Bluestone & Hockley | Portland Property Management https://www.bluestonehockley.com Portland Property Management Fri, 27 Mar 2020 16:26:15 +0000 en-US hourly 1 https://wordpress.org/?v=5.3.2 Information & Resources to Stay Informed and Prepared https://www.bluestonehockley.com/information-resources-to-stay-informed-and-prepared/ https://www.bluestonehockley.com/information-resources-to-stay-informed-and-prepared/#respond Fri, 27 Mar 2020 16:26:15 +0000 https://www.bluestonehockley.com/?p=27463 We are very lucky to have an abundance of small businesses throughout our community. To ensure each of our owners, tenants and entrepreneurs have access to the most updated resources, we are providing this newsletter to give you information that may be valuable to you. SBA Economic Injury Disaster Loan Program As part of its... Read more ›

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We are very lucky to have an abundance of small businesses throughout our community. To ensure each of our owners, tenants and entrepreneurs have access to the most updated resources, we are providing this newsletter to give you information that may be valuable to you.

SBA Economic Injury Disaster Loan Program

As part of its disaster assistance program, the SBA is providing low-interest working capital loans of up to $2 million to small businesses and nonprofits affected by the coronavirus. These loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits. Loan repayment terms vary by applicant, up to a maximum of 30 years.

Who’s Eligible?
  • As of March 23, businesses in every state plus American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands can apply.
  • You can use the loan to cover accounts payable, debts, payroll and other bills the coronavirus has affected your ability to pay.
How to Apply
  • Apply online and select “Economic Injury” as the reason you’re seeking assistance.
  • You’ll need to supply required supporting documentation that could include the business’s most recent tax returns, a personal financial statement and a schedule of liabilities that lists all your current debts.
  • Call the SBA Disaster Assistance Customer Service Center at 1-800-659-2955 for help with your application.
Local Resources and Information
City of Portland

Prosper Portland (the city’s economic development arm) is partnering with APANO to provide $150,000 in grants to businesses with Asian/Pacific Islander ownership, particularly those within the Jade District (centered on Southeast 82nd Avenue and Division Street) and in Old Town Chinatown. Businesses can apply here.

Prosper Portland is prepared to offer a three-month deferral of loan payments to its existing borrowers who request it and whose business have experienced a decline in revenue of 10% or more. Prosper is prioritizing public-facing businesses with annual revenues under $1 million. Contact Prosper about your existing loan by emailing lending@prosperportland.us.

Prosper is also offering rent relief to its commercial tenants. For businesses that have experienced a decline in revenue of 10% or more, Prosper is prepared to provide a three-month deferral of rent payments for April, May and June 2020. Find Prosper’s list of business resources here.

The City of Portland has partnered with Grubhub to support local businesses. Grubhub is suspending collection of up to $100 million in commission payments from impacted independent restaurants nationwide. Grubhub has also created a fund that will enable proceeds from its Donate the Change program to go toward charitable organizations that support restaurants and drivers impacted by the COVID-19 health crisis. Grubhub will work with local city officials to identify the organizations that can utilize the funds and to consider other support programs during the pandemic.

City of Beaverton

The City of Beaverton and the Beaverton Area Chamber of Commerce have launched an Emergency Business Assistance Program to assist with commercial rental or mortgage payments during the COVID-19 pandemic. Eligibility requirements include businesses with 50 or fewer full time equivalent employees in Beaverton affected by a mandatory change in service; businesses with an active Beaverton license; businesses with a lease or mortgage payment on the property; and business experiencing economic loss due to COVID-19. National chains are excluded. The program is in effect during the city’s declared state of emergency and while funds are available. Reimbursement grants of up to $2,500 per business are available for eligible businesses. Additional information and the application is available here.

City of Hillsboro

The city is working to set up a low-interest loan program for small- and medium-sized businesses in need of financial support because of COVID-19 containment efforts and government directives for closure or operational curtailment. Details are still being finalized.

City of Tualatin

The Tualatin Development Commission has created an Economic Stabilization Fund of $250,000 to assist Tualatin businesses affected by coronavirus.
Eligibility requirements for program funding includes businesses with 55 full-time or equivalent employees or fewer, a physical storefront within Tualatin city limits, a documented loss of income due to the COVID-19 pandemic and a current city business license. Reimbursement grants of up to $10,000 per businesses are available for those eligible. Full details, application, and judgement criteria will be released shortly. Check here for updates.

