Tuesday, April 28, 2020

Q1 Portland and Seattle Rental Vacancy Rates Statistically Unchanged from Year Earlier

Greater Seattle is currently tied with Knoxville, Tennessee for 7th place among top 75 U.S. metro area rental vacancy rates with a vacancy rate of 3.7%. Portland ties Rochester, New York, at 17th with a vacancy rate of 5.2%. Both northwest cities vacancy rates are statistically unchanged year-over-year.

The average national rental vacancy rate for Q1 2020 was 6.6 percent for multifamily dwellings of five or more units -- statistically unchanged from one year earlier, despite continuous delivery of multifamily units throughout the national market.

Year-over-year vacancy rates in the Western U.S. decreased from 4.6% in Q1 2019 to 4.1%.

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U.S. Homeownership Rate FallsAfter falling to a 26-year low in 2016, the homeownership rate has rebounded and stands at 65.3%, up 1.1% from Q1 2019. Homeownership in the West has remained statistically unchanged. 

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Monday, April 27, 2020

HFO Multifamily Marketwatch - April 27, 2020

Harvard’s Joint Center for Housing Studies reports there may be shrinking demand for rentals due to the pandemic; Oregon and Washington governors reveal a framework for gradually lifting stay at home orders, and the Oregon Emergency Board approves $8.5 million in rental support for landlords.

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Harvard’s Joint Center for Housing Studies reported earlier this month that the COVID-19 pandemic could exacerbate a slowdown in rental demand that had already started before business closures began. According to research associate Whitney Airgood-Obrycki, rental demand increased significantly between 2004 and 2016 but started to decline in 2017 and 2018. In 2019, just 400,000 new rental households were formed. Airgood-Obrycki believes that demand will drop further as cash-strapped families double up to afford rent. While the last recession pushed many homeowners into the rental market, this one is hitting service and hospitality industry workers the hardest – groups that tend to already be renters. As of March, RentCafe was already seeing a 22% decrease in searches for new rentals. But while Class A properties are likely to see far fewer applicants for vacant units, the demand for affordable housing is expected to increase substantially. While overall rents may go down, the most vulnerable tenants may find it harder to compete for these units. Also, eviction moratoriums and stay at home orders could discourage some renters from moving in the short term. There may also be a higher-than-normal number of evictions once these orders are lifted, and tenants are expected to pay back rent. Airgood-Obrycki concludes that the impacts of the pandemic will largely depend on its duration and the quality of the policy response to it. Still, in all likelihood, it will exacerbate inequalities already present in the rental market. JCHS – Rental Market Likely Headed for a Slowdown

HousingWire reports that a new rule allows banks to postpone appraisals for residential or commercial properties for up to 120 days after a loan has closed. The law was proposed by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp, and the Office of the Comptroller of Currency. It went into effect on April 17. FHA, HUD, VA, Fannie Mae, and Freddie Mac loans are exempt – the rule only applies to banks that are overseen by the Fed, the FDIC, or the OCC. Loans for new transactions, as well as refinances, are subject to this change. Appraisers have expressed concerns about the rule, especially in cases where a property’s value may drop over the 120 days. With current conditions contributing to higher than usual levels of uncertainty, appraisers believe that such an occurrence is well within the realm of possibility. But regulators believe the rule will expedite the lending process and get money in the hands of businesses and individuals. The new law is temporary – it will remain in effect until December 31, 2020. HousingWire – Banks Can Now Postpone Some Appraisals until 120 Days After a Mortgage Closes

According to calculations by a New York investment analyst, Oregon may be getting the short end of the stick when it comes to Paycheck Protection Program funds. The Paycheck Protection Program is part of the CARES act, which was passed by the US Congress in response to the coronavirus pandemic. Ernie Tedeschi, of Everscore ISI, found that just 42% of eligible payrolls in Oregon were covered by the program, the third-lowest percentage of any state in the nation. Joining Oregon in the bottom three were New York and California, two other Democratic strongholds. Meanwhile, over 79% of small businesses in Nebraska, North Dakota, and Kansas received funding through the program. US Senator from Oregon Ron Wyden has pledged to press the Trump administration on why there were such significant discrepancies between red and blue states, and why Oregon, in particular, received so little. Wyden argues, quote, “Relief Congress passed to help must get distributed fairly without any partisan thumb on the scale.” Tedeschi’s findings were initially published in Bloomberg News. Willamette Week – Oregon Businesses Getting Stiffed by President Trump’s Small Business Relief Program

