Governor Brown Extends Residential Eviction Moratorium to December 31, 2020

Governor Brown has extended Oregon's residential eviction moratorium until the end of December. The ban was originally implemented in April and was set to expire on September 30th. Last week Multnomah County extended its ban until January 8th and the City of Portland is expected to take similar steps this week. Residents must still pay or have payment arrangements to pay back due rent or face eviction when the bans expire. Read more. 

HFO Multifamily Marketwatch - Mid-Year Update

In this week's special edition, HFO Partner Greg Frick gives a mid-year update on the multifamily market for the greater Portland, Oregon metropolitan area. 

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City of Portland Plans Vote to Dissolve Unreinforced Masonry Policy Committee Amid Pandemic Emergency

The City of Portland plans to disband its URM committee at the council meeting on Wednesday, September 30th.

Joanna Papaefthimiou, the City of Portland Planning, Policy, and Community Programs Manager, emailed the following announcement on Friday: 

Dear URM Owners, Advocates, and Interested Parties:

Thank you for your patience awaiting an update on our work.  After much deliberation, the Portland Bureau of Emergency Management (PBEM) and the Bureau of Development Services (BDS) have agreed to dissolve the URM work group.  A resolution to accomplish this will be on the City Council agenda next week, on Wednesday, September 30.  

The ongoing pandemic emergency, the historic racial justice movement, wildfires, and the ongoing protests have forced us to refocus our resources.  It is now clear that PBEM must concentrate on pandemic response and recovery at least through 2021. Our bureau also has a role to play in the transformation of the City’s public safety systems.  Our colleagues at BDS are experiencing transformation of another kind, as they develop new systems to meet the needs of property owners and builders in a virtual format.  Neither bureau has capacity to lead a policy-making effort about unreinforced masonry in the coming year.  In the current economic climate, funds for seismic retrofits will likely be scarce for some time. 

As the current emergency makes clear, historically underserved communities continue to be disproportionately impacted by disasters of all kinds.  Black, Indigenous, and other communities of color are highly impacted by the current pandemic.  Many community leaders must now concentrate on the immediate well-being of their community, and on work for social justice and police reform.  

For all these reasons, we cannot proceed with the URM work.  The work group will be dissolved, and there are no plans to reconvene. Since the group only met twice prior to the pandemic and no decisions were agreed upon, there will be no final report. 

Earthquakes continue to pose a significant threat to the safety of Portlanders.  In the longer-term, PBEM will continue to work in partnership with the BDS and with other bureaus and public-sector partners to advance seismic safety in the built environment, including in publicly-owned infrastructure and in support for voluntary retrofits.  When we are able to focus on community recovery, seismic resilience will be a part of that strategy.  

In response, Angie Even, spokesperson for the URM group Save Portland Buildings, had this to say: 

We appreciate the City's acknowledgement of the pressing pandemic and economic issues currently facing our city. We hope the City will now pivot and invest in a holistic educational campaign that prepares the entire city facing a number of resilience challenges which include Portland's fuel tanks, fuel lines and water systems. Portland is far behind on an early warning system. That system would be an important accomplishment for Portland. 

HFO Brokers Rare 100% Value-Add Opportunity to National Investment Group

HFO Investment Real Estate (HFO) has sold the 164-unit Silverwood Apartments in Gresham, Oregon, for $30 million.  The asset was acquired by Gelt, Inc., a Los Angeles-based real estate investment and asset management firm. The 164-unit property is located at 4777 SW 11th St, in Gresham. 

“This property represents a rare one-hundred percent value-add opportunity in the highly desirable Gresham market,” said HFO partner Tyler Johnson. 

According to Gelt partner Jeff Harris, “Acquiring Silverwood Apartments during the COVID-19 crisis required us to be much more conservative with our projections for this asset. However, as a function of the good basis we bought the property for, a strategic business plan to capture significant value-add upside, and a desirable interest rate, we were able to forecast overall returns that met our desired yield requirements.”

