Multnomah County Incentivizes Renting to Formerly Homeless Tenants

This week, the Portland Tribune highlighted a new program developed by the Joint Office of Homeless Service that offers incentives and support to landlords who agree to rent to people coming out of homelessness. 

The program, Move-in Multnomah, guarantees rent for the duration of the qualifying tenant's lease (up to 12 months), as well as: 

• Holding fees to cover rent for vacant units while a tenant is being secured
• A hotline for housing providers to connect with tenant case managers if needed
• Resources to cover damages beyond the cost of the security deposit

In return, participating landlords must: 

• Be willing to provide available units at market rate
• Reduce screening criteria that could be a barrier for tenants coming out of homelessness

Landlords began signing up on April 14th, when program administrators started the process of connecting landlords and potential tenants. Initially, the program will focus on leases signed that will begin on May 1st, June 1st, or July 1st. 

The article notes program administrators are seeking more landlords to participate following a $4 million expansion of the program. The expansion is funded by the $2.4 billion Supportive Housing Services measure approved by voters in Multnomah, Washington, and Clackamas counties in May 2020.

Metro area landlords can apply at MultCo.us/Move-Multnomah by June 30th to participate in the program. 

The article quotes a Portland landlord of 50 years who says, "We were skeptical at first, but we tried it. It has been one of the best partnerships we have had."

Read the Portland Tribune story at PamplinMedia.com.

Sold! 24 Units in Tigard, Oregon

 

HFO is pleased to announce the sale of the Atwater Apartments in Tigard. Congratulations to HFO brokers Greg Frick and Lee Fehrenbacher and the rest of the HFO team!

Multifamily NW Apartment Report | Spring 2022

Multifamily NW Apartment Report | Spring 2022

At this morning's Multifamily NW Apartment Report breakfast, the Spring 2022 report was released.

The metro-area rental vacancy rate is below 4%, and rent growth is up 1%.

Submarket vacancies and average rents were reported as follows:

Housing costs skyrocketing in Portland

As more and more people move to Portland, and with home and multifamily construction failing to keep up, the cost of single-family homes and rental units continues to rise. 

In a story headlined "Renters Feel the Strain as Housing Costs Skyrocket," the Oregonian focuses on the strain put on renters in the Portland metro area as a result. Local appraiser Patrick Barry is quoted as saying that the sticker shock of rent increases may slow in the coming months but it might be another 18-24 months before rents stabilize. 

Read the story. 

End-of-Session Washington Multifamily Housing Association Legislative Update

The Washington Multifamily Housing Association provided the following update on Friday regarding the final outcome of legislation impacting multifamily rental owners in Washington State. 

All adopted bills, once signed by Gov. Inslee, will become effective June 9, 2022.

SHB 1593 – Expanding access to the Landlord Mitigation Program for Victims of Domestic Violence
This bill was proposed by WMFHA and supported by our long-term partners at Domestic Abuse Women’s Network (DAWN).

The measure allows landlords to seek reimbursement of up to $5,000 from the LMP when a resident terminates their tenancy in accordance with RCW 59.18.575 – victims of domestic violence, sexual assault, unlawful harassment, or stalking.

To be eligible, the landlord must return the full security deposit to the tenant and must forgo any collection actions against the tenant.

SSB 5749 – Methods of Rental Payments
Requires residential and manufactured housing community landlords to accept a personal check, cashier's check or money order for any payment of rent made by a tenant by mail, unless an accessible on-site location to pay rent is available.

However, such landlords are not required to accept a personal check for payment of rent if the tenant has had a personal check written to the landlord or the landlord's agent returned for insufficient funds or account closure within the previous nine months.

ESHB 2064 – Security Deposit Options
This legislation creates requirements around the use of security deposit alternatives. It also provides transparency of the product to tenants including maximum insurance coverage, and clearly identifies tenants remain liable for unpaid rent and damages, despite paying a "fee in lieu of a security deposit."   

This means that the property is the insured and the leasing consultants are considered the insurance agents. There is no real direct relationship between the insurer and the tenant. 

