether to support Governor Brown’s proposed real estate transfer tax. Governor Brown’s proposal, House Joint Resolution 203, would charge a 1% tax on real estate transactions based on the taxable value of the property. The first $500,000 of a property’s profit would be exempt from the tax. If the state legislature approves the measure, it will go to residents for a vote. At a hearing at the Capitol on February 11th, a handful of real estate agents broke ranks with the Oregon Association of Realtors, which opposes the measure. Chris Bonner of Hasson Company argued that the proposal would improve the real estate market because it would increase the funding to build much needed affordable housing. Isaac Judd of Hearthstone Real Estate argued in favor of the bill, though he cautioned that in more expensive metro areas it could make some homes even less affordable, as it would mainly be added to the price of a home. A spokesman for Governor Brown said that it would be up to buyers and sellers to determine who would pay the tax – it will not be codified in the law that one party bears responsibility. Shaun Jillions of the Oregon Association of Realtors argued that for more significant commercial properties, the tax could be prohibitive. He points out that for some projects, the land value alone exceeds the $500,000 threshold. No further committee meetings or floor sessions have been scheduled for this bill, but it could still move forward before the end of the legislative session.Portland Business Journal – Real Estate Industry at Odds over Gov. Brown’s Transfer Fees Proposal

The Seattle Times reports that after initially welcoming new residents priced out of Seattle, the city of Tacoma is finding itself in the middle of a housing price boom that is beginning to impact some longtime residents. The median home price in Tacoma is $337,940 – well below Seattle’s median of $750,000 – but over the past five years, many Tacoma neighborhoods have seen home prices explode. In Central Tacoma, prices have increased by 115% during that time, bringing the median to $323,100. In South Tacoma, prices have grown 116% to $273,600. In the North End and Northeast Tacoma, the two most expensive Tacoma neighborhoods, prices have increased by 62% and 71%, respectively. According to the NW Multiple Listing Service, in some communities such as Hilltop, South Tacoma, and the Eastside, home prices have risen by almost a third each year since 2016. In 2017 alone, approximately 18,000 King County residents relocated to Pierce County. While some longtime Tacoma residents are seeing neighborhoods that were once primarily home to Black, Hispanic, and Native residents become increasingly white, some of the new residents are moving to Tacoma specifically because it is a more diverse city than Seattle. As more residents continue to pour in, bidding wars are becoming standard for homes listed at under $600,000.

In many cases, these homes remain on market for under a week. The city is also seeing an increase in house flipping activity – between 2016 and 2019 the number of medium- and large-scale remodels increased by 36%. As a result, longtime residents are finding it harder to keep track of who is moving in and out of the neighborhood. And with a large number of new residents still commuting to jobs in Seattle, many areas appear to empty during the day, with residents leaving early in the morning and not returning until after dark. Still, many of these Seattle transplants see Tacoma as a place they can rebuild communities they lost after being priced out of their previous neighborhoods. Seattle Times – As Seattleites and Their Money FlowSouth, Tacoma Residents Grapple with Changing Neighborhoods

The Oregonian/OregonLive reports that as businesses prepare to pay the state’s new corporate activity tax for the first time in April, the Oregon Department of Revenue has not finalized rules clarifying what the tax applies to. The tax, which was approved in the Spring of 2019, charges business owners 0.57% on in-state transactions. It is based on total revenue rather than net profit. But some business owners are unsure of which purchases count as being in-state. Ross Stock, manager of Western Cascade Industries, says that some of his company’s milled lumber sales take place in Oregon but go directly to builders in California. His accountants are unable to give him advice on whether these sales will be counted under the new state law. As a result, Stock is not able to estimate how much his company will owe at the end of April – the figure could vary by hundreds of thousands of dollars. No other state has a comparable tax, so companies are left wondering how the state will ultimately apply it. The Department of Revenue published 17 temporary rules in December but is not expecting to finalize them until later this year. A bill currently working through the state legislature would provide leniency to businesses that end up paying less than they owe while the rules are being written, but it is unclear whether that legislation will pass. Sandi McDonough, CEO of Oregon Business and Industry, predicts that the legislature will continue to see groups pushing for changes to the tax during future legislative sessions. She describes the questions about how the tax works as, quote, “a conversation that’s never going to end.” She believes that because the tax will end up applying differently to every business, it will continue generating confusion among those who are responsible for paying it. Oregonian – Oregon’s Unique, Billion-Dollar BusinessTax Greeted with Confusion, Consternation