Built in 1991, the garden-style community is situated on just under nine acres and includes 32 buildings. It is comprised of 159 two-bedroom units, three one-bedroom units, and two three-bedroom units. The property features a pool, playground, walking/biking trails, and a picnic area. 

Over the next few years, Gelt plans on making upgrades to the unit interiors to include new vinyl plank flooring, stainless steel appliances, new cabinet faces, backsplash, ceiling fans, and other cosmetic improvements. The firm will also rebrand the asset, create new signage, paint the exterior of the building, and refresh the pool and playground areas.

This buy marks Gelt’s second apartment community in Gresham. The company also owns Powell Valley Apartment Homes, a 228-unit property which was acquired approximately four years ago. 

“We are cautiously navigating this new economic environment, but we continue to have confidence in favorable multifamily fundamentals over the long term in markets with job and population growth,” said Josh Satin, Director of Acquisitions with Gelt. “Over the next 12 months, we are looking to acquire $250 million in assets.”

About Gelt, Inc.
Gelt Inc. is a regional real estate investment and asset management company that seeks to acquire properties in strategic markets in the Western U.S. Since the company's inception in 2008, Gelt has acquired more than 10,300 apartment units, RV and mobile home sites, self-storage units, and apartment units in development, valued in excess of $1.56 billion. The firm’s philosophy is to be a prudent steward of investment capital, to invest wisely and confidently in emerging, constrained markets. Gelt seeks appropriate risk-adjusted returns while achieving income from current cash flow and appreciation through superior performance of its assets.

Coming Coon to Portland Metro Apartments: Improved Garbage and Recycling Collection Services

Metro government is proposing changes to garbage and recycling collection for apartments and condos. The changes consist of:

1) Improvements to clarify and consistency of stickers and signs, and implementation of a color-coded system for garbage and recycling collection. 

2) An improved and more consistent garbage and recycling collection experience. 

Metro hopes to bring multifamily service to the same level as single-family residential homes, which have enjoyed superior service based on prescriptive code and rules. Read more. 

 

HFO Multifamily Marketwatch - September 21, 2020

This week: Portland now requires landlords to pay relocation fees to any tenant receiving a rent increase before next March; across the country, rent collections are falling, and the CDC’s eviction moratorium is being interpreted by judges in different states in completely different ways.

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IRS Postpones Some Tax Deadlines for Victims of Oregon Wildfires

 The IRS announced on Wednesday that it will extend the deadline to file business taxes and some individual taxes for victims of the Oregon wildfires and straight-line winds that began September 7th. Taxes with payments or filing deadlines after September 7th but before January 15, 2021 will be postponed to January 15, 2021. The extension applies to residents of Clackamas, Douglas, Jackson, Klamath, Lane, Lincoln, Linn, and Marion counties. Taxes eligible to be postponed include third quarter estimated tax payments as well as tax filings for people and businesses who have received a postponement to October 15, 2020. Read more.

News Roundup: 250 SF Tiny Houses in Sacramento Cost More Than a Luxury Home; Chicago Affordable Housing Program Fails

Here are some of the latest items from Up for Growth, an organization supporting affordable housing development. 

Chicago has determined its ordinance requiring developers build more housing for low- and moderate-income households created just 1,000 homes in 13 years as the city's affordable housing shortfall surged to nearly 120,000 homes. That ordinance, similar to Portland's Inclusionary Housing or Inclusionary Zoning regulations, requires developers to designate between 10-20% of new residential units as affordable. A task force is now recommending changing the definition of "affordable." Read more.

In Sacramento last year, officials announced a makeover for the Capital Park Hotel, a century-old building that would bring life to a dilapidated asset with newly renovated rooms for the homeless. The pricetag to redevelop the hotel is more than $445,000 per unit for 250 SF apartments--the same as the median home value for homes of more than 1,600 SF. While Gov. Gavin Newsome decried the cost as "insanity," nonprofits have shrugged it off as "just the reality." Read more in the Sacramento Bee. 

HFO frequently covers the issue of Affordable Housing. See more.