Regional Resources

Portland-area utility providers are suspending automatic shutoff in the event of nonpayment. Those providers are Portland General Electric, Pacific Power, Portland Water Bureau and NW Natural.

Employees

Unemployment insurance benefits may be available to individuals who are involuntarily unemployed as a result of COVID-19. The amount of the benefit will vary based upon the amount of money that the individual has previously earned.
Oregon and Washington issued temporary rules for unemployment insurance benefits that are much more flexible during this crisis. Links to the webpages that detail the situations where an employee may file unemployment due to Covid-19 related situations are:

Federal Income Tax Filing and Payment Deadline Extension

The federal tax return filing deadline is now July 15, 2020. For tax payments of up to $10 million, the IRS has also extended the deadline for both individuals and businesses to July 15, 2020. Estimated tax payments for 2020 originally due on April 15 will now be due on July 15.

Check with your state tax agency to find out if your business has more time to file or more time to pay state and local taxes this year as a result of the coronavirus. Several states have already aligned their tax filing and payment deadlines with the new federal deadline. States also may waive or reduce penalties on late tax payments.
We are closely monitoring how Oregon and Washington is addressing tax relief and will provide an update in the coming days. Links to the webpages dedicated to each state’s tax relief pages are:

Source: https://greaterportlandinc.com/covid-business-resources

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Available Rentals

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How to Handle the Coming Surge in Retail Tenant Defaults https://www.bluestonehockley.com/how-to-handle-the-coming-surge-in-retail-tenant-defaults/ https://www.bluestonehockley.com/how-to-handle-the-coming-surge-in-retail-tenant-defaults/#respond Wed, 25 Mar 2020 15:32:42 +0000 https://www.bluestonehockley.com/?p=27457 Retail landlords facing tenant defaults as a result of the coronavirus pandemic will likely work with tenants toward a solution While no one knows the severity of economic disruption the coronavirus pandemic will cause, it is likely to hit retail tenants significantly. The shuttering of retailers for an undisclosed period will no doubt create decreased... Read more ›

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Retail landlords facing tenant defaults as a result of the coronavirus pandemic will likely work with tenants toward a solution

While no one knows the severity of economic disruption the coronavirus pandemic will cause, it is likely to hit retail tenants significantly. The shuttering of retailers for an undisclosed period will no doubt create decreased rent payments and potentially tenant defaults.

“According to data from Morgan Stanley, in early March retail traffic dropped 9.1%, apparel retail traffic fell 3.9% and luxury retail traffic declined by 14.7%. As cases of the COVID-19 virus spread throughout the country, retailers will confront plummeting sales,” Sean Southard, a partner with the San Diego offices of commercial real estate law firm Crosbie Gliner Schiffman Southard & Swanson, tells GlobeSt.com.

This is likely only the beginning. “This will, without a doubt, be a growing problem—exacerbated by Governor Newsom’s March 19 executive order requiring everyone in California to stay in their homes,” says Southard. “Because the economic uncertainty caused by the COVID-19 pandemic, rent relief requests and lease workouts will certainly increase as retailers look to landlords for some relief from their monthly occupancy costs.”

In response, some municipalities are placing moratoriums on evictions and foreclosures during the epidemic. “Governor Newsom’s executive order delegated authority to each municipality in California to limit both residential and commercial evictions until May 31, 2020, as each municipality sees fit,” says Southard. “However, municipalities cannot legally restrict unlawful detainer filings that arise from non-monetary defaults, or monetary defaults that are unrelated to the COVID-19 pandemic, although tenants must be able to document that their monetary default is related to COVID-19.”

Even with these restrictions in place, evictions are generally a last resort for landlords, and should especially be in this scenario. Instead, Southard recommends that landlords work with tenants toward a solution. “Maintaining positive tenant relationships and working with tenants who have bona fide needs will allow landlords to adopt successful relief strategies that provide tenants with sufficient relief for the tenant to remain viable, and ultimately return to full health at a cost the landlord can afford,” he says.

