By: Tony Petosa, Nick Bertino, and Erik Edwards of Wells Fargo Multifamily Capital

Despite a turbulent start to 2016, with the capital markets roiling from weakness in China and a downward spiral in oil and stock prices, borrowers have an abundant array of attractive financing options available for acquiring or refinancing Manufactured Home Communities (MHCs).  However, due to recent volatility, astute investors should take a thoughtful approach to navigating the field of potential lenders.  While the same lending alternatives are available since the economic recovery gained traction in 2012 - Fannie Mae, Freddie Mac, conduit lenders, banks and thrifts, and life insurance companies - each lender offers distinct advantages/disadvantages as it relates to loan structures, interest rates, closing costs, servicing, and their responses to the whims of the market.

From a general market perspective, there are still plenty of reasons for commercial real estate investors to be optimistic.  Treasury yields are currently near all-time lows, interest rate spreads for most lenders remain at favorable levels, and underwriting guidelines continue to moderate due to an ever expanding supply of active lenders in the market.    Employment and housing sectors have improved in the past year as U.S. unemployment dipped below 5% for the first time in many years.  Barron's recently reported that despite the turbulent markets, it expects the U.S. economy to avoid recession and grow at a 3% pace in 2016.  Additionally, while a precipitous fall in oil prices has had a negative impact on oil patch" locations

The Justice Department announced today that Thomas Mere, the owner and operator of Mere's Mobile Home and Recreational Vehicle Park in North Fort Myers, Florida, has agreed to pay $40,000 to resolve allegations that he discriminated against African Americans in violation of the Fair Housing Act.  The settlement, which is in the form of a consent order, must still be approved by the U.S. District Court for the Middle District of Florida.

The government's complaint, also filed today, alleges that the defendant falsely told African Americans that no mobile homes, recreational vehicles or recreational vehicle lots were immediately available for rent, but told similarly-situated white persons that they were, in fact, available for rent.  According to the complaint, the defendant encouraged prospective white renters to consider residing at Mere's Park and discouraged African Americans from residing there by, for example, referring African Americans to another mobile home and RV park, making discouraging comments about units that were available for rent and failing to provide African Americans complete and accurate information about available units and lots.  The lawsuit is based on the results of testing conducted by the department's Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices. 

Owners of rental properties cannot pick and choose residents based on race or color

Last night the Oregon Senate passed HB 4143 the Tenant Protection" bill. The bill is now on its way to Oregon Governor Kate Brown.

'The Oregonian' reports -

"... the 16-9 vote came late Wednesday

Since the last MHCO Legislative Update" last week there has been significant progress in moving the "inclusionary zoning" bill (SB 1533) and the "tenant protection" bill (HB 4143).  

No hostile amendments have been added to either bill.  At one point the Port of Portland objected to HB 4143 - turns out they have some RV property - but the amendment we had already added in committee sufficed and the bill moved forward.  

Both of these bills as well as two land use/housing affordability are moving forward as well.  We are in very good shape - somewhat remarkable given the of the media last autumn.  This is the last full week of the 2016 Oregon Legislative Session.

Here are two articles from the "Oregonian" that might be of interest.  Remember - the "tenant protection" bill and "inclusionary zoning" do not have an impact on MHC's.

http://www.oregonlive.com/politics/index.ssf/2016/02/housing_crisis_inclusionary_zo.html#incart_email

http://www.oregonlive.com/politics/index.ssf/2016/02/which_bills_are_alive_and_dead.html#incart_email

Good morning.  This has been a very busy week in the Oregon Legislature as we head into the home stretch of the 2016 Oregon Legislative Session.

The Renter Protection" bill (HB 4143) passed out of the Oregon House on Tuesday and is now in the Senate Rules Committee.  It is scheduled for a 'work session' this afternoon and will likely pass on to the full Senate for a vote later this week.  This legislative proposal will have a minimal impact on manufactured home communities in Oregon.  MHCO has worked very hard to keep the angst over the Portland housing crisis away from the manufactured home industry.  By all accounts we have been successful.  This bill also has no rent control.