According to newly released U.S. Census data, Oregon had the 10th highest rate of net migration between 2018 and 2019 of any state in the country. The state’s net migration rate was 6.9 per 1,000 residents, compared with 1.8 nationally. Just 12% of new Oregon residents were from other countries – the vast majority came from different parts of the US. Idaho, Nevada, Arizona, South Carolina, and Florida all saw net migration of over ten new residents per 1,000. Washington had the 6th highest net migration rate at 8.1 per 1,000 residents, while California lost 3.3. The most significant decreases in net migration occurred in Alaska, New York, Illinois, Hawaii, and Louisiana. Between 2010 and 2019, Oregon ranked 11th among US states for population growth, with a rate of over 10%. Three-quarters of the state’s population growth can be attributed to migration.

Meanwhile, the Eastern Washington city of Spokane was named one of the four metro areas primed for growth over the next decade by real estate company Redfin. Along with Spokane, Redfin predicts that Las Vegas, Charlotte, and Orlando will be the most attractive metros for home buyers over the next decade due to the affordability of land for new construction. Along with land prices, Redfin chose these metros because they have home price and sales growth over 4%, and searches from out-of-area home buyers over 40%. But Spokane’s attractiveness may depend on its ability to add more housing, with a variety of housing options including single-family homes, apartments, and condos. Year over year, home prices were up 16.3% in January, reaching $273,418. The city has the opportunity to expand its urban growth boundary in 2025, which could open up more opportunities for housing development. Oregonian – Oregon Insight: Inbound Migration Rate Is among the Nation’s Fastest and Seattle Times – Spokane among Four Metro Areas Primed for Growth in Next Decade, According to Redfin

According to Willamette Week, Metro miscalculated the potential revenue that would be generated by its homeless services measure. The measure would generate revenue from a 1% tax on households with incomes over $250,000, or individual taxpayers with incomes over $125,000. Staffers initially estimated that it would generate $175 million, but later corrected that figure to $135 million. The $175 million number was based on taxing all households earning over $125,000. Advocates had initially sought $250 million for homeless services – Katrina Holland, executive director of JOIN and chair of the Here Together advisory board, told the Willamette Week that Metro President Lynn Peterson had personally pledged to refer a ballot measure of at least that amount. A spokesman for Peterson declined to provide a statement on her position regarding how much Metro should be asking voters for.

Meanwhile, the Portland Business Alliance has come out against the income tax approach, pushing instead for a regional payroll tax that could generate $250 million per year over the course of 10 years. The Alliance argues that Oregon is already a high-income tax state, especially compared with Washington where there is no income tax. The organization cited a 2015 report by EcoNorthwest that suggested that high-income individuals may opt to move to Washington to avoid such a tax. While Metro is already considering a payroll tax for its transportation measure that will appear on the November ballot, the Portland Business Alliance letter indicates that the group would still support a payroll tax for that initiative in addition to the payroll tax it proposes to fund homeless services. Metro had planned to refer the measure at its meeting on February 20th but pulled the item from the agenda on Wednesday. Peterson has committed to continue working with the Here Together coalition on the measure. Portland Tribune – Business Leaders: Payroll Tax Better for Homeless Services and Willamette Week – Regional Government Metro Will Weigh Referring a Much Smaller Homeless Services Measure to Voters and Portland Tribune – Metro Postpones Homeless Services Measure Vote

The City of Portland released a progress report for the housing bond passed in 2016. The city faced criticism for its slow start to investment using bond funds, but over the past year has made significant progress toward meeting its goals. So far, two projects are open and occupied: the Ellington, which the city purchased and has kept affordable for low income and formerly homeless families, and the East Burnside Apartments, a newly constructed property also purchased by the city, with 51 apartments for formerly homeless families with children. An additional ten projects are in pre-development, with a total of 1,110 units. Of the 1,424 total units being funded by the bond, 600 are affordable at 0-30% AMI, 658 are family-sized units, and 313 are permanent supportive housing. Three projects are located on the West Side, one is in St Johns, and the rest are scattered across the East Side. Three are located East of 205. According to the city, 87% of the new units are in high opportunity areas. The city is partnering with local nonprofits on two-thirds of the 254 permanent supportive housing units the city approved in 2019. These groups include the Native American Rehabilitative Association, the Native American Youth and Family Center, and the Immigrant and Refugee Community Organization. So far, the two currently open properties house a diverse mix of residents including children, seniors, and people with disabilities. Portland Housing Bond – 2019 Progress Report

