Oregon Governor Kate Brown Calls Special Session on Evictions as Tenants Push for Moratorium to June 2023

Oregon Governor Kate Brown has announced a special session for December 13. The governor is hoping to provide $100 million to transition from large-scale rental assistance to long-term renter protections, including eviction diversion strategies or assistance with legal representation with tenant outreach and education. Multifamily NW is not in favor of a special session and would prefer the state do as promised by cutting checks to Oregonians in need. 

Tenant groups have been pushing for a moratorium through June of 2023.

Read the story. [No subscription required.]

Baltimore Sun [Opinion] Affordable Housing Policy Shouldn't Be Left Up to Local Leaders

Baltimore land use and zoning attorney Tom Coale criticized the decentralization of housing policy, claiming it favors the housed.

In Maryland, a study by the Department of Housing and Community Development indicated a current shortage of 85,000 units of affordable apartments, with an additional 97,200 families eligible for affordable housing expected to move to the state by 2030. 

He called on the state legislature to expedite the construction of housing units to prevent the worsening deterioration of housing conditions. 

"Unfortunately, housing policy isn’t set in our state capitol, but rather in the county seats and city halls that have been delegated that power by the state. And, in doing so, local leaders accountable to those who already live there must decide whether they will pass laws to benefit those who don’t. By operation, the priorities of the housed are elevated over those of homeless people."

Read the full piece in the Baltimore Sun. 

Sold! 51 Units in SE Portland - 20 on Hawthorne

 

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HFO is pleased to announce the sale of 20 on Hawthorne. This 51-unit multifamily building in one of Southeast Portland's most vibrant neighborhoods is a mixed-use asset offering first-floor retail. Congratulations to Tyler Johnson and the rest of the HFO team! Call our office for additional details on this sale.

Sold! 4 Units in North Portland, Oregon

 

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HFO is pleased to announce the sale of 3026 N. Williams. Congratulations to brokers Todd Tully and Jack Stephens and the rest of the HFO team!

Report: Washington State Economy Beats Projections

In January the 2022 Washington legislative session will convene to write and pass a supplemental budget. That task will be easier with the good news that there has been a steady uptick in state revenues throughout 2021.

Last week the State of Washington Economic and Revenue Forecast Council projected revenue collections for the 2021-2023 budget cycle are nearly $900 million above the original forecast, and projections for the next two-year cycle (2023-2025) jumped by more than $965 million.

Friday's meeting was the final forecast before Governor Inslee releases his draft budget proposal before January 10th when the session begins. Budget leaders in both the Washington State House and Senate will release their own proposals. 

Seattle Received more than 1,300 Federal Housing Vouchers - So Far 10 People Have Used Them

The Seattle Times reports that three Seattle-area housing authorities received hundreds of vouchers to get people off the street and into housing, but six months later, only 10 have been used. Read the story.

HFO Multifamily Marketwatch - November 22, 2021

This week: U.S. vacancy rates and rents break records, multifamily housing construction rose in October, and Oregon toys with extending the eviction moratorium once again.

Listen to our latest podcast.

Home Construction Backlog Surges, Worsening Shortages, Even as Multifamily Starts Increase

Highlights:

•     Housing starts fall 0.7% in October
•     Single-family starts drop 3.9%; multi-family up 6.8%
•     Building permits rise 4.0%; single-family gain 2.7%

WASHINGTON, Nov 17 (Reuters) - U.S. single-family homebuilding tumbled in October while the number of houses authorized for construction but not yet started jumped to a 15-year high, underscoring the disruption to the housing market from an ongoing shortage of materials and labor.

Though the report from the Commerce Department on Wednesday showed an increase in permits for future homebuilding, the rise was concentrated in the volatile multi-family housing segment. This will do little to alleviate an acute shortage of houses on the market, which has led to record annual gains in home prices.

