Tuesday, March 31, 2020

Portland Bureau of Development Services Only Processing Tier #1 & #2 Permits

Portland's Bureau of Development Services has created a tiered system to ensure that its efforts are focused on immediate infrastructure needs. According to the BDS website, the agency is currently only focusing on intakes for Tier #1 and Tier #2 projects, which include hospitals and clinics, essential services, shelters and transitional housing, essential facilities, wastewater treatment, and wireless facilities. Tier #2 also includes permits for projects that are already under construction. Portland Housing Bureau Projects are considered Tier #3, while other regulated affordable housing projects are Tier #4. All other projects are considered Tier #5. Read more.

Monday, March 30, 2020

Portland Sets April 1st Deadline for Small Businesses to Apply for Aid

The Portland City Council passed a $2 million grant package last week that is expected to support up to 150 local businesses that have been impacted by the COVID-19 pandemic. Businesses with fewer than 50 employees that make less than $2 million in annual gross revenue and have seen at least a 25% decline in revenue since February 1st are eligible for the funding. Businesses can expect between $2,000 and $10,000 in grant money if they are chosen, and funds will be dispersed starting Friday, April 10th. Applications are due by 11:59 PM on April 1st. Read more.

HFO Multifamily Marketwatch Podcast - March 30, 2020

Oregon and Washington issue stay-at-home orders; Oregon’s governor delays state tax filing deadline, and local, state, and federal government work on funding strategies to offset the pandemic’s economic impact.

Listen to our latest podcast.

Here's the text version:

Oregon Governor Kate Brown announced last Wednesday that the state’s income tax deadline will be moved to July 15th. Her announcement came less than a week after Treasury Secretary Steven Mnuchin announced that the federal tax filing deadline would be delayed to the same date. Also, Portland arts tax filings will be due in July. Oregon’s filing extension applies to personal and corporate income tax filings. However, corporations that are making estimated tax filings for the current tax year will still have a deadline of April 15th. The extension is due to the impacts of the COVID-19 pandemic, but some lawmakers have expressed concerns that the delay in revenue collection could impact recovery efforts. State Senator Elizabeth Steiner Hayward of Portland estimates that the state could forgo $300 to $500 million in the short term as a result of this decision. Brown acknowledged the complexity of balancing these concerns, which required her to weigh lower revenues and the need for an expensive public health response against the large number of people whose lives have been impacted by the pandemic. OPB – Oregon Delays Personal Income Tax Deadline until July

The Portland City Council passed two measures on Wednesday that dedicate a total of $4 million to emergency efforts aimed at tackling the impacts of COVID-19. The first measure transfers $3 million in unallocated reserves from the General Fund to an “initial incident budget.” Of this, $1 million will be directed to a Small Business Relief Fund that will be distributed to approximately 150 local businesses. The rest of the $3 million funding package will be allocated to coordinated response efforts, including shelter beds, handwashing stations, and protective gear for first responders. The Small Business Relief Fund will be administered by Prosper Portland, which will also add $1 million from its own budget to the Fund. As of Monday, March 30th, businesses will be able to apply for grants up to $10,000. The city plans to prioritize companies that have seen at least a 25% decrease in revenue, but which have continued paying employees or providing workers with healthcare benefits. Businesses owned by women and people of color will also be prioritized. Prosper Portland plans to distribute money to selected companies by the second week of April. According to the Oregonian, Prosper Portland is also considering using $1 million from the enterprise zone tax abatement program to fund five-year, interest-free loans to businesses. Also, the City Council approved $1 million in direct payments to Portlanders, which will come out of the Portland Housing Bureau’s budget. The funds are intended to go toward necessities like food and cleaning supplies, but the specifics of the payments are still being worked out.
Oregonian – Portland Approves $3 Million in Coronavirus-Related Aid, Including for Impacted BusinessesPortland Business Journal – Prosper Portland Readies $2 Million Small Business Relief Package 

The Portland Tribune reports that the city of Wilsonville is considering significant changes for its Town Center area. The city’s Town Center plan was finalized in 2019 after years of public outreach and discussion among city leaders. In the plan, heights on Main Street were limited to 3 to 4 stories. But earlier this month, the City Council held a work session with city staff. After viewing a virtual visualization, Council Members argued that height limits for some buildings should be between 6 and 9 stories instead. Councilor Charlotte Lehan argues that taller buildings would provide scenic views of the community and that the city should be thinking about these structures from the rooftop perspective as well as the street view. Councilor Ben West agreed, describing the original design as sterile and “squatty.” But City Planning Director Miranda Bateschell explained that the public was in favor of shorter buildings and that taller ones would be more expensive to build. Mayor Tim Knapp also expressed concerns that there are not enough green spaces designated within the Town Center area. Bateschell believes that the visualization the staff provided to the city council, which spurred discussion of these changes, may not have captured the full scope of the plan. The City Council intends to revisit potential changes in the future, though a date has not yet been set. Portland Tribune – Nine-Story Towers? Wilsonville Thinking Big for Town Center

Governor Brown of Oregon and Governor Inslee of Washington both issued stay at home orders last week, telling residents to avoid going out unless absolutely necessary. Governor Brown’s order allows businesses and nonprofits to remain open as long as employees are allowed to work from home where possible. Companies that remain open must designate an employee who is responsible for ensuring social distancing measures within offices and physical workspaces. The state has opened a hotline for workers to report conditions that violate social distancing rules. Also, Brown’s order allows coffee shops, cafes, and restaurants to remain open as long as they are only taking pickup or delivery orders. Doctors’ offices, health care facilities, grocery stores, pharmacies, pet stores, and veterinary offices may also remain open. Childcare facilities that serve 10 children or fewer can continue to operate, though priority must be given to the children of medical professionals and first responders. Businesses that rely on foot traffic and close interaction with customers are required to close. The order also bans all social gatherings and outdoor activities where people are not able to maintain 6 feet of distance. People or businesses found in violation of the rule could face Class C misdemeanor charges. Governor Inslee’s order is similar to Brown’s, requiring the closure of a large number of businesses and the cancellation of social events as well as concerts, festivals, and parades. Inslee’s order includes a detailed list of the types of essential companies that may continue to operate, such as law enforcement, health care, manufacturing, childcare, food and agriculture, transportation, finance, defense, media, and local government. While Brown’s stay at home order is tied to the state of emergency, Inslee’s mandate is scheduled to end on April 8th. Oregonian – Oregon Stay at Home Order: Where Can I Go? Seattle Times – Here’s What Gov. Inslee’s New “Stay-at-Home” Order Does and Doesn’t Restrict

In the wake of Oregon Governor Kate Brown’s stay at home order, many homeless residents are wondering how they will be impacted. Unlike similar rules in other states, Governor Brown’s order did not carve out an exemption for homeless residents, who are, by definition, unable to stay at home. The rule requires residents to keep a distance of six feet from others, and a violation could result in up to 30 days in jail or a fine of up to $1,250. But homeless residents and social workers argue that it is much more difficult for people in homeless encampments to maintain an appropriate social distance. Raven Drake, who runs Street Roots' coronavirus action team, says that when distributing items like hand sanitizer, her group works to mark off six-foot intervals, but it is difficult to enforce them. Advocates worry that the order will give police officers more of an incentive to arrest residents who group together to keep warm at night. Social workers who hand out free meals have also expressed concerns about the order. Brown’s spokesman Charles Boyle argues that the law is not meant to criminalize homelessness. Still, without explicitly addressing the needs of homeless residents, it may not do enough to protect them from being disproportionately targeted. Oregonian – Oregon’s “Stay at Home” Order Leaves Unanswered Questions for People with No Homes