Both Governor Kate Brown of Oregon and Governor Jay Inslee of Washington indicated last week that while it is still too early to fully reopen businesses and services, they are working on frameworks to slowly ramp-up state economies. A draft of Governor Brown’s framework for “Reopening Oregon” was privately disclosed to the Oregonian last week, though it will not be finalized until the first week of May. Consistently with previous statements from the governor’s office, the draft proposal indicates that the state will not be able to ease restrictions until certain conditions are met, including a decline in the number of new COVID cases and increases in testing capacity and contact tracing. The framework indicates that the first phase, which would not be rolled out until at least late May, would allow some schools, youth activities, restaurants, gyms, personal services, religious gatherings, and non-emergency medical procedures to recommence. It would still require that people in at-risk groups stay at home and that all Oregonians minimize non-essential travel, and work from home where possible. But public health officials in the Portland area are less optimistic than Brown’s office appears to be – Dr. Jennifer Vines emphasized the need for continued social distancing to keep outbreaks localized. At the same time, Health Authority director Patrick Allen warned against operating in a “halfway place” that could cause a resurgence of the disease. Meanwhile, Governor Inslee announced that his stay-at-home order will not be lifted by May 4, the date he initially set in his executive order. But he did indicate that if the number of new cases continues to drop, he may begin to lift restrictions on elective surgeries, outdoor recreation, and construction activity. Like Brown, Inslee argues that the state cannot start lifting restrictions unless there is a significant increase in testing and contact tracing. He also advocates for more resources for mental health and homeless services.

As of April 27, low-income families in Portland can begin applying for $250 Visa gift cards to cover expenses. The City has allocated $1 million for cash assistance - $200,000 will go toward the gift cards, while the rest will be given to 19 local nonprofits that will provide up to $500 per household within their networks. The nonprofits serve a number of vulnerable communities, including people with disabilities, homeless residents, immigrants, refugees, domestic violence survivors, at-risk youth, and communities of color. In order to apply for the gift cards being distributed by the Portland Housing Bureau, residents must show how they have been impacted directly by the COVID pandemic. This can include job loss or a cut in hours worked, missed work due to childcare needs, increased childcare expenses, or having to take care of yourself or a relative who is sick with the virus. Only those who made 50% or less than the area median income prior to the state of emergency are eligible. On the scale provided by the City, this includes individuals making less than $30,800 per year, or 4-person households making under $43,950 per year. Applications are being accepted by 211info. Oregonian – Portland to Give $250 Gift Cards to Low-Income Families to Help with Expenses

The Oregon Legislature’s Legislative Emergency Board met last Thursday to vote on over $30 million for coronavirus response efforts. While more funding is likely to be available after the May 20 revenue forecast is released, the funding allocated in this session will come from the current two-year general fund and lottery budget. Among the eleven agenda items, the committee voted on were $12 million in rental assistance for people experiencing a loss of income. The support also includes hotel vouchers for homeless residents and $10 million in small business assistance for businesses with no more than 25 employees. Both of these items were approved with unanimous votes. Of the $12 million allocated for rental assistance and emergency shelters, $3.5 million will go toward hotel vouchers for homeless residents and farmworkers in need of quarantine. In comparison, $8.5 million will go to landlords on behalf of tenants who are unable to pay rent. The $8.5 million will be distributed to local jurisdictions based on a preset formula that takes into account both total population and level of need. Renters who make less than 50% of the area median income will qualify for these subsidies. House Republican Leader Christine Drazan asked whether this threshold will take into account lost wages since the crisis, or whether only those who made 50% AMI before business closures will be eligible. A legislative staff member indicated that these details will be determined in contract negotiations with continuums of care. The $10 million in business assistance will be distributed by predetermined agencies, which some of the members of the committee pointed out are primarily located along the I-5 corridor and in Bend. Local governments will have the ability to match these funds through existing emergency programs, and Speaker Kotek believes the total amount available will be close to $15 million. For all of the agenda items, the specifics will have to be hammered out by state agencies and the groups charged with distributing the funds. While a handful of committee members expressed concerns over this, all were in agreement that emergency actions are needed to ensure people and businesses across the state are provided with essential financial resources. Northwest Apartment Investor Blog – Oregon Legislative Emergency Board Approves $8.5 Million in Rental Assistance