"Residential housing construction activity continues to flounder," said Christopher Rupkey, chief economist at FWDBONDS in New York. "There are zoning problems, higher land costs, a lack of labor, and inflation has inflated the cost of raw building materials."

Single-family housing starts, which account for the largest share of the housing market, dropped 3.9% to a seasonally adjusted annual rate of 1.039 million units last month. The fourth-straight monthly decline pushed starts to the lowest level since August 2020. Homebuilding fell in all four regions, with large decreases in the Northeast, Midwest, and West.

Permits for buildings with five units or more surged 6.5% to a rate of 528,000 units. Housing completions were unchanged at a rate of 1.242 million units. Single-family home completions dropped 1.7% to a rate of 929,000 units.

The stock of single-family housing under construction increased 1.4% to a rate of 726,000 units last month, the highest since May 2007. Multi-family homes under construction rose to the highest level in more than 47 years.

Over time the housing backlogs and more inventory could help to bring more homes on to the market and cool the house price inflation, which has sidelined some first-time buyers. A lot will, however, hinge on the supply of building materials and other inputs as well as labor.

"The recent slowdown in project completions has limited home sales in new communities," said Mark Vitner, a senior economist at Wells Fargo in Charlotte, North Carolina. "That said, the growing backlog of projects should keep builders busy for the next couple of years."

Source: Reuters. Story by Lucia Mutikani. Read full story.

Headline Roundup: Rent Control in St. Paul Minnesota Halts Construction and Worsens Crisis, Sending Politicians and Bureaucrats Scrambling

News reports and editorials are reporting on the chaos caused by the implementation of rent control in St. Paul.

On November 2nd, St. Paul voters approved a ballot initiative limiting rent increases to three percent annually without exemptions for new construction or inflation, making it the strictest rent control ordinance in the nation. City Mayor Melvin Carter III is now considering amending the bill as developers begin to halt construction and investors pull out from projects that were already underway. 

Some are arguing that Mayor Carter did not do enough prior to the vote to inform residents of the implications of rent control. Many St. Paul residents are unclear about the specifics of the new ordinance, such as the implementation date and whether or not the bill can still be amended.

Star Tribune: Rent control vote creates St. Paul mess. Developers halt projects as confusion surrounds the strict ordinance and the approval of the rent control bill creates confusion among residents and policymakers. 

Las Vegas Review-Journal: Rent control backfires in St. Paul [Editorial] Historical evidence demonstrates that rent control fails to address the root cause of housing affordability issues. What we're seeing in St. Paul is no different.

National Review: St. Paul Rent-Control Initiative Backfires, Unleashes ‘Chaos’ in Housing Market. Democratic leaders are already seeing the harmful implications of the new ordinance. Now, they're trying to find solutions.

Reason: Developers Halt Projects, Mayor Demands Reform After St. Paul Voters Approve Radical Rent Control Ballot Initiative. St. Paul's rent control bill does not include exemptions for new construction, causing a number of developers to halt projects.

Star Tribune: Rent-control flip adds insult to small landlords' injury. [Opinion] Small property owners are disproportionately impacted by Mayor Carter's decision to support rent control.

Roundup source: Growing Homes Together https://www.growinghomestogether.org

Forecasters: Jobs to Grow Fastest in Bend, Portland

A recent Oregon Employment Department report made headlines this week as state forecasters indicated job growth in central Oregon will soar 18.5% in the coming decade. Portland metro ranks second at 18.1% with the mid-valley coming in a close third with growth projected at 17.3%. Read the story. [No subscription required.]

Roundup: Seattle Recovers, National Occupancy Rates and Rents Break Records

Yardi Matrix reports:

• In the Puget Sound area, Rent rose to $2,046 in September, a 2.0% uptick on a T3 basis and 40 basis points above the national rate. Through Q3 2022, nearly $2 billion in multifamily deals have closed, and 26,470 apartments were underway as of September. Click here to download the full report. 
  
  
• Nationally, U.S. asking rents increased by $23 in October to a new record high, driven by an ongoing surge in demand that began last spring. 
  