The 'inclusionary zoning' bill (SB 1533) passed out of the Senate Committee on Tuesday as well.  This bill is the result of some intense bargaining with the final amendments to the bill being drafted and adopted this past Tuesday.  MHCO was very concerned that this is where we would face a rent control challenge.  Our main concern was the elimination of the pre-emption of rent control in ORS 91.225.  The new amendments do not impact our rent control pre-emption.  

There are two other bills addressing affordable housing that will be up for consideration.  The bills encourage government entities to take into account opening up more land for affordable housing and annexing (HB 4079 and SB 1573). 

Here is a link to a recent "Oregonian" article on the passage of the renter protection bill (HB 4143).  Click:

http://www.oregonlive.com/politics/index.ssf/2016/02/house_approves_ren…

Finally

By Emily Q. Shults

Bullard Law - 503.248.1134 or on the web at www.bullardlaw.com

On Thursday, the Oregon House of Representatives approved landmark legislation (Senate Bill 1532) which raises the state's minimum wage rate to the highest in the United States, and does so through an unprecedented tiered system based on where Oregon residents work.  The bill now heads to Governor Kate Brown, who has already indicated that she will sign it into law. 

A product of heated debate and compromise between the interests of unions, businesses and farmers, the plan imposes a series of gradual increases over six years.  By 2022, the state's current $9.25 an hour minimum wage - already one of the highest in the nation - would climb to $14.75 in metro Portland, $13.50 in cities such as Salem, Eugene, and Bend, and $12.50 in rural communities.  Below is a timeline of the planned minimum wage increases for each designated geographic tier":

Tier 1 (the Portland urban growth boundary):

July 1

We are now approaching the halfway point in the 2016 Oregon Legislative Session. We are starting to get a much better sense of what legislative proposals are moving forward and which ones will likely remain in committees and not see the light of day until perhaps the next legislative session in 2017.

The "tenant rights" bill HB 4143A passed out of the Oregon House Rules Committee late yesterday afternoon with the "dash 14A" amendment which addressed MHCO's last issue - the extension to 90 days for "no cause" evictions. This amendment returns "no cause" evictions to 60 days for tenancies over 1 year. With the adoption of this amendment manufactured home communities in Oregon will face NO SIGNIFICANT CHANGES from this legislative session. There will be no rent control or rent justificiation. The one year limit on rent increases will impact only apartments - NOT manufactured home communities. HB 4143A heads to the House floor for a vote then on to the Senate. MHCO does not expect any "anti-landlord" language to be added as we head over to the Senate chamber.

The other legislation MHCO is watching is SB 1533 the "inclusionary zoning" bill. This bill is up for a public hearing tomorrow in the Senate Committee on Finance and Revenue. Since it is only scheduled for a public hearing the bill will not move out of committee until possibly later this week. Time is starting to run out on this legislative session and there is little room for bills to stall.

This has turned out to be a very successful legislative session for community owners in Oregon. It is the first Oregon legislative session in 20 years to not have any signficant legisaltive changes impacting community owners. We still have a couple weeks to go - but things are looking good. MHCO will keep you up to date as we head into the final weeks of the 2016 Oregon Legislative Session.

We are now in day 9 of the 2016 Oregon Legislative Session.  Today is a major milestone for the session - after today House Bills NOT passed out of House Committees (and likewise Senate Bills in Senate Committees) are considered dead and will have to be reintroduced in the 2017 Legislative Session.  Bills in the House or Senate Rules Committee, Revenue and Ways and Means are the exception.  Which by the way, is our next stop in our 2016 Legislative journey.