The Oregon Occupational Safety and Health Division announced that it will begin conducting spot checks of workplaces to evaluate whether they are complying with coronavirus safety measures. According to the Daily Journal of Commerce, Oregon OSHA received 2,887 COVID-related complaints between March 2 and April 12, more than the total complaints typically received each year. Many of these complaints were from workers on large construction sites, who allege that social distancing practices are not being followed. On one job site, a worker with COVID symptoms was told he could be fired for not reporting to work. OSHA plans to conduct on-site inspections of 12 workplaces to ensure safety regulations are being followed. OSHA intends to prioritize investigations of employers that it deems most likely to continue failing to comply with the new safety rules.
DJC – Officials Starting to Check Out Oregon Workplaces

Finally, the LA Times reports that the high cost of building affordable housing in California is increasing at the same time that the demand for affordable housing is set to skyrocket due to the impacts of the coronavirus. The LA Times interviewed developer Ginger Hitzke, whose 10-unit affordable housing project in Solana Beach is now estimated to cost nearly $1.1 million per unit, making it the most expensive affordable housing project in the state. When Hitzke first proposed the plan in 2009, it was an 18-unit building that was expected to cost around $414,000 per door. In 2010, Hitzke was asked to reduce the size of the building and then waited four years for the City Council to approve the project. The City Council’s approval required Hitzke to build an underground garage with 53 parking spots under the 10-unit building. Over the next four years, she battled two separate lawsuits filed by a neighboring condo association. In 2019, construction costs increased again, bringing the price per unit to $1,073,214 and causing a funding gap. In December 2019, the state pulled its funding from the project because construction had not yet started. In March, Hitzke informed the City she wanted to back out of the development agreement. The City had promised the affordable, family-sized units to residents who had lost their homes in 1992 after a local motel was demolished. These residents were promised new housing by 1999, but many are still waiting. As business closures and layoffs continue due to the ongoing pandemic, the competition for the small number of affordable housing units is expected to increase dramatically. But California’s history of delaying and adding to the cost of affordable housing has kept the supply of these units artificially low. Governor Newsom has begun work on simplifying the process for developers to get funding for affordable housing, but this will do little in the short term to help vulnerable renters. They may find themselves without a place to live by the end of the year. LA Times – Affordable Housing Can Cost $1 Million per Apartment in California. Coronavirus Could Make It Worse

Where Major Candidates for Portland Area Elected Offices Stand on Housing

By Jennifer Shuch, HFO Research Analyst

As Oregon’s May 2020 primary approaches, a large number of local, regional, and national candidates have entered the race with housing as a top priority. Housing affordability, both for renters and homeowners, has become a flashpoint in political debate throughout the country.  Rent growth in Portland has begun to slow due to new units coming online. An increasing number of households are rent-burdened--defined by the U.S. Department of Housing and Urban Development (HUD) as spending more than 30% of household income on rent.

At the national level, public housing investment is well below historical levels. But the candidates vying for the Democratic nomination have all unveiled plans aimed at tackling affordability issues. Former VP and presumptive nominee Joe Biden has a policy calling for $640 billion in investments aimed at helping renters and homeowners.

In the Portland mayoral race, Mayor Wheeler’s reelection may hinge on whether city residents are as enthusiastic about his housing record as he is. An additional three city council seats are also up for election. Most hotly contested is the position held since 2017 by Chloe Eudaly, who campaigned on a platform focusing primarily on issues such as tenant rights and rent control. Metro —a government entity charged with overseeing regional planning, parks, and some major entertainment venues in Portland’s three-county metro area—passed a $652.8 million housing bond in 2018. Metro will ask voters again in May for up to $250 million for homeless services funding. There are currently three races for open Metro Councilor seats.

In light of all this, we have compiled an overview of candidates’ positions on housing issues in races for the City of Portland, Multnomah County, Metro, and the Democratic nominee for U.S. President.

City of Portland

Mayoral RaceTed Wheeler is up for reelection as Portland’s Mayor. Among his 18 competitors are leading contenders Sarah Iannarone, Teressa Raiford, and Ozzie Gonzalez. Both Iannarone and Gonzalez have released housing plans, while Wheeler’s website mainly touts what he sees as his most significant accomplishments so far.

