Oregon Tenant Protection Bill

This seems to be a subject much talked about amongst real estate agents, property managers, landlords, tenants, and homeowners (i.e. everyone). Yet, if you Google "Oregon tenant protection bill" or "Portland tenant rights bill", all you'll get is a few cut and dry articles from the Oregonian and other local news blogs and not much else. Most of what you'll see will be about other legislation that has already passed.

What are we afraid to talk about? I'm a Portland area real estate agent and I eat complicated, controversial topics for breakfast. Okay, no, I usually eat eggs for breakfast. Sometimes cereal. Occasionally a snack bar... 

But that's beside the point. Let's boldly go where few have gone before.

The original version of this article can be found here.

Boldly blogging where no one has blogged before.

Boldly blogging where no one has blogged before.

The housing shortage is driving legislation.

People are passionate about this subject because Portland is in a housing shortage. We need approximately 24,000 units to meet demand (read my blog about all the people moving here). Barring economic catastrophe, a housing shortage will always cause home values to rise and rents to increase. This places undo pressure on tenants and home buyers, while current homeowners get to watch their net worth rise and landlords have the opportunity to raise rents.

The only real solution to a housing shortage is to build more housing but of course we only have so much space available. But, hey, we're Portlanders, and if we can find a weird way to help solve this problem, by golly, we're gonna leap down that rabbit hole.

Multnomah County and Enhabit (no relation to Inhabit) are launching a pilot project called "A Place For You". It aims to build ADUs (accessory dwelling units or "tiny homes") in Portland resident's backyards. These will be used to house homeless families rent-free for 5 years in exchange for a tax abatement to the property owner. After 5 years, the homeowner gets to keep the ADU to be used as they see fit. The pilot project is starting with just 4 units but over a 1,000 homeowners have expressed interest.

It almost sounds like an episode of Portlandia. 

It's okay if you don't know what this is. What am I saying? No, it's not okay. It will never be okay. Things will never be the same again!

It's okay if you don't know what this is.
What am I saying? No, it's not okay. It will never be okay. Things will never be the same again!

This is an interesting idea but creativity isn't going to get us very far in the short term (and that doesn't get politicians re-elected). The housing shortage is enough of a hot topic that politicians such as Ted Wheeler and Tina Kotek have thrown their weight toward repealing the statewide ban on rent control (although last year Ted Wheeler said he supported this for the state but not in Portland, where he would adopt other measures first, he seems to have now changed his position). In the election last year, Chloe Eudaly upset incumbent Commissioner Steve Novick despite having no political experience. Her grassroots campaign for the Portland City Council was focused entirely on tenants rights.

Now that we're firmly into 2017 it means that politicians are putting their legislation where their mouth is.

In Portland, new rental ordinance is already in place.

Before we talk about the infamous House Bill 2004, let's quickly take a look at the tenant protection ordinance that took effect back in February this year. This was an emergency ordinance brought forward by Chloe Eudaly and Ted Wheeler that was passed unanimously by the Portland City Council. It requires landlords to pay moving costs for tenants that are evicted without cause or for tenants that must move because rents have been increased by more than 10 percent in a 12 month period. The one exemption is for landlords that have only one rental unit. Moving costs paid by the landlord range from $2900 to $4500 depending on number of bedrooms.

Attorneys are already dueling in court over the legality of this ordinance but for now it stands.

Not that kind of duel. Although court cases might be more interesting this way. 

Not that kind of duel. Although court cases might be more interesting this way. 

This brings us to the Tenant Protection Bill (HB 2004) that was recently passed (31 in favor - 27 opposed) by the Oregon House of Representatives and has now moved along to the state Senate for review. There are a lot of nuances to this bill and several compromises were made to get it this far. Remember, this is NOT law yet.

Here's a few salient points of the pending bill.

