Effective Immediately: New State Eviction Regulations

On March 29, 2023, Governor Tina Kotek signed House Bill 2001, making significant changes to the process of eviction for nonpayment.

From Portland.gov: 

HB 2001 defines ‘nonpayment’ as nonpayment of a payment that is due to a landlord, including a payment of rent, late charges, utility or service charges or any other charges or fee as described in the rental agreement. As defined under HB 2001, ‘nonpayment’ does not include payments owed by a tenant for damages to the premises.

Important requirements and changes made by HB 2001 include, in part:

• When serving a notice of termination for nonpayment of rent per ORS 90.394, HB 2001 increases the notice period from 72 hours to 10 days or from 144 hours to 13 days
  
  
• Requires the landlord to deliver a copy of a newly created notice when serving the tenant with any termination notice related to non-payment, whether under ORS 90.392 or ORS 90.394. This notice will be posted on the website of the Oregon Judicial Department. This notice is in addition to any other notices required by ORS 90 and Portland City Code.
  
  
• Extends the time a tenant is able to cure the nonpayment cited in a termination issued under ORS 90.392 or ORS 90.394 up to the first appearance in court.
  
  
• Requires the landlord to reasonably participate with rental assistance programs.
  
  
• Housing providers may need to update business forms in relation to terminations issued under ORS 90.394 and the newly required notice.

HB 2001 takes effect immediately. Portland.gov reccomends housing providers and tenants with questions about how HB2001 applies to a specific situation consult a legal professional.

Read more at HB2001 Passed by Oregon Legislature | Portland.gov 

Federal Appeals Court Rules Landlords Can Inquire About Renters' Criminal History

In a landmark decision on March 21, a federal appeals court ruled that landlords have the right to inquire about potential or current renters' criminal history. This ruling has far-reaching implications for both landlords and tenants, igniting debates over housing rights and public safety. In this blog post, we'll delve into the details of the case and discuss its potential impact on the rental market.

The case in question involved a group of Seattle landlords who argued that a Seattle ordinance banning landlords from asking about criminal records violated the First Amendment right of free speech. The defendants, the City of Seattle, claimed that this practice disproportionately affects minority populations and perpetuates systemic discrimination. The defendants contended that by allowing such inquiries, the court would be legitimizing an unjust and harmful practice.

The plaintiffs--primarily landlords and property management companies--maintained that knowing a tenant's criminal background is essential for ensuring the safety of other residents and protecting their property. They emphasized that landlords have a duty to provide a secure living environment and that denying them access to pertinent information would impede their ability to do so.

After careful deliberation, the federal appeals court ultimately ruled in favor of the plaintiffs, concluding that landlords are within their rights to ask potential or current renters about their criminal history. The court stated that such inquiries are not discriminatory in nature, as the Fair Housing Act does not explicitly prohibit them. Furthermore, the court pointed out that landlords have a legitimate interest in safeguarding their properties and residents.

Case 21--35567; D.C. No. 2:18-cv-00736JCC CHONG YIM; MARILYN YIM; KELLY LYLES; EILEEN, LLC; RENTAL HOUSING ASSOCIATION OF WASHINGTON, Plaintiffs-Appellants,  v.  CITY OF SEATTLE, a Washington municipal corporation, Defendant-Appellee. 

Report Finds Building a Home Cheaper Than Buying in Oregon and Washington

A new report by StorageCafe has shown that it is more cost-effective to build a home than to buy one in several states, including Oregon and Washington. StorageCafe calculated each state's approximate home-building cost by combining the median cost of a construction contract with the cost of land on median-sized lots, and then adding 10% for other expenses like permits and fees for real estate agents. In Washington, building a home would cost around $493,000, which is $66,000 cheaper than the median single-family home cost of $559,000. Oregon ranked 14th, with an average total building cost of $502,000 and median listing price of $545,000.

The report shows that building a home is also cheaper than buying one in Hawaii, California, Colorado, Utah, and Virginia. On the other hand, there are states where home buying is significantly cheaper than home building, including Pennsylvania, Ohio, Illinois, Maine, and Iowa. 

