Friday, November 27, 2020

HFO Director of Operations Receives Women in Real Estate Award

Donna Brunner, HFO Director of Operations
Donna Brunner

HFO's Principal Broker Donna Brunner has received a Connect Media Commercial Real Estate 2020 Women in Real Estate Award for the Seattle/Northwest region. Brunner was one of six women in the Pacific Northwest recognized for talent, drive, and fresh ideas. Connect Media received nearly 500 nominations from all sectors of the commercial real estate industry.

Donna Brunner brings more than 27 years of real estate experience to the HFO Investment Real Estate team. She is well-versed in multifamily and commercial leasing, residential sales, and new development.

She previously managed a portfolio of more than 15 apartment communities exceeding 1,000 units. She has also spearheaded the construction of a major shopping mall, including lease negotiations with anchor tenants. Prior to joining HFO in 2015, Brunner had spent nine years as an Operations Manager for Marcus & Millichap in Portland.

"These are just a few of the reasons we chose Brunner as one of the 2020 Women in Real Estate Award winners in Seattle & Pacific Northwest. Connect Media’s Women in Real Estate Awards honor the achievements and inspirational stories of women who have reached respected positions of leadership and play key mentorship roles for others." -- Connect Media

Brunner is always on the lookout for ways HFO can improve, and better serve its clients and staff.

Wednesday, November 25, 2020

Oregon Supreme Court to Review Portland Relocation Ordinance

A case involving an appeal to invalidate Portland's relocation ordinance has been granted review before the Oregon Supreme Court. 

Read more.

Oregon's Eviction Moratorium Proposal Draws Ire of Both Renters and Landlords

 

The Salem Statesman Journal reports that a draft bill to extend the eviction moratorium through June of 2021 has both tenants and landlords angry that the state is not providing enough relief. 

The extension proposal as well as providing funds for relief will not be taken up unless the legislature calls a remote special session in December. 

Read more.


Oregon Landlords Working to Extend Eviction Moratorium Through June

 

The Oregon legislature has proposed extending the state eviction moratorium through the end of June with a $100 million allocation of general fund money to support rental assistance programs and a new fund for landlords. Read more. 

Oregon Landlords Feel the Strain of Eviction Moratorium

 

Oregon landlords are trying to keep their head above water even as the legislature considers extending the eviction ban an additional six months. Read more.

Monday, November 23, 2020

Multifamily Marketwatch - November 23, 2020

Oregon's unemployment rate has dropped to 6.9%, but legislators fear recent lockdowns could spur a new round of layoffs; the state of Oregon will provide free debris cleanup to all homes and businesses, including mobile home parks, in areas impacted by this year's fires; investors nationwide are buying up student housing from struggling universities and converting it into market rate units for young professionals.



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Oregon’s unemployment rate fell to 6.9% in October, down from a high of 14.9% in April. But a sudden spike in COVID-19 cases statewide prompted Governor Kate Brown to announce a temporary freeze for bars, restaurants, museums, and other non-retail businesses, which some fear could result in another round of layoffs. 54,600 Oregonians have been out of work for at least six months, and restaurant industry jobs are down 20% from last year. A federal program that provided an extra $600 per week in unemployment benefits expired at the end of July, and the Pandemic Unemployment Assistance Program is slated to expire at the end of December. Oregon House Speaker Tina Kotek is calling on Governor Brown to convene a special legislative session under the catastrophic disaster provision, which was passed in 2012. She believes the state should spend $100 million to, quote, “keep Oregonians housed and stabilize the rental market.” But Senate President Peter Courtney believes the spike in COVID cases has made it too dangerous for legislators to return to the Capitol at this time. Governor Brown issued a statement that she would convene a session if lawmakers could agree on a list of priorities. Along with rental assistance, Kotek and Courtney both believe the state should do more to help businesses that are struggling due to the pandemic. 

