While it may seem clear on first reading, the recent change in statute regarding rent increases is leaving even the attorneys scratching their heads.

One issue that seems clear is that a lease renewal is exempt from the rent increases that apply to month-to-month residencies. A new lease or lease renewal is a contract with its own terms that are not affected by this change in statute.

It is also clear that you may increase the rent in a month-to-month tenancy with a 90-day written notice, as long as it doesn’t take effect prior to the end of that first year.

What is not so clear is what happens when by its terms, a lease expires and converts to a month-to-month tenancy. After much discussion and attorney consultation, the Oregon Rental Housing Association, recommends that the most conservative and safest interpretation is to count the first year of tenancy as starting on the day the property transitions to a month-to-month tenancy. After that clock begins, you may lawfully serve a 90-day notice of rent increase so long as it will not be effective prior to the end of the first year of the tenancy (from the day it converted to a MTM).

There is uncertainty and ambiguity regarding this law change, and on first look it may appear that “first year of tenancy” can include the term of a lease; however, this is a potentially risky move and we don’t want you to take chances that could hurt you in the courtroom, nor do we want any of you to be the test case for this new law. Look for more answers in the coming months and be assured this will be addressed and clarified in the next legislative session. Call the Helpline for assistance if you have any questions about your specific situation.

Legislator's proposed 'tenant protections' won't protect tenants: Editorial

It's hard not to want to do something in response to the horror stories filtering out of what life in a housing crunch has become. Tenants and advocates talk of massive rent hikes driving seniors out of apartments, and of families so desperate to stay in their units that they don't complain to landlords about moldy conditions. Children cycle through ...

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As you have most likely heard by now, the city of Portland has passed an ordinance that requires landlords to give tenants 90-days notice to vacate for No-Cause Notices, and 90-days notice to increase the rent by more than 5%.

PAROA & ORHA of course have opposed this ordinance and we will definitely be opposing any state wide changes that resemble this. The reason the city of Portland gave for this ordinance is that; rent has gone up considerably over the last 1-2 years, and the steep incline in rent costs hasn’t been met by an increase in income.

This new ordinance by the city of Portland doesn’t solve the actual problem. It is essentially putting a bandage on an injury that requires stitches. The real “problem” is that demand has heavily outweighed supply in the rental market. This has been caused by a number of things including; out of state residents moving into Portland, an influx of new renters that used to be home owners prior to the housing market crash of 2008, and financial institutions not being willing to lend on new construction of commercial buildings like apartment complexes.

This ordinance will result in a negative impact for tenants. Many landlords have used No-Cause Notices as an easy option for a tenant to move out peacefully and avoid an eviction being on their record. We will most likely see an increase in for cause evictions due to landlords not wanting to wait 90-days to have a “bad” tenant move. Another serious issue is that adding any regulation to an industry creates more barriers to entry and will make investors think twice before getting into the rental business. This is the opposite of what really needs to happen to correct this issue.

Long story short, we are going to exit the Portland market in 2016 despite having rentals there for 25 years. The market has just become too ridiculous - and costly - to navigate. 

In order to solve the problem of an extremely low vacancy rate the city of Portland needs to investigate ways to incentivize developers to build affordable housing and to speed up the process. If there are permits or zoning changes that need to happen for a rental unit to be built, then it should be fast tracked through the city’s system. This will get more units to the market faster and thus equalize the supply and demand issue in the Portland housing market.

This may not be the end of this issue though. There is a good chance that we will see something like this at the state level next year. So be sure to keep your eye out for something like this and reach out to your state representative when that time comes. We need solutions to the actual underlying problems and not short sighted fixes that will cause more problems.

The news making headlines across Oregon and around the nation is that there are not enough available rental units. The solution proposed by tenant's rights groups and some legislators is to eliminate no cause evictions and limit rent increases. ORHA is committed to encouraging builders, contractors, developers, and state and local programs to help address the lack of affordable housing.

What is the solution, and how can we help? First, we need to identify the issue. Solving the affordable housing crisis won’t be done by forcing an artificial rent cap or even by slowing down rent increases. Housing costs are driven by the same issues that all other commodities are driven by, namely the market, the costs of labor and materials. If there is less of anything, prices will naturally and automatically go up. It’s just plain ignorance of the law of supply and demand to suggest that suppressing rental prices will magically solve the problem of a lack of housing units. Anyone who says that rental prices are why people can’t find a home isn’t listening to themselves talk. If there are ten people looking for a home and there are only five homes available in the area, logically there will be five people who can’t find a home; the price of the home isn’t the issue. Every study that looks at this housing “crisis” notes that the vacancy rate is extremely low everywhere in Oregon. If the rental price was the issue, then our vacancy rates would be high, not at all-time lows.

Second, we need to promote a faster permitting process, tax deferment programs, tax waiver programs, lower bank loan rates and loan incentives; and city and county grants to encourage builders to develop more affordable housing.

Third, Housing Authorities are working with reduced funding, while at the same time serving a dramatically increased client base. Local housing authorities need more funding now, and their clients need longer time frames to be allowed to look for housing. Rental dollar limits need to be adjusted for today’s market not based on the rates from three years ago.