  
• Average U.S. occupancy rates also broke records, reaching a high of 96.1 percent in September. 

The Portland Housing Bureau announced:

• Metro government has approved seven "concept endorsements" for funding from the regional affordable housing bond. The request is for $88.6 million in Metro bonds. The seven projects would add 805 new units and retain affordable status for 89 existing units for a total of 894 units. The projects would likely be completed in the next few years.  

Sold! 7 Units in St Johns

 

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HFO is pleased to announce the sale of The Edison, 7 units in the St Johns neighborhood of North Portland. Congratulations to Lee Fehrenbacher and the rest of the HFO team. Please call our office for additional details on this transaction.

Oregon and Counties Receive $525 Million for Housing Assistance. Blogger Asks: Where has it Gone?

The Oregonian reported over the weekend that the state will stop taking rent assistance applications because it is running out of money. A local blogger is questioning what has happened to all the money and points to flaws in the story's accuracy.

The Oregon Housing Blog reports there was incorrect information in this story by The Oregonian on rental housing assistance. 

The Housing Blog states that Oregon has or will receive $360,826,176 in housing assistance. This amount is acknowledged in a media release from Oregon Housing and Community Services. (OHCS)

According to the Housing Blog: 

"Neither the press release or the Oregonian story report who and what non-rental assistance activities are being funded with the remaining $71 million/20% of the total $360 million. [$360 million-$289 million [from press release]=$71 million/$360 million= 20%.

"The Oregonian Story Also Doesn't Include $165 Million in Direct Local Emergency Rental Assistance (ERA) Allocations, Bringing Total Oregon ERA Allocations to $525 million. 

"That $525 million is $136 Million/ 82% More than the OHCS $289 Million in the Story. 

"Missing from the Oregonian story is any reference to the direct TREASURY ERA local allocations to 6 counties and the City of Portland which total another $165 million. These allocation bring total Oregon ERA allocations, (excluding tribal allocations of another $21 million) to $525 million." 

Multifamily Marketwatch - November 15, 2021

This week: Build-to-rent single family homes are picking up steam, and what’s the impact of the infrastructure bill on multifamily?

Listen to our latest podcast.

Sold! 49 Units in Beaverton, Oregon

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HFO is pleased to announce the sale of 49-unit Fairwood Apartments in Beaverton. Congratulations to Lee Fehrenbacher, Tyler Johnson, and the rest of the HFO team!

Sold! 21 Units in SW Portland, Oregon

 

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HFO is pleased to announce the sale of 21-unit Curry Court in SW Portland. Congratulations to Greg Frick and the rest of the HFO team!

Sold! 14 Units in Milwaukie, Oregon

 

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HFO is pleased to announce the sale of 14-unit Maple Grove Court in Milwaukie, Oregon. Congratulations to Jack Stephens, Lee Fehrenbacher, and the rest of the HFO team!

2021 Awards: HFO Again Ranks Tops Among Corporate Philanthropists

For the fifth time in the company's 22-year history, HFO has been recognized by the Portland Business Journal among the area's top corporate philanthropists in its size category. 

The recognition was announced recently at the Business Journal's annual celebratory event. HFO ranked 3rd in its category overall. Total cash contributions for HFO was $83,509. HFO is pleased to support numerous charities throughout the year, including the nonprofits Harbor of Hope, Transition Projects, and Face to Face Portland.

"We're grateful to our clients for putting their trust in us," said HFO marketing director Aaron Kirk Douglas. "Their ongoing support of our business makes it possible for us to continue growing our philanthropic impact on the communities we serve."

Each year, the Business Journal ranks the most generous corporate philanthropists in four categories. For years HFO has ranked among the top 25, but this year marks the fifth time HFO has been in the top 10 for area businesses with annual revenue of $10 million or less.

HFO regularly contributes to charity for each transaction of the client's choice. The company utilizes a matching fund from which it makes annual year-end donations to select nonprofits.