Oregonian – Oregon’s Unemployment Rate Falls to 6.9%, but Coronavirus “Freeze” Could Bring Fresh Layoffs

OPB – Oregon Lawmakers Considering First-Ever “Catastrophic” Special Session Next Month 


Shortly after Governor Brown announced that there would be a full statewide freeze to control the spread of COVID in Oregon, Governor Inslee of Washington announced his own plan for a temporary shutdown. Since January, 2,500 Washingtonians have died of COVID-19, and like in Oregon the number of new cases across the state is beginning to spike. There were 2,286 new COVID cases reported the week ending November 13th, double the number of cases recorded two weeks prior. Much of that spread is due to community transmission rather than a single superspreader event. Governor Inslee’s order went into effect November 17th and will last until December 14th. Indoor bar and restaurant services are prohibited, though outdoor dining is still permitted. Inslee also shut down indoor movie theatres, museums, zoos, and acquariums and capped all retailers, including grocery stores, at 25% capacity. Religious organizations, offices, and personal services providers are also included in the 25% cap. The Governor’s order prohibits indoor gatherings with people from outside of one’s household and limits outdoor gatherings to 5 people. Childcare facilities, schools, and colleges do not fall under the order, and should continue using specific state guidance for schools. Inslee plans to direct $50 million to businesses that have been impacted by the pandemic.

OPB – Indoor Gatherings, Dining Banned in Washington as COVID-19 Cases Spike


Portland State University released new preliminary data showing that Oregon’s population continues to grow, though at a slower rate than in years past. Between 2019 and 2020, Oregon’s population grew by 0.7%. Deschutes is still the fastest growing county in the state – it saw a 2.1% increase in its population over the past year. The population continues to decline in some of the state’s most rural counties, and the number of deaths exceeded the number of births in 21 counties statewide. Washington County saw the highest population growth in the Portland metro area, at 1.1%, followed by Multnomah at 1% and Clackamas at 0.7%. Columbia County, just northeast of Portland, also saw its population increase by 1%. Harney County in Southeastern Oregon saw the biggest population decrease statewide at -1.1%. The state experienced net migration of more than 28,000 people over the past year.

Willamette Week – Oregon Still Growing but at a Slower Rate, New Portland State University Numbers Show

PSU Population Research Center 

The State of Oregon announced last week that it will provide free debris cleanup to all homes and businesses that have been impacted by this year’s wildfires, including mobile home parks. While the clearing of hazardous debris was already free, home and business owners have been left to deal with ash, rubble, burned vehicles and mobile home bases, damaged or fallen trees, and other difficult-to-clear objects. The state estimates that the full clean up effort will cost $621 million, but FEMA will cover most of the cost. Commissioners in Jackson County had written to the state asking for such a program, specifically urging state leaders to cover mobile home parks, which make up a large portion of the area’s affordable housing. Home and business owners must opt into the program, but will not be charged any up-front costs. In addition, contractors performing the work will not seek payment from insurance companies. To opt into the program, property owners must complete a Right of Entry form with their county. More information can be found on the state’s 2020 Oregon Wildfire Recovery website.

Oregonian – Oregon Wildfire Debris Cleanup Will Be Free for All; FEMA Extends Aid Application Deadline 


Oregon’s Occupational Safety and Health Administration issued new rules for employers to protect workers and customers from COVID-19. Most of the rules went into effect last Monday, though some will be phased in over time in order to give employers sufficient leeway for implementation. The rules are separate from Governor Brown’s temporary lockdown orders. Employers are now responsible for informing employees within 24 hours of a work-related infection, and must ensure that all employees, contractors, and customers wear a mask or other face covering. In addition, employers must provide masks to employees free of charge. If an employee chooses to wear a face covering where it would not normally be required, employers are not allowed to prohibit them from doing so. Employers are also required to incorporate employee feedback by December 7th in order to determine risks of exposure. They must also create an infection control plan by December 7th, and provide information and safety training to workers by December 21st.