To encourage other developers to adopt mass timber technologies, Ben Kaiser of Kaiser Group + Path Architecture is publicly releasing all drawings, technical specifications, and engineering documents for his Carbon 12 building in North Portland. At 8 stories, Carbon 12 is one of the tallest mass timber buildings in the US. Corey Martin of Hacker, another firm that has completed mass timber buildings in the city, believes the mass timber movement is bringing people together due to its potential for innovation. He describes enthusiasts as a, quote, “open-source community.” Both Martin and Kaiser argue that there is a lot to learn about mass timber and that the knowledge gained from completed projects should be shared with other developers. In building Carbon 12, Kaiser found that mass timber buildings fare better in seismic events due to the lightness of the structures. They are also easier to build on brownfield sites. Since Carbon 12 was completed, Kaiser has received several information requests and has given more than 200 tours of the building. The high level of interest among building professionals spurred his decision to make plans public. DJC – Eager to Stimulate a Mass-Timber Revolution

The Seattle Times reports that as Washington residents are told to stay in their homes, construction professionals who continue showing up to building sites have mixed feelings about being designated as essential. While workers on some sites have been told to go home, Inslee’s order carved out exemptions for the construction of some critical projects, including health care facilities, transportation infrastructure, and housing. Maintenance workers at public housing facilities are also exempt from the stay at home order. Construction industry groups had lobbied Inslee to allow them to continue working, arguing that they had already begun taking precautions against COVID-19 infections. But Seattle Times reporters spoke with some construction workers who say that these precautions are all but impossible to follow in some circumstances. One worker explained that on residential building sites, a large number of workers may end up crowding into unventilated rooms as small as 600 square feet. While homebuilding is allowed to continue, at least one home builder, Sellen Construction, has halted work for two weeks due to health concerns. CEO Scott Redman has pledged to continue paying the company’s 320 employees during this time. But despite the risks, some construction industry professionals would prefer to continue working to ensure that residents continue to feel safe in their homes. Portland Business Journal – Portland Building Owners Stress Cleaning, Other Precautions amid COVID-19 Pandemic

Finally, a new report titled “More for Less?” published by Harvard’s Joint Center for Housing Studies evaluates design and construction strategies that could begin to address the high cost of housing. The report’s author, Hannah Hoyt, conducted 30 interviews with construction and policy professionals to determine the extent to which construction choices could impact the cost of housing. Hoyt acknowledges that significant policy changes at both the local and federal levels are needed to increase the construction of affordable housing. Still, she also points out areas where building professionals could start to reduce costs until these policies are adopted. Hoyt points out that the solutions will not be the same in every market, and that industry leaders must evaluate what makes sense for a specific project or region. One aspect of construction that is more universal, however, is time. The longer a project takes from inception to completion, the more it will cost. While developers do not necessarily have the power to reduce approval timelines, they may be able to lessen the amount of time spent on design and construction. Hoyt also argues that a focus on building efficiency can improve the design as well as lowering costs. In her analysis, Hoyt focuses on ways to reduce land costs, soft costs, and hard costs, which include site preparation, structure, interiors, and services. She hopes that by sharing strategies gleaned from these interviews, she can provide best practices for cost reduction in multifamily construction projects. JCHS – More for Less?

Gov. Inslee Clarifies Real Estate Transaction Guidance

Governor Jay Inslee of Washington issued a memorandum on Friday clarifying restrictions on real estate transactions during the COVID-19 state of emergency. While real estate activities are allowed to continue during the state of emergency, Gov. Inslee has issued a number of restrictions limiting in-person interaction during real estate transactions. The new rules include:

  • In person meetings with customers are only allowed when necessary for a customer to view a property or sign necessary documents
  • Real estate open houses are not permitted
  • No more than two people can be on site at a time for property viewings, inspections, appraisals, and final walk-throughs, which must be arranged by appointment
  • All new real estate listings must be facilitated remotely

Wednesday, March 25, 2020

Gov. Brown Announces State Personal Income Tax Deadline Is Delayed until July

Governor Brown announced today that the state of Oregon is delaying the deadline for personal income tax filings until July 15th, in line with the new deadline set for federal tax filing. The Oregon Department of Revenue is expected to provide further guidance on the change. Lawmakers have expressed concerns that the delay will make it more difficult to fund emergency mitigation efforts - State Senator Elizabeth Steiner Hayward estimates that the state could experience a short-term hit of $300 to $500 million. Read more.

Tuesday, March 24, 2020

What's new in 2020 in Real Estate Opportunity Zones with Trent Baeckl of Perkins and Co.

Perkins & Co Shareholder Trent Baeckl offers an update on what's new relating to the creation of real estate opportunity zones.

Gov. Inslee Issues "Stay-at-Home" Executive Order

Washington Governor Jay Inslee announced a Stay-at-Home order for the entire state, just hours after Governor Brown of Oregon issued a similar order. Inslee's order is effective immediately and is scheduled to last until April 6th. Businesses deemed non-essential will have 48 hours to close and will not be allowed to open until April 8th. Activities permitted for Washington residents include:

  • Grocery shopping and ordering takeout
  • Attending medical appointments
  • Visiting pharmacies
  • Outdoor activities that allow for social distancing
  • Essential errands to gas stations, banks, food banks, and laundromats
  • Going to work if you're employed by an essential business
Governor Inslee's order includes a long and detailed list of which jobs are considered essential. These include emergency services, law enforcement, health care, manufacturing, child care, food & agriculture, transportation, finance, defense, media, and local government. Read more.

Monday, March 23, 2020

Gov. Brown Issues "Stay at Home" Executive Order

Oregon Governor Kate Brown issued an executive order aimed at keeping Oregonians in their homes to stop the spread of COVID-19. Effective immediately, Oregonians will no longer be able to gather in "non-essential social" groups. Only essential businesses may remain open. The list of essential businesses includes:

  • Cannabis stores
  • Bars, restaurants, and cafes (delivery & pickup only)
  • Childcare facilities with a limit of 10 children (priority must be given to children of first responders)

Governor Brown's order does not require businesses to close, but she urges employers to let their staff work remotely when possible. Read more.

Follow Today's Live Oregon Joint Special Committee on Coronavirus Response

Watch today's Coronavirus Response Committee meeting happening live in Salem.


Oregon Gov. Kate Brown Signs 90-Day Eviction Moratorium

Oregon Governor Kate Brown has signed a 90-day moratorium on evictions due to nonpayment of rent. Unlike the moratoriums in the City of Portland and Multnomah County, Governor Brown's order does not require tenants to prove that they have suffered loss of income due to COVID-19, nore does it provide a framework for potential repayment of overdue rent. The governor's order instead prohibits law enforcement officers from "serving, delivering or acting on any notice, order or writ of termination of tenancy or the equivalent or any judicial action....that relates to residential evictions for nonpayment." Read more.

Friday, March 20, 2020

Federal Income Tax Filing Deadline Moved to July 15th

Treasury Secretary Steven Mnuchin announced today that the deadline to file Federal income taxes has been pushed to July 15th. In his announcement, Secretary Mnuchin stated, "All taxpayers and businesses will have this additional time to file and make payments without interest or penalties." Read more.

Thursday, March 19, 2020

Governor Inslee of Washington Announces statewide eviction moratorium

Washington will have a 30-day moratorium on evictions for non-payment of rent, according to news reports

A list of available rent assistance available to renters is being updated continuously on the Washington Multifamily Housing Association website and can be found here.