Alternative options include workouts, temporary rent deferrals, rent forgiveness, conversion to alternate rent payments, delayed commencement dates, relief from operating expenses and forbearance of exercising rights, according to Southard. “The bottom line is that landlords must understand the affected retail asset, the rights and obligations under the lease for both parties, as well as market trends and conditions as applied to the premises,” he says. “The landlord walks a fine line and can be at risk if they do too much or too little.”

Still, there is limited potential for some tenants to take advantage in this situation. To mitigate against unwarranted requests for relief, landlords should swiftly put systems in place. “Unfortunately, even during a national and global crisis, there are always opportunistic tenants seeking relief when it is not warranted,” says Southard. “Landlords must to have mechanisms and systems in place to assist them in identifying where the real needs are and what tenants are most likely to rebound once the economy begins moving forward again.”

Source: Kelsi Maree Borland with GlobeSt.com

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Landlord Penalty Chart | Fair Access in Renting (FAIR) Ordinances, City of Portland, Oregon.

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Investors See Value in Parking Lots…As Future Multifamily Buildings https://www.bluestonehockley.com/investors-see-value-in-parking-lotsas-future-multifamily-buildings/ https://www.bluestonehockley.com/investors-see-value-in-parking-lotsas-future-multifamily-buildings/#respond Fri, 20 Mar 2020 15:40:43 +0000 https://www.bluestonehockley.com/?p=27449 Source: Sebastian Obando, National Real Estate Investor (NREI) Investors are increasingly targeting parking lots for potential multifamily redevelopment, especially in urban areas, according to industry sources. “Given the multifamily market has been so strong for the past decade, we’re at a point that really justifies development,” says Rob Goldstein, assistant portfolio manager at CenterSquare Investment... Read more ›

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Source: Sebastian Obando, National Real Estate Investor (NREI)

Investors are increasingly targeting parking lots for potential multifamily redevelopment, especially in urban areas, according to industry sources.

“Given the multifamily market has been so strong for the past decade, we’re at a point that really justifies development,” says Rob Goldstein, assistant portfolio manager at CenterSquare Investment Management, a global investment manager focused on actively managed real estate and infrastructure strategies. “We’ve seen debt costs decrease and demand and rental revenue increase. So, those two factors both contribute to the appeal of parking lot conversions to residential.”

Parking lots have been selling quickly recently, especially in cities where they occupy valuable pieces of land. Over the past seven years, the average number of urban parking lot transactions nearly doubled from the average number during the 2006 to 2012 period, according to data from real estate research firm, the CoStar Group. Since 2013, the average annual volume of urban parking lot sales totaled $130 million- up from the annual volume of under $100 million from 2009 to 2012.

“The trend of surface parking lots changing into multifamily housing has been increasing in KTGY’s work over the past decade across the country,” says Ben Kasdan, associate principal at KTGY, an international architecture firm. KTGY is currently working on about a dozen projects on former parking lots sites, including projects in Fairfax, VA, Pasadena, CA, and Los Angeles.

Along with multifamily properties, vacant parking lots can also be repurposed into office buildings or hotels.

“Any asset that can provide high density, so, offices or hotels would make sense,” says Goldstein. “It wouldn’t make sense to build a two-story building on a parking lot because land values have increased so much that you would really need to build up to justify the land costs. That’s why you’re seeing high-density properties being constructed.”

While this redevelopment trend has been partially driven by the expectations that there will be less need for parking spaces in the future, not all industry sources see parking lots going away. Portland-based MMDC Commercial Real Estate purchased a nine-story stand-alone parking garage in downtown Denver this February for $10.65 million, according to public records. The brokers in the deal said the “overwhelming interest from buyers for this property clearly demonstrates that many investors don’t see that risk of parking lots going away.” Still, developers can often save millions of dollars if they build fewer parking spaces.

“It’s not that cars are no longer needed entirely, but the way in which cities utilize private vehicles has already changed and is continuing to change still,” says Kasdan. “With fewer drivers, fewer parking spaces are needed. Zoning ordinances need to catch up with this trend, as the cost of constructing code-required parking contributes significantly to the challenge of providing new attainable housing.”

Read more news from Bluestone & Hockley HERE!