Finally, The Atlantic published an article adapted from a new book by author and New York Times economics reporter Conor Dougherty. In his book, Golden Gates: Fighting for Housing in America, Dougherty asks whether groups representing the predominantly white YIMBY movement can build a coalition with older, more diverse tenant and renter groups to advocate for more housing. Dougherty argues that housing shortages have been an issue in American cities since the late 1970s. He catalogs the experts who warned about the impacts of excessive land use regulations and NIMBY sentiment among local homeowners, including Lawrence Katz, Edward Glaeser, and Joseph Gyourko. He also gives credit to Sonja Trauss, who has built a reputation as a leading advocate for increasing the housing supply in the Bay Area. As many members of the Millennial generation find themselves priced out of housing, the Yes In My Backyard movement has gained steam. But an event at the 2018 YIMBYTown conference in Boston showed that the campaign could benefit from reaching out to groups that have been pushing for the same goals, but without the national spotlight. At the same time as the conference, a tenants rights group called City Life/Vida Urbana was hosting the Boston People’s Plan Assembly nearby. Two hundred members of the group marched to the YIMBYTown conference and demanded that the attendees listen to their concerns and ideas, and learn from community groups that have been on the front lines of these issues for decades. Dougherty argues that the success of groups advocating for more housing may require broader coalitions advocating together, rather than groups siloed in many cases by age and race as much as geography. The Atlantic – Victims of NIMBYism, Unite

Thursday, February 20, 2020

Update: Portland and Seattle Metro Area Rent Growth Forecasts

Yardi Matrix reports the following:

January 2020 year-over-year rent growth
  • Seattle 3.5%
  • Portland - 3.8%
The Pacific Northwest outperformed the national average rent growth of 3%.

2020 Yardi rent growth forecast:
  • Seattle - 5.8% 
  • Portland - 5.2%  
Occupancy rates December, 2019: 
  • Seattle - 95.3%
  • Portland - 95.2%

Wednesday, February 19, 2020

Wall Street Journal: Seattle's New Ordinance will Freeze Needy Families out of the Rental Market

In an editorial published earlier this week, the Editorial Board of the Wall Street Journal harshly criticized Seattle's recently enacted winter evictions ban.

The ban puts a stop to nearly all evictions from December 1 to March 1. Unless a landlord is willing to take a renter to court (for example, to prove that they are dealing drugs or committing crimes on-site) the landlord has to prove that the activity has "a detrimental impact or constitutes an imminent threat to the health or safety of other tenants or the property owner." Or otherwise, as the editorial board quipped, "--wait until it's warmer."

Subscribers to the Wall Street Journal can read the entire article here.

Portland Housing Bond Progress Report Highlights Investments Made in 2019

The City of Portland released a progress report for the affordable housing bond passed by voters in 2016. While the city had a slow start with investment of bond funds, in 2019 nine new projects were announced. So far 314 units across two properties are currently open and occupied. An additional 1,110 units are in various stages of development for a total of 1,424 units. 600 of these units will be available to households making 0-30% AMI, 658 are family sized units, and 313 are permanent supportive housing units. Three projects currently in pre-development are located on the West side, one is located in Cathedral Park, and the remainder are on the East side. Two are located east of 205. Read more.

Monday, February 17, 2020

RentCafe January 2020 Oregon Rent Report finds Rents Mostly Flat, but Down in Bend and Aloha

According to RentCafe's January 2020 rent report for Oregon, last month saw rents stay mostly flat across the state. Keizer saw this biggest rent increase at 0.5%, followed by Lake Oswego, Happy Valley, and Portland. Lake Oswego still boasts the highest average rent in the state, at $1,689. Aloha saw the biggest month over month decrease at 1.6%, followed by Bend at 1.2%. Rents in Eugene and Springfield were down 0.8%. Nationally, rents are up 3% year over year. Read more.

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.

Listen to our latest podcast.

Or if you prefer, here's a text version.

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.

HFO-TV: Asbestos in Multifamily Housing: Enforcement and Remediation in Oregon and Washington

The experts from J.R. Johnson talk with HFO Partner Greg Frick about the government's recent stepped-up enforcement of new regulations requiring testing multifamily units for asbestos before disturbing or demolishing suspicious materials. Appearing for J.R. Johnson LLC are President Clint Arp and specialist Jason Ramsey.