Tuesday, March 17, 2020

Mayor Ted Wheeler, Multnomah County Chair Deborah Kafoury Announce Eviction Moratorium

In a press conference this morning, Mayor Wheeler and Multnomah County Chair Deborah Kafoury announced the following with regard to a forced moratorium on evictions.

Read more on Oregonlive/The Oregonian.

  • In Multnomah County and the City of Portland, the courts and police departments will no longer be advancing eviction proceedings, effective immediately.
  • All evictions for nonpayment of rent will be halted for the duration of the state of emergency.
  • Tenants will be given 6 months following the end of the emergency declaration to repay back rent. 
  • Wheeler said he plans to meet with local banks and credit unions on Thursday to urge them to provide leniency on mortgage payments for landlords and building owners who will be impacted by this eviction moratorium. 
  • Wheeler also asked the state legislature to expand rental assistance programs. 
  • Neither the city nor the county plan to offer monetary assistance to renters or landlords. 
The Mayor thanked landlords who have already stepped up to help tenants who are struggling to pay rent as a result of business closures and lost income.

Mayor Wheeler also announced that the city will be distributing $150,000 in grants to businesses in the Jade District, which were among the first to see economic impacts from the crisis. He hopes this grant program can eventually be expanded to neighborhoods across the city.

At the beginning of the Q&A portion of the press conference, protesters asked Wheeler and Kafoury to freeze rents until the economy recovers, citing concerns that six months will not be enough to pay significant back rent that may accrue. Neither Wheeler nor Kafoury responded to the protesters.

Watch or Call-In Live 9 am Today | Portland-area Elected Leaders to Announce Eviction Moratorium

A news briefing on the steps that Chair Deborah Kafoury and Mayor Ted Wheeler are taking to protect housing security during the COVID-19 outbreak in the City of Portland and Multnomah County will be held at 9  a.m. Tuesday, March 17, 2020 at the Gladys McCoy Health Department Headquarters, Room 150.

  • Jennifer Vines, MD MPH, Tri-County Health Officer
  • Multnomah County Chair Deborah Kafoury
  • Portland Mayor Ted Wheeler

New information on housing security, situation update on Multnomah County COVID-19 outbreak and hospital readiness

Room 150, McCoy Health Department Headquarters, 619 NW 6th Ave., Portland

9:00  a.m. Tuesday, March 17, 2020 

Call in:
Dial 888-363-4734, participant code 1285443#

RentCafé February Rent Report: Albany, Keizer See Highest Year over Year Rent Growth

RentCafé released its February Rent Report for Oregon, finding that Portland rents increased 2.8% year over year but decreased by 0.3% since January. Nationally, rents are up 3.2% year over year. Albany saw the highest rent growth in the state over the past year at 6.9%, followed closely by Keizer (6.3%), Oregon City (6.1%), and Bend (5.9%). Lake Oswego was the only Oregon city where rents declined year over year - the Clackamas County city saw rents decrease by just 0.1%, but rents there remain the highest statewide, averaging $1,588 per month. Read more.

Monday, March 16, 2020

Gov. Brown Announces Statewide Social Distancing Measures

Governor Brown announced at a press conference this afternoon that she is working to implement a variety of measures aimed at addressing the COVID-19 outbreak across the state. Among these measures is an executive order, which goes into effect tomorrow, March 17th, prohibiting events with more than 25 attendees and requiring establishments that serve food to end dine-in service and only offer takeout or delivery. She has exempted grocery stores, pharmacies, retail stores, and workplaces from the order, but urges non-essential businesses that are unable to accommodate social distancing to close their doors to customers. She also asks Oregon residents not to gather in groups of more than 10 people. In addition, Brown is convening a Coronavirus Economic Advisory Council to limit price gouging for essential items, and a joint task force that will allow all Metro hospitals to operate as a single system.

Watch the video of Governor Brown's press conference here.

Bisnow: Free Coronavirus Webinar for Multifamily Owners Thursday March 19 at 10 am Pacific

Click here to register for Bisnow's complimentary webinar on Thursday at 10 am Pacific. 

Topics include:
Continuity of business planning
Reviewing lease agreements in case of business disruptions
How to create healthy, hygienic work and living environments
Strategies for resident and tenant communication

There will be time for questions.

HFO Remains Open For Business to Support Your Needs

HFO's team remains available to serve your multifamily real estate investing needs during regular business hours. While some team members are now working remotely, it is not impacting our ability to deliver regular services. We will continue to post updates and resources here for multifamily owners on the COVID-19 virus. 

Coronavirus Resources for Multifamily Owners and Managers

The National Multifamily Housing Council offers a full host of resources for apartment owners and managers here at this website.

Click here to register for Bisnow's complimentary webinar on Thursday, March 19 at 10 am Pacific. 

Topics include:
Continuity of business planning
Reviewing lease agreements in case of business disruptions
How to create healthy, hygienic work and living environments
Strategies for resident and tenant communication

There will be time for questions.

U.S. Census Rental Vacancy Rates for Q4 2019: Portland ranks 6th Lowest, Seattle Ties For 21st

Of the nation's top 75 metro markets, greater Portland has the nation's 6th lowest rental vacancy rate while the Seattle metro area ties for 21st Lowest with Las Vegas.

The U.S. Census Bureau reported that the fourth-quarter 2019 rental vacancy rate for the Portland/ Vancouver/ Hillsboro metro area was 3.2%, a decrease of 1.5% from the previous quarter and an increase from 2.5% one year earlier.

Seattle/Tacoma/Bellevue's metro area vacancy rate was listed at 5.6%, up 0.5% from a year earlier and up 1% from the prior quarter.

The nation's lowest rental vacancy rates, by metro area: 

  1. Worcester, MA - 0.4%
  2. Bridgeport-Stamford-Norwalk, CT 2.5%
  3. Sacramento-Roseville-Arden-Arcade, CA - 2.7%
  4. Rochester, NY - 3.0%
  5. Minneapolis-St Paul - Bloomington, MN-WI - 3.1%
  6. [Tie] Columbus, OH and Portland-Vancouver-Hillsboro, OR (TIE) - 3.2%
  7. [Tie] Riverside-San Bernardino-Ontario, CA and San Francisco-Oakland-Hayward, CA - 3.3%
  8. [Tie] Hartford-West & East Hartford, CT and Salt Lake City, UT - 3.6%
  9. [Tie] Oklahoma City, OK and San Diego-Carlsbad, CA - 3.8%
  10. Fresno, CA - 3.9%

Average National Rental Vacancy Rate

The average national rental vacancy rate for Q4 2019 was 6.4 percent for multifamily dwellings of five or more units -- not statistically changed from 6.6% one year earlier, despite continuous delivery of multifamily units throughout the national market.

Year-over-year vacancy rates in the Western U.S. remained statistically unchanged.

Click to Enlarge
U.S. Homeownership Rate Falls
After falling to a 26-year low in 2016, the homeownership rate has rebounded and has increased slightly over the past year to 65.1%. Homeownership in the West has remained flat at about 60% from the end of 2018 to 2019.

Click to Enlarge

HFO Multifamily Marketwatch Podcast - March 16, 2020

COVID-19’S impact results in anti-eviction laws; Oregon Republicans’ walkout on cap-and-trade leads Governor Kate Brown to enact rules by executive order; and while housing costs rise in wealthy cities, economic growth concentrates in second-tier metros.

Listen to our latest podcast.

