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We are now well into the second half of the 2017 Oregon Legislative Session.   There finally is some good news - most of the bad legislative proposals that MHCO has been tracking have been defeated.  There are four remaining bills - two that MHCO supports and two that MHCO opposes that are still in play at this point in the legislative session.  The two bills supported by MHCO are the result of significant work and represent compromises that the MHCO worked on in order to keep more detrimental legislation from moving forward.  In a perfect world where the the legislative process is more business friendly these compormises would not have been necessary.  Sadly, that is not the legislative environment we are currently dealing with this session.

HB 2008 - this lengthy bill originally proposed everything MHCO has been fighting against over the past twenty years - from 'enforcement' to 'rent justification' and much longer timelines notifying residents when the community is to be sold.  All of HB 2008 was deleted and replaced with an amendment that addressed three items:

1. Increase park closure reimbursements form $5000/$7000/$9000 to $6000/$8000/$10000 for single/double/triple when a community is CLOSED.  Also eliminated a proposal that the community owner pay up to $20,000 in relocation costs per home when the community closes.
2. Addresses cooperatives (communities owned by residents).   Owner (resident in a cooperative) is not required to remove the home if the cooperative agrees with the owner to waive or extend the deadline by which the buyer or subsequent buyer must remove the home or store the home in the space for a specific period of time.  This only applies to homes in communities owned by the residents.
3. Upon sale of a manufactured home community the following information will be provided to residents:
   1. The number of vacant spaces and homes in the      community
   2. The final sale price of the community
   3. The date the conveyance became final

HB 2008 passed out of the House Committee on Human Services and Housing on Tuesday, April 18th with a vote 7-2 in favor.

SB 277 - This bill is the landlord-tenant coalition bill that was negotiated over several months by landlord and resident organizations.  This is the result of the controversies this past summer over disrepair and deterioration issues in communities that had received extensive media coverage.  The proposal increases the time residents have to make improvements from 30 to 60 days.

 The legislative proposal also clarifies disrepair and deterioration and addresses aesthetic" issues which are different from "deterioration" and "disrepair."  For example

Tony Petosa and Nick Bertino - Wells Fargo Multifamily Capital

From both a global and national perspective, we are in the midst of witnessing major change unfold as President Trump takes over the reins from the Obama administration. It is undeniable that material shifts in policy are in the works, social and economic alike. Some of these will likely have an effect on the commercial real estate lending environment, including financing for manufactured home communities (MHCs). The Trump administration is already taking a new approach to banking regulations, which may at some point include working with Congress on the future of the government-sponsored entities (GSEs), Fannie Mae (FNMA) and Freddie Mac, both of which are active lenders to the MHC sector. More immediately, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd- Frank) is under review by the new administration in an effort to scale back regulations enacted during Obama's presidency. And, as if we didn't have enough change going on, many economists are predicting higher interest rates this year.

In 2016, FNMA and Freddie Mac continued to be reliable lending sources for multifamily and MHC properties while having remained in conservatorship since 2008. MHCs in 2016 were again excluded from the annual lending cap placed on the GSEs by their regulator, the Federal Housing Finance Agency (FHFA), and consequently MHC loans were generally priced with interest rate spreads well inside of those for conventional apartment properties. In December 2016, the FHFA announced that MHCs would continue to be excluded from the lending caps in 2017, which came as welcomed news to MHC property owners and lenders alike. Since Freddie Mac and FNMA will not have a limit on the volume of MHC loans they can originate this year, we anticipate they will continue to price MHC loans aggressively.

While we appear to be in a state of business as usual" with the GSEs in the near term

 We are in the home stretch of the 2017 Oregon Legislative Session. The target adjournment date is June 23rd, the constitutional deadline for adjournment is July 10th. The actual date will fall somewhere between the two - most likely in late June. Significant budget, tax, transportation issues still need to be haggled over as the legislative session draws to a close.

Nearly all legislative proposals MHCO has been tracking (mostly opposed) have died in committee.

Click Here or at the top of this article  "MHCO Legislative Update"  for links to bill drafts and the status of all bills actively tracked by MHCO.