Monday, February 10, 2020

Seattle Votes to Ban Wintertime Evictions

The Seattle City Council has voted to limit when and how renters can be evicted.

The Seattle Times reports that Council member Kshama Sawant’s legislation would prohibit evictions from being carried out between Nov. 1 and April 1, with some exceptions. Sawant has called winter evictions cruel and inhumane.

Learn more.

HFO-TV: Tyrone Poole on Oneapp Rental Application Service

Tyrone Pools is the inventor of, a new platform to connect renters directly with housing they qualify for through a simple interface that requires just one rental application. An informational event for owners will be held Thursday Feb. 20 from 3-6 pm at the Double Tree Lloyd Center.

HFO Partner Greg Frick Presents an Industry Update

A 2019 recap and 2020 forecast for the Portland/Vancouver MSA Apartment Market is presented in this presentation by HFO Partner Greg Frick.

Oregonian Editors: Don't Rush Homelessness Measure Onto May Ballot

Editors of The Oregonian/Oregon Live have this to say to Metro government criticize Metro government for "Magical thinking" and implore: "Don't do it." Read more.

Rent Control, Criminal History Bills Dead in Washington

According to the Washington Multifamily Housing Association, proposals that have not yet had a policy committee hearing or vote are considered dead for this legislative session in Olympia. The rent control bill, HB 2779, had a first reading on January 21st and was referred to the Civil Rights and Judiciary Committee. That committee did not hold a hearing on the bill, so it will not move forward this legislative session. Another bill, Senate Bill 6490, would have prohibited landlords to consider criminal history in tenant screenings. According to WMFHA, this bill is also not going to move forward this legislative session because the committee did not bring it to a vote. Read more.

Multifamily Marketwatch Podcast - February 10, 2020

This week: Oregon State Senator Shemia Fagan proposes a bill increasing enforcement of Fair Housing Laws in Oregon; Tacoma finds success with a program providing temporary rent vouchers for college students, and a new Harvard study provides details but few surprises on the status of Rental Housing in America.

Listen to our latest podcast.

Or if you prefer, here's a text version.

In response to complaints from minority community groups in Oregon, State Senator Shemia Fagan is introducing SB 1534, which would increase the enforcement of Fair Housing Laws. Labor Commissioner Val Hoyle is a vital supporter of the bill – she believes that the current complaint-based system is insufficient. Factors such as fear of retaliation and language barriers can keep renters from reporting violations. Renters may also be unaware that they are not being informed of move-in specials or that they are being asked to pay higher security deposits. According to the Fair Housing Council of Oregon, more than one in four prospective renters faced discrimination in their search for housing. SB 1534 would reinstate Oregon’s partnership with the US Department of Housing and Urban Development, which has not been active since 2015. After an initial investment of $299,000 from the state, the HUD would pay 90% of increased enforcement costs. The bill does not contain specifics on what the increased enforcement might entail.

TriMet has released new details on the path for the proposed Southwest Corridor MAX line. As initially promised, the line’s terminus will be Bridgeport Village transit center. TriMet is also proposing a transit center in Tualatin with 960 parking spaces, as well as a station on Hall Boulevard with parking for up to 100 vehicles. Additional safety improvements are planned for 72nd Avenue, to allow pedestrian access between the transit center and the Bridgeport Village shopping area. Tigard Mayor Jason Snider cautions TriMet from relying too heavily on the park-and-ride model. He explains that the city is planning significant development around essential transit stops, and he hopes that residents will take advantage of walking and cycling options for connecting with light rail. To that end, Jonathan Maus at the BikePortland blog points out that plans for the line include six miles of new cycling facilities. Between the Barbur Transit Center and Naito Parkway, TriMet’s plans include four miles of raised protected bike lanes separated from traffic by a “curb-protected furnishing zone.” The Southwest Corridor MAX line will run from downtown Portland along Barbur Boulevard, cross over I-5 at the Barbur Transit Center, and continue along 99W, Bonita Road, and 72nd Avenue to its terminus at Bridgeport Village.