  1. After 6 months, no-cause eviction of tenants renting month-to-month are banned (before 6 months no-cause eviction of tenants renting month-to-month are allowed with 30 days written notice).
  2. After 6 months, evictions are allowed for month-to-month (30 days after the effective date of this legislation) and fixed term tenants (immediately after the effective date) with 90 days written notice for specified reasons, such as renovations, repairs, when the property is scheduled to be demolished, or for the sale of the property. Landlords must pay one months rent to cover relocation expenses in this case. (However, if the reason is repairs/renovations, the landlord must offer a new rental agreement back to the evicted tenant before other potential tenants.)
  3. After 6 months, evictions are allowed for month-to-month and fixed term tenants with 30 days written notice for cause. (Examples of cause: non-payment of rent, violation of drug or alcohol program, pet violation, substantial damage, etc. There are additional provisions that govern "cause" and timelines that a landlord should be fully aware of.)
  4. If the landlord terminates the tenancy in violation of the provisions, the landlord would be required to pay 3 months of rent to the tenant in addition to potential damages. This applies to both month-to-month (30 days after the effective date) and fixed tenancies (immediately after the effective date).
  5. Exceptions to the above exist for landlords that own four or fewer rental units or for landlords that live on the property and own two or fewer rental units.
  6. The bill also allows cities and counties to adopt their own rent control program which effectively abolishes the statewide ban on rent control.
  7. An exemption to rent control is provided for any new residential development for a period of 5 years from the date of issuance of the first certificate of occupancy.
  8. If a city or county passes a rent "stabilization" program, it must provide landlords with a fair rate of return and a process for the the landlord to petition for permission to increase rent in excess of the amount allowed in the program when needed to achieve a fair rate of return.
The rubics cube of government. Nuff said.

The rubics cube of government. Nuff said.

A few of the compromises that allowed this bill to pass include the exemption for landlords that own 4 or fewer units, reducing mandatory relocation assistance down to one month (originally the bill called for three months even when the eviction is for an allowed reason), and the 5 year exemption for new residential developments.

What does this mean?

So, does this bill seem sensible? Why would anyone object to it? Why was it passed on such a slim margin and why is the battle for it in the senate expected to be difficult?

I think the biggest concern is with point 6 - 8. Rent control is only fiercely debated when you don't talk to economists. Meaning, economists largely have a consensus of opinion that rent control results in a reduced supply of property to the market (which of course drives rents and home prices even higher).

Wait a second, reduces the supply? Didn't I just say earlier that this problem is a result of a housing shortage? 

Based on historical data, most economists viewpoints, and studies that have been conducted on rent control, enacting rent control (or "stabilization") causes housing shortages to become worse than if no controlling measures were put into place. I don't like it when legislatures pass bills with provisions that aren't supported by the data. (Read this article and this one and this one to gain some perspective on what economists think about rent control)

I don't think the 5 year exemption for new construction or vague "fair rate of return" language is enough to curb the negative side effects of rent control but politicians only have so many tools in their belt when in comes to housing. Those tools tend to be very blunt instruments. Even though a screwdriver might be needed, we're instead getting a hammer. Or maybe a mallet. Or maybe even a sledgehammer. Except I don't think Peter Gabriel is the solution here.

This analogy is too good for a caption.

This analogy is too good for a caption.

The merits of points 1 through 5 above really come down to your point of view. I won't delve into those here other than to say that I see both the positive and negative ramifications to being this restrictive about evictions but I'm open minded about the ideas.

HB 2004 hasn't passed the senate yet (it was just referred to the Human Services committee). I'll be following along to see if it passes and is signed by the governor, or if it dies, or if it becomes reborn as something more palatable. This is an interesting time for anyone that is a landlord or tenant!

Do you own a rental property? If so, what are your plans? If this bill passes, much of the legislation will go into effect either immediately or within 30 days. I'm a Portland area realtor and can assist you in deciding what course of action makes sense for your investment. Contact me if you have questions.

- Brandi Whitaker

Moving to Portland

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Portland is a place known for lush greenery and verdant parks, eco-friendly residents, and a myriad of coffee shops, craft breweries, and eclectic eateries. If you’ve ever had the chance to play tourist here, you’re likely already aware of a few of things that make this city great – proximity to Oregon’s beautiful beaches and mountains, ample opportunities for kayaking, fishing, hiking, and other outdoor recreation, and our thriving arts and music scene. Not to mention there are lots of fun landmarks and attractions to explore, like the Oregon Zoo, the Japanese Garden, the nearby Columbia Gorge, and Washington Park, just to name a few. By vacationer’s standards, this is a great city to visit, but what’s it like to live here?

