Each quarter we pool our knowledge and experience to evaluate the latest real estate market data. We provide our thoughts here to give you an insider’s look at what’s going on in Portland.Read More
I met Miles and Brandy at a wine night dinner party with mutual friends. They were a smart, hilarious couple, with a house full of three kids, a dog, and chickens (well, the chickens were technically in a coop in the backyard). I liked them immediately.
Last year they contacted me about selling a house they owned in SE Portland - a BEAUTIFUL vintage home in a FANTASTIC neighborhood! I was thrilled. We did a walk-through and originally the plan was to wait until the tenant's lease expired, but with the Portland market being so strong and the location what it was, I thought we could sell it with the lease in place. Which is exactly what we did. Success!
But that was just the beginning...
Miles and Brandy had a plan, a grand plan, a farm plan. The goal was to sell the SE Portland home then sell the house they were living in at the time in SW Portland and finally find a dream country property with a few acres and plenty of space for the entire family to live the farm life! We listed their SW Portland home which was near Multnomah Village and started looking in Newberg for the dream property.
One day, we came across a listing for a house that was in need of "a little TLC." We made it out to the property and drove up a VERY long and daunting gravel driveway with several tight switchbacks. The whole time I was thinking "I hope my Jetta makes it. I hope I don't get stuck. I hope this is worth it, once we get to the top."
Wow, was it ever worth it!
It was like magic, once we made it to the property at the top of the hill. The view was spectacular and it just had a very special feeling. Then we turned around and looked at the house which had been vacant for quite some time. We thought "Oh, cool! Look at that eco-roof!" Then quickly realized the entire roof had been severely lacking in maintenance and had literally grown an entire ecosystem. I had never seen anything like it. We got inside to find that the roof was leaking (and had been for some time), there were spiders and dead flies everywhere, and almost every inch of it needed to be updated. I thought to myself "This will never fly. Beautiful property, but just too much work for them." Boy, was I ever wrong.
Brandy and Miles listed and sold their SW Portland home with me and they bought that Newberg property in need of "a little TLC." They did a complete gut remodel and turned this tired, sad, neglected house, into a beautiful and unique dream home for their family: a truly contemporary farm-house.
They are the most adventurous couple I have ever met. They are creative, smart, funny as heck, and absolutely not afraid to get their hands dirty! This was my third transaction with them in less than a year. Third time was the charm: their farm-life dreams were officially a reality. It was one of the most rewarding real estate experiences I have had the pleasure of being a part of. Thank you Miles and Brandy for allowing me represent you throughout the process. It was a fantastic ride I will never forget! I am looking forward to checking out the solar eclipse this summer at "The Farm!"
Before and Afters of The Farm
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.
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.
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.
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.
- 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).
- 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.)
- 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.)
- 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).
- 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.
- The bill also allows cities and counties to adopt their own rent control program which effectively abolishes the statewide ban on rent control.
- 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.
- 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.
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.
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.
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.
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!