Oregonian – What Oregon Workers, Employers Need to Know about New COVID-19 Safety Requirements Monday 


Despite recent setbacks for the SW Corridor MAX Line, Portland’s Bureau of Planning and Sustainibility still plans to move forward on upzoning SW Portland to prepare for future growth. TriMet General Manger Doug Kelsey believes the MAX project could still come back in the future, though the agency plans to suspend work on the project after the conclusion of the Final Environmental Impact Statement. But BPS will still be accepting public comments on its upzoning plan for the West Portland Town Center until December 3rd, and the Portland City Council will vote on the plan in the Fall of 2021. West Portland Town Center is the area surrounding the Barbur Crossroads, at the intersection of Barbur Boulevard, Capitol Highway, and Taylors Ferry Road. The Crestwood Neighborhood and part of the Multnomah Neighborhood fall within the boundaries of the Town Center plan. James Peterson, Land Use Committee Chair of the Multnomah Neighborhood Association, believes the upzoning project should be put on hold until funding is found for the MAX line project. Marianne Fitzgerald, vice president of the Crestwood Neighborhood Association points out that the area lacks critical infrastructure beyond the proposed MAX line – including stormwater systems, bike lanes, sidewalks, and adequate bus service. The plan would allow for multi-story apartment buildings, mixed use businesses, and retail hubs, and the city hopes that it will bring more affordable housing to the area.

Portland Tribune – City Plans for SW Portland Growth Despite MAX Line Failure 


In April of this year, Massachusetts enacted one of the first and most far reaching temporary eviction moratoriums in the nation in an effort to keep residents housed during the pandemic. Cities and states around the country followed suit, but in October Governor Charlie Baker allowed the moratorium to expire, stating that the longer the moratorium was in place the deeper in debt tenants and landlords would become. In anticipation of the moratorium’s October 17th end date, state legislators Mike Connolly and Kevin Honan introduced the Housing Stability Act, which would have extended the moratorium until the end of 2021 and provided economic support for tenants and landlords. But the bill languished in committee for months and was never brought to the floor for a vote, despite input from groups representing tenants and small landlords. The Housing Stability act was one of the boldest and most far reaching plans proposed in any state – it included a rent freeze that stabilized rents at pre-pandemic levels, a ban on foreclosures for homeowners and owner-occupant landlords, a mortgage deferment program for small landlords, and a state relief fund for landlords who owned 15 properties or fewer. But the bill faced significant headwinds both from some landlord lobbying organizations and from legislators opposed to the expansion of welfare programs. In addition, just before the eviction moratorium expired, Governor Baker announced a plan for a $171 million eviction diversion fund that would increase funding for the Rental Assistance for Families in Transition program. Still, state experts believe that without the moratorium between 60,000 and 100,000 Massachusetts residents could face eviction in the coming months.

Shelterforce – Massachusetts Showed States How to Create an Eviction Ban. Now It’s Backpedaling


Finally, the New York Times reports that over the past few years real estate investors have been purchasing student housing complexes from struggling universities and converting them into traditional market-rate units. In 2016, Pebb Capital purchased a housing property for students attending Yeshiva’s Cardozo Law School in Manhattan. Pebb renovated the former dormitory into furnished apartments and in 2020 sold the renovated building for nearly double what they had paid for it. A number of colleges and universities nationwide were already facing financial struggles prior to the pandemic, and the last several months have greatly exacerbated the problem. Experts expect that an increasing number of universities will choose to sell off assets, including student housing, in order to stay afloat. This year alone, Pebb has renovated two more student housing projects – The Cadence in Tuscon, Arizona and Monarch Heights in Manhattan. A large number of smaller colleges and universities have been forced to close over the past few years, and developers are now turning these properties into mixed-use campuses with housing and other amenities. Patrick Sentner, executive vice president at CBRE, argues that while occupancy is low due to the pandemic, marketing former dorms to young professionals is a smart financial move, because these tenants are more able to pay rent and less likely to cause wear and tear on a unit than typical student occupants.

NYTimes – As Occupancy Dwindles, College Dorms Go Beyond Students

Saturday, November 21, 2020

Call to Action for Oregon Rental Owners for Legislative Hearing Monday, November 23


Multifamily NW has issued a call for immediate action for Oregon Rental Owners.

At 10:00 am on Monday, November 23rd, the House Interim Committee on Housing has an informational hearing to review Speaker Kotek’s housing assistance proposal, which aims to extend the eviction moratorium and change several aspects of Oregon Landlord-Tenant law. This proposal was drawn up by a small group of individuals and advocates, with limited housing providers' input. No public testimony will be accepted at this meeting, which is why we need your voices to be heard by emailing your legislators and leaders of the House Interim Committee on Housing.
  