Available Rentals

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CAT got your bottom line? Corporate Activity Tax has pounced! https://www.bluestonehockley.com/cat-got-your-bottom-line-corporate-activity-tax-has-pounced/ https://www.bluestonehockley.com/cat-got-your-bottom-line-corporate-activity-tax-has-pounced/#respond Mon, 09 Mar 2020 19:00:14 +0000 https://www.bluestonehockley.com/?p=27429 Source: Jordan Manley, DJC Oregon Since Governor Kate Brown signed Oregon’s new Corporate Activity Tax (CAT) into law on May 16, 2019, business owners have many burning questions. What is the CAT? To which businesses does the CAT apply? How is the CAT calculated? Can business owners pass the CAT on to their customers? The... Read more ›

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Source: Jordan Manley, DJC Oregon

Since Governor Kate Brown signed Oregon’s new Corporate Activity Tax (CAT) into law on May 16, 2019, business owners have many burning questions. What is the CAT? To which businesses does the CAT apply? How is the CAT calculated? Can business owners pass the CAT on to their customers?

The CAT is a tax imposed on businesses to continue to enjoy the pleasure of conducting business in the state of Oregon. The CAT is not a traditional tax like a sales tax or an income tax, but rather one measured by the total amount a business realizes from transactions and activity in Oregon (i.e. the “commercial activity” of the business). The new law defines “commercial activity” as the total amount realized by a company from the transactions and activity in the regular course of business in Oregon, without deducting expenses incurred by the business. In other words, the CAT is a modified gross receipts tax on business and is considered an expense of the business. The CAT does provide a deduction from taxable commercial activity of 35% of the greater of:

  • the annual cost inputs (i.e. cost of goods sold as calculated under IRC 471); or
  • the annual labor costs.

The CAT is applied to Oregon taxable commercial activity exceeding $1 million. The CAT applies to tax years beginning January 1, 2020, and Oregon requires CAT filing and payment on an annual calendar year, despite the fiscal year used by some businesses. As the first CAT applies to tax years beginning January 1, 2020, the first CAT tax returns will be due April 15, 2021.

However, be aware that a business that expects to pay more than $5,000 of CAT liability for the calendar year must make quarterly estimated payments on April 30, July 31, October 31 and January 31 of each preceding calendar year beginning in 2021.

The CAT is calculated as $250 plus 0.57% of the amount of Oregon commercial activity exceeding $1 million. To calculate the CAT business owners will need the following information:

  • determine the total amount of commercial activity anywhere the business transacts plus any applicable exclusions;
  • determine the total amount of commercial activity in Oregon;
  • determine the amount of compensation paid to employees (excluding any employees who are individually paid more than $500,000 annually); and
  • determine the amount of qualifying payments to subcontractors for labor.

The ability of business owners to pass the CAT through to customers may ease some nerves about this new tax. However, business owners should calculate the mathematical value while also considering the subjective value of passing such a tax onto its customers. Some businesses may determine the risk of distaste from customers required to pay the extra tax and the potential for reputational damage greatly outweigh the minimal value derived from passing the tax through to customers. Although the law does not prohibit any business from recovering CAT when determining the total price charged to customers, another consideration for business owners is that the total price charged will be included in the total calculation of the business’ commercial activity. That means the business, by passing the expense through to the customer, generates a higher volume of gross receipts and the business owner effectively pays CAT on the CAT collected from the customer, meaning more CAT is paid overall.

Ultimately it will be critical to analyze the taxability of CAT receipts as there are many different exemptions available for calculating the CAT. The legislature continues to make technical corrections to the CAT in addition to providing further guidance about the new law. It is likely another bill may come about to implement changes to CAT policy. To stay up to date on the CAT and further developments, business owners should review information published by the Oregon Department of Revenue and the Oregon Legislature. Business owners should also consult with legal counsel to better understand how they may be impacted.

Jordan Manley is an attorney in Sussman Shank’s business group. She advises clients on a variety of business issues related to business transactions, taxation, business formation, business succession planning and estate planning.

Read more news from Bluestone & Hockley HERE!

