Tacoma Positioned as Breadwinner for Pierce County Growth Plans

The Urbanist reports that adding density to Tacoma will be its primary target for housing the majority of additional residents it will absorb through 2044. The City will plan for an additional 71,000 of the area's estimated growth of  275,000. Read more. 

Sold! 14 Units in NE Portland

Congratulations to HFO brokers Lee Fehrenbacher and Greg Frick and the rest of the HFO team on the sale of 14-unit Alameda Court in Portland, OR. 

Redmond & Kenmore Washington Pass Additional *Renter Protections*

From Washington Multifamily Housing Association Reports

Following are changes recently enacted by the City of Redmond and City of Kenmore City Councils:

City of Redmond – Notice of “Tenant Protections”: Changes Effective July 30
On Tuesday, July 19, the Redmond City Council passed a new “Tenant Protection” Ordinance with several requirements/prohibitions. Unfortunately, the council chose an immediate effective date of July 30.

Notice of Rent Increase
Any rental agreement or renewal of a rental agreement shall state the dollar amount of the rent or rent increase and require:

• 120 days written notice for rent increases greater than (3%)
• 180 days written notice for rent increases greater than (10%)

If the rental agreement governs subsidized housing where the amount of rent is based on the income of the tenant or circumstances specific to the subsidized household, the landlord shall provide a minimum of thirty (30) days prior written notice of an increase in the amount of rent to each affected tenant.

What This Means:

• Rent increases starting on July 30 cannot exceed 3% for the first 120 days and cannot exceed 10% for the first 180 days because you would be unable to comply with the new noticing requirements.
  
  
• If you planned to increase rents by more than 3% on August 1, note that you will be out of compliance. 

Move-in Fees & Security Deposits

• All move-in fees and security deposits charged by a landlord before a tenant takes possession of a dwelling unit shall not exceed one month's rent, except in subsidized housing, where the amount of rent is set based on the tenant's income.
  
  
• Tenants entering rental agreements with terms lasting six or more months may pay their move-in fees and security deposits in six equal monthly installments over the first six months of occupying the dwelling unit.
  
  
• Tenants entering rental agreements with terms lasting fewer than six months or month-to-month rental agreements may choose to pay move-in fees and security deposits in two equal monthly installments over the first two months of occupying the dwelling unit.

Late Fees

• Late fees and penalties due to nonpayment of rent charged to a tenant shall not exceed 1.5% of the tenant's monthly rent.

Social Security Number

• A landlord may ask for a social security number as part of the screening process but may not deny an applicant solely because they don’t provide one.

City of Kenmore Notice of “Just Cause & Deceptive and Unfair Practices Ordinance” -- Effective August 24
On Monday, July 25, the Kenmore City Council passed a new “just cause” ordinance with several requirements/prohibitions regarding evictions and tenancy termination. The effective date is Wednesday, August 24, 2022.

Just Cause
A landlord shall not evict or attempt to evict any tenant, refuse to continue or renew a tenancy after the expiration of the rental agreement, or otherwise terminate or attempt to terminate the tenancy of any tenant except for the just causes allowed for by the ordinance. (See section 8.[1]55.075)

Unfair or abusive acts by landlords are prohibited. 
Landlords are prohibited from unfair or abusive acts or practices or deceptive acts or practices as defined by the ordinance. (See section 8.55.078)

Portland Rents Up for Sixth Straight Month

ApartmentList.com's August 2022 Rent Report shows Portland rents increased 1.6% over the past month, and the annual growth rate hit 7.2%.

While this marks the sixth straight month of growth for the city, the annual rate lags behind the state and national averages of 10.7% and 12.3%. 

Though Portland's median two-bedroom rent of $1,512 is above the national average of $1,358, the report notes that the city is still considered affordable compared to many other large cities nationwide, including San Francisco, where the median rent for a two-bedroom apartment is $2,659 — more than one-and-a-half times the price in Portland.

Read the full report at ApartmentList.com

Sold! 11 Units in Vancouver, WA

 

Congratulations to HFO broker Todd Tully and the rest of the HFO team on the sale of 11-unit Primrose Park Apartments in Vancouver, WA. 

June Multifamily Construction Pipeline at Highest Volume Since 1970s

The June Census Bureau residential construction report shows multifamily housing permits and starts have rebounded from last month's declines. YieldPro.com reports June permits were up 28% from June 2021 and 11% over the trailing 12-month average, and housing starts for buildings with five or more units were up 16% from June 2021 and 14% above the trailing 12-month average.

Meanwhile, multifamily housing completions were down 4% from June 2021 and up 8% compared to the trailing 12-month average. The number of multifamily units in the pipeline continued to grow in June, with 841,000 units under construction, a 24% annual increase and the highest number of multifamily housing units under construction since the mid-1970s.

Read more at YieldPro.com. 

RealPage: Multifamily Rents Are Moderating

GlobeSt.com reports that research from multifamily analytics provider RealPage shows June rents were lower than earlier this year in more than half of the major U.S. metros the firm tracks.

“Moderating demand and rent growth were widely expected, and it appears to be finally happening,” the article quotes Jay Parsons, RealPage’s Head of Economics and Industry Principals, saying. “The open question is whether the market is entering a true slowdown due to inflation or it’s stabilizing toward more sustainable, balanced levels. We tend to take the latter view.”

RealPage analysts say the June 19.2% rent growth rate likely could be the peak growth rate. Read more at GlobeSt.com. 