Sold! 36 Units in Gresham

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HFO is pleased to announce the sale of 36-unit Shenandoah Garden Apartments in Gresham. Congratulations to Jack Stephens, Greg Frick, and the rest of the HFO team!

Oregon Forecasters: State Will Add 300,000 New Jobs in 10 Years Even as Job Growth Slows

Oregon will create a little more than 300,000 jobs in the next decade, recovering quickly from the epidemic and expanding at fewer than 1% faster than during the prior decade.

Oregon employment will rise by 17% between 2020 and 2030, compared to 21% in the prior decade, according to projections released Thursday. The last ten years saw the nations strongest labor market on record.

Forecasters project that nonfarm employment will top 2.1 million workers in 2030, up from 1.8 million last year.

Leisure and hospitality, the industry most severely hampered by COVID-19, will lead the way in the next decade, expanding by 46%, according to forecasts.

That's nearly quadruple the growth rate in the prior 10 years, and it suggests forecasters believe bars and restaurants will eventually experience a complete recovery from the financial stress they have endured over the past 20 months.

Health care (19% growth), professional and business services (19%), information (15%) and construction (13%) are among the top-growing industries in Thursdays forecast.

Economists predict manufacturing will expand by 11% by 2030 -- but thats only enough to recoup the factory jobs lost during the epidemic. At about 200,000 manufacturing jobs in 2030, factory work will remain well below its peak of 229,000 in the late 1990s.

Which areas perform worst in the forecast for the next decade?

Newspapers and book publishers, which have been in a bind for years because of reorientation to social networks and online news, are expected to lose another 700 jobs, resulting in an 18% decline, while radio and television broadcasters, who have had similar problems, will lose 17% of their jobs.

Computer manufacturing (a subcategory that doesnt include chipmakers like Intel) is projected to fall 21%, as well as telecom companies, with a 16% drop in net income.

Mike Rogoway | mrogoway@oregonian.com | Twitter: @rogaway 

First time subscriber? The Oregonian is having a 50% off special - get one full year of electronic access for $60. Sign up here.

Multifamily Marketwatch Podcast - November 8, 2021

This week: Portland’s real estate reputation trends up, construction spending turns down, and the predicted national rise in evictions has yet to materialize.

Listen to our latest podcast.

NYT: Ballot Initiatives to Increase Housing Won Big Tuesday, Possible Harbinger for 2022

By Jennifer Steinhauer

Nov. 3, 2021

A slew of initiatives aimed at addressing the nation’s housing crisis passed on Tuesday, a test run for ballot choices in 2022 as more cities and states take aim at rising rents, a continued explosion in short-term rentals and the depressed housing stock nationwide.

The epicenter of the action was in the West, particularly in Colorado, where housing prices have skyrocketed in recent years, with short-term rentals helping lead the way. In Leadville, a scenic former silver mining town, voters overwhelmingly approved a new 3 percent tax on visitors staying in hotels, motels and short-term rentals, which will be used to create more affordable housing.

Measures to increase fees on short-term rentals passed in Telluride, Avon and Ouray; Vail approved a sales tax increase for housing.

“If folks want to play in the beautiful mountains of Colorado, then individuals must also be able to live and work in those same towns,” said Corrine Rivera Fowler, the director of policy and legal advocacy at the Ballot Initiative Strategy Center.

Other cities and counties around the country passed similar initiatives. In coastal Lincoln County, Ore., where tourism is a major economic driver, the sole item on the ballot was a measure that would require the phasing out of short-term rental homes in unincorporated residential areas — and it prevailed in spite of a large spending campaign by opposing groups. Houses used for short-term rentals have pushed up rents n tourist towns, making them unaffordable for workers. In some cities, houses targeting short-term rentals have been built faster than cheaper units for lower-income residents.

In both Minneapolis and St. Paul, Minn., residents approved rent-control measures, and in Boston, Michelle Wu won the mayor’s race after calling for a form of rent control.