Metro has released more plans for the homeless services measure that will appear on the May primary ballot in the Portland region. Rather than an increase in property taxes, the measure would include a tax on high earners, raising a maximum of $250 million. While the proposal is expected to be referred to the ballot on February 20th, a February 4th work session demonstrated that there is still a significant amount of work to be done to iron out the details. But Metro President Lynn Peterson is confident that her team is willing to put in the work to get it done in time. A poll released by HereTogether shows that 53% of voters support a tax on individuals earning more than $125,000 or families earning over $250,000. Metro’s ability to tax personal income is capped at 1%, though House Speaker Tina Kotek is reportedly working on legislation to increase that cap. HereTogether is studying a potential tiered income tax system that it plans to present to Metro this month. A handful of Metro Councilors are worried that the public’s goodwill regarding tax proposals could be running thin, potentially impacting the funding measure for the Southwest Corridor MAX line, which will be up for a vote in November. Along with that measure, voters will be asked to approve levies for Portland Public Schools, the David Douglas School District, and the Multnomah County Library. The gas tax will also be up for re-approval in November.

NextCity reports that a housing voucher program for college students in Tacoma appears to be having a positive effect on students at risk of homelessness. The Tacoma Housing Authority launched the Community Housing Assistance Program in 2014, and between 2014 and 2016 tracked the performance of students who received vouchers compared with those who were in similar financial situations but did not receive assistance. The disparities were significant – while just 16% of students who did not receive housing vouchers remained enrolled in school after two years, 60% of those who received vouchers through the CHAP program remained enrolled. GPA’s for those who received vouchers were higher on average as well – 3.05 compared with 2.75. The program is available for students at Tacoma Community College as well as the University of Washington’s Tacoma campus. In Tacoma, studio apartments typically cost $800 per month, but students who receive vouchers through the CHAP program pay between $400 and $800, depending on their income. The program includes a mix of project- and tenant-based vouchers. In one recently opened apartment building near the UWT campus, 63 of the building’s 152 small studio apartment units are subsidized. The Harvard Kennedy School’s Ash Center for Democratic Governance and Innovation named Tacoma’s CHAP program one of the top 25 Innovations in American Government in 2018. As the program continues, it is being monitored closely by Sara Goldrick-Rab of the Hope Center for College, Community, and Justice at Temple University in Philadelphia.

According to the New York Times, the movement to ban gas hookups in new homes is gaining momentum in cities nationwide. Berkeley, California was the first city to ban natural gas hookups in 2019, followed by Brookline, Massachusetts. Now several west coast cities including LA, San Francisco, and Seattle appear to be following suit. In some markets where a ban has not yet gone into effect, a handful of developers are already making the switch to all-electric buildings to meet self-imposed environmental goals. But not all developers believe the blanket bans are a good idea–home builders are concerned that their homes will not be as appealing without the option of gas stoves. Developer Aaron Fairchild of Portland- and Seattle-based development company Green Canopy has hired chefs to do cooking demonstrations to make potential residents feel more comfortable with the idea of cooking on an electric stove. And it is not just home cooks that are wary of banning gas – the restaurant industry has also come out against the idea. But in some parts of the country, the concept of all-electric homes is unlikely to be seen as particularly radical. 45% of homes in the Southeastern US are already all-electric. Climate change experts believe that switching from natural gas to electricity could be a critical step toward reducing carbon emissions, particularly in dense cities. The Global Carbon Project believes a large portion of the added emissions last year were due to an increase in oil and natural gas use.

Oregon Public Broadcasting published an article last week detailing the shift that has taken place over the past several years regarding the importance of housing policy at the state level. In 2013, Governor Kitzhaber had all but given up on Oregon Housing and Community Services, a bureau that at the time suffered from a lack of a coherent mission. But now housing and homelessness issues dominate conversations at the state legislature, and in 2019 the agency’s budget increased by $160 million. House Speaker Tina Kotek recently released a plan to declare a homelessness state of emergency across the country, arguing that many local jurisdictions have been unable to solve housing-related problems in their communities. But while everyone agrees that housing costs and homelessness are an issue statewide, some Senators believe that the state may be moving too quickly. Senator Betsy Johnson of Scappoose thinks the state should do more to ensure that the programs it invests in are providing positive outcomes, and delivering the most “bang for the buck” for taxpayers. Still, Kotek appears prepared to introduce several ambitious housing bills in this year’s short legislative session. Along with the state of emergency declaration, she hopes to approve $50 million for new affordable housing units and $20 million for the preservation of existing affordable housing. In addition, Kotek is working on plans to establish a statewide voucher program.

