Search

By Gordon R. Friedman - The Oregonian/OregonLive

Published 8-20-18

The Portland City Council will soon consider an ordinance to cap what landlords can charge for security deposits and limit how they may use renters' credit and criminal conviction history to deny them tenancy.

"Screening criteria and security deposit reform" will be the subject of an upcoming council agenda item, Commissioner Chloe Eudaly wrote in an August 14 post to her Facebook page. The ordinance is scheduled for a hearing September 20, said Eudaly spokeswoman Margaux Weeke.

It is exactly the kind of move that Oregon landlords feared when they banded together to try to raise $2 million to fight those and other restrictions they say will undermine their businesses.

Policymakers in other cities have also explored regulating security deposits, citing mounting pressures on renters who struggle to save up cash for move-in fees. New York City's comptroller in July introduced a deposit-limiting measure. The Seattle City Council adopted a similar ordinance in December 2016, and landlords filed a lawsuit to challenge it.

In Portland, landlords may currently charge what they like as a security deposit, and there are few regulations over how deposits must be returned after a tenant vacates. That would change under Eudaly's ordinance. In the Facebook post, Eudaly described one an effect of the ordinance as "limit security deposit requirements."

The ordinance would also change how landlords may use information about potential tenants. Property owners typically perform criminal records and credit history checks on rental applicants. Some renter advocates have described the background checks as offering landlords a pretense for discriminating against those with criminal pasts or poor credit.

Eudaly said in her Facebook post that changing how landlords may use information about rental applicants to deny them tenancy is in part intended to "reduce barriers to housing" and "prevent discrimination."

According to a draft of the ordinance provided by Eudaly's office, she has considered establishing a system that requires landlords to approve tenants on a first-come, first-served basis, though a minimum credit score would still be allowed.

To deny applicants, landlords would be required to rank applicants on their credit history, criminal convictions and housing record and give them a chance to provide favorable information.  

The draft ordinance includes a list of crimes that are not to be judged by landlords as meaning a tenant convicted of them would likely harm the property or cause the premises to be unsafe, if the applicant was sentenced at least three years prior or released from prison one year prior. The list includes felony assault and battery, felony burglary or breaking-and-entering, stalking and misdemeanor domestic violence, dealing or manufacturing illegal drugs, and non-forcible sex offenses, among others.

By:  The Oregonian Editorial Board

Printed 9-16-18

Portland's elected officials are doing their part to promote the $652.8 million regional housing bond going to voters this November. They have contributed to  the campaign, offered their heartfelt support in public meetings and signed on as official endorsers for the bond.

But if they really want to help get and keep families housed, they should focus on how their own policies stand in the way. Because regardless of the bond's success or failure, the duration and severity of this housing crisis hinge on whether leaders encourage the market as a whole to add more housing or quash it.

Unfortunately, a sweeping proposal being developed by Portland City Commissioner Chloe Eudaly falls squarely in the latter category.

Eudaly announced months ago that her office was looking at the process with which landlords screen potential tenants. The intent, policy director Jamey Duhamel told The Oregonian/OregonLive Editorial Board, is to ensure fair rental practices while helping needy renters, whose monthly income, criminal background, or credit history would typically turn off potential landlords.

The motivation seems understandable. The method, however, leaves much to be desired. Eudaly's eight-page proposal as currently drafted is heavy-handed, overly complicated and forces so much financial and legal risk onto landlords that many may opt to leave the rental business altogether. And the bigger question remains: How do these policies make housing any more affordable?

Among the many concerns in the latest version released: landlords aren't allowed to require that applicants show a monthly income of more than twice the monthly rent, even though three times monthly rent is more typical as assurance that a tenant can afford the payments. 

Landlords must go through an extensive and confusing matrix of questions in evaluating whether an applicant's criminal history merits a denial. And landlords must issue a written explanation to tenants who are denied after being vetted. The "notice of denial" must detail the reasons for turning down the applicant and establish that they are "highly and substantially more probably to be true than not that the applicant as a tenant will adversely affect the substantial, legitimate, non-discriminatory interest of the landlord."

It's not just a daunting set of poorly-written requirements. It's also an invitation to rejected applicants to sue.