Other cities approved funding measures such as bond issues or dedicated tax revenue for housing. In Albuquerque, voters approved new bonds that would finance the construction and rehabilitation of low- and moderate-income housing.

Experts expect more of the same in the next election cycles.

“As housing availability decreases and housing costs increase in cities, especially big cities across many states, voters will continue to see more housing-related measures on the ballot,” said Josh Altic, the ballot measures project director at Ballotpedia.

Important Opportunity Zone Deadlines: December 31, 2021 and Beyond

The online platform www.Realized1031.com provided the following information regarding upcoming deadlines for opportunity zone (OZ) investors, real estate developers, and qualified opportunity zone fund (QOZF) managers. 

Some investment deadlines have already passed, but there is still a basis step-up deadline that hasn’t passed, providing investors with some time to take advantage of this tax benefit.

In this article, we’ll go through the details of what to expect for OZ deadlines in 2021 and beyond. Note that some of these dates have been extended due to COVID-19. The final dates are shown below.

December 31, 2021 — Second of two annual asset tests for Qualified Opportunity Zone Businesses and QOZF. This is also the last date that investors can contribute capital into a QOZF and receive a 10 percent step-up in basis. A 10 percent step-up in basis reduces the investor’s original capital gains by 10 percent.

Looking out past 2021 and up to 2026, deadlines are focused on investments for eligible capital gains. You’ll notice this set of deadlines falls at the end of each June.

Beyond 2021

• Starting in 2021, eligible gains can be invested on a rolling annual basis.
• June 28, 2022 — Eligible capital gains recognized in 2021 must be invested by this date.
• June 28, 2023 — Eligible capital gains recognized in 2022 must be invested by this date.
• June 27, 2024 — Eligible capital gains recognized in 2023 must be invested by this date.
• June 28, 2025 — Eligible capital gains recognized in 2024 must be invested by this date.
• June 28, 2026 — Eligible capital gains recognized in 2025 must be invested by this date.
• December 31, 2026 — Deferment on original gain ends, and gain is recognized.
• April 15, 2027 — Income taxes for 2026 are due. This includes tax payments due on your original deferred gain.
• June 28, 2027 — The last date to invest 2026 capital gains. This is also the final deadline to invest in a QOZF for the 10-year gain exclusion.
• 2028 — The first year in which some of the earliest Opportunity Zone investments may be sold and qualify for the 10-year gain exclusion.
• December 31, 2028 — Expiration of the designation of Qualified Opportunity Zones. QOZFs may still be active after this date to receive the 10-year exclusion. Expiration should not have any effect on receiving this incentive.
• June 28, 2037 — The earliest date on which the last Opportunity Zone investments may be sold and qualify for the 10-year gain exclusion. Applies to 2026 through June 28, 2027, deferred gains that were invested into a QOF.
• 10-year gain exclusion also starts ending on this date for deferred gains invested into QOZF from 2026 through June 28, 2027. If held for 10 years, those investments can now be sold.
• December 31, 2047 — The ability to eliminate gains on a taxpayer’s QOF investment could cease upon the expiration of QOZ designations.

CoStar: Portland is Closing-in on a Record Volume of Multifamily Transactions

The Portland Business Journal today cites CoStar reports in a story highlighting Portland's active multifamily market. CoStar says the metro area needs a little more than $400 million in apartment deals before the end of the year in order to beat the 2016 sales volume record of $2.978 billion. 

So far in the year, the area has tallied $2.567 billion, according to CoStar, which included complexes of five or more units and didn't count residential condos and co-ops.

Portland is still popular because it costs about half as much per door as multifamily housing in Seattle or the Bay area, and homeownership continues to be expensive. Multifamily construction is down and rents are edging higher. 

Seattle Times Editorial Board: End Eviction Moratoriums Now

The Seattle Times editorial board has called for an end to the state's eviction moratoriums, saying they are unnecessary and are harmful to property owners. 