Opponents of the I-5 Rose Quarter Freeway Expansion in Portland have recently determined that the Mayor may be able to demand a review of the project due to its encroachment on the Eastbank Esplanade. The freeway expansion would turn the celebrated and much-used path along the river into a cave of sorts – the freeway would hang over the path blocking sunlight and increasing noise and pollution. According to federal law, the City of Portland must sign off on the encroachment for the freeway expansion to move forward. If the city does not sign off, the state would be required to make improvements and compensate the city. The Mayor could also instruct ODOT to perform a full environmental review of the project, which several local leaders have been calling for over the past several months. The Eastbank Esplanade is not the only sticking point for opponents of the freeway expansion – Portland Public Schools has been urging ODOT to conduct a review of the potential impacts to the recently re-opened Harriet Tubman Middle School. The Albina Vision Trust has also expressed frustration with ODOT, due to the agency’s waffling on plans to include buildable freeway caps.

Finally, Harvard’s Joint Center for Housing Studies released its 2020 report on America’s Rental Housing. The detailed, 40-page report finds that the number of low-cost rental units continues to decline, while the number of cost-burdened households has ticked up substantially. With low vacancy rates and new construction concentrated at the higher end of the market, rental property prices rose 150% between 2010 and the third quarter of 2019. Meanwhile, a lack of federal investment in housing programs has kept the number of households receiving assistance flat since 2008, despite an increasing need. Over 80% of households making under $15,000 per year are either severely or moderately cost-burdened, along with around 55% of households earning between $30,000 and $44,999 per year. Just under 50% of all renter households in the United States are moderately or severely cost-burdened. At the same time, the number of high-income renters has risen substantially over the past few years, driven by young, college-educated households. Nearly half of these upper-income renters are white, and around 44% are married. As of 2019, approximately 44 million households in the United States rent their homes, up from about 33 million in 2004.

Thursday, February 6, 2020

Seattle City Council votes Monday 2/10 on Winter Eviction Ban

The Seattle City Council will vote Monday, February 10th on whether to permanently ban renter evictions during the winter months. Read more.

Wednesday, February 5, 2020

HFO Opinion: Ending Homelessness Requires Wraparound Services

HFO's Senior Research Analyst and podcast host Jennifer Shuch has an op-ed that appears today in the Portland Tribune. Read it here.

Opinion: Portland's New F.A.I.R. Housing Ordinance

In the February Rental Housing Journal, guest columnist Ron Garcia refers to FAIR as "Forcibly Accepting Increased Risk." Read his column here. 

Monday, February 3, 2020

Harvard Joint Center For Housing Studies | 2020 Report on Rental Housing in America

No surprises in this most recent report:
"Over the past decade, additions to the nation’s rental stock consisted primarily of large multifamily properties and single-family homes—units that are typically more expensive than those in small and mid-sized buildings. This shift has effectively shrunk the middle of the rental market. And despite the recent strength of multifamily construction, much of the rental stock is aging and in need of maintenance and updating. At the same time, rental deserts—providing only limited housing options for renter households—exist in a variety of communities from urban to rural, and the barriers to multifamily development in these locations remain formidable."
Read and download the report here.

Ban on Homeless Camping Remains Intact -- For Now

An Oregon Court of Appeals Ruling last week upheld a recent conviction for violating Portland's camping ban, but the judges signaled that a different case might overturn the ban.

The federal 9th U.S. Circuit recently ruled that cities cannot ban camping if there are not enough shelter beds to house every homeless person, but in this case, the camper didn't present enough information on whether she could have accessed shelter at the time she was arrested.

Read more in The Oregonian/Oregon Live.

Important Meeting Thursday for URM Owners in North Portland, 3-7 pm

The City of Portland will hold its second URM Workgroup meeting this Thursday, February 6th from 3-7 pm at the Vancouver Avenue Baptist Church in Portland.

URM owners and interested citizens are invited to attend.

Save Portland Buildings has compiled a significant trove of documentation in opposition to the city's handling and management of the unreinforced masonry project so far which they plan to present at the meeting on Thursday.

To view and download the agenda and the City's presentation, click here

Multifamily Marketwatch Podcast - February 3, 2020

This week: The Washington State legislature continues its session with several housing bills introduced, including rent control and a ban on no-cause evictions; job news in Portland is mixed despite recent high tech expansions, and boom times continue in the City of Vancouver, Washington.