We are urgently asking you to send an email to your legislators [click here to find yours] as well as Chair Fahey, Vice-Chairs Rep. Meek, and Rep. Zika no later than Monday, November 23rd, at 8 am.
  
Please copy and paste the following text and send it to Rep.JulieFahey@oregonlegislature.gov, Rep.MarkMeek@oregonlegislature.gov, Rep.JackZika@oregonlegislature.gov, & [your Senator and Representative].
  
BEGIN TEMPLATE LETTER
  
Dear Legislators,
  
On Monday, November 23rd, the House Interim Committee on Housing has an informational hearing to review Speaker Kotek’s housing assistance proposal.  The proposal contains many components that will be harmful to the housing industry and fails to guarantee adequate rental assistance. Please consider the following points:
  
  • Without adequate emergency rental assistance, this proposal simply pushes the problem out another six months and deepens the tenants and housing providers' financial stress.  
  
  • The proposal provides that a tenant can decline to pay rent until July 1, 2021, by merely signing an “attestation” of hardship. The proposal continues to permit deferral of rent for virtually any reason, even if it is not causally related to the COVID-19 Pandemic or the Governor’s executive orders. There is no due process or legal mechanism to evaluate the validity of attestations.
  
  • The proposal re-writes other sections of the landlord/tenant law unrelated to the pandemic. Any proposal to resolve the moratorium should focus on pandemic specific issues, not unrelated agenda items.
  
  • The proposal includes wildfire-related issues which are being addressed by FEMA. Those displaced by wildfire should receive support but should not be addressed in this proposal.
  
  • Oregon anticipated the need to utilize private property under a state of emergency when it passed ORS 401.192 (3). That law would include protections and reasonable compensation if the real or personal property was utilized for the State's emergency actions. HB 4213 and this proposal sidestep existing law, putting the moratorium's burden on housing providers.
  
We encourage you to direct funding towards the emergency rental assistance system and target those households at risk of eviction.
  
Thank you,
  
  
[YOUR NAME]
  
END TEMPLATE LETTER

Shared by your HFO Team.

Wednesday, November 18, 2020

State of Oregon to Provide Free Fire Debris Cleanup for Homes and Businesses

A road leading into a mobile home park, with homes on either side

The State of Oregon announced Monday that it would provide free fire debris cleanup for all homes and businesses, including mobile home parks, in areas impacted by wildfires. The state estimates it will cost $621 million to provide this service, and a large portion will be covered by FEMA. Businesses and homeowners must opt in to the program by completing a Right of Entry form with their county. More information can be found on the state's 2020 Oregon Wildfire Recovery website. Read more.

Monday, November 16, 2020

Multifamily Marketwatch - November 16, 2020

Oregon Governor Kate Brown issues orders a pause for all Portland metro area counties; Planetizen reports on potential impacts of Biden win; federal unemployment benefits will expire at year end, and it appears unlikely that Congress will take action before then.



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Both Oregon and Washington have seen record spikes in the number of new COVID cases over the last few weeks, and leaders in both states are weighing options for controlling the spread of the disease before the holidays. In Oregon, Governor Brown has ordered a two week “pause” for the counties with the highest infection rates, including Multnomah, Clackamas, Washington, Baker, Union, Marion, Jackson, Umatilla, and Malheur. During the pause, capacity at restaurants, bars, gyms, bowling alleys, and museums will be limited to 50 people, including staff. The Governor is also asking residents to keep social gatherings to 6 people or fewer. The counties included in the pause all have infection rates of at least 200 per 100,000 residents, except for Washington and Clackamas Counties. The Portland Metro’s suburban counties had case counts just under the threshold, but Governor Brown expressed concern over their high daily case counts. Tricia Mortell, Washington County Public Health Manager, issued a statement urging the public to cooperate with the new rules. She emphasized that area hospitals are, quote, “on the verge of becoming overwhelmed.” Cases are also spiking in the Puget Sound region of Washington. The state health agency believes the recent surge is part of a trend that started in King, Snohomish, and Pierce counties in mid-September.