Portland City Council Approves Expanding Relocation Fee Ordinance to Cover Any Rent Increase

 The Portland City Council voted unanimously Wednesday on a measure to expand the existing relocation fee ordinance to cover any rent increase. Previously, property owners were only required to pay the fee if a tenant chose to move after a rent increase of at least 10%. The new rule is effective immediately and applies to any rent increase that is scheduled to go into effect between now and March 31, 2021. Tenants must provide written notice that they are unable to pay the new rent within 45 days of receiving notice of a rent increase. Read more.

Election 2020: Joe Biden's Tax Proposal

Joe Biden, the Democratic nominee for President, has laid out an ambitious tax plan that he hopes to implement should he be elected in November. According to the Tax Foundation, Biden hopes to increase payroll taxes as well as long-term capital gains taxes, eliminate the step-up basis, increase corporate taxes, and potentially do away with 1031 exchanges.

The potential elimination of 1031 exchanges for investors with annual incomes over $400,000 has caught the attention of real estate experts nationwide. Biden hopes to use the money generated by this proposal to finance childcare and eldercare initiatives. Past attempts to eliminate 1031 exchanges have been unpopular with lawmakers, however, and if elected president Biden would need the support of Congress to implement this change. In addition, Biden plans to tax long-term capital gains at the standard income tax rate of 39.6% for those earning over $1 million annually and eliminate the step-up basis. 

Biden’s plan also includes an increase in corporate taxes to 28% and imposing a 15% minimum tax on book income for companies with at least $100 million in annual net income. He also hopes to tax the profits of foreign subsidiaries of US firms at a rate of 21% and raise the tax on the top income bracket to 39.6%.

Researchers at the Wharton School estimate that Biden’s tax plan would raise $2.6 trillion. While individuals in the top 0.1% of earners would see a 3.2% increase in their share of federal taxes and the rest of the top 1% would see a .2% increase, all other income groups would see their share of federal taxes either stay the same or go down slightly.

In addition to his tax plan, Biden’s housing proposals also include changes to the tax code. Biden hopes to implement a renter’s tax credit to approve housing affordability. He also hopes to expand housing assistance for community workers and fully fund rental assistance programs, including Section 8. Biden supports the Legal Assistance to Prevent Evictions Act of 2020, which would give tenants access to legal assistance for eviction proceedings. Biden has also come out against local exclusionary zoning policies.

HFO-TV: Portland / Vancouver Metro Mid-Year Multifamily Market Update

HFO Partner Greg Frick offers a mid-year 2020 Multifamily Market Update for the Portland/Vancouver metro area.

 

Seven Insights for Landlords on the National Eviction Moratorium

 

Two attorneys provide their thoughts -- not legal advice -- on how landlords can best react to the national eviction moratorium. Attorney Jeff Watson said 

"We have gone from unprecedented to crazy. What concerns me the most is that this is now creating precedent for future administrations, future agencies, to use this as a rationale, to stop all sorts of economic commerce across the United States of America, any particular form of commerce, any type of interaction, any type of business agreement, (or) consumer agreement that they don’t like.” 

Read more. 

HFO Multifamily Marketwatch - September 14, 2020

This week: Portland Mayor Ted Wheeler announces plans to extend the city’s eviction moratorium and lower the threshold for mandatory relocation assistance payments. Atlanta and Chicago pause construction activity and the nation’s largest banks worry about outstanding commercial real estate loans.

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Vote on Expanded Relocation Assistance in Portland Scheduled for Weds., September 16th

Portland Mayor Ted Wheeler announced last Tuesday that he plans to ask the City Council to vote on expanding the relocation fee ordinance due to the COVID-19 pandemic. According to the Portland Mercury, a vote on this will be held Wednesday, September 16th. If it passes, landlords who raise the rent by any amount for the remainder of the year will be required to pay between $2,900 and $4,500 in relocation assistance if their tenants choose to move. If the City Council chooses to adopt it, the emergency ordinance would be effective immediately. Read more.

The National Eviction Ban is Hurting Rental Owners

“Everyone wants to point the finger and look at the Wall Street types that have invested in real estate, but that’s really a fraction of the market,” said Bob Pinnegar, CEO of the National Apartment Association. “Most of the rental housing we have in this country is provided by individuals who are simply running a small business and trying to stay afloat and survive.” Read more. 