On his website, Mayor Wheeler claims that he has more than doubled shelter capacity in the city, prevented 7,000 households from falling into homelessness, helped 6,000 people connect with transitional housing services, and built over 800 units of affordable housing.  His office has also touted the city’s progress in exceeding its housing bond goals of creating or preserving 1,300 housing units. So far, however, of the 1,424 bond-funded units, only two complexes with 314 total units are open and occupied as of March 2020.  While Wheeler’s campaign website emphasizes what the Mayor has accomplished over the last four years, it does not indicate what his plans are for the future if he’s re-elected. And there are differing opinions as to the validity of the Mayor’s claims.

Of Wheeler’s plethora of challengers, both Sarah Iannarone and Ozzie Gonzalez have released housing proposals, and Teressa Raiford limits herself to commenting on demolition and displacement in her platform statement. Iannarone’s housing plan calls for a five-year plan to end the housing state of emergency, which has been in place since 2015. She argues that the city needs a task force to assess housing inventory and resident needs. That city leaders must use this information to solve the problems that are persisting in the city’s housing market. Iannarone also calls for increased communication between city bureaus, nonprofit organizations, and private sector stakeholders. Her plan addresses the city’s taxation system – she advocates for recalibration to eliminate inequities between East Portland and other parts of town, as well as land value and real estate transfer taxes. Iannarone’s housing proposal also focuses on eviction prevention and tenants’ rights. She argues in favor of a tenants’ bill of rights, including the right to organize, and she believes that the city should fund the rental registration system and track eviction rates. Iannarone is in favor of using tourism tax revenue to create a rental subsidy reserve, and advocates for relegalizing SRO’s throughout the city. She is the only candidate calling for a moratorium on the development of self-storage facilities in mixed-use zones, centers, and corridors. She also seeks the reduction of costs and red tape for small-scale building projects.

Like Iannarone, Ozzie Gonzalez advocates for collaborating with stakeholders to tackle housing issues. His housing plan calls on the city to partner with managers, developers, and real estate firms to establish a housing inventory system. Gonzalez’s strategy focuses on development-side issues – he would like to see more incentives for producing a variety of housing types and an emphasis on transit-oriented development. He also believes the city should find new uses for vacant units.

While Teressa Raiford does not have a comprehensive housing proposal, her policy statement, which she calls The People’s Platform, calls for a moratorium on urban redevelopment. She believes demolitions should await the coming together of communities to decide what should be saved or replaced. She pushes back on “demolition, rezoning, and redevelopment,” which she believes serves only “big investors, large corporations, and the high-income earners.”

The Oregonian Endorsed Ted Wheeler for re-election in its Op-ed on Sunday, April 26th.

Portland City Council

Portland City Council Position No. 1, is currently held by Commissioner Amanda Fritz, who is vacating her seat. Of the nine candidates, Carmen Rubio, Candace Avalos, and Timothy DuBois are the only candidates that have put forth housing plans.

Carmen Rubio is assumed to be the front runner due to the large number of endorsements she has received from local elected officials. Rubio advocates for coordinating with state, regional, and federal partners to address housing affordability, and investing in homeless prevention and anti-displacement measures.  She argues that the city needs to increase density if residents want better transit and more affordable housing options, and she stresses the need for data-driven solutions to the city’s problems. In a survey conducted by Portland Tenants United (PTU), Rubio did not commit to advocating for an end to the statewide ban on local rent control policies. While she did not explicitly back the state law, she argued that she would need to be sure that increased rent restrictions would not reduce the availability of affordable housing.

Candace Avalos believes the city should fully fund rental assistance programs and collaborate with service providers to support people who may be on the verge of homelessness. She advocates for an innovation hub dedicated to finding new ways to build affordable housing without subsidies. Avalos also believes that the city should incentivize building affordable housing ‘at scale’ and advocates for streamlining the permitting process. Like Sarah Iannarone, she calls on the council to fully fund the Office of Rental Services, which oversees the rental registration program.  Unlike Rubio, Avalos has committed to overturning the state preemption of local rent control policies. Avalos argues that local jurisdictions must be allowed to use whatever tools may help keep residents housed.