Listen to our latest podcast.

by Jennifer Shuch

1) The legislative session in Washington began on January 13th and only runs for two months this year, but lawmakers are hoping to pass several new housing laws. Representative Nicole Macri is sponsoring two of these laws – one that would cap yearly rent increases at 5% plus CPI and require 180 days’ notice for rent increases over 3%, and another banning no-cause evictions. The rent control bill, HB 2779, was referred to the Civil Rights and Judiciary committee on January 21st, but a hearing has not yet been scheduled. Along with capping rents statewide, it would also lift the state’s preemption of local rent control policies. A public hearing was held on January 24th for Macri’s just-cause eviction bill, HB 2453. The bill would eliminate no-cause evictions and require landlords to give 120 days’ notice if a unit is renovated or sold. Landlords would also be required to offer a new lease when the previous one has expired. If a tenant is engaging in an illegal or dangerous activity, landlords would still be able to evict on three days’ notice. The House Committee on Civil Rights & Judiciary held an executive session on the bill January 31st.

Further action has not yet been scheduled. Finally, a public hearing was held on HB 2452 in the House Finance Committee on January 23rd. The bill would roll back the real estate excise tax increase, which was approved last year. The law is being proposed by a bipartisan group of legislators led by Andrew Barkis of Olympia. Barkis hopes that repealing the excise tax increase could help attract more developers at a time when Washington is experiencing a significant shortage of housing.

2) The Oregonian reports that over the past few years, Clark County, Washington’s economy has been booming. Total sales in the county between 2010 and 2018 increased at an average annual rate of 8.8%. But between 2015 and 2018, the county saw yearly sales growth of over 10%. This includes retail sales activity as well as construction and manufacturing. Meanwhile, sales activity statewide grew at an average of 6% annually. Clark County benefits from being part of the Portland region, which saw significant wage and job growth over that period. Clark County’s unemployment rate is currently 4.7%, and the county continues to attract new businesses from both Portland and Seattle. In the past few years, some large companies have opted to move their headquarters to Vancouver, including PeaceHealth and Banfield Pet Hospital. The Vancouver-based nLight was also the first Portland-area company to complete a successful IPO in over a decade. To continue attracting new residents and businesses, Vancouver has made significant progress on the development of its waterfront – new construction there has included retail and office space as well as apartments and condos.

3) Oregon Governor Kate Brown is proposing legislation aimed at changing the state’s constitution to implement a real estate transfer tax. The governor’s proposal does not currently include specifics on the amount that real estate transfers would be taxed, but it does carve out an exemption for the first $500,000 of a property’s value. Governor Brown plans to use the money raised by the tax to fund affordable housing initiatives throughout the state. Because lawmakers passed an amendment to the Constitution in 2012 banning transfer taxes, if the legislature passes the Governor’s resolution, it will go to residents for a vote in the next election. While both Portland and the Metro regional government have passed bonds intended to fund the construction and preservation of affordable housing units, several other municipalities across the state lack the resources to increase their affordable housing supply. Governor Brown devised this proposal in hopes of providing these cities with a new funding stream. But Shaun Jillions of the Oregon Association of Realtors has stated that Brown has told him she does not plan to, quote, “push it very hard this session.”

4) Two large tech companies have recently announced plans to expand their workforces in Portland, but job news for the region has been somewhat mixed over this past week. Apple announced last Monday that it would be leasing office space in the new 7 Southeast Stark building in the Central Eastside Industrial District. While the company has not stated how many employees it will hire for the new office, there are currently over 30 Portland positions listed on the company’s employment site. A large number of those jobs are engineering positions. On Tuesday, fintech company Square announced that it would be leasing three full floors of the Aspect building on SW 6th and Washington downtown. The three stories include a total of 64,000 square feet of office space, enough to house over 200 employees. Square signed a long-term lease with the owner of the building, and a spokesman emailed a statement to the Portland Business Journal, saying that the company plans to expand its footprint in Portland. On the heels of these two positive announcements for the Portland region, however, a loan servicing group with an outpost in Beaverton announced a large number of layoffs. Mr. Cooper Group plans to close its site in Washington County, eliminating 301 jobs by March 18th. The company received $900,000 in public funds in 2010 when its parent company at the time, IBM, promised to retain 710 jobs as well as adding 900 in Beaverton. IBM had to pay the state $55,200 after failing to hit its hiring goals, and last year sold the business to Cooper Group. While these layoffs are likely to have an impact on Washington County residents, the Metro Area’s economy remains strong. The unemployment rate was 3.7% in December – the lowest rate since 1976.