If you’re contemplating a move to the lovely City of Roses, you’re probably curious to know a bit more about the city than just the travel guide highlights. To give you an inside look at the real nitty-gritty details of what it’s like to live here, our friends at Great Guys Moving Company, in conjunction with Moonraker Marketing, have put together a useful infographic. In this “Moving to Portland” guide, you’ll find helpful information on everything from the most walkable neighborhoods to the climate to the cost of living here.

Takeaways

What are the big takeaways? Portland, the 29th largest city in the country, is a very manageable size. With fewer people and more land mass than other West Coast cities, Portland is also one of the most affordable. While almost everything is more expensive here (except the cost of energy) than compared to the national average, it’s still a lot cheaper than living in Los Angeles or San Francisco. For instance, the average cost of a home in San Francisco is more than double the average home price in Portland. It’s also a great place to live for those looking for a reprieve from California’s insanely high taxes. Though the Oregon income tax, at 9%, is one of the highest in the country, it’s offset by the fact that there is zero sales tax. Portland is also a great place for job-seekers, with unemployment at .6% below the national level and ample career opportunities in everything from farming and fishing to sales and construction. When it comes to weather, Portland is a tad rainier and sees fewer sunny days than the rest of the U.S., but it also has an overall milder climate.

I can help

Whether you’re moving here for a new job or just a change of pace, you’ll find that Portland is a great place to call home. As you plan your move and start the search for a place to live, keep me in mind. Whether it’s a contemporary condo in walkable downtown Portland or a craftsman bungalow in Laurelhurst, I can help you find the perfect property to call home!

Online Real Estate Scams

Hold onto your money, folks, and verify, verify, verify.

Online scams nowadays often have more to do with social engineering than serious hacking. But protecting your data is very important, too.

Online scams nowadays often have more to do with social engineering than serious hacking. But protecting your data is very important, too.

So this is a super exciting topic, right? I've attended enough classes on information security to know how quickly people tune out (about 47.8 seconds). We're all vulnerable, though, so let's keep on top of this crazy world.

THE WIRE FRAUD SCAM
 

How it works
This one has been around for a couple of years and there are several different variations. However, the end result to a client during a real estate transaction is virtually the same. You receive an email from what looks to be your title company or realtor (it may have come from a hacked email address or be a "spoofed" email address). It includes wire instructions related to the house that you are purchasing. You go ahead and wire the amount to the account details shown because why wouldn't you? Unfortunately, that account you just sent your money to was actually an account that the scammer had access to.

Don't let go of your control! (haha, see what I did there)

Don't let go of your control! (haha, see what I did there)

Scammer = $, You = :(

How to avoid the scam
Always, and I mean always, verify wire instructions via a phone call to someone you trust (the title company if you are familiar with the agent, your realtor, or your loan officer). Don't use any contact information contained in the email with the wire instructions.

Fictitious Property Scam
 

This one mostly impacts people that live out of state looking to purchase or rent a property but there are local variations, too. It is especially prevalent in hot markets. I could see this really starting to impact Portland. Take a look at my blog about all the people moving here. 

How it works 
Scam artists copy photos of previously listed homes and create a fake property profile. They post to websites that allow for basic, unverified user accounts such as FSBO (for sale by owner) websites. Prospective buyers/renters call the information listed and, depending on the variation of the scam, may go so far as to make an offer to purchase/rent the home. 

In the case of properties for sale, the interested buyer moves forward in wiring funds or mailing a cashier's check for earnest money (an amount often sent with an offer to purchase to prove how "earnest" the buyer is in their desire to buy the home). After funds are sent, the online property profile vanishes. In the case of rentals, the scam artist asks for an upfront "application fee" which promptly disappears along with the online listing. This scam can also happen on popular websites like Zillow, Trulia, or Craigslist. These sites aggressively crack down on scam accounts but there will always be some that slip through.

For sale online in southeast Portland for $450,000. Just take my money, already.

For sale online in southeast Portland for $450,000. Just take my money, already.