Read the text of this week's podcast:

As the number of COVID-19 cases in the US continues to grow, economic activity has slowed substantially for the service and tourism industries. A large number of workers who depend on significant events like South by Southwest or other major conferences as a substantial part of their yearly income are scrambling to find ways to pay their bills. Meanwhile, an even larger pool of service industry workers sees their hours cut, and tipped workers in many places are trying to survive on sub-minimum wage as customers avoid restaurants. The vast majority of these workers do not have paid time off, despite CDC guidance that workers should stay home for up to two weeks if they are sick. As a result, a movement is growing in cities across the US is pushing for local governments to protect these vulnerable residents from eviction. Outside the US, steps have already been taken to ensure impacted residents don’t lose their homes. In Singapore, the government has stepped in to ensure that renters who experience quarantine or discrimination due to the virus will not face eviction. And in Italy, the Deputy Economic Minister announced the suspension of all mortgage payments. In Miami-Dade County, the police department has temporarily suspended eviction activities. The cities of San Francisco and San Jose are working to advance new protections for renters, including a moratorium on evictions for people whose wages have been impacted by COVID-19. In Oregon, Portland Tenants United gathered 1,800 signatures on a petition asking state and local officials to suspend eviction proceedings for the duration of the crisis, regardless of whether renters can prove they lost wages due to quarantine. Portland City Council member Chloe Eudaly is among the signatories of the petition. On Thursday, Mayor Wheeler declared a state of emergency that, among other things, could enable the city to enact temporary rent control rules. As the outbreak continues, municipalities will be faced with growing numbers of vulnerable residents grappling with increasing economic precarity. Whether and how they address these issues could have longer-term economic impacts. CityLab – An Emerging Coronavirus Concern: Eviction

The City of Portland announced earlier this year that a second court had affirmed the 2035 Comprehensive Plan, which went into effect May 2018. The plan was challenged by the Multnomah Neighborhood Association, which objected to the city’s missing middle housing plan, also known as the Residential Infill Plan. The city plans to hold a hearing on amendments to the Residential Infill Plan April 9th – likely the final hearing where public testimony will be heard. A decision is expected soon after. The Comprehensive Plan was first approved in December 2017. Six appeals were filed against various parts of the plan, but the Land Conservation and Development Commission voted to reject all of the objections. In September 2018, the Multnomah Neighborhood Association brought their case to the Oregon Court of Appeals, which upheld the earlier LCDC decision, giving the neighborhood association 35 days to file an appeal with the State Supreme Court. The neighborhood association chose not to submit such a request during that time. The 2035 Comprehensive Plan remains in effect. City of Portland – Portland’s 2035 Comprehensive Plan Affirmed

The Portland Mercury reports that former Commissioner Steve Novick has endorsed Chloe Eudaly in this year’s city council race. Eudaly defeated then-incumbent Novick in a contentious city council race in 2016, but in his endorsement announcement, Novick praised Eudaly for following through on her campaign promises. He highlighted her work on tenants’ rights, as well as the Rose Lane project to speed buses through the central city. In his speech, Novick took swipes at Eudaly’s highest-profile challenger, former Mayor Sam Adams. He said Adams’s most significant accomplishment was the Arts Tax, which, as previously reported, is extraordinarily unpopular and has high administrative costs. Novick also accused Adams, who served as the Transportation Commissioner, of letting the streets rot. Along with Novick, Commissioner Jo Ann Hardesty, Metro President Lynn Peterson, Senator Jeff Merkley, and Congressman Earl Blumenauer have all come out in support of Eudaly’s re-election. Portland Mercury – Former City Commissioner Steve Novick Endorses Chloe Eudaly for Portland City Council.

In the aftermath of a bicameral Republican walkout in the Oregon State Legislature that killed 20 bills, Governor Kate Brown has issued an executive order enacting some parts of SB 1530, the cap and trade bill that spurred the walkout. Governor Brown’s order updates carbon reduction goals in line with SB 1530, aiming for a 45% reduction below 1990 levels by 2035, and an 80% reduction by 2050. Brown is directing state agencies to update building codes to prioritize energy efficiency. Also, her executive order addresses carbon reduction in gasoline, appliances, and food waste. Emissions will also be capped for the industrial, transportation, and natural gas sectors. In all, 19 government agencies will be tasked with reducing statewide emissions. Her plan for this emissions cap resembles the system of “allowances” outlined in SB 1530 – polluters will have to obtain permits for their emissions, and the number of available permits will decline over time. $5 million in emergency funding has been allocated to implement the executive order’s provisions. SB 1530 would have created funding mechanisms with the potential to raise hundreds of millions of dollars for implementation. Still, Governor Brown lacks the ability to achieve that level of funding through executive order. Senate Minority Leader Herman Baertschiger, who recently announced plans to leave the Senate at the end of his term, argued that Brown’s order would open the state up to costly lawsuits. But Brown counters that if Senate Republicans had stayed in the Capitol to complete their work during the legislative session, the order could have been avoided. Brown’s general counsel, Dustin Buehler, believes the Republican walkouts could make courts more sympathetic to the argument that the Executive Branch is the only state entity currently able to act on climate change. OPB – Gov Kate Brown Orders State Action on Climate Change

The Portland Business Journal reported last week on the potential effects of an ongoing pandemic on the real estate market. On the residential side, Windermere Real Estate chief economist Matthew Gardner believes that residential listings will slow because homeowners will be less comfortable allowing strangers into their homes for tours. And while historically low interest rates may entice buyers, stock market volatility may impact their ability to afford a down payment. Jacob Pavlik of Colliers International warns that construction costs could rise as contractors find themselves unable to access Chinese steel, which is generally less expensive than steel produced in the US. But a recent report from Cushman & Wakefield concludes that it is too early to determine the effects of the virus on the market. Researchers argue that the real estate market does not respond as quickly as the stock market to events like this, and that previous disruptive events have only caused short term negative impacts. PBJ – 3 Takeaways Regarding COVID-19’s Effect on Real Estate

Planetizen published a blog post from the Journal of Planning Education and Research, which examines the discrepancies between the reported median rent and the actual rent new tenants are paying in significant cities. Researchers found that figures for typical rents in an area varied across sources, and in many cases, those numbers were below what they found for new listings. For example, in 2018, the American Community Survey found that a typical two-bedroom unit in San Francisco rented for $2,017 per month. But in the most recent American Housing Survey, which looks at the entire San Francisco metro area, the median two-bedroom rent was found to be $1,722. According to the HUD’s Fair Market Rent data, however, a 40th percentile two-bedroom unit in the San Francisco Metro Area costs $3,121. At the same time, Zillow finds that the median two-bedroom unit in the city of San Francisco costs $4,197. There will be price discrepancies based on geography. In essence, figures for the city proper are unlikely to line up with those for an entire metro area, which may include suburbs of varying desirability. But the discrepancies can also be due to variation in existing leases vs. current asking rents. Data from existing leases can be impacted by policies like rent control, or factors like how long a tenant has been in a given unit. As a result, this information may not provide a renter who is new to a city and looking to rent an accurate picture of what they can expect to pay. JPER urges agencies like the Census Bureau and HUD to partner with online listing services like Craigslist and Zillow to create an accurate picture of current asking rents that can be used to determine funding levels for vouchers and assistance programs. This information could also be used by City Planners to address local housing issues. Planetizen – How Much Does It Cost to Rent an Apartment, Anyway?