Most importantly, the public needs to be educated as to what “affordable housing” means. Most would describe affordable housing as basic housing with no upgrades. These units are built at a lower cost, so that they can be rented at lower rates. They are built specifically for a population that must pay considerably less than the market rate. The usual target for this type of housing are the disadvantaged, the elderly and the disabled. Residents often have some kind of rental assistance.

Many Oregon cities are currently working on programs, grants and incentives to encourage building more affordable housing. We need to focus on the problem of growing a larger inventory of rental units, and not get sidetracked by the notion that rent control or rental rate “management” will solve the problem. Cities and counties have complete license to lower the costs of development, and to streamline the permitting process which is a huge issue with new construction.

ORHA has been committed to working with local Housing Authorities for over 20 years and many of our local associations have employees of Housing Authorities on their Board of Directors. Together, we are committed to encouraging rental owners to work with lower income tenants. Oregon’s many Housing Authorities will agree that their main impediments to serving more clients are a lack of funding and a low vacancy rate.

Understanding how we got to this crisis mode would assist our legislators’ to better address the real problem. The 2008 economic downturn caused many people to lose their homes and they became renters. We also have thousands of college graduates who in the past were starter home buyers that are now renters because of the sluggish job market and high student loan debt. This issue isn’t the fault of greedy property owners who during the downturn; were forced to accept rents far below the level of making any kind of profit. This is a systemic problem that will take honest and creative participation of many segments of our society.

We need more rental units, not rent control by any name!

I am sure you have by now noticed the reports of Formaldehyde being emitted from manufactured flooring imported from China. As a landlord this obviously could be concerning. Should we be worried about being sued by our tenants or should we be worried about being forced to take on the large expense of replacing the flooring in our units?

As of right now it is too early to answer these questions, but it is worth keeping a close eye on as a landlord with manufactured flooring in your units. If you or your tenants are concerned then the first step is to test the air inside the unit. You can purchase a test kit for around $80. If you happen to purchase your flooring from Lumber Liquidators then they will actually give you a testing kit for free.

If the test comes back positive for Formaldehyde then I would suggest that you take this health risk seriously and replace the flooring if that is the suspected cause. Formaldehyde is actually used in the vast majority of manufactured flooring, but that is typically only emitted into the air for a short time after installation. The flooring with the problem has come from certain manufacturers in China according to initial reports. When installed, the flooring has an ongoing reaction to the glue used that continuously emits Formaldehyde into the air. This obviously causes a health risk as it can build up and eventually poison your tenants.

If you have been watching the reports on this it is gaining momentum and there are law firms that have already started building class action law suits against those they feel are responsible. As with many things regarding public health in this technological age, it is unlikely to just go away any time soon. This will just add momentum to the trend that has been gaining a lot of momentum over the years of everyone preferring things that are all natural.

From the food we eat to the clothes we wear there has been a growing and now very large segment of our nation’s population that prefers everything to come from natural sources. Within my company we look at this as a possible tipping point in the housing industry as a whole when it comes to using natural materials. There may be a fast approaching day where units with natural materials rent for a premium. So it might be worth trying to get ahead of this curve and sourcing natural materials to use when you are doing the next renovation or a turn over that includes replacing materials.

Within my company, www.CBPropertyManagement.com, we have recently spent close to $150,000 on natural, reclaimed wood floor planks and natural wool carpeting. We did this to help get the costs of using these materials down to that of synthetic materials for our clients. Since these materials are typically the more expensive ones to purchase we bought them in bulk straight from the manufacturers so that our clients can take advantage of that extra savings. Hopefully we will see more companies taking this proactive approach to make it feasible for their clients to use these materials in units that aren’t considered strictly high end.

You may ask why we would go beyond wood flooring and purchase wool carpet as well. We figure that the wood flooring is just the start. As far as I know there haven’t been any reports on synthetic fiber carpeting causing any health issues, but that won’t matter to anyone that jumps on the band wagon of wanting to pay a premium to rent a unit with all natural materials used in its construction. The benefits of wool carpeting is that it is hypo-allergenic, naturally stain resistant, is better at regulating temperature, and of course comes from a sustainable source.

There are many materials commonly used in rental units that can be replaced by natural materials. The next time you are doing a renovation or turn over it might be worth your time to at least research the possibilities and then advertise your unit as being one that uses those natural materials. Now that we have started this program we have seen about an average of a 5% increase in rents and we estimate that should grow to be a 10-15% premium being added to units that use natural materials as this trend continues to grow. This also turns the public’s growing fear over these reports of formaldehyde in manufactured flooring into a profitable fear for you as a landlord that offers units with natural materials.

Christian Bryant

President of PAROA & CBPropertyManagement.com

The Bureau of Labor and Industry has been doing a series of workshops around the state to inform landlords about the recent changes to the rules around housing vouchers. Oregon Public Broadcasting interviewed Brad Avakian, Oregon State Labor Commissioner and Christian Bryant, President of the Portland Area Rental Owners Association & President of Coldwell Banker Mountain West Property Management.