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Make Oregon Count https://www.bluestonehockley.com/make-oregon-count/ https://www.bluestonehockley.com/make-oregon-count/#respond Fri, 06 Mar 2020 16:46:31 +0000 https://www.bluestonehockley.com/?p=27421 Once every 10 years, the U.S. Constitution requires a full count of the population to reapportion seats in the U.S. House of Representatives. That exercise, the U.S. Census, begins in a matter of weeks (mid-March 2020). Oregon is working hard to ensure the state’s residents are fully counted. For the first time, the primary method... Read more ›

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Once every 10 years, the U.S. Constitution requires a full count of the population to reapportion seats in the U.S. House of Representatives. That exercise, the U.S. Census, begins in a matter of weeks (mid-March 2020). Oregon is working hard to ensure the state’s residents are fully counted.

For the first time, the primary method of response to the census will be electronic. The U.S. Census Bureau is counting on most households to complete the census forms online.

Why is the census important?

Census results drive decisions that will affect economic investments in our state and our representation in Congress until 2031. Census results determine congressional representation and the number of our Electoral College votes and are used to draw boundaries for state and local election districts. In the last census, Oregon was just shy of gaining one seat in Congress – we have to get it right this time!

The federal government also uses census numbers to guide more than $1.5 trillion annually from 316 federal spending programs for education and health programs, highways, roads and bridges, water and sewage systems, and other projects vital to our health and well-being. Nonprofits and businesses use the same data to help determine where to build health care facilities, child care and senior centers, grocery stores and new factories.

In 2016, Oregon received $13.5 billion of these funds from just 55 of these 316 programs, or $3,200 per person, including:

  • Nearly $507 million in bridge and highway maintenance and construction;
  • $8.5 billion in health programs;
  • Over $2 billion in education;
  • $900 million for housing; and
  • $512 million for rural assistance programs.

Based on these numbers, the state would lose up to $8 million over the decade for every 100 households missed, which would affect its ability to adequately support children, veterans, senior citizens, and low-income families.

How it works?

Beginning in mid-March 2020, the U.S. Census Bureau will send each household a postcard inviting residents to go online (or call) and provide information about the number of people residing at that address. The questionnaire will ask for names, sex, age (including date of birth), and race/ethnicity of each person living at the residence, whether residents own or rent and for a phone number in case there is a need to follow up. Only one person should fill out the census for the entire household.

What is the timeline?

The process begins in mid-March 2020 and ends at the end of July. Those who do not respond will receive reminders in the mail until the beginning of May, when Census Bureau staff will begin going door to door to contact those who do not respond. Results must be delivered to the president by December 31, 2020.

Is it safe?

By federal law, the information provided is confidential. The U.S. Census Bureau uses the highest level of data security to safeguard the information it receives. In fact, census forms can be used ONLY to produce statistical information about the population, and penalties for violations are severe.

For more information, refer to the Fact sheet on Census and Confidentiality.

Source: https://www.oregon2020census.gov/

Major Changes Coming to City of Portland Residential Property Management!

Read more from Bluestone & Hockley HERE!

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Government Affairs Alert: Multifamily NW took a stand against Portland’s failed housing policies https://www.bluestonehockley.com/government-affairs-alert-multifamily-nw-took-a-stand-against-portlands-failed-housing-policies/ https://www.bluestonehockley.com/government-affairs-alert-multifamily-nw-took-a-stand-against-portlands-failed-housing-policies/#respond Fri, 28 Feb 2020 18:07:33 +0000 https://www.bluestonehockley.com/?p=27387 Dear Members of Multifamily NW, Today, Multifamily NW took a stand against Portland’s failed housing policies. As of February 20, 2020, we have filed a lawsuit to stop and repeal the FAIR ordinance with the United States District Court, for the District of Oregon, Portland Division. As many of you know, Portland City Council passed... Read more ›

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Dear Members of Multifamily NW,

Today, Multifamily NW took a stand against Portland’s failed housing policies. As of February 20, 2020, we have filed a lawsuit to stop and repeal the FAIR ordinance with the United States District Court, for the District of Oregon, Portland Division.

As many of you know, Portland City Council passed the FAIR ordinance last June after a hostile and broken policy development process facilitated by the Rental Services Commission. The ordinance is set to take effect on March 1. The chief proponent of the ordinance, Commissioner Chloe Eudaly, would later make the statement, “We know it will take time for tenants to understand and for the industry to adjust. We know some fine-tuning will be necessary. But we also know that research and data have laid a solid foundation for the decisions we made.”