Duhamel said Eudaly's office is focusing on how to "fine-tune" the proposal, which is tentatively scheduled to go before the City Council next month, to ease the administrative burden. But the flaws in the policy aren't going to be fixed by fine-tuning. The problems are baked into the fundamental assumptions underlying the policy.

For example, the screening proposal seems to assert that the city - not landlords - should get to decide how much financial risk landlords should bear. Citizens have not and should not hand over that kind of authority to city commissioners who believe their policy choices trump an individual's financial autonomy.

It also fails to consider that there are many landlords and affordable-housing groups that already accept tenants with criminal histories or credit problems. They do so not by following a rigid list of criteria but after considering the mix of tenants or other location-specific issues that make a tenant more suitable in one building than another.

And it neglects to address the underlying reason that people are struggling to find affordable places to live - a lack of housing on every income level caused by years of underbuilding. Instead, such onerous mandates on landlords - with limited ways to protect against the risk - could prompt some to drastically raise rent when units become vacant or take the property out of the rental market entirely.

Duhamel said that, in her opinion, only a handful of landlords would likely get out of the business altogether, dismissing "what if" concerns as "fearmongering." But she acknowledges the city has no data on how a previous policy - mandatory relocation assistance to tenants whose leases are not renewed - may have affected the rental market.

Others, who admittedly represent the landlord viewpoint, say it has definitely led to the loss of many rentals. Since the beginning of the year, 30 landlords who used the Garcia Group property management firm decided to sell their properties, owner Ron Garcia told The Oregonian/OregonLive Editorial Board. That's a tenth of the ownership portfolio, he said, and many of the properties were condos or single-family homes that likely went to buyers seeking to occupy, rather than rent, the property.

The region's housing crisis is real with thousands of homeless people living on the street and many more on the brink as wages don't keep pace with rent. But landlords' screening policies aren't the reason Portland is in a housing crisis. Leaders should focus on the true culprit - the need for more housing at all income levels - and make sure they don't unwittingly become an accomplice.

-Helen Jung for The Oregonian/OregonLive Editorial Board

Over the years many MHCO members have asked for a generic set of rules and regulations.  Attached is a copy of a generic set for your review.  Please be advised that any changes to  existing rules will require following a process outlined in statute (ORS 90.610) for residents currently living in your community.  MHCO has developed FORM 60 to use when changing your rules and regulations.  Your community rules are for you to develop and implement.  Hopefully this set of generic rules and regulations will give you some ideas for where your rules fall short.  Remember - all rules and regulations need to be implemented consistently and thoroughly.

On September 26, 2018, Senator Elizabeth Warren (D-MA) introduced S. 3503, the American Housing and Economic Mobility Act, which seeks to help bring down costs for renters and buyers and level the playing field so working families everywhere can find a decent place to live at a decent price."" The bill would invest $445 billion in several existing programs including the National Housing Trust Fund

By:  Dale Strom, Second Generation Oregon Community Owner and MHCO Board Member

This is the third of a multiple part series on a private owner of a Manufactured Home Community willingly attempting to sell that Community to an Association of tenants within that Community. Riverbend MHP is a 39 space community located within the city limits of Clatskanie, OR. In the first part of this series, the motivation of the owner is revealed on why he wanted to work with CASA of Oregon exclusively rather than offering this Community for sale to all interested private parties. In the second part, the owner met with the Deputy Director and the Real Estate and Cooperative Development Manager for CASA of Oregon. The framing, presentation and negotiation of the Agreement to Purchase" was discussed.

In this third part

The 2018 Midterm Elections are over and the results are worse than expected.  

In the Oregon House Democrats pick up three seats defeating Republican Representatives Vial (Wilsonville), Parrish (West Linn) (who spoke at conference) and Helfrich (east Multnomah County and Hood River) giving the Democrats a 38 to 22 vote to control of the chamber - well over super majority and close to historic highs for party control.

In the Senate Republicans lost a southern Oregon seat held by an outgoing Republican.  Ballots are still being counted but it looks like the Democrats will control the Senate 18-12 and a super majority as well.    This is a swing of two  votes for rent control in the Senate given the loss of Senator Rod Monroe in the May 2018 Democratic Primary.  In 2017 we defeated rent control by one vote in the Senate.

 Governor Kate Brown (Democrat) won over Knute Buehler.