5) The Oregonian reports that the apartment vacancy rate in Portland has started to increase as new apartment units come online, resulting in more concessions at older, amenity-rich buildings. According to CoStar, the Portland Metro apartment vacancy rate is now at 5% and could increase to 5.7% by 2022. Renters who had previously seen sharp increases in rents and faced few options when apartment hunting are now finding that if their rent increases, they may be able to find a better deal somewhere else. Concessions currently being offered include up to two months of free rent, deposits as low as $99, or $1,000 gift cards upon move-in. Appraiser Patrick Barry expects rents to increase 1-2% this year, compared with 2.5% last year. After years of lackluster growth in the number of new apartments during the recession, new supply over the past few years has had a stabilizing effect on the market. According to the Oregonian, the metro area’s population growth requires 5,000 to 6,000 new apartments each year. As construction activity begins to slow, vacancy rates could start ticking down again.

6) Oregon Congressman Earl Blumenauer and Michigan-based Congresswoman Rashida Tlaib held a forum on housing policy at Jefferson High School in Portland on January 26th. Blumenauer published a report on federal housing policies called “Locked Out” last September and has been pushing for legislation that would restore federal investment in affordable housing. Congresswoman Tlaib’s district in Detroit is the third poorest in the nation, and she has championed public housing as an essential piece of her anti-poverty agenda. Tlaib warned the audience about the potential impacts of spending federal dollars on a sports stadium, like the one being floated by the Portland Diamond Project. She warned that within ten years, a stadium could push out an entire neighborhood by taking over homes, parks, and schools.

Meanwhile, Blumenauer laid out plans to turn Section 8 housing vouchers into an entitlement, create a renters’ tax credit, and repeal the Faircloth Amendment, which puts a cap on new public housing. Many audience members were excited to meet Congresswoman Tlaib, who has been an outspoken member of the “squad” of freshmen congresswomen who aim to bring large-scale changes to federal policymaking. She is a democratic socialist, and one of the first two Muslim women ever elected to Congress.

7) The Land Use Board of Appeals issued an opinion late last month siding with state regulators who argued that Portland did not provide sufficient justification for 200-foot height limits in the Chinatown neighborhood. City officials had included the change in height limits in the Central City 2035 plan. At the time, the city claimed that the 200-foot limits were compatible with the existing scale and character of the neighborhood. The ten-block area originally had 425-foot height limits, but in a four and a half block section of the historic district, heights had been limited to 100 feet. Included in this small area are the Lan Su Chinese Garden and Block 33 – a surface parking lot where Guardian Real Estate Services is planning to build a massive mixed-use development. The Planning and Sustainability Commission recommended a 125-foot height limit in 2017, but the City Council amended the plan to allow for building heights up to 160 feet on the west half of Block 33. After a request from the developer, Mayor Ted Wheeler and Commissioners Eudaly and Saltzman agreed to increase that limit to 200 feet. But the Land Use Board of Appeals argues that the city’s characterization of the height limits as compatible with the existing scale of the neighborhood is not supported by evidence. Most of the buildings in that neighborhood are under four stories – a 200-foot height limit would allow buildings up to 20 stories to be built there. LUBA agreed with a decision by the land use board in 2019 that the city had not put forward an acceptable argument that demonstrated that the height limits complied with city policy.

8) Finally, the Brookings Institution published an article by Jenny Scheutz that breaks down the variables that contribute to high housing costs. Scheutz points out that while the trope of the “greedy real estate developer” building expensive housing has gained traction in the public imagination, it oversimplifies the regulatory and financial pressures that ultimately make housing so expensive. Scheutz argues that development is inherently risky and becomes even more dangerous in markets with higher regulatory barriers. Zoning laws, impact reviews, appeals processes, and required site improvements can all add to the time and expense of starting a project. She explains that allowing developments to be built more quickly would help reduce the cost of housing. Time increases uncertainty in development projects because over time the costs of construction labor and materials can change, and market fundamentals can shift. In riskier regulatory environments, developers will choose to build whatever can make them the most money in the end – to a large extent; this is why cities like San Francisco will see a glut of high-end luxury housing being built, but far fewer workforce units. Schuetz also points to the restrictions placed on developers by capital providers, who need to ensure a specific rate of return for their investors or financial institutions. The amount of risk associated with development can impact interest rates or the availability of capital. Finally, she argues that the political power of homeowners who choose to protect their home values by blocking new developments has added additional complexity and risk to the development process.