Tim DuBois believes the city should do more to increase housing diversity and build more housing near transit and job opportunities. He also argues for a streamlined and expedited permitting process.

The Oregonian Endorsed Cermen Rubio for election in its Op-ed on Sunday, April 26th. 

Portland City Council Position No. 4 is also up for grabs this year, with incumbent Chloe Eudaly facing challenges from former Mayor Sam Adams as well as professor and prior public servant Mingus Mapps, Keith Wilson and four other candidates. Eudaly defeated incumbent Steve Novick in 2016, mainly by gaining the support of housing and tenants’ rights advocates. During her time as a commissioner, she has advocated for rent control and increased tenant protections. Eudaly’s staff devised the recent FAIR ordinances governing rental applications and safety deposits. As of March, Eudaly has not released a housing policy platform to indicate her priorities should she be re-elected.

Former Mayor Sam Adams has received an endorsement from Smart Growth Oregon, and his housing plan reflects the idea that more housing is needed at all affordability levels to make up for years of underbuilding between 2010 and 2018. While Adams supports the Residential Infill Plan, he believes that the city should also increase density along arterials and near transit stops. He also argues for expediting the permitting process for both affordable and market-rate projects. Adams’s goal, should he be elected, is to bring all stakeholders together to build a long-term plan to determine which type of housing is needed, and who should build it. He also wants to re-evaluate current design rules to make sure they meet city goals. Adams also intends to conduct regular surveys of renters and property owners to track affordability, rent increases, and demographic information, as well as property ROI and the amount an owner invests in updates and maintenance.  Adams is also in favor of ending the state preemption on local rent control laws and allowing local jurisdictions to establish individual policies.

Mingus Mapps has released plans on housing and homelessness, both of which emphasize the need for new housing units at a variety of income levels. His Ending Homelessness and Housing First proposal calls for a ban on price gouging in the rental market, as well as an additional 1,500 units of permanent supportive housing. He also believes the city should increase funding levels for short-term rental assistance to keep people in their homes when they may be experiencing temporary setbacks.  In his Affordable Housing for All plan, Mapps advocates for fee reductions, streamlining, and faster inspections to increase development activity in the city. He also argues that the city should protect renters’ rights and increase housing density.  In his public appearances, Mapps has argued that the City Council has neglected to bring all interested parties to the table to find the best solutions for housing and homelessness issues. In an interview with HFO, Mapps  agreed that the city has weaponized housing policy, and made it harder for smaller landlords to operate. He believes the city should do more to understand the consequences of policy decisions.

Also running for Position 4 is Keith Wilson, a University of Portland Business School graduate, world traveler, and President of Portland-based trucking company TITAN Freight. His housing plan focuses on the need for more housing units in the city. He advocates increased flexibility to allow for more SRO, micro, and cohousing units. He also argues for the conversion of single-family homes to multi-generational and multi-family residences and the reduction of development fees.
While an additional four candidates are running for Commissioner Eudaly’s seat on the City Council, none of these contenders have released a housing proposal.

The Oregonian Endorsed Mingus Mapps for election in its Op-ed on Sunday, April 26th. 

Portland City Council Position No.2. Commissioner Nick Fish passed away suddenly in December. Since then, 13 candidates have filed. Of those candidates, four have housing policy details outlined on their campaign websites, while an additional two mention housing but do not discuss the details of their housing plans. Loretta Smith, who ran against Commissioner JoAnn Hardesty in 2018, is the highest-profile contender in this race. In her brief list of city priorities, Smith states that she will address homelessness through increased supportive services and affordable housing.

Sam Chase, who has been the Metro Councilor for District 5 since 2013, touts his involvement in the creation and passage of the Metro housing bond as a major highlight of his career.  Chase’s housing plan includes implementing a plan originally championed by Nick Fish to create 2,000 permanent supportive housing units for homeless residents. He also believes the city should invest in creating new affordable housing, particularly in transit corridors, with infrastructure already in place to support these new units. He also believes that jurisdictions within the Portland Metro Area should be required to build adequate shelter beds and affordable housing.  Chase is in favor of lowering the rent increase threshold that triggers the relocation assistance requirement in Portland and overturning the statewide prevention on local rent control policies.