Oregonian – Entire Portland Metro Area Placed on “Pause” amid Coronavirus Pandemic, Gov Kate Brown Announces

Oregonian – Washington State Also Records a Spike in New Cases of COVID-19 


The low inventory of homes for sale in the Portland Metro Area continues to drive prices up. The average sale price in the region jumped to $516,500 in October, a new high. And unlike in other years, October did not appear to be the start of a typical winter slowdown. During the first 10 months of 2020, the average sale price in the region was 6.5% higher than in the same period in 2019. The median price now sits at $460,000. Even higher-priced homes are seeing increased interest, due to a lack of inventory. And while there were 7.7% more homes listed in October than September, during the first 10 months of this year new listings were down 7.5%. October’s inventory was 1.1 months, a record low for the region. In addition, the wildfires that swept through the state earlier this fall destroyed 4,000 homes, driving up the number of people looking for a new place to live. Historically low interest rates are also likely driving up regional demand.

Oregonian – Portland Homes Hit Highest Average Sale Price of $516,500 Due to Low Inventory, Pent-Up Demand


Despite the ongoing pandemic, a number of Portalnd Metro Area companies have reported good news in the last few weeks. Portland-based tech company Puppet, which provides software for managing data centers and large computing networks, announced that it is aiming for an IPO in 2021. Puppet would be the first Oregon-based tech firm to hold an initial public offering since 2004. Puppet employs 450 workers, the vast majority of whom are based in Portland. In addition, another Portland tech company is showing signs of growth. Bumped, a marketing technology startup that is pioneering a credit card rewards program that gives users fractional corporate stock shares, announced last week that it has raised $16 million in investments from venture capital firms. In a funding round two years ago, the company raised $14 million. Bumped employs 37 Portland-based workers. In Vancouver, Washington, the recent purchase of an industrial park could signal future growth. New Blueprint Partners and Rabina purchased the Vancouver Technolgoy Center for $35 million. They plan to convert the campus into best-in-class flex, industrial, and office space. According to Rabina president Josh Rabina, the buyers were drawn to the property due to the area’s population growth and large talent pool.

Oregonian – Portland Tech Company Puppet Sets 2021 Target for IPO

Portland Startup Bumped Raises another $16 Million for Credit Card Rewards that Pay Companies’ Stock

PBJ – Vancouver Campus Sells for $35 Million   

Following Vice President Biden’s victory in the presidential election earlier this month, Planetizen published a summary of what his win could mean for land use, transporation, and climate policies. Biden’s housing plan emphasizes the impact of land use policies on housing affordability, explicitly calling out the racist history of exclusionary zoning. He supports the HOME Act of 2019, which would require states that receive Community Development or Surface Transportation Block Grants to develop an inclusionary zoning strategy. Compared with his bold housing plan, Biden’s transportation agenda is less clear. While he frames his priorities around environmental justice, social equity, and safety, he also calls for large-scale investment in repairing roads, bridges, and highways. Although this focus on road investment does not necessarily indicate a strong commitment to limiting carbon emissions, the President-elect does have a $2 trillion climate change plan that includes overhauls of the nation’s electric grid and transportation industry. Importantly, however, all of his plans would require support from Congress, which could be limited by Republican opposition in the Senate.

Planetizen – What Biden’s Win Could Mean for Land Use, Transportation, and Climate


The Oregon Employment Department announced earlier this month that it hopes to pay recipients of unemployment assistance “waiting-week” benefits by Thanksgiving. The federal CARES act provided funding to the state earlier this year in order to help pay benefits out to unemployed workers immediately, rather than requiring them to wait one week before filing for assistance. But Oregon has been extremely slow to pay out this benefit to residents who have been left without a job due to the pandemic. Oregon is the only state in the nation that has not yet paid waiting week benefits. According to Employment Department officials, this failure to pay can be traced to the state’s obsolete computer systems. Initially, the state was told that it would have to repay the funds to the federal government if they are not distributed to workers by the end of the year. Now, however, it appears the federal government may show more leniency to the state as it works to distribute the money. Since the beginning of the pandemic, 600,000 Oregon residents have applied for unemployment benefits, and 380,000 have received assistance.