In Portland Jo Ann Hardesty won a seat (Position 3) on the Portland City Council.  She replaces a moderate on the Council and has very extreme views.  This will be a problem for us as over the next two years as her EXTREME views trickle down to Salem.  Her election pushes Portland even further left - as if that is even possible!

In short - a devastating night in Oregon for business and landlords.

MHCO will continue to monitor election results and legislative proposals as we move into the 2019 Oregon Legislative Session.  Make no mistake - we have lost pro landlord legislators in every election since 2010 - in essence we have cut through the fat, muscle and bone and after last night we are now on to cremation.  This election and the resulting super majority in both chambers with a Democratic Governor will have a profound impact on Oregon business and landlords. 

By: Dale Strom

Dale Strom is a second generation Manufactured Home Community landlord. He is a Board Member, past President and current Treasurer of MHCO.

This is the fourth of a multiple part series on a private owner of a Manufactured Home Community willingly attempting to sell that Community to an Association of tenants within that Community. Riverbend MHP is a 39 space community located within the city limits of Clatskanie, OR.

In the third part, the meeting with the tenants is held in Clatskanie, OR. The turnout of the tenants was overwhelming to the author, as well as the enthusiasm of those in the Clatskanie PUD board room. The Author ends this day feeling that this purchase will, more than likely, have a good chance to occur.

In this fourth part, the author now awaits hearing from CASA the Association is formed and learning about the steps being taken during the due diligence, fund acquisition and appraisal periods. Soon, the closing date, November 1, will be here.

*****

Now that I'm home, and just spoken with my onsite manager about what occurred at the meeting, unknowingly, I am entering the Michael Collins phase. Who is Michael Collins you ask? The end of part 3 of this series will give you a hint. I will bring the Michael Collins analogy full circle later in this article.

The meeting at the Clatskanie PUD with the tenants was on June 26, a Tuesday. Other than my manager, I get no feedback from anyone at the meeting. It was either that Thursday or Friday that I call the phone number of the Development Director. No answer; so a message is left on the voice mail. The purpose of my call was to get a summary of what occurred after I exited the meeting.

No response to my message. I'm not going to send another message or phone call. Maybe I'm not to know what went on. Maybe there are things in flux where the information that I'm looking for is not solid. I will wait.

On July 5, nine days after the meeting with the tenants, I get an email from First American Title that a Title Report will be sent to me for my review and approval. I am given a gesture of a happy closing from the Escrow Officer. I guess this purchase is going through.

In a sale to a tenant group in order to form a cooperative, all homes must be owned by the occupants. There can be no park owned homes in a cooperative. OK, this is a small part of this process that I wasn't aware of. Not that it is a problem; but my manager lives in one home and another tenant that is on Section 8 assistance lives in another home that I both own. The home that my manager lives in shouldn't be a problem. I can finance that home to her and her husband, change the ownership documents to their names and I will become a lienholder.

The other home may be an issue. How do you sell a home to a person that doesn't have the proverbial pot to pee in"? To sell Riverbend

By Angel Rogers, ARM, CCRM

It's hard to believe that it has been six weeks since the annual conference in Eugene.  Before we know it 2019 will be here!  Hopefully you will be bringing a renewed sense of pride, commitment, and enthusiasm for your career into the new year, as well as some of the concepts and ideas that were introduced during the conference. 

I know from my own experience of attending conferences that the amount of information gained can be overwhelming.  You may even be asking yourself, 'What happens next, and how can I implement all the great ideas?  Here is something to think about - a "worst practice" is to allow managers to roll out the ideas on their own.  Or

By: Bradley Kraus - Attorney at Law - Warren Allen LLP

Bradley Kraus is an attorney at Warren Allen LLP, where he is a member of the firm's landlords' rights team. A graduate of the University of Minnesota, Mr. Kraus also graduated cum laude from Lewis and Clark Law School. He currently represents many of the Pacific Northwest's premier management companies and ownership entities and assists clients in various litigation matters, including business, property and contract disputes.

A landlord recently approached me after I watched his eviction trial. He was pro se, and lost to a well-known tenants' attorney due to, among other things, a failure to follow the statutes and requirements set out in the statutes which govern eviction actions in Oregon. Among his questions about what just happened, he exclaimed, [t]his is so straightforward; they owe me rent! That should be all that matters! Doesn't the judge care?!"