How to avoid the scam
For home buyers, always work with a buyers agent. Attempting to buy a home without representation, especially when you live out of state, can lead to a whole host of problems (we'll save that for a future blog). Of course, I'm completely biased in this opinion because I'm a realtor but when it comes to the buyer side of things, there's very little to lose by having someone represent you. 

Other things you can do if you're a renter or you just don't want to hang out with your friendly neighborhood realtor:

  1. Check the tax records. Most places have some type of online public access to check this (locally that would be PortlandMaps) but if not, lookup the local Tax Assessor's office and give them a call. If the name on the tax record doesn't match the property profile, slowly back away before turning around and running. Figuratively speaking, of course. Don't, like, leave your computer behind in a public place.
  2. Ask for the property address then look it up on your favorite maps program then check the street view. Does it match the picture? No? Methinks I smell a rat.
  3. Contact a local realtor and ask them about it. I am sure that any who respond will be happy to help you find information about the house even though they don't represent you. Who knows why. I guess realtors are just super friendly that way. Then, if they seem like smart people that you could hang wallpaper with for an hour or two, maybe consider interviewing them...?
  4. Check for odd grammatical and spelling errors along with weird turns of phrase. Evildoers are getting better at this but are rarely perfect. Also, if the listing details clearly don't match what the pictures of the place look like or the price is entirely too good to be true, it is very likely a scam. 
You knew this post had to include a picture of the ubiquitous hoodie-wearing hacker, right?

You knew this post had to include a picture of the ubiquitous hoodie-wearing hacker, right?

So there you are. These scams will now be successfully avoided by everyone I know. But, I feel like there's more to say about protecting yourself online that goes beyond real estate. Since this post has been relatively short for me, why not keep going? Just a disclaimer: no matter what you do, there is never a way to be completely protected. 

Having made that cheery statement, here's just a few pieces of advice for greatly reducing your online vulnerability that I find myself frequently dispensing and are just as frequently ignored:

  1. Keep ALL of your devices up to date which means update everything as soon as a new release comes out. That means Apple users, too (the days of thinking that Apple products aren't vulnerable are over). No, do not wait a week or two to see if you like the feel of the update. Vulnerability patches are entirely too important to wait. 
  2. Use a random password generator for everything. Store them in a password keeper (check out LastPass and Dashlane). Make sure that the password you use to access the password keeper is really good (like a passphrase). Yes, there are some downsides to using a password keeper and there's always debate about the safety of keeping all your passwords in one place. However, the alternative most people use is having one, maybe two, passwords for EVERYTHING. To me this is a lot riskier than relying on a very successful company to maintain sophisticated software that protects your data.
  3. If you do not want to use a password keeper then make sure not to use the same password for everything. Please use a different password for all of your financial accounts. At least in this manner, if one of your non-financial passwords gets cracked, they can't use it to drain your accounts. Make your financial passwords as difficult as possible (which means more complex than a word followed by a digit or two.) If you find yourself copying your passwords onto Notepad or Word then it's time for a password keeper.
  4. Do not click links in emails unless they are from a trusted source, no matter how interesting they look. Also, be careful of "attachments". A recent scam involves taking a screen capture of a PDF or other attached document and inserting it into the email. This way it looks like a legitimate document to download but is actually a link to a site that will install malware on your computer. 

- Brandi Whitaker

The Case of the Rapidly Increasing Oregon Population

WHY SO MANY PEOPLE ARE MOVING TO OREGON AND WHAT I THINK ABOUT IT

"Nancy Drew and the Jewel Stealing Sasquatch That Moved to Oregon"

"Nancy Drew and the Jewel Stealing Sasquatch That Moved to Oregon"

If this were The Hardy Boys or Nancy Drew (I devoured those books as a kid) then I would start this case by hunting for clues. There would inevitably be some type of jewels, paintings, or other objects involved and I would almost certainly get to travel to interesting locations. At some point I would get to ride in a spectacular car, motorcycle, boat, plane, or other oddball method of transport like a Sasquatch or something. In the end, my master sleuthing would uncover the mystery, plus some unexpected twist no one was expecting (or maybe I’m thinking of Scooby Doo).