Another frontrunner in the race is Julia DeGraw, progressive organizer, and director of nonprofit lobbying organization PDX Forward. DeGraw’s housing plan, which she calls Housing for All, argues that developers have too much influence on city policy. She believes housing is a human right, and the city should fully fund rental assistance programs as well as the Rental Services Office and build profoundly affordable housing throughout the city. She also argues that the city should go further in outlawing no-cause evictions and do more to enforce recently passed tenant protections—DeGraw advocates for redirecting subsidies to affordable housing projects and community land trusts. Like Candace Avalos, she believes the city should set up an innovation hub to come up with new ideas for producing affordable housing. She also urges the city to explore a vacancy tax.

Also running is a longtime tenant advocate and former head of Portland Tenants United (PTU), Margot Black. Black advocates for lifting the state ban on rent control so that the city of Portland can enact what she refers to as ‘real’ rent control policies. She also advocates for increased tenant protections, including universal eviction defense, and a collective bargaining process for rental agreements. In addition to increased tenant protections, Black is in favor of a ‘housing wage for all’ and argues that the city should improve accountability for public and affordable housing providers.

Both Jeff Lang and James Davis’s proposals focus primarily on homelessness and include big ideas for turning under-utilized city sites as campuses for homeless residents. Jeff Lang argues that the city should turn the Veterans Memorial Coliseum into such a school, including dorms with locking doors, a medical clinic, teaching facilities, and offices for local nonprofits.  Meanwhile, James Davis argues that Concordia University, which will shut down at the end of the Spring semester in 2020, should be purchased by the city and operated as a housing-first project.  Both Lang and Davis also argue that the city should allow for a wider variety of housing types, including co-ops, SROs, tiny home villages, and intentional communities. Davis believes the city can facilitate this by creating a public bank for nontraditional lending.

The Oregonian Endorsed Sam Chase for election in its Op-ed on Sunday, April 26th. 

Other Local Elections

While candidates in the Portland City Council and Mayoral races are prioritizing housing, candidates in other local races have not yet released housing plans. The vast majority of candidates running for Multnomah County and Metro Council positions have not released many details on how they will address the region’s most pressing issues. But with Metro planning to release housing bonds and homeless measure funding to cities and counties throughout the region, how these candidates propose to address housing needs may become more critical than ever.

Multnomah County Commissioner District 3
Jessica Vega Pederson, who is running for Multnomah County Commissioner in District 3, has released a housing statement (not a plan). Pederson plans to work with community organizations to build coalitions with local government agencies, including Multnomah County, to address homelessness and affordable housing. She also believes the county should operate as a “one-stop-shop” for connecting residents with housing and social services.

Metro Councilor District 3
Gerritt Rosenthal has released a statement arguing that Metro should do a better job of evaluating data and listening to residents and developers when determining whether to expand the urban growth boundary. He also supports Metro’s housing bond.

Metro Councilor District 5
Two candidates for Metro Councilor in District 5 answered PTU’s survey about rent control and tenant protections, though they have not put out comprehensive housing plans. Candidate Cameron Whitten is in favor of lowing the statewide rent cap but doesn’t believe local jurisdictions should be able to set individual rent control policies, arguing instead for a stronger relocation ordinance in the city of Portland.  Candidate Chris Smith disagrees with Whitten, arguing that housing stability is a crucial part of planning for climate-related investments. Smith believes cities and other local jurisdictions should be able to establish regulations that help keep people in their homes.


Friday, April 24, 2020

National League of Cities Recommends Local and Federal Rental Assistance

The National League of Cities published an article by staffers Lauren Lowery and Natasha Leonard, who argue that cities should establish rental assistance programs for renters impacted by the COVID-19 pandemic. They suggest that cities use some of the increased funding from the CARES act that is being directed to Community Development Block Grants and Emergency Services Grants in order to fund rental assistance programs. Lowery and Leonard warn that without this assistance, low income and other vulnerable renters could face an "eviction cliff" once emergency orders are lifted. Hillsboro, OR is mentioned in the article as a city that has already allocated some funding to rental assistance - $100,000 of the Washington County city's $1.1 million crisis funding package is dedicated to helping renters. Read more.