Two significant legislative proposals addressing manufactured home communities are on their way to the Governor's desk for signature. Here is a summary of these two bills:

SB 277A - This is the landlord tenant coalition bill that was negotiated over several months and addresses changes to disrepair and deterioration. The bill provides clear definitions of disrepair and deterioration as well as making it clear that cosmetic or aesthetic concerns are not disrepair or deterioration. The 30 day cure period is extended to 60 days. The bill also clarifies the responsibility of new residents who purchase an existing manufactured home in the community for repairs including cosmetic or aesthetic concerns as long as those concerns are included in the community rules and the community owner gives written notice to a prospective purchaser before he or she becomes a new resident.

HB 2008A - this bill caused a great deal of anxiety for community owners when it was introduced in January. The original bill contained nearly every legislative concept that MHCO has been fighting against for the past 20 years. MHCO negotiated with John VanLandingham (Lane County Law Center) and Representatives Marsh, Fahey and the House Speaker to reach a compromise that removed nearly all of HB 2008 and replaced it with three issues.

The first issue increases the amount homeowners are compensated when a community CLOSES from $5,000 (single wide), $7,000 (double wide), $9,000 (triple wide) to $6,000 (single wide), $8,000 (double wide), $10,000 (triple wide) and tied future increases in compensation to CPI.

The second issue in the compromise addressed resident-owned communities. USDA Rural Development would like to pilot their 502 1% loan program in resident-owned cooperatives, however, they won't if there are restrictions requiring a lien holder to remove an abandoned or foreclosed MH after 12 months. The compromise will give resident-owned cooperatives the flexibility to negotiate storage terms with lien holders that are beneficial to the cooperative. This, in turn, will allow the cooperative to attract lenders who offer extremely affordable loan products to manufactured homeowners in cooperatives who wish to replace older or unsafe homes with new, energy-efficient ones.

The third issue, when a community sells the new community owner will need to report to the state - the number of vacant spaces and homes in the manufactured dwelling park; the final sale price of the community; the date the conveyance became final; and the name, address and telephone number of the new owner.

Finally, the other issue of great concern to all landlords is RENT CONTROL. HB 2004A (the rent control bill) is in the Senate. In March the HB 2004A passed out of the Oregon House and has had a public hearing in the Senate. Final action on the bill (work session) is scheduled for the end of May. There is no indication what the Senate will do, but a number of Democratic Senators have expressed opposition. At this time all eyes are on the Senate - we should have a good idea later next week on what direction the Senate will take on rent control and the elimination of 'no cause' eviction. We will keep you posted on any developments - all should be revealed within the next two weeks.

MHCO Legal Counsel Phil Querin will do a complete analysis and provide practical advice for all MHCO members (managers and community owners) on these new laws later this summer. In addition all necessary changes to MHCO Forms will be made as well.

If you have any questions or concerns please feel free to contact the MHCO office at 503-391-4496.  

This afternoon the Senate Committee on Human Services amended HB2004A with a dash 9 amendment that DOES NOT include rent stabilization, rent control or the elimination of the preemption of local rent control. The dash 9 amendment is attached below and replaces all of the language from the original HB 2004 that was introduced in January 2017. The bill moved this afternoon out of the Senate committee on a party line vote. Some Portland Democratic Senators have expressed their disappointment that the bill contains no rent control. That may ultimately doom the bill but not likely.

MHCO will have Phil Querin review and prepare a full analysis if the legislation passes the Senate and House. With just 6 weeks left in the legislative session time is getting short. MHCO will continute to monitor legislative developments and send updates when necessary.

A copy of the dash 9 amendment is posted at the top of this article.

Last month, HUD announced that the owners and managers of two California apartment complexes has agreed to pay $72,000 to resolve allegations of discrimination against a female resident with disabilities who requires an assistance animal.

The case came to HUD's attention when a Northern California fair housing group filed a complaint alleging that the owner and its agents discriminated against a resident who has a medical condition and requires a service dog. Allegedly, the animal alerts the resident when she is experiencing physiological changes and helps to ameliorate many of her disability-related symptoms.