BikePortland published a rundown of the recent transportation forum, where 20 candidates for a variety of City offices answered five questions on regional transportation issues. Candidates were asked how they would tackle rising greenhouse gas emissions, how they would make roads safer, whether they support the I-5 Rose Quarter freeway expansion, how they would address a decline in cycling, and how they would ensure low-income communities benefit from transportation investments. Several candidates argued that to reduce greenhouse gas emissions, the city should make transit free for all residents. Among the city council candidates that advocated for free transportation were Margot Black, Seth Woolley, Rachelle Dixon, Carmen Rubio, and Mingus Mapps. Candace Avalos, who is running for Amanda Fritz’s council seat, discussed her plan for a city-wide Green New Deal, which she describes as necessary for tackling emissions using an equity lens. Candidate answers varied more widely on the question of how to improve safety. While Tim DuBois and Keith Wilson focused on how to change driver behavior with policies like red light and speed cameras as well as distracted driving laws, Loretta Smith argued that road deaths should be treated as a public health epidemic. Sam Adams criticized PBOT’s lack of commitment to Vision Zero, but Commissioner Eudaly explained that ODOT controls many of the most dangerous roads. Commissioner Eudaly and Sam Chase were the only city council candidates who did not explicitly come out against the I-5 Rose Quarter Freeway Expansion. Mayoral Candidate Ozzie Gonzalez argued that the project still has the workforce and community redevelopment potential, while Sarah Iannarone called for congestion pricing, and Teressa Raiford outwardly opposed the plan. BikePortland – Metro: Region Is Failing to Meet Transportation Safety Goals

Finally, the New York Times reports that although the wealthiest cities in the US have continued to see their economies grow, income has become more concentrated in second-tier cities over the past three decades. While it is true that the difference in per capita income grew substantially between 2000 and 2018 since 1980, the top 5 metros have seen their share of aggregate national income slowly wane. Between 1980 and 2018, the top five cities have seen their share of national income decrease by 0.6%, while cities ranked between 6 and 10 have seen their share grow by 1.7%, and those ranked between 11 and 50 have increased by 3.1%. Upshot reporter Jed Kolko argues that this shift is occurring because the places getting richer are not getting bigger – the largest, wealthiest cities have built relatively little housing over this time, due to a combination of regulations and geography. As a result, their population growth has slowed substantially. While people at the top of the income scale can still afford to move to these cities, younger, less affluent workers have chosen to live in a larger number of less expensive metros. But these workers are not necessarily moving to the most affordable metro areas. Cities that fall outside of the top 250 metros by total income have seen their share of national wealth drop by 3.7% since 1980. NY Times – Yes, Rich Cities Are Getting Richer. But That’s Not the Whole Story

Thanks for listening – we’ll be back next week with a new edition of Multifamily Marketwatch. Be sure to check out our recent HFO TV interview with Perkins & Co Shareholder Trent Baeckl, who discusses recent updates to the Opportunity Zones program. HFO TV videos are on our website, our YouTube channel, and the HFO mobile app. And you can always stay up to date on multifamily news throughout the week by visiting or subscribing to the Northwest Apartment Investor blog.

Seattle Mayor Signs Emergency Order Halting Residential Evictions

Seattle Mayor Jenny Durkan signed an emergency order on Friday that temporarily halts residential evictions for nonpayment of rent. The emergency order will go now to the City Council, which can choose to ratify, reject, or modify it. Until the Council makes its ultimate decision, the eviction moratorium will remain in effect. The emergency order is in response to the ongoing COVID-19 epidemic, which is having a disproportionate impact on people who lack paid leave through their jobs. The order prevents landlords from issuing pay-or-vacate notices for nonpayment of rent. In addition, landlords cannot initiate eviction proceedings in court, or advance evictions that are already in progress. Read more.

Thursday, March 12, 2020

Mayor Wheeler Declares State of Emergency

Portland Mayor Ted Wheeler declared a state of emergency this morning in an effort to slow the spread of the COVID-19 virus. According to the city ordinance that addresses states of emergency, the city has the authority to "Establish rent controls and provide temporary or permanent housing by purchase, lease or otherwise and to enter into arrangements necessary to prepare or equip the living units for occupancy." The declaration also allows the city to coordinate with relief agencies, order evacuations, establish a curfew, or blockade streets. So far, none of these measures have been taken. The city has so far focused its efforts on assisting the homeless population, which may be particularly vulnerable. Read more.

HFO Ranks Among top 5 Firms for Total Commercial Real Estate Sales

HFO Investment Real Estate is pleased to announce that the firm ranked in the top five for commercial real estate sales firms in the Portland market for the  year ending 2019. HFO has consistently ranked among the top 10 since 2007.

The CoStar Power Broker Awards also recognize professionals ranging from office leasing, retail leasing, industrial leasing and sales.

Wednesday, March 11, 2020

REPORT: Steps for Multifamily Communities to slow the spread of COVID-19

The National Multifamily Housing Council has released a report for multifamily owners and management companies. COVID-19 Preparedness for Apartment Firms is a detailed 11-page summary for owners and managers to review. Note that you can download the report by clicking on the download link (arrow) in the upper right hand corner.

NMHC has also compiled a list of resources for apartment firms here. 

Tuesday, March 10, 2020

Washington's Four Pending Statewide Landlord/Tenant Changes

The Washington Multifamily Housing Association reports there are four landlord-tenant bills awaiting signature from Governor Mike Inslee as of the end of this year's session, which ends  Thursday, March 12.
  • Senate Bill 5165 prevents housing providers from discriminating against potential tenants based on their immigration or citizenship status. Landlords will no longer be able to require a social security number on a rental application or offer different terms to a tenant based on citizenship status. [Status: on Governor's desk awaiting signature.]
  • House Bill 2535 requires landlords to wait five days before assessing late fees, as well as requiring that housing providers work with tenants who pay rent with a source of income that comes from government service. In some cases, the tenant may not receive their income – such as social security – until the 3rd of the month. In these cases, landlords must allow for a later due date for rent payments to avoid late fees. [Status: on its way to Governor for signing.]
  • House Bill 1694 will enable tenants to ask housing providers for a payment plan if move-in costs are more than 25% of first months’ rent. Tenants can also request payment plans if last months’ rent is required. [Status: on its way to Governor for signing.] 
  • Senate Bill 6378 allows housing providers to refuse to accept cash payments, requires landlords to take community pledges for rent during the 14 days after an eviction notice is issued, prohibits evictions due to non-rent charges such as late fees or damages, and prevents attorney fees from being awarded when a tenant fails to respond to an Eviction Summons. [Status: on Governor's desk awaiting signature.] 

Portland Housing Bureau Advisory Bodies Need Members - Applications Due Friday, March 13

The Portland Housing Bureau convenes, encourages, and supports community dialogue and partnerships that inform strategic housing decisions. Currently, the Housing Bureau is looking to fill multiple positions on several of our advisory bodies.

Fair Housing Advocacy Committee (FHAC) is looking for 16 new members. FHAC advocates for the implementation of strategies that affirmatively further fair housing and hold the jurisdictional partners of Multnomah County accountable.

Portland Housing Advisory Commission (PHAC) is looking for 2 – 3 new members. PHAC advises on housing and homelessness policy, strategy, and resource issues, promote improvements generally within the Housing Bureau and the larger housing system as well as provides a forum for public input on housing and homelessness issues.

Rental Services Commission (RSC) is looking for 5 new members. RSC is the primary public forum for discussion of rental housing law and regulation, and renter-owner programs and services in the City of Portland.

To talk with someone about these opportunities or to receive assistance completing the application, please call 503-823-2375. Apply online at: http://bit.ly/phbcommissions.

Multifamily Construction Defect Litigation Update

Ball Janik shareholder Robert Wilkinson discusses trends in the construction defect market. Topics include inspections, the role of insurance, and how to best navigate issues as an apartment investor.