Thursday, April 23, 2020

Oregon Legislative Emergency Board Approves $8.5 Million in Rental Assistance

The Oregon Legislative Emergency Board met last Thursday to vote on over $30 million for coronavirus response efforts. The board unanimously approved $12 million for rental assistance for people experiencing a loss of income and hotel vouchers for homeless residents. Of this, $3.5 million will go toward hotel vouchers for homeless residents and farm workers in need of quarantine, while $8.5 million will go to landlords on behalf of tenants who are unable to pay rent. The $8.5 million will be distributed to local jurisdictions based on a preset formula that takes into account both total population and level of need. Renters who make less than 50% of area median income will qualify for these subsidies. House Republican Leader Christine Drazan asked whether this threshold will take into account lost wages since the crisis, or whether only those who made 50% AMI prior to business closures will be eligible. A legislative staff member indicated that will be determined in contract negotiations with continuums of care. 

Wednesday, April 22, 2020

Landlords Bracing for Potential Financial Hit in May

The Daily Journal of Commerce reports that while most landlords in the Portland area saw the bulk of their tenants make rent payments in April, many are bracing for more to skip rent in May. According to HFO's Greg Frick, the majority of landlords saw between 8% and 15% of renters miss a payment, but in some buildings that percentage was closer to 30%. So far, this does not appear to be concentrated in specific neighborhoods  according to Frick, "it's all over the map." At the same time, transactions are largely on hold as banks shift their focus to small business loans. Read more.

Tuesday, April 21, 2020

Contact Your Congressional Representatives and Demand Protection for Apartments

The National Apartment Association (NAA) requested industry assistance in calling the critical services of apartments to our nation's congressional representatives.

It is imperative that Congress pass relief targeted relief to the rental housing industry and fix a number of problems in the CARES Act.

Please contact your Member of Congress and demand they protect apartments!

Our Congressional representatives need to:

  • Create an emergency rental assistance program for those who are impacted by the COVID-19 crisis and struggle to cover housing expenses.
  • Better tailor the CARES Act eviction moratorium provision and safeguard owners’ ability to effectively manage their communities.
  • Allow more housing providers access to mortgage forbearance and ensure fairness and flexibility in its terms. 
  • Provide financial assistance for property-level financial obligations such as property taxes or insurance payments and extend credit to multifamily mortgage servicers.
  • Expand the Small Business Administration’s Paycheck Protection Program to include all multifamily businesses.

A recently introduced bill would suspend rent payments. This is NOT what we need! 

Congress Needs to Protect Apartments! 

City of Portland to Provide Limited Funding for COVID-19 Emergency Household Stabilization Fund

The City of Portland will provide up to $250 per household from a $1 million emergency fund on a first-come-first served basis beginning 10 am on April 27th.

Individuals will need to provide proof of loss of employment income, dependent care or other hardship as a result of COVID-19 and be earning no more than 50% of the area median income. 

Individuals can obtain more information and apply beginning 4/27 at this link.

Monday, April 20, 2020

US Supreme Court Denied Petition to Appeal Seattle First-Come First-Served Law

The US Supreme Court announced Monday that it would not hear an appeal of a Washington state supreme court decision upholding a Seattle law that requires landlords to process tenant applications on a first-come, first-served basis. Seattle-based landlords sued after the law was passed in 2017 - a King County judge sided with the landlords, but in 2019 the Washington supreme court upheld the law. Because the US Supreme Court declined to hear the case, the law will stand. Read more.

Friday, April 17, 2020

WA Gov. Jay Inslee Extends Eviction Moratorium, Freezes Commercial and Residential Rents

Governor Jay Inslee announced Thursday that he is extending the state's eviction moratorium for an additional seven weeks. In addition, his order bans residential rent increases as well as commercial rent increases on businesses impacted by the COVID-19 pandemic. Washington Attorney General Bob Ferguson told the Seattle Times that rent increases during a public health emergency could violate the Residential Landlord Tenant Act and Consumer Protection Act. Governor Inslee is also prohibiting landlords from collecting late fees or other charges for nonpayment of rent, or charging rent for units that are inaccessible to tenants, such as seasonal or college housing. State Rep. Andrew Barkis of Olympia expressed disappointment over the governor's order - he has been working to gather support for a measure that would provide increased rental assistance to tenants. Read more.