The fair housing group also claimed the resident, who had lived at the property for more than 15 years, was subjected to discriminatory statements and retaliation due to the presence of her assistance animal, including false accusations that the animal was disruptive, that it bit maintenance workers, and that it was not a service animal under California law. The complaint claimed that the resident's Housing Assistance Program voucher was ultimately cancelled, forcing her to find housing elsewhere.

HUD reported that its subsequent investigation corroborated the resident's need for the dog and discovered written discriminatory statements made by the property managers. HUD found no evidence indicating that the animal was disruptive or had bitten anyone.

The settlement requires the owners and managers to pay $31,000 to the resident and to pay $41,000 to the fair housing group. Among other things, the owners also agreed to develop and implement a reasonable accommodation and reasonable modification policy consistent with fair housing law.

Landlords are required to provide a reasonable accommodation for individuals who require assistance animals

MHCO.ORG Note:  Pressure continues to build to provide more renter rights and legalize some form of rent control or rent justification.  Portland City Council's action this afternoon is yet another precursor of more to come in the Oregon Legislature.  Stay tuned - this issue is not going away anytime soon.

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By Jessica Floum

The Oregonian/OregonLive

Exceptions to Portland land use rules, protections for city renters facing eviction or big rent hikes, and political pressure to devote taxpayer and donor money to affordable housing will continue for the foreseeable future, following a unanimous Portland City Council vote Wednesday.

All those measures are intended to curb Portland's critical shortage of affordable housing and spike in homelessness.

The council voted Wednesday to extend for a second time its a declared "housing emergency." It also voted to extend a renter protection policy adopted in February by six months to give city officials time to implement a permanent renter's rights policy.

Instituted in 2015, the emergency declaration has encouraged spending on housing, allowed for flexibility in where city and county officials can open shelters and fast-tracked building permits for affordable housing projects. The council extended the declaration by 18 months and charged the Portland Housing Bureau and the city and county's Joint Office on Homeless Services to develop criteria for when the city should lift the temporary rules.

Commissioners hope to implement permanent rules in the city's zoning codes by then. They might include permanent zoning exemptions that allow for homeless camps such as Right 2 Dream Too or emergency homeless shelters in the winter.

"There's more we need to do to stabilize the systems that impact housing and homelessness in our community," Mayor Ted Wheeler said. "This is an emergency that requires action now."

Led by former housing advocate and city Commissioner Chloe Eudaly early this year, the council adopted a tenant protection rule that requires landlords to pay $2,900 to $4,500 in relocation costs to renters whom they evict without cause or who must move as the result of a rent increase of 10 percent or more.

The council extended that policy, set to expire Friday, by six months. Wheeler, the housing commissioner, pledged to bring a permanent renter protection rule back to the council on December 6.

Dozens of renters urged the council Wednesday to take the rule further.

They shared experiences of landlords finding ways around the rule such as increasing rents by 9.97 percent instead of 10 percent and requiring renters to pay for utilities that the landlord previously covered.

They advocated for closing an exemption for "mom and pop" landlords who only rent one unit. The impact on the renters is harmful, regardless of who the landlord is, they said.

Many of the most vulnerable tenants rent from smaller landlords because they can't access "mainstream" rental opportunities due to criminal histories or other "troubled records," said Katrina Holland, executive director of renter advocacy group Community Alliance of Tenants.

The owners and manager of three apartment buildings in Washington have agreed to pay $95,000 in damages and civil penalties to resolve a lawsuit charging them with refusing to rent to families with children, according to a recent announcement by the Justice Department.

In its complaint, the department alleged that a manager told a woman seeking an apartment for herself, her husband, and their one-year-old child that the apartment buildings were adult only." The complaint also alleged that the defendants advertised their apartments as being in "adult buildings." The family filed a complaint with HUD

By Erik Edwards, Nick Bertino, and Tony Petosa

For the past several years, the talking heads" have been warning us about the coming rise in interest rates