Oregonian – Oregon Hopes to Pay Jobless Workers’ Waiting Week Money by Thanksgiving


The Portland Tribune reports on the potential impacts of Mingus Mapps replacing Chloe Eudaly on the Portland City Council. Mapps is the former director of Historic Parkrose, and this was his first time running for office. He defeated Commissioner Eudaly with 56% of the vote, and is just the fourth Black Portlander elected to the council in its history. While Eudaly ran in 2016 and again in 2020 as a progressive activist focusing on disability and tenants’ rights, Mapps billed himself as a moderate. His priorities include police reform, homelessness, the ongoing pandemic, and changing the city’s commission form of government. During the campaign, Mapps received support from the real estate and development communities as well as the Portland Police Association and a number of neighborhood groups. After his tenure as director of Historic Parkrose ended in 2018, he worked briefly for Portland’s Office of Community and Civic Life. Commissioner Eudaly is in charge of the office, which has received an unusually large number of personnel complaints over the past year. Mapps cited his experience at the OCCL as the catalyst for his run against Eudaly. While Mapps has done a number of interviews with press and local affinity groups, he has not presented many concrete plans to address his top priorities. He told the Portland Tribune that he is looking forward to working with the other council members on solutions.

Portland Tribune – Mapps Win Shakes Up City Council


Last Tuesday a group of 150 community members rallied in Laurelhurst Park to block the sweep of a homeless camp. In April, the Homelessness and Urban Camping Impact Reduction Program, or HUCIRP, announced that it would be following guidance from the CDC and limiting sweeps of homeless encampments. But in June, the program changed its policy to allow for the removal of camps with 8 or more structures. Laurelhurst Park is currently home to around 100 campers – so far 15 have been referred to shelters. HUCIRP attempted to coordinate its sweep of the park with the opening of the Mt Scott Community Center shelter. HUCIRP has been removing trash from the park and installed portable toilets in August, but spokeswoman Heather Hafer argues that many campers at Laurelhurst are not in compliance with HUCIRP’s guidelines. Homeless resident JJ says that people feel safe in the park, and that local authorities have not handled outreach to the homeless community well. He adds that sweeps often cause residents to permanently lose their only possessions.

Portland Tribune – Portland Activists Decry Campsite Sweep at Laurelhurst Park


Finally, the New York Times reports that as expanded unemployment benefits and eviction protections expire at the end of the year, millions of Americans who have been thrown into poverty by the pandemic will be left without a safety net. 13 million Americans have been receiving payments through two temporary unemployment programs that are set to expire at the end of December, with no signs that the economy is likely to see significant improvement in the near term. As of October, 3.6 million people nationwide have been out of work for over six months. Expanded unemployment insurance, which provided an extra $600 to people who lost their jobs early on in the pandemic, expired in July. This benefit kept millions of people from falling into poverty, but since then many of those who were able to keep their heads above water are now facing tough choices about which bills to pay. And there are few signs that Congress will take action before the end of the year, despite bipartisan calls for more aid. As of mid-October, 9.3 million people were receiving support through the federal Pandemic Unemployment Assistance program, which will end after next month. But a number of Republican lawmakers have been hesitant to expand the program, due to a belief that unemployment assistance discourages recipients from seeking work. But there are currently very few jobs to apply for, and many people are being left without options. In addition, a large number of traditional stop-gap jobs in the retail and restaurant industries carry high risks of COVID infection. Aneta Markowska, chief financial economist at Jefferies, argues that a delay in benefits could cause irreversible damage to both workers and the economy.

NYTimes – Millions Face Loss of Jobless Aid: “Without It, I’m Dead in the Water”


New OSHA Rules Go Into Effect Today in Oregon

The state of Oregon in blue with the text "State of Oregon 1859" and the state seal in yellow.