The study's release follows the publication of another recent report regarding housing attainability in Oregon. Moving company HireAHelper found that people in Portland earning the median wage must work 92 hours a week to afford a median-priced home.

Read more at StorageCafe.com and HireAHelper.com.

Fed Raises Key Interest Rate to 4.75%-5.00%

The Federal Reserve unanimously decided to raise the federal funds target range by 0.25% to 4.75% to 5.00%. 

In accordance with its December estimate, the Federal Reserve officials predict a quarter-point increase in rates this year, bringing it to a peak range of 5.00% to 5.25%. This is lower than the level markets had expected before the collapse of Silicon Valley Bank. 

The Fed’s statement suggested that recent events could lead to tighter credit conditions for households and businesses, which could weigh on economic activity, hiring, and inflation.

Read more at ConnectMoney.com

IRS Extends California Tax and 1031 Exchange Deadlines

The IRS recently released updated disaster extensions impacting most counties in California. Not only does this update delay the tax filing deadline to October 16, 2023, but it could also extend investors' 1031 exchange deadlines until October 16, 2023.

If you are a resident of or have your principal place of business in California, you may be considered an “affected taxpayer” that is eligible to significantly extend the 1031 exchange timelines. 

For example: Typically, if you were to close your investment property on April 1st, you would have until May 16th to identify a replacement property and September 28th to close (45 and 180 days, respectively).

With this recent extension, however, you will now have until October 16th to both identify AND close the acquisition of your replacement property, allowing those doing 1031 exchanges to take more time to complete due diligence on properties they plan to purchase and potentially take advantage of lower interest rates (if rates decrease later in the year).

Experts in the exchange industry expect to see investors increasingly taking advantage of this limited opportunity to list and sell investment properties and exchange into a better-performing assets with several months to identify and complete the purchase.

Contact us at HFO to learn more and stay tuned for our upcoming HFO-TV interview with Milissa Ormiston-Hall, vice president for Oregon / SW Washington in IPX1031's Northwest Regional Office, where we dig further into the advantages of completing an exchange in 2023.

Read more at IRS.gov

Portland City Council Approves Plan to Incentivize Conversion of Vacant Office Buildings into Apartments

The Portland city council has approved a plan to convert vacant downtown office buildings into apartments in an effort to address the city's housing crisis. The two ordinances passed are intended to incentivize office building owners to convert their buildings into residential units.

“Recognizing the enormous cost of office conversions, the City is acting to create greater financial feasibility for conversions that produce additional housing in the central city and drive investment into empty offices for more vibrant neighborhoods in safer and more sustainable buildings,” said Mayor Ted Wheeler. “While this isn’t a silver bullet, it’s a positive tool to overcome structural and financial barriers to reinvestment into buildings and neighborhoods. We continue to seek more state-level financial support in order to achieve scale.”

Ordinances Passed: 

• Exemptions for System Development Charges: Exempts qualifying conversion projects from all System Development Charges up to the amount of the actual cost of the seismic retrofit or $3 million, whichever is lesser. Eligible conversions still must comply with Inclusionary Housing requirements. This exemption will expire and be re-evaluated in July 2027.
  
  
• Adjustment for Seismic Standard: Adjusts the seismic improvement standard for R-2 classified buildings, which is consistent with the level of safety required by other major cities in seismic areas, like San Francisco.

Read more at kptv.com

Oregon House Passes $200 Million Bipartisan Bill to Address Housing and Homelessness Crisis

The Oregon House of Representatives has passed a $200 million housing and homelessness bill with bipartisan support. The majority of the package, $130 million, fulfills Gov. Tina Kotek's request for immediate funding to begin addressing unsheltered homelessness in much of the state.

The bill aims to address the state's housing crisis and homelessness issue by investing in affordable housing projects, increasing rental assistance, and providing emergency shelter to those in need and is expected to help more than 20,000 households across the state. It also includes provisions to prevent displacement and provide legal aid to renters facing eviction. 

The bill now moves to the Oregon Senate for consideration.

Read more at KGW.com.