Provisions of housing bills that did not pass include those that would have:

• Required 180 days' notice for rent increases above 3%
• Limited late fees to 1.5% of tenant's monthly rent
• Prohibited the use of criminal history in screening except for sex offender registry information 
• Required landlords to make copies of estimates and invoices for repairs and deductions for tenants
• Prohibited deductions for carpet cleaning unless the landlord could document damage beyond normal wear and tear
• Permitted a tenant to request a walkthrough before the end of tenancy 
• Created a one-year statute of limitations on collections for money owed for damages
  

Remember: Elections Matter! 
2022 is also a major election year with the entire state House of Representatives and half the state Senate appearing on the November ballot. WMFHA will be watching these races closely and meeting with candidates to educate them on our industry needs.

Building relationships with elected officials allows our industry access to share our viewpoints. WMFHA’s Political Action Committee (PAC) will remain an influential tool in our efforts to ensure public officials understand the importance of responsible policy that supports, not harms, the rental housing industry.

We continue to strive to advance policies that create more diverse housing development throughout our state to address the demand/supply imbalance currently stressing housing affordability.

CoStar: As Portland Struggles to Keep Up, Seattle’s Apartment Pipeline is Larger Than Ever

CoStar Analytics reports that Portland multifamily construction has declined to its lowest level since the early 2010s, while deliveries in the Seattle market continue to reach new highs. 

Apartment absorption (the difference between move-ins and move-outs) surpassed the delivery of new units by 40% in Seattle and just 25% in Portland over the past 12 months. 

Demand for multifamily units continues to increase in the region, driven by a lack of supply and strong population and job growth, supporting average annual rent increases above 10% in both markets.

Though the pandemic slowed the delivery of new units in the Puget Sound, the report notes that Seattle has recovered quickly and is on pace to deliver a record-high 12,000+ units in 2022, while Portland deliveries are expected to reach just 3,300 units — the lowest annual total in the metro since 2013.

CoStar analysts cite a number of potential factors in explaining the disparity, including different approaches to the inclusionary zoning program that has recently come under fire in Portland, writing

"The Seattle city council voted through an inclusionary zoning policy of its own but coupled the requirements with additional benefits for developers, allowing them to build taller, denser buildings in wide swaths of the city. In Portland, there was little added benefit for developers and an exception for smaller buildings."

In 2022, the report concludes, Seattle will face the challenge of sustaining enough demand to absorb the pending wave of deliveries, while Portland will likely continue to struggle to meet housing needs. 

Report: Housing Experts Spar over Whether Portland''s Inclusionary Zoning Works

The Portland Business Journal reported this week that while speaking at a recent pro-housing conference, Cassie Graves, a city official who coordinates inclusionary housing in the city, gave a so-so grade to the program. 

While pointing to an estimated 1,550 inclusionary housing units coming online thanks to the program since its implementation on February 1, 2017, only 475 are actually open and rented.

Developers hate the program and find ways to skirt it because, for example, it would require places like the new Ritz Carlton hotel and condo building to have affordable units in the same building unless a developer pays a hefty fee.

Portland economist Joe Cortright of City Observatory is quoted in the article as saying  

“You can talk about the units that IZ has built,” Cortright said, “but you can’t see the units that aren’t built because IZ raises the cost of housing. And we know that there’s been a collapse in the housing pipeline in Portland in the last three or four years.”

Because the IZ regulations impact developments of over 20 units, many developers are breaking hundred+ unit communities into smaller adjoining ones to avoid the threshold for mandatory compliance with IZ regulations.Prior to this month's report on 475 units being open, the city had reported 423 IZ units open as of January 31, 2022.

Sold! 49 units in Albany, Oregon

HFO is pleased to announce the sale of 49-unit Sherman Oaks in Albany! Congratulations to Greg Frick, Adam Smith, and the rest of the HFO team. 

Willamette Week: Thought Portland Housing Was Expensive? It's Worse in Tigard, Milwaukie, Beaverton, Hillsboro, Wilsonville Happy Valley, and Oregon City

Willamette Week explains that while home prices in Portland seem high, the suburbs are higher. Read more. 