Oregon OSHA has released new COVID-19 safety requirements that go into effect today for all employers statewide, though some of the new rules will be phased in. The rules are intended to protect employees and customers and limit the spread of the virus. The OSHA rules are separate from the temporary pause that goes into effect on Wednesday, November 18th. Under the new OSHA rules, employers must:

  • Notify workers within 24 hours of a work-related COVID infection
  • Require all employees and customers to wear face masks
  • Provide face masks to employees
  • Allow employees to wear face masks even when not required by law
  • Incorporate employee feedback in order to gauge risks
  • Create an infection control plan by December 7th
  • Provide information and training to employees by December 21st.
You can read more about the new rules here.

Friday, November 13, 2020

Portland's Small Landlords Struggling Due to Eviction Moratorium

a calculator with the word "rent" on its screen lying on a pile of paper.

 The Oregonian reports that local landlords in Portland are struggling to pay their mortgages and other bills due to eviction moratoriums at the local, state, and national levels. According to Multifamily NW, between 12% and 15% of renters have been unable to make full rent payments during the pandemic. A Portland State University survey found the situation more dire - 36% of the 460 tenants surveyed by PSU reported that they owed back rent. And the $60 million in renter assistance allocated by the state's Emergency Board has not been enough to cover the difference. Without additional assistance at the state or federal level, there could be widespread evictions at the beginning of 2021. Read more.

Tuesday, November 10, 2020

Voters Approve New Local Taxes in Oregon

Information courtesy of Stoel Rives. Contributing attorneys: Chris Heuer, Kevin Pearson, Laura Gritz, Melissa Roberts, and Michael Such. www.stoel.com. 

Portland-area voters approved several new local taxes in the November 3 election. Together with previously enacted taxes that either have become effective or will become effective in 2021, these new taxes will significantly increase the state and local tax burden in Oregon and especially the Portland area.

Multnomah County Preschool for All Tax (Multnomah County Ballot Measure 26-214)

Multnomah County voters approved a measure that imposes a new income tax on Multnomah County residents and non-residents with taxable income derived from sources within Multnomah County. The tax will become effective January 1, 2021, and initially will be imposed at a rate of 1.5% of taxable income over $125,000 for single filers and $200,000 for joint filers. This rate will increase to 2.3% effective on January 1, 2026. Individuals will also be subject to an additional 1.5% tax on taxable income over $250,000 for single filers and $400,000 for joint filers. When fully phased in, the aggregate top tax rate will be 3.8%. The proceeds of the tax will fund preschool services for qualified Multnomah County residents. The scheduled rate increase is subject to a “technical team” recommendation as to whether the increases are necessary to fully fund the planned preschool program.

The new tax will apply to all taxable income of Multnomah County residents, regardless of source. For non-residents, only income derived from sources within Multnomah County will be subject to the tax.  A previously proposed version of the preschool tax indicated that sourcing income to Multnomah County would likely be determined by applying rules similar to the state income tax sourcing rules applicable to non-Oregon residents.  If that approach is applied, we would expect that income attributable to nonresidents' services in Multnomah county would be sourced to the county and would be subject to the tax. Income attributable to nonresidents' services outside the county would be sourced outside the county and would not be subject to the tax. Also, if rules similar to the state income tax sourcing rules are applied, it is possible that special rules would apply for persons providing managerial services as officers and executives of businesses located in the county and owners of businesses with pass-through income sourced within the county.

Property Tax Measures

Several new property tax measures were also approved by voters in the Portland area. These include measures that will impose additional property taxes to finance public school modernization, library renovations, recreational programs, and park services.  The public school modernization measure authorizes the Portland public school district to issue up to $1.2 billion in bonds for school facilities and education investments. The measure is expected to result in additional property tax liability for affected property owners of $2.50 per $1,000 of assessed value. The library renovation measure authorizes Multnomah County to issue $387 million in bonds to update, renovate, and construct libraries across the county. The measure is estimated to increase the property tax rate by 61 cents per $1,000 of assessed value. The recreation program and park services measure authorizes the City of Portland to impose a five-year levy to operate the city’s park system, including improving water quality and wildlife habitat, controlling erosion, and planting and protecting park trees. The levy will be imposed at a rate of 80 cents per $1,000 of the assessed value of affected property and is expected to raise approximately $48 million each year of the five-year period.