Thursday, April 9, 2020

Fed Announces Additional TALF Measures – Includes CMBS

On April 9, 2020, the Federal Reserve announced additional measures to support the economy amounting to as much as $2.3 trillion in liquidity. Among their actions, the Term Asset-Backed Securities Loan Facility (TALF) will now include legacy commercial mortgage-backed securities (CMBS) as eligible collateral. Eligible CMBS securities must have been issued prior to March 23, 2020, while securities related to other asset classes are only eligible if they were issued after this date.

According to Lisa Pendergast, Executive Director of the CRE Finance Council, “The acceptance of existing CMBS securities is an important step in the recovery of our market and economy as the $4.5 trillion commercial real estate market represents some 18% of GDP, and thus will play an important role in the U.S. recovery from COVID 19. We know that TALF 1.0 had an immediate and positive impact on restoring stability to the CMBS market and that the recovery in the secondary market was imperative in order to restart CMBS lending and issuance.”

TALF Specifics for CRE
The TALF term sheet specifies the following for the commercial and multifamily real estate loan/securities markets:
  1. The underlying credit exposures for CMBS must be to real property located in the United States or one of its territories; 
  2. CMBS securities related to single-asset single-borrower (SASB) and commercial real estate collateralized loan obligations (CRE CLOs) are not eligible at this time. 
TALF provides three-year loans to investors of CMBS and other eligible collateral. Haircuts and other terms can be found on the Fed’s website

CREFC will continue to work with the Federal Reserve and Treasury to update them of the status of our markets and highlight the benefits of adding new issue CMBS, SASB CMBS, and CRE CLOs. To that point, CREFC will be sending a letter to the Federal Reserve and Treasury this morning advocating for the inclusion of CRE CLOs into TALF.

Wednesday, April 8, 2020

Multnomah County Chair Deborah Kafoury Weighs Changes to Eviction Moratorium

The Oregonian reports that Multnomah County Chair Deborah Kafoury is weighing changes to the county's eviction moratorium to bring it more in line with the state moratorium. Currently, the county's eviction moratorium requires tenants to alert their landlords on or before the first of the month if they are unable to pay rent. But the county has received feedback from community members who were unable to contact landlords or management companies prior to the first of April. The statewide order states that tenants must contact their landlords "as soon as reasonably possible." County officials are working to change the language to better reflect state guidelines. Read more.

Tuesday, April 7, 2020

National Apartment Industry Seeks Additional Support for Residents, Rental Owners and Operators

The National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) called on lawmakers today to act, requesting financial assistance to the nation's 108 million renters and the 17.5 million workers the industry supports.
Read their joint letter to Congress here. 

Oregon Sees Some Rent Growth in March, but Impacts of COVID Not Yet Reflected in the Data

RentCafé published its March rent report for Oregon. Many parts of the state are continuing to see modest year over year rent growth, but rents in the coming months are likely to see more of an impact from the COVID-19 pandemic. Year over year, Oregon City saw the strongest rent growth at 7.4%, followed by Bend (6.5%), Albany (6.2%), and Milwaukie (5.8%). In Portland, rents grew 3.2% year over year. Lake Oswego, still the most expensive city in the state for renters, saw the smallest year over year increase at 0.9%. Read more.

Federal Government Doles out $2 Trillion Stimulus for COVID-19, Multnomah County May Get $0

The Portland Tribune reports that although Multnomah County has been leading the charge against COVID-19 in the Portland area, the stimulus package may exclude it from funding. Read more.

Monday, April 6, 2020

The Multifamily Lending Environment During COVID-19 with AMF Capital Director Tim Steele

HFO has a video chat with AMF Capital Director Tim Steele for the latest on the Multifamily lending environment. 

Multi-Housing News: U.S. Renters May Need $12 Billion in Monthly Support

In a story this morning, Multi-Housing News summarizes report information from Amherst.

"Renters across the U.S. may require $7 billion to $12 billion each month in temporary assistance over the next three to six months as the coronavirus puts a deep freeze on the economy," according to a new report by data and analytics firm Amherst Capital Management.

Thursday, April 2, 2020

HFO Launches COVID-19 Information Hub for Multifamily Owners/Investors in Oregon and Washington

HFO is pleased to announce the launch of its website hub for multifamily owners to locate resources and information regarding multifamily owners best practices for facing the COVID-19 pandemic. New resources will be added continuously. Please check back often. Click here to access the link.