Willamette Week: Renters Feeling Squeezed in Today's Market

It's been two years since tenants had to worry much about being evicted, but that protection ended in March unless a tenant can prove a pending application for rental assistance.

With those COVID-19 eviction moratoriums over, back rent comes due from the first year of the pandemic. 

Sticker shock is sinking in for tenants receiving those renewed rent obligations in a housing market that continued to tighten during the lockdown. 

Vacancy rates are dropping, rents are rising, and fewer apartment buildings are expected to be built than any time since around 2012.

Willamette Week offers this advice for tenants: with Portland's strong renter protections, and state rent control capped at 10% this year, collect a relocation fee for rent increases above 10% or find a free lawyer through the eviction defense project. If your apartment is in crummy shape you can also refuse to pay if you get a lawyer to help you demand a fix.

The paper goes on to quote HFO Partner Greg Frick:

"Greg Frick of HFO Investment Real Estate says Portland's inclusionary housing policies and Oregon's rent control laws have also driven some out -of-state investors away from the Portland market. 'Now with inclusionary zoning and the perception of what's going on in Portland,' Frick says, 'if as an investor you have the ability to go to other places, those are check marks that aren't real favorable for the city of Portland.'"

Yup.

Report: Record First Quarter Growth for Multifamily but Economy Remains a Concern

Yardi Matrix reports a record-high for multifamily growth in Q1 of 2022, but tempered its analysis with caution about economic concerns moving forward. There are potential headwinds to rent growth with decline expected in some markets. 

• The Southwest and Southeast continue to be the strongest markets

Approximate year-over year rent growth for March, 2022 (average, all asset classes)

• Seattle: 16.4%
• Portland: 13.3%

Month-over-month rent growth (average, all asset classes)

• Seattle: 1.8%
• Portland: 1%

Rent growth forecast for 2022:

• Seattle: 6.4%
• Portland: 5.9%

Portland, OR Job Growth Nation's 10th Fastest in 2021

The U.S. Bureau of Labor Statistics reports that Portland's job growth ranked #10 among the nation's 50 largest metros, at 6.2%. Top ranking cities included Las Vegas, Orlando, San Diego, L.A., Austin, San Francisco, San Hose, Riverside, and Dallas-Fort Worth. Seattle's job growth was 5.8%. 

Oregon's job growth overall ranked #6 in the country. Read more. 

Sold! 10 Units in West Linn

 

HFO is pleased to announce the sale of Caufield Place Apartments in West Linn. Congratulations to brokers Lee Fehrenbacher and Jack Stephens and the rest of the HFO team.

Oregon Rental Housing Owners: Oregon's New Legislation on Cooling Devices

As a result of the heatwave that occurred in the Pacific Northwest in 2021, Oregon's representatives in Salem passed the following legislation regarding cooling devices in rental units.

Courtesy of Multifamily NW 

The 2022 legislative season was relatively uneventful as compared to the previous years. The only significant legislation passed impacting the housing industry was the bipartisan Emergency Heat Relief bill SB 1536, that Multifamily NW successfully negotiated, and was signed into law and effective on March 24, 2022. This law amends the Oregon Residential Landlord Tenant Act to limit restrictions on renters' use of portable cooling devices from May to September of each year. It also requires that housing providers provide cooling devices in new construction.

Overview of Requirements
SB 1536 governs restrictions on “portable cooling devices”, which are defined to comprise “air conditioners and evaporative coolers, including devices mounted in a window or that are designed to sit on the floor.” This definition does not include devices whose installation or use would require alteration to the dwelling unit.

General Rules
Housing providers may not prohibit or restrict residents from installing or using a portable cooling device (including window units) of the renters choosing except for the broad restrictions discussed below.

Optional restrictions on all portable cooling devices. 

The installation or use of the device may not:

• Violate building codes or state or federal law;
• Violate the device manufacturer’s written safety guidelines for the device;
• Damage the premises or render the premises uninhabitable; or
• Require amperage to power the device that cannot be accommodated by the power service to the building, dwelling unit, or circuit.