Figuring out why Oregon is one of the top moving destinations in the United States takes a super sleuth. Some reasons are obvious. People from more expensive areas, like much of California, enjoy moving to Portland because they have a lot more buying power. Their jobs also tend to transfer well to our market. Many companies are opening PDX satellite offices and have found that their employees are jumping at the chance to move up here (I’m looking at you, Google). 

There is no denying that you can afford more house in Portland than you can in the heavily populated areas of California. The median home price in San Francisco is north of 1.3M. I’ve seen headhunter after headhunter try to recruit many of my engineer friends to move down there (unsuccessfully). The running “joke” is that a down payment in Silicon Valley could buy you an entire house in most of the rest of the United States.

This is California. If it were Oregon these people would be wearing Smartwool long johns, Pendleton sweaters, Columbia jackets, and Patagonia puffer coats. And they'd still be huddled a lot closer together for warmth.

This is California. If it were Oregon these people would be wearing Smartwool long johns, Pendleton sweaters, Columbia jackets, and Patagonia puffer coats. And they'd still be huddled a lot closer together for warmth.

But, as much as Oregonians love to blame all problems (especially traffic) on Californians and people living in Vancouver, there is a deeper story here.

California’s net gain/loss is actually pretty close to zero (about the same amount of people move in as move out). Oregon, on the other hand, stands at about a 67% gain vs 33% loss rate. It seems that word has traveled far and wide. People from Arizona, Texas, Colorado, Illinois, Kentucky, West Virginia, and others are all finding their way to the Pacific Northwest (Seattle is getting them, too).

However, one of the biggest sources of transplants is New York and other northeast states. New York itself is one of the most moved from states at a 63% loss vs 37% gain rate. It’s easy to see why this would happen. All the reasons Californians love to move here make sense for New Yorkers. And unlike Southern Californians, East Coasters aren’t trading year-round mild weather for the privilege of growing webbing between their toes.

Pro tip(s) for migrators: Only wimps carry umbrellas in Oregon. Never buy a piece of outerwear without a hoodie. Beards are not optional.

Pro tip(s) for migrators: Only wimps carry umbrellas in Oregon. Never buy a piece of outerwear without a hoodie. Beards are not optional.

Although, they’ll still have to grow webbing between their toes.

They’re also going to have to deal with an ongoing housing crisis. But that’s another story.

Even though the majority of people move to Oregon for a job (52.75%), there are other reasons. The next most cited response is retirement (19.90%) and people over the age of 65 are actually the largest age group moving to Oregon (24.35%). Although it’s fairly even across the board.

Oregon doesn’t seem like the most likely place to retire but when you factor in Bend, Sisters, Ashland, and the entirety of the coast, it does make sense. Not to mention the fact that we have some kickin’ retirement communities around the Portland metro area.

Family and Lifestyle round out the other major reasons people move to Oregon. Family will always be a good reason to move but not every state offers quite the same lifestyle as Oregon. Whether you want to start a tech company, keep it weird, or follow your outdoor adventure dreams, we’ve got it all.

Weather wasn’t a survey option but I’m sure if it had been, that would have been the top response, right? Or the prevalence of bicycle lanes. That would have been way up there.

This isn't a bicycle race. It's just Portlanders on their normal morning commute.

This isn't a bicycle race. It's just Portlanders on their normal morning commute.

So, we have a pretty good idea now of why so many people are moving here. The next question would be: Is this a good thing?

I would have to say, “YES!” Many of the people moving here are accepting jobs that sorely need to be filled. Because companies are beginning to realize that Oregon is more than just the end destination of their favorite 80’s computer game, the job market is booming. We’ve been setting records for job growth and we need talent, stat.

Of course, we also need available housing, stat. But, that’s still another story.

Full disclosure: I am not a native Oregonian. I moved here in 2001 from my home state of Georgia. I have an enormous soft spot for anyone from the eastern seaboard because I worked sales for years to New York and the surrounding states. For some reason, my straight-forward, analytical, "get ‘er done" personality jives well with New Yorkers. I sometimes miss traveling back there and being able to visit 6 states in a day (although I don’t miss the tolls).

So if you’re looking to transplant yourself to the Portland area, look me up. We’ll see all kinds of interesting locations, maybe weather a few twists, and eventually uncover a jewel of a home. But no Sasquatches. I promise.

- Brandi Whitaker