Economic data and industry research were not a part of that solid foundation. Representatives of the rental housing provider community, including Multifamily NW, could play only a symbolic role in the development of the FAIR ordinance. Despite being regularly attending members of the Rental Services Commission and in good standing, our collaboration on this major policy initiative was consistently rejected.

At the time of adoption, Mayor Ted Wheeler and the Portland City Council had committed to fixing the glaring errors in the ordinance during the administrative rulemaking process before the law was to be implemented. It’s now clear that commitment will not be honored, and Portland housing providers will be forced to comply with a broken law.

Since June, Multifamily NW’s members and staff have worked around the clock to make sure our housing provider members are prepared to meet the sweeping administrative demands created by the FAIR ordinance. The Multifamily NW’s Forms Committee has volunteered dozens of hours of their personal time to collaborate with Multifamily staff and legal counsel to craft the additional forms needed to comply with the FAIR ordinance.

With the Rental Services Commission providing only a slow drip of inconsistent and outright perplexing information pertaining to the legal compliance requirements of the ordinance, it became clear that the administrative rulemaking process was not going to fix this ordinance. Further action is required to protect Portland’s housing providers and renters from the clearly disastrous impacts of the FAIR ordinance.

We want to thank all our members who have worked so diligently throughout this process. Thank you for hours spent trying to guide the Rental Services Commission away from bad housing policy, speaking up at Portland City Council’s public hearings in opposition to the FAIR ordinance in front of a hostile crowd of activists and helping guide our legal actions against the city.

We look forward to a positive outcome for our members in this fight and for the future of rental housing in Portland. Stay tuned for more updates as they become available.

Bluestone & Hockley Real Estate Services management team is closely monitoring this situation and will provide updates as they become available!


Available Rentals

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Landlord Penalty Chart | Fair Access in Renting (FAIR) Ordinances, City of Portland, Oregon. https://www.bluestonehockley.com/landlord-penalty-chart-fair-access-in-renting-fair-ordinances-city-of-portland-oregon/ https://www.bluestonehockley.com/landlord-penalty-chart-fair-access-in-renting-fair-ordinances-city-of-portland-oregon/#respond Fri, 28 Feb 2020 16:48:13 +0000 https://www.bluestonehockley.com/?p=27434 The time has come for Portland landlords and property managers to be paying closer attention.  Even though the final drafts of the ordinances have just arrived, rest assured tenants will be testing us to ensure we are complying with all of the new rules and regulations. Training sessions for Portland renters on these ordinances have... Read more ›

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The time has come for Portland landlords and property managers to be paying closer attention.  Even though the final drafts of the ordinances have just arrived, rest assured tenants will be testing us to ensure we are complying with all of the new rules and regulations. Training sessions for Portland renters on these ordinances have been going on since mid-February and will continue through at least May. A summary of the new rules can be found here https://www.svnbluestone.com/major-changes-coming-to-city-of-portland-residential-property-management/

The Portland Bureau of Housing (PHB) has published their list of rules and forms just ahead of the March 1, 2020 deadline (https://beta.portland.gov/phb/rental-services/fair-access-renting-fair-rules).   These ordinances are daunting and to avoid a financial blow, you need to be familiar with all of them.

Penalties

As a reference tool, we have created a chart of the damages built into the new ordinances.  It’s astonishing and overwhelming.  No mistakes allowed, otherwise you will pay applicants or tenants considerably.  Pay close attention to the penalties below and establish procedures, such as quality control check every advertisement, rental agreement and final accounting before they are sent out, to avoid mistakes.

This chart shows the potential of a penalty for each type of infraction based on the ordinance. The ordinance reads a landlord is liable to an applicant/tenant if they fail to comply with any requirement.  It’s possible that you could be liable to damages to each applicant that finds the mistake you have made. Whether these penalties stack on top of each other or are a one-time charge remains to be seen. In any case forewarned is forearmed.

What is a landlord to do?