There were two committee work sessions yesterday.  In the "Senate Committee Human Services and Early Childhood" the "inclusionary zoning" bill (SB 1533) was amended with a compromise between a large pool of interests - from cities, counties, realtors, home builders, housing activists etc.   The amendment eliminates the pre-emption on inclusionary zoning" - which cuts close to our pre-emption on rent control (ORS 91.225).  There had been rumors/discussions in the Capitol for the that the legislature would make adjustments to our rent control pre-emption.  It did not happen.  The committee never mentioned rent control.  The bill (SB 1533) passed unanimously out of the Senate committee to the Senate Revenue Committee.  SB 1533 allows construction excise taxes as part of the overall compromise hence requiring a detour to the Senate Revenue Committee.  (Side note: Some of the revenue generated by this legislation will go to Oregon Housing and Communities Services for affordable housing programs such as money for first time home buyers.  That money could be used for first time homebuyers in MHCs.  MHCO will look into this further.)

The second hearing and work session was in the ""House Committee on Human Services and Housing"".  The committee adopted the dash 11 amendment to HB 4143.  This amendment strengthens the RV exception which MHCO requested and exempts MHCs from the new regulations on apartments (such as no rent increase during the fist year).  The bill passed out of the Committee to the ""House Rules Committee"". The "Rules Committee" may also adopt some changes that would open up land outside the urban growth boundary for building of affordable house.  The committee may also make changes to the 90 day no cause notice setting it back to 60 days.    The dash 11 amendment was adopted and the committee voted along party lines with one Republican (Knute Buehler

Good morning!  We are now on day 7 of the 2016 Oregon Legislative Session - 28 days left.

MHCO has been monitoring several bills.  The most significant is HB 4143, now referred to as the renter protection bill".  This bill is the legislature's response to the Portland housing crisis that has been the focus of the media over the past 6 months.

For the most part this bill does not impact manufactured home communities.  MHCO has worked to include an amendment that would exempt RV's from the proposed legislation. We expect that the amendment will be accepted by the Legislature and RV's will be exempt from the new laws.  If the dash 7 amendment is adopted the only impact on manufactured home communities will be on landlords who own homes in their community.  If you own a home in a MHC and rent it out the "no cause" notice increases from 60 days to 90 days.

However

Editor's Note:  Earlier this year MHCO passed significant changes to Oregon's abandonment law in the Oregon Legislature.  To assist MHCO Members with these changes, MHCO has developed three new forms as a result of the new abandonment law:  The new forms are: MHCO Form 31A "Declaration of Intent"; MHCO Form 31B "Declaration of Compliance"; and MHCO Form 31C "Declaration of Sale".  Attorneys Phil Querin and Mark Busch provided input as well as the Oregon Department of Revenue.  Below is Phil Querin's explanation of the changes to Oregon's abandonment law.  Further clarification will be provided in the 2016 MHCO Management Training Seminars and future "Question and Answer" sessions with Phil Querin.

Current Oregon Law. ORS 90.675(14) provides that following the public or private sale of an abandoned home, a landlord may deduct from the proceeds of the sale the reasonable or actual costs of notice, storage and sale and the unpaid rent. If any funds remain, the landlord is required to remit the excess proceeds to the county tax collector to the extent of any unpaid property taxes and assessments owed.1 

However, if one of the following circumstances apply, the county tax collector is required to cancel all unpaid property taxes and assessments: 

1. The landlord destroys or disposes of the home after a determination from the assessor that its current market value is $8,000 or less; 

2. The sale was held, but there was no buyer of the home; 

3. There is a buyer of the home; its current market value is $8,000 or less; but the 

   proceeds of sale are insufficient to satisfy the unpaid property taxes and assessments owed after distribution of the proceeds for the landlord's actual cost of notice, storage and sale and unpaid rent; or 

4. The landlord buys the home at the sale; its current market value is more than $8,000; the proceeds of sale are insufficient to satisfy the unpaid property taxes and assessments; and, the landlord disposes of the home. 

New Oregon Law. No. 4 above has been stricken,2 and the following rules (found at ORS 90.675(14)(d) and (e) and (15) of HB 3016,) will apply. On January 1, 2016, if the landlord follows these new laws, the tax collector and Department of Revenue (collectively tax collector") will be required to cancel unpaid taxes in the following additional circumstances: 

1. The landlord sells the home to a buyer who intends to occupy it in the community in which it is currently located