Portland, Ore. Rental Owners: Changes to Screening and Security Deposits Outlined Here

Local attorney Anna S. McCormack offered a presentation on Portland's new Screening and Security Deposit ordinances recently for the National Apartment Association. Here are her handouts, including forms provided by the Portland Housing Bureau. Total pages: 37. Here's the link where you can read and download this handout. [Note: the download button is in the upper right hand corner]

Monday, March 9, 2020

City Council to Hold Public Hearing on Residential Infill Plan on Thursday

The Portland City Council plans to hold a public hearing on the Residential Infill Plan amendments this Thursday, March 12th at 2pm. This could be the last public hearing before the Council votes on the final plan. Among the proposed amendments is one that would allow developers to build up to 6 units on single family lots if half of the units are affordable at 60% MFI. Read more.

HFO Multifamily Marketwatch - March 9, 2020

This week: Portland’s inclusionary housing policy appears to have slowed multifamily development; four bills in Washington State related to landlord-tenant laws await the Governor’s signature; development activity in Portland has slowed since the implementation of Portland’s inclusionary housing policy; and an update on some land-use ballot measures in California.

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The Daily Journal of Commerce reports that housing production was down by 5.9% in Portland in 2019 due to a combination of factors including rising construction costs, increased regulations, and an oversupply of new luxury housing units. The number of housing permits issued by the Bureau of Development Services peaked in 2017 when 5,993 units were permitted. In 2018, that number dropped to 4,887. While 2019’s permit rate was similar to 2016 and earlier, the region is still facing a lack of supply due to underbuilding in the recession’s aftermath. The DJC also notes that 2017 is the year the City’s inclusionary zoning requirement went into effect. Since then, the number of permit applications for buildings under 20 units has increased substantially, indicating the possibility that many sites are not being built out to their full potential.

Along with smaller buildings, there are a handful of large superblock projects in the pipeline. But the number of mid-sized projects has not returned to pre-2017 levels. Private developers also see increased competition from government agencies, as Metro and the City of Portland use bond funds to build affordable housing bond projects. The City is currently seeking an outside consultant to evaluate the first three years of the inclusionary zoning requirement. In essence, it is not yet clear whether the City plans to change the law if the report finds that the policy has a hand in slowing construction. DJC – Costs Escalating for Multifamily Development

The Federal Reserve announced Tuesday that it has decided to cut the benchmark interest rate by half a percentage point. The range now sits between 1% and 1.25%. In October, when the Fed announced a previous rate cut, Chairman Jerome Powell indicated there were no plans to cut rates again in the near term. But economic impacts from the Coronavirus spurred the regulatory body to action. In a statement last week, Chairman Powell indicated that the Fed might move to lower rates further if fears of a pandemic continue to weigh on economic activity. But lower interest rates do little to alleviate concerns of a rapidly spreading virus, and after a brief jump, the stock market continued trending downwards. Despite initial hopes that the cuts would stimulate the economy, in reality, the Fed’s actions do not fix supply chain, personnel, or business travel issues currently being faced by major companies worldwide. While some investors are hopeful that the Fed will cut interest rates further in March, if the impacts of the Coronavirus lead to a recession, the government will have little room to lower rates further. NY Times – Fed Makes Emergency Rate Cut, but markets Continue Tumbling

Willamette Week reports that Metro’s projections for ridership on the proposed SW Corridor MAX line may have been over-inflated. TriMet announced new ridership estimates last month, lowering the number of expected riders by 12%. Still, the line is expected to attract 37,500 new riders – the equivalent of an I-5 car lane’s worth of people. The project’s costs are estimated at $2.8 billion – it will be the most extensive line item on the $3 billion transportation measure that will appear on the November ballot. The revised projections are due in part to TriMet’s decision to reduce the number of park and ride spaces along the line – the most recent version of the plan includes 2,000 fewer spaces in total. The agency decided to eliminate these parking spaces due to cost and traffic concerns. Other MAX lines are also failing to meet ridership goals. The Yellow line is 4,700 daily riders short of its 2020 targets, while the Green Line has 12,000 fewer passengers than anticipated. The number of transit riders in the region has dropped by 6% since 2009, despite TriMet’s goals of doubling ridership by 2040. John Charles of the Cascade Policy Institute believes investment in light rail and streetcars is inefficient – he advocates for more investments in bus lines, which are “better, cheaper, and faster.” Public transit activists in the region have also argued that the newer MAX lines, including the Orange line, would benefit from better bus connections. Only 23% of SW Corridor rides are expected to connect with other transit options. Former TriMet planner Jim Howell believes that is an indication that the proposed line is not well-linked to the current system. Advocates also argue that there is a need for more housing density along the line, which like the Orange line, will primarily travel through single-family neighborhoods. Willamette Week – TriMet Downgrades What It Expects to Accomplish with Its Next Light Rail Line

The Washington Multifamily Housing Association issued a legislative update last week, detailing the four landlord-tenant bills that have passed both chambers of the state legislature. These bills are awaiting a signature from Governor Inslee – the other housing bills being watched by WMFHA this session were defeated. Senate Bill 5165 prevents housing providers from discriminating against potential tenants based on their immigration or citizenship status. Landlords will no longer be able to require a social security number on a rental application or offer different terms to a tenant based on citizenship status. House Bill 2535 requires landlords to wait five days before assessing late fees, as well as requiring that housing providers work with tenants who pay rent with a source of income that comes from government service.

In some cases, the tenant may not receive their income – such as social security – until the 3rd of the month. In these cases, landlords must allow for a later due date for rent payments to avoid late fees. House Bill 1694 will enable tenants to ask housing providers for a payment plan if move-in costs are more than 25% of first months’ rent. Tenants can also request payment plans if last months’ rent is required. Senate Bill 6378 allows housing providers to refuse to accept cash payments, requires landlords to take community pledges for rent during the 14 days after an eviction notice is issued, prohibits evictions due to non-rent charges such as late fees or damages, and prevents attorney fees from being awarded when a tenant fails to respond to an Eviction Summons. Washington’s legislative session is scheduled to end Thursday, March 12, 2020, at 5 pm. WMFHA – Legislative Update: The Final Push

Health experts in Portland are warning that the coronavirus outbreak could critically impact the area’s homeless population. Homeless residents are more likely to have health conditions that could exacerbate the effects of the virus without the sanitary conditions that could prevent it from spreading. The City does not offer sufficient hygiene facilities for its unhoused residents, where they can wash their hands, shower, or do laundry. The Coronavirus is particularly deadly for people over 65, and according to Dr. Brian Chan of OHSU and Central City Concern, many homeless patients have health issues typically found in people who are 10 or 20 years older. At a Community Conversation on Homelessness last week at the University of Portland, Mayor Wheeler said the county is working on a response plan for shelters, but that it has not yet been finalized. Over the past few years, homeless communities in Portland and San Francisco saw an outbreak of Shigella, a usually rare bacterial disease. HIV has also spread through these communities in recent years. Even after regular outbreaks of disease, public health workers are still struggling to identify where official recommendations fall short for unhoused communities. While hospitals have been discharging coronavirus patients to recover at home, homeless residents who are discharged from hospitals are significantly more likely to die. At the same time, there are not enough hospital beds in the area to enact an effective quarantine. Without a comprehensive plan to address these issues, homeless residents could end up one of the hardest-hit communities in the region. Oregonian – Coronavirus Could Hit Oregon Homeless Population Particularly Hard