CDC Releases Considerations for Multifamily Owners Including Populations at Increased Risk for COVID Complications

Multifamily housing poses a challenge during the COVID-19 pandemic due to potential for increased risk of exposure for residents and staff. 

The CDC has released guidance to help owners, managers, and operators of multifamily to work together with residents, staff, and public health officials to create a safe living environment and prevent the spread of COVID-19. 

Public health actions needed to reduce the spread of COVID-19, such as social distancing, can lead some people to feel isolated and lonely or can increase stress and anxiety. The CDC provides guidance in assessing and reducing exposure risks and resources for coping with stress in healthy ways. Read more.

Mayor Wheeler Announces Plans to Extend Eviction Moratorium, Lower Threshold for Relocation Assistance

In a press conference on Tuesday, Mayor Wheeler announced that he plans to implement a handful of emergency measures aimed at protecting renters during the ongoing pandemic. According to the Portland Housing Bureau, around 14% of renters in the city were unable to pay rent in July. Mayor Wheeler plans to issue an executive order to extend the citywide eviction moratorium to the end of the year. He will also put forward an emergency order that would require landlords to pay relocation assistance if they raise the rent by any amount. Currently relocation assistance is only owed when property owners increase rent by at least 10%. Wheeler will also allocate $500,000 to housing stabilization programs in East Portland. Last month, regional government agencies allocated $29 million in rental assistance to households that have been impacted by the pandemic. Read more.

Watch the full press conference here. 

HFO Multifamily Marketwatch - September 8, 2020

This week: The CDC issued a national moratorium on evictions for renters who can prove substantial loss of income due to COVID. Seattle rents decline for the third month in a row, and Portland home values continue to rise despite widespread unemployment.

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Portland Adopts Nationally Groundbreaking Plan for Residential Infill

Portland's Residential Infill Project (RIP) was recently called "The Best Low-Density Zoning Reform in US History" by the Sightline Institute, a Seattle-based nonprofit think tank that works with citizens and decision-makers seeking to advance long-term solutions to our region's most significant challenges.

HFO partner Greg Frick interviewed City of Portland Project Manager Morgan Tracy for an update on the recently adopted the Residential Infill Project, highlighting pieces of interest to the multifamily housing investor. 

Trump Bans Evictions Nationally Through End of the Year

President Donald J. Trump yesterday imposed a four-month moratorium on residential evictions. The move does not assist those landlords who must continue making mortgage payments. Read More.

Meanwhile, National Multifamily Housing Council President Doug Bibby had this to say in response:

We are disappointed that the Administration has chosen to enact a federal eviction moratorium without the existence of dedicated, long-term funding for rental and unemployment assistance. An eviction moratorium will ultimately harm the very people it aims to help by making it impossible for housing providers, particularly small owners, to meet their financial obligations and continue to provide shelter to their residents.

Not only does an eviction moratorium not address renters’ real financial needs, a protracted eviction moratorium does nothing to address the financial pressures and obligations of rental property owners. Without mortgage forbearance protections and protections from other property-level financial obligations such as property taxes, insurance payments, and utility service, the stability of the entire rental housing sector is thrown into question.

We agree with Secretary Mnuchin, Speaker Pelosi and Leader Schumer that policymakers need to come back and negotiate a strong rental assistance program. Furthermore, we believe renter protections are best left to state and local officials who better know their housing markets and can tailor protections to the varied and unique eviction laws and judicial processes across jurisdictions.

Seattle Mayor Jenny Durkan extended the Emerald City's eviction ban through 2020 on August 14th.

Oregon Governor Kate Brown extended the state foreclosure ban until the end of 2020 on August 31st. 

Oregon Governor Extends Foreclosure Moratorium to December 31

Oregon Governor Kate Brown has extended the state foreclosure moratorium until the end of 2020. Read more in the Oregonian.

(Note: this post has been corrected to reflect corrections made by The Oregonian. The state eviction ban for renters has expired.)