PHB – Portland Housing Bureau has established classes not just for landlords but for tenants as well (see their website).  You may want to go to both of them to see what they are telling the tenants to do.  As you read the material and adjust your forms and policies, take a deep breath, be patient and ask others for help.  We suggest that you call the PHB, Multifamily NW, Rental Housing Alliance of Oregon and your local friendly attorney.  The lawsuit filed by Multifamily NW et al., requesting a temporary restraining order and injunction against the City of Portland, was denied on February 27th,2020, but the lawsuit is still ongoing.

We have been working diligently on our policies for some time and even now continue to refine our forms and policies to make sure we avoid these onerous penalties.   If this is as frustrating to you as it is to us, send money to the Multifamily NW Legal defense fund https://www.multifamilynw.org/defense-fund.

If you feel overwhelmed or need help complying with these new ordinances, consider hiring us as your property manager.

 

 

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Major Changes Coming to City of Portland Residential Property Management! https://www.bluestonehockley.com/major-changes-coming-to-city-of-portland-residential-property-management/ https://www.bluestonehockley.com/major-changes-coming-to-city-of-portland-residential-property-management/#respond Thu, 27 Feb 2020 19:13:29 +0000 https://www.bluestonehockley.com/?p=27401 Do you know what to expect come March 1, 2020 when the City of Portland’s Fair Access in Renting (FAIR) ordinances go into effect? These ordinances dramatically alter the application screening and security deposit requirements! On February 18, 2020, Bluestone & Hockley hosted a class on the new ordinances, and their impact, to over 70... Read more ›

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Do you know what to expect come March 1, 2020 when the City of Portland’s Fair Access in Renting (FAIR) ordinances go into effect? These ordinances dramatically alter the application screening and security deposit requirements! On February 18, 2020, Bluestone & Hockley hosted a class on the new ordinances, and their impact, to over 70 clients and colleagues! The class was presented by Russell White, Director of Residential Property Management at Bluestone & Hockley who not only has two decades of residential property management experience but has also been on top of this since the rulemaking process started!

If you were unable to attend the class, you may view the video of the class by clicking here or the image below. Additionally, we have summarized the myriad of changes into easy-to-read bullet points.

Important Update

On February 20, 2020, Multifamily NW, a trade association whose members own or manage more than 30,000 apartments in Portland, filed a federal lawsuit in U.S. District Court alleging the FAIR Ordinances violate the Oregon and United States Constitution. Bluestone & Hockley is closely monitoring this developing situation.

Introduction

What is FAIR and why do we have it?

  • Fair
  • Access
  • In
  • Rent

“The heart of the Fair Access in Renting Policies is about addressing the criteria that continue to be used as a proxy for race, which includes criminal records, income requirements, and credit scores which leads to discrimination and disparate outcomes…”

– Commissioner Eudaly’s comments on FAIR

Application and Screening (30.01.086)

Advertisements must include:

  • When applications will be accepted (no sooner than 72 hours);
  • Criteria must be listed or provide a link to it;
  • Screening fee; and
  • *Whether or not the unit advertised is an accessible dwelling unit.

* An accessible dwelling unit is defined as a Type A Unit pursuant to the Oregon Structural Building Code and ICC A117.1. These are units specifically designed for wheelchair users throughout the unit.

Order of processing applications:

  • For applications received from advertisements, a landlord must manually or digitally track the date and time the application was received;
  • Any applications received prior to the open application period must be marked as received 8 hours after the start of the open application period; and
  • If during the first 8 hours of the open application period a landlord receives an application for an accessible dwelling unit from an applicant that is mobility disabled, the landlord must give priority to such an application.

Application forms must include:

  • A section for applicants to declare their mobility disability;
  • City of Portland’s “Notice to Applicants relating to a Tenant’s right to request a Modification or Accommodation”;
  • City of Portland’s Application and Screening Rights and Responsibilities which is in reference to where they can find a list of applicant rights from PHB;
  • Landlord’s screening criteria must be included if a screening charge is enforced; and
  • A place to include supplemental information from tenant to mitigate potentially negative screening results.
General Screening Process (30.01.086)

Landlord may not reject an applicant if applicant cannot produce a social security number or legal proof of lawful presence in the US. Acceptable forms of ID include:

  • Social Security Card;
  • Permanent Resident Card;
  • Immigrant Visa;
  • Individual Taxpayer Identification Number (ITIN);
  • Non-Immigrant Visa;
  • Any government-issued identification regardless of expiration date; and
  • Any non-governmental identification or combination of identifications that would permit a reasonable verification of identity.