As Portland residents are starting to receive notices that the annual $35 Arts Tax is coming due in April, Willamette Week reports that the arts organizations that initially lobbied for the tax are unhappy with how it has been implemented. Since the arts tax was passed, the largest arts organizations in the City, including Portland Center Stage, the Oregon Ballet Theatre, the Portland Art Museum, the Portland Opera, and the Oregon Symphony, have all seen public funding levels fluctuate. This year, both the Portland Art Museum and the Portland Opera will see lower levels of Arts Tax funding than they did before the tax’s passage in 2012. Scott Showalter, President of the Oregon Symphony, claims that the arts tax has made funding less reliable, despite hopes that it would provide arts institutions with a permanent funding stream, leaving them less reliant on philanthropy and ticket sales. And because so many Portlanders have grown frustrated with the tax, the City now employs a collection agency to go after residents who fail to pay three years in a row. While the City expected the $35 per resident tax to generate $12 million, even at its peak in 2016, the City fell short of its goal, raising just $11.46 million. Compounding matters, the City has used the arts tax to plug holes in public education funding – in 2017, 71% of the funds generated by the arts tax went to schools. Administrative costs, which were initially promised to stay below 5%, now average 9.9%. And as funding continues to dwindle, Metro has moved to dramatically increase rent at the performance centers that house the most significant arts organizations. The Symphony, Ballet, and Opera are all facing rent increases of at least 30% this year. Andrew Proctor, executive director of Literary Arts, expressed frustration at having to use meager city funds to pay Metro for ever-increasing rents. In his view, the City is essentially paying itself, rather than boosting the art institutions the tax was initially meant to serve. Willamette Week – Portland’s Leading Arts Organizations Hate the Arts Tax, Too

BikePortland reports that Metro has released its first-ever report on traffic fatalities and serious injuries. The report tracks severe and fatal injuries from 2014 to 2018, along with baseline numbers from 2011-2015, as well as target numbers established in the 2018 Regional Transportation Plan. The report looks at a variety of metrics, including the total number of road fatalities, the rate of deaths per 100 million vehicle miles traveled, the number of serious injuries, the price of severe injuries per 100 million vehicle miles traveled, and the number of non-motorized fatalities and serious injuries. The region met its 2014-2018 target in just two of 25 categories, and in almost every case, the actual performance over that time was worse than the baseline. For example, between 2011 and 2015, there were 62 fatalities. Metro had hoped that between 2014 and 2018, there would be 58, but in reality, there were 75. The number of serious injuries also jumped significantly, from a baseline of 458 between 2011 and 2015 to a total of 512 between 2014 and 2018. The rates of fatalities and serious injuries per 100 million vehicle miles traveled also increased, as did the number of deaths and severe injuries per 100,000 people, indicating that the increase in the number of injuries and fatalities is not strictly due to more people traveling around the region. The one bright spot in the report is that the number of serious bicycle injuries did improve slightly, from 33 in 2011-2015 to 30 in 2014-2018. Metro hoped that the number of motor vehicles involved in fatalities would decrease slightly every year, reaching 0 in 2035, but instead, there has been an increase over each of the last five years. If current trends continue, the number of fatalities could reach 140 by 2033. Metro hopes to use this data to inform its 2020 transportation measure, which will include safety improvements on city streets. BikePortland – Metro: Region Is Failing to Meet Transportation Safety Goals

Finally, Planetizen published a blog post detailing some of the land-use measures that were up for a vote on Super Tuesday. Most of the bills that passed or appear on their way to passing were on ballots in cities and counties across California. Voters in the City of San Francisco approved Measure E, a controversial plan to cap new office space based on whether the City meets its affordable housing goals. Also, in San Francisco, voters appear to have passed Measure D, a vacancy tax on retail space that amounts to $250 per linear foot during the first year a space remains vacant. The tax increases to $500 the second year and $1,000 every year after. In San Jose, voters approved a tax on the sale of properties worth over $2 million. The City hopes to use the expected $73 million annual revenue from the tax to fund affordable housing and homeless services. A handful of transit measures were defeated, including a sales tax in Contra Costa County and a similar tax to fund the SMART transit system in Marin and Sonoma Counties. In Redlands, voters defeated a bill that would allow for more density surrounding a new regional rail line. In Mountain View, residents rejected a measure that would have softened a 2016 rent control ordinance.  Planetizen – Super Tuesday Results for Planning and Land Use Votes

Tuesday, March 3, 2020

Fed Slashes Interest Rates - Range Now Sits Between 1% and 1.25%

Due to fears of a downturn due to the coronavirus outbreak, the Federal Open Market Committee lowered the benchmark interest rate to a range of 1% to 1.25%. On the heels of the announcement, the S&P 500 rose by over 1%. The most recent rate cut occurred in late October, when the Fed lowered the benchmark interest rate to a range of 1.5% to 1.75%. At that time, Chairman Powell indicated that the Fed did not have plans to cut the rate further in the near term, but recent stock market declines due to the coronavirus outbreak caused the Fed to reevaluate. Read more.

Monday, March 2, 2020

City of Portland Multifamily Permits Fall in 2018, 2019

The Daily Journal of Commerce reports today on data received from the Portland Bureau of Development Services. The DJC submitted a public records request for information on the number of permits for apartment and condo projects with three or more units between 2010 and 2019. The numbers indicate that after increasing by 44% between 2016-2017--when the City implemented its inclusionary housing requirements--the number of permits fell by 18.45% between 2017 and 2018 and fell another 5.2% between 2018 and 2019.

Experts tell HFO research that the number of multifamily permits is expected to fall again in 2020 despite ongoing in-migration to the area. Developers cite increasing expenses and obstacles to development as a major part of the problem.

The DJC provides the numbers they obtained here in this story.

Per Capita Multifamily Development Leads in Camas, Happy Valley and HIllsboro

The Oregon/OregonianLive reports that multifamily housing in Camas, Happy Valley and Hillsboro leads the regon, according to data from the Oregon Employment Department. Read more.

HFO Multifamily Marketwatch - March 2, 2020

This week: Details on Metro’s plans to refer a $248 million homeless services tax measure to the May ballot; Three years after imposing inclusionary zoning on developers, the City of Portland seeks third-party analysis; And the Oregon legislature comes to a standstill as Republicans walk out to avoid a vote on cap and trade legislation.

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The Metro Council has referred its homeless services measure to the May ballot, narrowly making the February 27th deadline. Metro had initially planned to impose a 1% income tax on individuals making over $125,000 or households making $250,000, but when the revenue estimate for this plan was revised downward to $135 million, the regional government decided to add a business tax to reach its $250 million goal. The measure now includes both a 1% income tax and an additional 1% tax on businesses with Portland-area revenues over $5 million. This decision comes on the heels of reports that Oregon businesses are still grappling with how much they will have to pay under the state’s new business tax. But the Portland Business Alliance, which took part in negotiating changes to the measure, appears to support the burden on businesses. If voters approve the tax measure, it will go into effect in 2021 and sunset in 2030 unless voters choose to extend it. Metro estimates that 90,000 taxpayers will be subject to the income tax, while 6% of Portland companies will be subject to the business tax. The revenue will be distributed in proportion with population to each of the three counties overseen by Metro. Economist Joe Cortright takes issue with this aspect of the plan – he explains in his City Observatory blog that the homeless population, particularly those who are unsheltered, are overwhelmingly concentrated in Multnomah County. He breaks down the amount each county would be given per unsheltered resident based on Metro’s distribution estimates, finding that while Multnomah County would receive $54,263 per unsheltered homeless resident, Washington County would receive $355,653. Cortright charges that by distributing funding based on total county populations rather than homeless people, the measure contributes to inequity. Still, $250 million per year would be the most significant amount of funding ever directed to homeless services in the metro area.