Previously Enacted Changes

The newly enacted taxes are in addition to taxes that were previously enacted and either have become effective or will become effective in 2021. These include the new Metro tax to fund services for people experiencing homelessness or at risk of experiencing homelessness. This tax will become effective January 1, 2021, and will be imposed at a rate of 1% on individual taxable income over $125,000 for single filers and $200,000 for joint filer per year. The tax also will apply to the “business profits” of any businesses with gross receipts of more than $5 million per year—the details of how this tax will operate remain to be determined. Metro has announced plans to adopt administrative rules in fall 2020 and has said that it expects the rules to be similar to administrative rules for Multnomah County’s personal income tax, which was in place from 2003 to 2005, and the Multnomah County Business Income Tax.

Also, the Multnomah County Business Income Tax rate increased from 1.45% to 2.0% effective January 1, 2020. The new Oregon Corporate Activity Tax (CAT) also went into effect on January 1, 2020. The CAT generally is imposed at a rate of 0.57% on commercial activity from Oregon sources above $1 million. For a summary of the CAT, see Oregon Enacts New Corporate Activities Tax.

These new taxes significantly increase the total tax burden on Oregon's individuals and businesses, particularly those in Multnomah County. With the passing of the preschool tax in addition to the recently passed measures, the combined top state and local income tax rate for Multnomah County residents who earn over $250,000 will be at or near the highest in the United States. It is also estimated that businesses in Multnomah County will be subject to a more than 20% increase in overall taxes due to the recent tax changes.

New Metro Payroll Tax (Metro Ballot Measure 26-218) Defeated

Voters rejected Metro Ballot Measure 26-218, which would have imposed a new 0.75% payroll tax on employers who employ individuals in the Metro areas (most of Washington, Multnomah, and Clackamas Counties) to fund traffic, safety, transit improvements, and transportation programs.

Please contact one of the Key Contributors to this Alert if you have questions about the above taxes or any Oregon state and local taxes. 

Monday, November 9, 2020

HFO Multifamily Marketwatch - November 9, 2020

Portland Mayor Ted Wheeler won re-election; Oregon Democrats maintain supermajorities in both legislative chambers; Washington Governor Inslee is re-elected, and CityLab reports the potential impacts of climate change are increasingly important for real estate investors.



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Thursday, November 5, 2020

National Multifamily Housing Council Statement on Failure of California Rent Control Ballot Measure

Statement on Failure of Proposition 21

Washington, D.C. – Statement from the National Multifamily Housing Council on the failure of California's Proposition 21: 

For the second time in as many election cycles, the people of California have spoken loud and clear and defeated short-sighted rent control ballot measures. Proposition 21’s rejection is a victory for hardworking Californians who deserve real housing solutions that increase supply and bring costs down and a signal that voters recognize that rent control is not a sound solution for housing affordability. These challenges will only be solved by collaboration, not by politically-charged statewide ballot initiatives. Lawmakers, community leaders, and the housing industry need to work together to make housing affordability a genuine priority, especially at a time when a home is our safe haven.

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Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the trillion-dollar apartment industry. We bring together the prominent apartment owners, managers and developers who help create thriving communities by providing apartment homes for 40 million Americans. NMHC provides a forum for insight, advocacy and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, e-mail the Council at info@nmhc.org, or visit NMHC's website at www.nmhc.org.


Tuesday, November 3, 2020

Lawsuit Alleges State of Oregon Underreporting its Backlog of Unemployment Claims

According to the Statesman Journal, a new filing in a class-action lawsuit against the Oregon employment department Oregon’s alleges the state is understating how many unemployment claims are stuck in adjudication.

The lawsuit in Multnomah County Court, which was filed by attorneys from non-profit law firm The Oregon Law Center, was certified as a class action last week and could include over 100,000 individuals in the state and force the state to speed up its adjudication process. 

Read the full story. 

Monday, November 2, 2020

HFO Multifamily Marketwatch - November 2, 2020

This week: Oregon’s COVID-19 Emergency declaration is extended to January 2nd, 2021, the Portland area’s apartment sales have declined in 2020, but one analyst expects ongoing demand as Seattle-work-from-home employees move to Portland.



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