Housing Providers may require that the device be:

• Installed or removed by the housing provider or housing provider’s agent;
• Subject to inspection or servicing by the housing provider or housing providers; or
• Removed from October 1 through April 30.

Optional restrictions on portable cooling devices for windows

The installation of the window device may not:

• Impede necessary egress from the dwelling;
• Interfere with the renter’s ability to lock a window that is accessible from outside;
• Require the use of brackets or other hardware that would damage or void the warranty of the window or frame,
• puncture the envelope of the building or otherwise cause significant damages;
• Be used without being adequately drained to prevent damage to the dwelling unit or building; or
• Be installed in a manner that does not prevent risk of falling.

IMPORTANT: Housing providers may only enforce the optional restrictions addressed above if they provide a written list of restrictions to the residents. The written restrictions must also state whether the housing provider intends to operate a community cooling space, which is strictly optional.

Regarding restrictions related to electrical amperage limitations wherein the property does have some capacity (but not enough for the entire community to use their own device), housing providers must prioritize those with a disability who need portable cooling devices.

Special termination rules for violation of AC restrictions
Assuming that a renter installs a device in violation of portable cooling device rules, a termination notice may be issued but the applicable cure or termination period will be tolled (i.e. paused) during extreme heat events, which is defined as any day on which the National Weather Service of the National Oceanic and Atmospheric Administration has predicted or indicated that there exists a heat index of extreme caution for the county. In addition, the termination notice for a portable cooling device violation must state that the date of termination specified in the notice will be extended by one day for each day that there is an extreme heat event for the county of the premises; and that information regarding days with an extreme heat event can be found on the website for the Oregon Housing and Community Services agency.

Housing Provider Liability Protections Regarding Portable Cooling Devices
Under SB 1536, housing providers are not responsible for any interruption in electrical service that is not caused by the housing provider including interruptions caused by an electrical supply’s inability to accommodate the use of a portable cooling device.

In addition, housing providers are immune from liability for any claim for damages, injury or death caused by a portable cooling device installed by the renter. Based upon this protection, housing providers will likely require residents to properly install their own portable cooling devices.

Cooling Requirements in New Construction
For new construction, cooling facilities will be required. Specifically, in a building where building permits for its construction were issued on or after April 1, 2024, the dwelling units must have adequate cooling facilities that:

• Provide cooling in at least one room of the dwelling unit, not including a bathroom;
• Conform to applicable law at the time of installation and are maintained in good working order; and
• May include central air conditioning, an air-source or ground-source heat pump or a portable air conditioning device that is provided by the housing provider

Investments in Heating and Cooling
In addition to the regulations discussed above, SB 1536 enacted a variety of new programs, including:

• an air conditioner and air filter deployment program;
• upgrades to Oregon’s Housing and Community Services Department website proving information on extreme heat
• events and cooling centers, and other resources;
• a heat pump deployment program;
• residential heat pump rebates and grants; and
• a warming, cooling, and clean air shelters program.

Effective Immediately
SB 1536 is passed as an emergency measure and takes effect on passage. Consequently, housing providers should send out restrictions on portable cooling devices as soon as possible. 

KOIN-TV: Portland Hemorraging Rental Properties

(March 25, 2022) Multifamily NW and ECONorthwest updated a recent report on the loss of single-family residential rentals this week. The report confirms the loss of rentals throughout Portland and the larger metro area. 

“The loss of the detached rental stock is widespread across the region, with 90% of tracts having fewer units today than in 2014. The number of units lost was more heavily concentrated in neighborhoods with lower home prices across the region,” reads the new report titled, “Single family detached rental housing trends from 2015 to 2020 in the Portland Metro region.”

According to the report, 3,987 rental houses were removed from rental inventory in Portland from 2015 to 2020. The total loss of rental homes in the region was 6,417. Read more. 

The report is similar to one conducted in Seattle, showing a significant drop in rental unit registrations.