Seattle Mayor Jenny Durkan has decided against issuing a veto for the city’s new wintertime eviction ban, opting instead to let it move forward without her signature. The new law passed with a 7-0 vote, and just six votes are needed to override a mayoral veto. The mayor issued a statement saying she plans to spend an additional $200,000 on eviction prevention next winter, which she believes will be more beneficial to families facing eviction than the seasonal ban. The additional funds will be directed to the United Way’s Home Base Program, which estimates that it could be used to help 150 additional families. Durkan’s press release also included pointed statements indicating her frustration with the council – she urged city council members to, quote, “pass a bill to actually help people facing winter evictions.” Her statement also indicated that she is concerned about possible litigation, which could redirect funding from programs that support renters to city legal fees. The new winter eviction ban, which will run from December to March each year, will only apply to tenants earning below median income. Tenants who engage in criminal or nuisance activities could also still be evicted. 

Willamette Week reports that State Senator Shemia Fagan, who defeated incumbent Rod Monroe to win her East Portland district in 2018, is giving up her seat to run for Secretary of State. Former House Majority Leader Jennifer Williamson had intended to run for the Secretary of State position but pulled out of the race after a Willamette Week article questioned some of her campaign spending. Since her race in 2018, Fagan has received strong support from public employee unions, who have been looking for a candidate to replace Williamson. Fagan is one of a handful of candidates looking to fill the statewide office – her opponents in the race include State Senator Mark Hass, former head of Oregon’s Department of Consumer and Business Affairs Cameron Smith, and former Congressional challenger to Greg Walden Jamie McLeod Skinner. District 24, which is currently represented by Fagan in the Senate, includes large portions of East Portland as well as parts of Milwaukie and Happy Valley. In her race against incumbent Rod Monroe in 2018, Fagan positioned herself as an affordable housing and tenants rights activist taking on a landlord. She currently serves on the Senate Committee on Housing and Development, as well as the Senate Committee on Health Care.

The Portland Business Journal reports that the City of Portland is looking for an outside group to conduct a market study on its inclusionary zoning program, which went into effect February 2017. Internal reviews of the program have been conducted periodically throughout the first three years, but have failed to include holistic analyses of the program’s impacts on the market. The Portland Housing Bureau is working to define the scope of the market study before issuing a request for proposals. Local experts and economists have noticed a decrease in the number of applications for large projects since the law went into effect, as well as an increase in the number of projects under 20 units, which are not subject to the law. A permit report issued by the city in January 2020 found that over the past three years, applications have been submitted for 79 private projects with a total of 4,886 units – of these, approximately 520 units will be affordable. So far, just 55 affordable rental units have been completed under the program, including 24 studios, 20 1-bedrooms, nine 2-bedrooms, one 3-bedroom, and one 4-bedroom. Only 6 of the 91 projects subject to IZ, including both public and private development, are located in the Central City plan district.

CityLab reports that Democratic Presidential hopeful Joe Biden has become the latest candidate to release a housing plan. While the former Vice President claimed in the recent debate in South Carolina that he would, quote, “go after those people involved in gentrification,” his plan does not appear to address the issue of gentrification directly. Biden’s housing plan includes $640 billion in spending over a 10-year period, which would be directed to rental housing assistance, eviction protections, and support for municipalities that end exclusionary zoning practices. His primary challengers have all released housing plans that include a variety of strategies to deal with issues like displacement and affordability. Senators Elizabeth Warren and Bernie Sanders both plan to spend large amounts on building affordable housing units and increasing tenant protections. Senator Sanders’s plan also includes a national rent control program that would cap all rent increases at 3% per year. Likewise, Mayor Pete Buttigieg plans to direct funds toward building and restoring affordable housing, though his plan redirects money from existing programs rather than relying on new revenue sources. His plan also addresses vacancy issues in Rust Belt cities. Senator Amy Klobuchar’s strategy focuses on expanding existing programs, including LIHTC and rural rental assistance programs. Like his competitors, Biden plans to roll back the Trump administration’s changes to disparate impact laws and Affirmatively Furthering Fair Housing rules. But his plan does not indicate whom he believes the people involved in gentrification are, or how he would address gentrification and displacement directly.

The City of Tigard is planning to update its Washington Square Regional Center plan, which could entail turning the struggling retail center into a vibrant mixed-use community. The city has approved a contract with EcoNorthwest to evaluate changes to the policy, which could take up to 18 months to complete. The 827-acre area included in the study is home to the mall area as well as the RedTail Golf Center and additional parts of Beaverton, Tigard, and unincorporated Washington County. Several large stores in the retail area have closed recently, including Sears, Orchard Hardware, and Toys R Us. While the Tigard City Council plans to continue supporting the 940 businesses that operate in the area, Senior Planner Susan Shanks believes that plans should also include housing. The city intends to involve the community in any decisions about the area’s future by hosting outreach and community engagement events. Currently, approximately 14,278 people work within the boundaries of Washington Square, and the city hopes to continue supporting the businesses that contribute to the area’s high employment levels.

For the second legislative session in a row, Oregon Republicans have staged a walkout over a proposed cap and trade bill. This year, Republicans in both chambers are participating, and as the short legislative session comes to a close, $500 million in funding for crucial statewide programs hang in the balance. That funding was planned to go toward the state’s child welfare program, psychiatric hospital, and forestry department, all of which impact residents in both Republican and Democratic districts across Oregon. Additionally, House Speaker Tina Kotek had planned to use $120 million of that funding for homeless services and affordable housing. An additional $11.65 million had been intended to go toward emergency relief for victims of flooding in Pendleton. State Universities had hoped that lawmakers would direct $300 million for renovation and expansion programs. With Republicans gone, the chambers are unable to reach quorum, meaning these funds will go unallocated. Senate Republican Leader Herman Baertschiger argues that Governor Brown could still find a way to direct relief funding to Pendleton, but spokeswoman Kate Kondayen issued a statement saying that the Governor does not have $12 million in discretionary funding, and there is no rainy-day fund for emergency relief. If Republicans fail to return to Salem, these programs will go unfunded until the 2021 legislative session. Republican legislators are calling on their Democratic counterparts to send the cap and trade bill to a public vote, but Senate Majority Leader Peter Courtney says that his colleagues are unwilling to do so. Senator Courtney has also stated that he does not plan to send state troopers to retrieve Senate Republicans who have chosen to walk out.

Finally, the Economist published a special report on housing in January, which looked at the policy decisions and market forces that have led to housing unaffordability in many countries worldwide. Economist writer Callum Williams argues that where housing prices have skyrocketed past affordable levels, nations have made it too difficult to build new housing, created unwise incentives to encourage investment in the housing market, and failed to develop regulatory infrastructures to prevent housing bubbles. Callum cites figures from the Joint Center for Housing Studies, which show that between 1960 and 2016, median rents in the US increased by 61%, while median renter incomes grew by 5%. Before this period, housing bubbles were infrequent due to lower reliance on mortgage markets, transit improvements that allowed people to live farther from job centers, and a lack of land-use regulations. He traces the increasing importance of homeownership to housing programs established for veterans after World War II. Callum compares the US housing markets to those in other countries, finding that places like the US and UK, which instituted programs incentivizing homeownership at the expense of renter households, have seen unaffordability rise faster than countries like Germany that have a culture of renting. In countries where there has been a significant rise in homeownership, there has been a concurrent rise in NIMBYism, which makes it more challenging to build new homes. Callum concludes that keeping housing costs down requires better regulation of housing finance, improvements in transit systems to decrease travel times to job centers, and planning decisions that address the structural undersupply of housing.