Washington Multifamily Marketwatch - Seattle Law May be on Shaky Ground

This week: the 9th Circuit Court of Appeals appeared skeptical of a Seattle law preventing landlords from asking about a tenant's criminal history; A California Appeals Court upholds a California law requiring payment of one month's rent to legally evicted tenants.

Check out this episode!

Multifamily Property Prices Down 4% in June

Commercial real estate research and advisory firm Green Street reports that commercial property prices further declined in June, down 4.9% from a March 2022 high.

“The repricing that has occurred in bonds and stocks is finally evident in the commercial property market,” says Peter Rothemund, co-head of strategic research at Green Street, in the recently published report. “Price discovery is still taking place, and economic uncertainty and interest rate volatility make that challenging, but prices of most properties are down 5%+ from recent highs. In a few sectors, pricing has held up better.”

The report notes prices in the multifamily sector are down 4% over the past month, 15% in the past 12 months, and 16% since before the onset of the pandemic.

Read the full report at GreenStreet.com.

Multnomah County Ranked #1 for Incoming Investment

Oregon Business reports Multnomah County was ranked first in Oregon for incoming investment for the first time in six years. Portland also registered a 126% annual increase in multifamily sales volume in 2021, with the third-highest population growth of any Northwest city that year.

The article quotes state economist Josh Lehner saying the high population growth is indicative of recovered and growing demand for housing in the region. However, Lehner cautions, new building permits have declined, which he points to as the biggest concern for the city's recovery.  

Read more at OregonBusiness.com.

Portland City Council Voted to Amend Fair Access In Renting Ordinance (FAIR)

Multifamily NW reports the Portland City Council has amended the Fair Access in Renting Ordinance (FAIR) to settle a February 2022 lawsuit brought against the city to invalidate FAIR on the grounds that the ordinance violates both the Oregon and U.S. constitutions.

Commissioner Dan Ryan initiated negotiations with the lawsuit's legal team to seek a compromise, and a final vote to approve the negotiated amendments was held on June 29th. 

The resulting changes expected to come into effect in 30 days include: 

• Applications and Screening: Applicants who have successfully appealed a housing provider's denial of their application for a unit that has since become unavailable were previously entitled to prequalification for rental opportunities at any of the housing provider's properties (with no geographic restrictions). The amendment restricts this prequalification requirement to the provider's properties only within the city of Portland. 
  
  
• Security Deposits:  The requirement for housing providers to use a depreciation schedule published by the Portland Housing Bureau to allocate the value of any item for which a housing provider deducts the cost of repairs or replacements from a security deposit.
  
  While housing providers must still include in the rental agreement a “Unit inventory” and “Unit Condition Report” itemizing all fixtures, appliances, equipment, or personal property that would require deduction from the security deposit to repair or replace, the depreciated value is no longer required on those forms.
  
  See MultifamilyNW.org for examples of items that should be listed in these categories. 
  
  
• Repair or Replacement of Flooring Material: Housing Providers are no longer required to calculate the size of the “discrete impacted area” when charging for the cleaning of flooring material and may charge for the cleaning of flooring material as permitted by state law.
  
  
• Unit Condition Reports: Housing providers and renters must agree to sign a Unit Condition Report detailing the condition of all fixtures, appliances, equipment, or personal property that would require a deduction from the security deposit to repair or replace. Following the recently approved amendments, the procedures for the required use of Unit Condition Reports have been significantly altered.
  
  See MultifamilyNW.org for detailed information about the changes and the new procedures for Unit Condition Reports.  
  
  Housing providers are also still required to update the condition report following repair or replacement of any item listed, but information regarding the depreciated value of those items is no longer required.
  
  
• Damages for Violation of FAIR: Housing provider penalties for failing to comply with the security deposit requirements of FAIR have been reduced from double the security deposit to an amount up to $250 per violation (plus actual damages, reasonable attorney fees, and costs).

Multifamily NW has scheduled webinar training on the FAIR Ordinances settlement amendments on Thursday, July 7th from 1:00 p.m. to 2:30 p.m. 

Visit MultifamilyNW.org for detailed information about the changes. 

This article is not intended as legal advice. Please obtain the advice of an attorney for any policy changes or decisions regarding residential and commercial landlord-tenant matters. 

Washington Multifamily Marketwatch - 1.02

This week: Washington state's population continues to boom, state property values soar for 2022, plus updates on the nation's housing shortage and affordable housing initiatives.

Check out this episode!

Portland City Auditors: Building Permit Reviews Slower, but "Substantive Progress" Made

In a one-year follow-up to its 2021 report criticizing long-standing problems within Portland’s building permits system, the city auditor's office says the city made "substantive progress" in addressing the previous audit recommendations. 

The March 2021 report called for city council-level leadership to solve the long-standing problems in Portland's building permits system. Time-consuming delays, shoddy customer service, and a lack of accountability threatened the city’s post-pandemic economic recovery, the report concluded.

Commissioners Dan Ryan and Mingus Maps co-chair the Permit Improvement Task Force, which was established in April 2021 with three overarching goals: to reduce permitting timelines, improve the customer experience, and improve performance management.

According to its own dashboard, the city has only gotten slower at processing most permits in the months since. However, the report applauds the city tracking timing publicly at all, noting "The knowledge that in recent months the City has been taking roughly twice as long as stated goals may help customers set more realistic expectations about permit duration." 

The update also reports that a manager has been hired to improve communications and centralize work among the various bureaus involved in the permitting process, and the city has created a new position who will be tasked with working on "customer complaint accountability."

Click to visit the Permit Timeline Dashboard May 2021 - May 2022

Read the full report at Portland.gov