"Eviction moratoriums were useful tools to ensure renters stayed housed during the uncertainty of pandemic job losses. While these important emergency measures kept people facing job losses housed, they also caused their own hardship for landlords with their own bills to pay.

"But now that the economy is slowly recovering, unemployment claims are falling, relief funds are flowing and new renter protections are in place, state and local leaders should let blanket bans expire."

Click to read the full article, no subscription is required.

WSJ: Fears of a Significant National Rise in Evictions Have Not Materialized

WSJ: When the federal moratorium on evictions ended in August, many feared that hundreds of thousands of tenants would soon be out on the streets. More than six weeks later, that hasn’t happened.

Instead, a more modest uptick in evictions reflects how renter protections at the city and state levels still remain in parts of the country, housing attorneys and advocates said. Landlords, meanwhile, say the risk of an eviction epidemic was always overstated and that most building owners have been willing to work with cash-strapped tenants.

Both groups also think that federal rental assistance, slow to get off the ground earlier this year, is now helping prevent many new eviction filings.

Eviction filings in court—which are how landlords begin the process of removing tenants from their homes—were up 8.7% in September from August, according to the Eviction Lab, a research initiative at Princeton University that tracks filings in more than 30 cities. But the rate is still low on a historic basis, and, at 36,796 filings, it is roughly half the average September rate pre-pandemic.

Sign in to your WSJ subscription to read the full article.

NMHC: Rent Control and Eviction Moratoriums Can't Solve The Undersupply

 

National Multifamily Housing Council President Doug Bibby outlined how rent control measures and eviction moratoriums fail to address the root causes of the housing affordability shortage facing the U.S. In place of failed policies, Bibby offers a roadmap to address the underdevelopment of housing that has plagued the U.S. for decades. He also argues for the expansion of and improvements to the Section 8 housing program. Read more in Multifamily Executive Magazine.

Up for Growth: Asking You to Take Action Now on Housing

By Mike Kingsella, CEO, Up for Growth Action

After weeks of negotiations, President Biden today announced a new framework for his Build Back Better package, and is urging lawmakers to advance the bill in Congress.

Thanks to effective outreach by our bill endorsers and Up for Growth members over the past month – your calls, letters and emails to members of the U.S. House and Senate – the vital Unlocking Possibilities Program remains in the bill.

While we’re a long way from final passage, the announcement represents a significant victory in the battle for housing equity in America, as it reaffirms the Administration’s commitment to address the nation’s housing shortage and signals to future negotiators that this vital program is off the table.

However, we still need your help. Until passage is assured, we must redouble outreach efforts. Too many members of Congress are still undecided or in the “no” column on the overall package and must be made aware that a critical new housing program hangs in the balance.  In addition, we must urge our pro-housing champions on the hill to continue outreach to their colleagues and request that they remain firm on this major commitment. Here’s what you can do:

• Contact your senators and representatives and ask them to urge colleagues to support the Build Back Better framework that includes the Unlocking Possibilities Program – a groundbreaking provision that would empower states and local governments to address the nation’s affordable housing crisis.
  
  
• Remember to share the letter we sent to Congressional leaders on October 1 – signed by 16 organizations – urging Congressional leaders to preserve these vital housing provisions in the budget reconciliation package.

As outlined in the revised framework, the legislation will “create more equitable communities through investing in community-led redevelopments projects in historically under-resourced neighborhoods and...incentivizing state and local zoning reforms that enable more families to reside in higher opportunity neighborhoods.”

In fact, the Unlocking Possibilities Program is the only provision in the Build Back Better Act focused on eliminating exclusionary zoning and artificial barriers to housing, and we are pleased that Congress is poised to take meaningful action to advance this program.

As we await additional details and watch closely for next steps on Capitol Hill, we will be sure to stay in touch. Again, thank you for a great effort this month to advance the cause of affordable, accessible housing for communities nationwide.