Portland Ranks 4th for Average Tech Salaries & Salary Growth

The Portland area ranked fourth for average tech salaries and growth among industry hubs nationwide, according to the recently released Dice Tech Salary Report. Portland came in just behind Seattle, WA, with an average tech salary of $127,724. 

The Silicon Valley area led the country with a $144,962 average salary. Boston and Seattle were second and third, with salaries of $130,399 and $129,456, respectively.

Portland's 15.5% growth rate since 2021 was also fourth among cities with a significant tech industry presence, following Columbus, OH, Tampa, FL, and Phoenix, AZ.

The tech recruitment platform published the 18th edition of its annual report using survey data collected from the website's users between August 16, 2022, and October 17, 2022.

By the end of 2022, the report notes, layoffs throughout the tech industry totaled more than 140,000, but "the tech unemployment rate dropped to 1.5% in January, and demand for tech talent remained historically strong throughout the year, especially in more established industries like finance and banking, healthcare, consulting, and aerospace and defense."

Read the full report at Dice.com.

Portland Business Taxes Have Increased 32% Since 2019

The Portland Business Alliance and Downtown Portland Clean and Safe released the "2023 State of the Economy" report with research from ECONorthwest in late February. The report found:

• There has been a 32% increase in local business taxes in the City of Portland since 2019
• Portland metro employment grew faster than U.S. employment in 2022
• Jobs were recovered nearly or fully across the state by December 2022 but were down 4.5% compared to pre-pandemic levels in Multnomah County
• Construction and leisure/hospitality industries added the most jobs in the last year, but trade, transportation and utilities are lagging
• Census data estimates show sizable Multnomah County out-migration but Clark County growth

Read more and download the full report at PortlandAlliance.com/2023

Washington State Needs Over 1 Million Homes in Next 20 Years

The Washington State Department of Commerce today released its final housing needs projections, which show the state needs to add 1.1 million homes over the next 20 years, and more than half of them need to be affordable for residents at the lowest income levels. 

Based on census data and the Office of Financial Management’s population projections, these final housing projections show that the state needs more than 50,000 new units annually to keep pace with expected population growth.

“Every community in the state is experiencing housing pressures and needs to plan for enough housing so that everyone can live inside," reads a new release from the Washington State Department of Commerce. "This housing will require significant local, state, and federal investments to meet our state’s future housing needs because it is difficult for the private market to produce housing for the lowest income brackets.”

According to the release, recent federal data suggests approximately 30% of Washingtonians are cost-burdened, meaning they spend more than that 30% of their income on housing.

Read more at Commerce.WA.gov

Bill Would Give Homeless, Low-Income Oregonians $1,000 Monthly Payment

Oregon legislators are considering a bill that would provide a $1,000 monthly stipend to homeless and
low-income people. 

The People's Housing Assistance Fund Demonstration Program would allocate $25 million from the state's general fund that would be administered by the state's Department of Human Services to provide 12 monthly payments of $1,000 to individuals who are "experiencing homelessness, are at risk of homelessness, are severely rent burdened, or earn at or below 60% of area median income." The program, proposed by Senate Bill 603, sunsets in January 2026.

The legislation would provide financial assistance to individuals experiencing housing instability. The bill's proponents argue that providing a basic income to homeless individuals could help reduce the number of people living on the streets and provide them with the resources they need to get back on their feet.

A similar program was implemented in Vancouver, B.C., in 2018, with homeless participants receiving $7,500 each. A report on the "New Leaf Project" found that the program had been successful in moving participants into stable housing and even utilizing the cash for savings.

“We saw that people very quickly moved into housing, between one and three months,” Claire Williams, the founder of the project, told KATU. “We saw that people had increased food security, which is incredible. People are getting three square meals a day.”

Portland's proposed measure would task Portland State University with studying the impacts the payments have on recipients' status and how the money is spent. Results would be reported to the legislature before the 2024 session.

If passed, the legislation would make Oregon the first state in the U.S. to offer a statewide Basic Universal Income.

Read more at KTVL.com and SB603 2023 Regular Session - Oregon Legislative Information System (oregonlegislature.gov)