A household may choose which adult applicant(s) will be financially responsible. Landlord can use screening of financially responsible applicants for approval or denial.

A landlord can only require a household to make 2x the monthly rent. In some cases the income requirement can be 2.5 times the monthly rent. See the City of Portland’s Application and Screening Minimum Income Requirement form.

A landlord may require a guarantor if the household does not qualify. Such guarantor cannot be required to make more than 3x the monthly rent and cannot be held to an agreement that exceeds the rental agreement.

Screening Fees (30.01.086)

If the landlord conducts screening through a professional screening company, the landlord cannot charge the applicant more than the cost of using the screening company.

If the landlord conducts some of the screening and uses a professional screening company, the landlord must not charge the applicant more than 25% above the cost of the screening company.

If the landlord conducts all of the screening, the landlord must not charge applicant more than 10% what a screening company in the Portland Metro would charge.

Low Barrier Criteria (30.01.086)

A landlord may not reject an applicant for criminal history under the following circumstances:

  • An arrest that did not result in conviction, unless the resulting charge is pending on the date of the application;
  • Participation in or completion of a diversion or a deferral of judgement program;
  • A conviction that been judicially dismissed, expunged, voided, or invalidated;
  • A conviction for a crime that is no longer illegal in the State of Oregon;
  • A conviction or any other determination or adjudication issued through the juvenile justice system;
  • A criminal conviction for misdemeanor offenses for which the dates of sentencing are older than 3 years from the date of the application, excluding court-mandated prohibitions that are present at the property for which the applicant has applied; or
  • A criminal conviction for a felony offense for which the dates of sentencing are older than 7 years from the date of the application, excluding court-mandated prohibitions that are present at the property for the which the applicant has applied.

A landlord may not reject an applicant for credit history for:

  • A credit score of 500 or higher;
    Insufficient credit history, unless the applicant in bad faith withholds credit history information that might otherwise form the basis for a denial;
  • Collections in amounts less than $1000;
  • Balance owed for prior rental damage in an amount less than $500;
  • A Bankruptcy filed by the applicant that has been discharged;
  • A Chapter 13 Bankruptcy filed by the applicant under an active repayment plan; or
  • Medical or educational/vocational debt.

A landlord may not reject an applicant for rental history for:

  • Eviction if it:
    • was dismissed;
    • was 3 or more years before the date of the application;
    • was entered fewer than 3 years before the date of the application if:
      • it was a no cause eviction;
      • Eviction was a failure to appear, and applicant presents credible evidence to the landlord that the applicant had already vacated the unit before the court date.
    • was subsequently set aside or sealed pursuant to procedures in state law.
  • Rental References, except:
    • Defaults in Rent;
    • 3 or more material violations of a Rental Agreement within one year;
    • Outstanding balance due to the landlord;
    • Lease violations that resulted in a termination with cause;
  • Insufficient rental history
Landlord’s Screening Criteria (30.01.086)

If a landlord chooses to use their own screening criteria, if any single criterion is more prohibitive than any of the Low-Barrier screening criteria, the landlord is required to conduct an Individual Assessment before issuing a denial to the applicant. They must consider:

  • the nature and severity of the incidents that would lead to a denial;
  • the number and type of incidents;
  • the time that has elapsed since the date the incidents occurred; and
  • The age of the individual at the time the incidents occurred.

If still denied, the landlord must ensure:

  • denial is not discriminatory; and
  • they provide a Notice of Denial to the applicant within 2 weeks of the denial which includes an explanation.
Appeals (30.01.086)

An applicant can appeal a denial for up to 30 days.

  • Applicant can correct, refute, or explain negative information;
  • If appeal is approved the applicant will be prequalified for rentals at the landlord’s properties for 3 months; and
  • Waive the applicant’s screening fee for the 3 months after the appeal approval.
Exemptions (30.01.086)

Section 30.01.086 does not apply to a process for leasing of a dwelling unit that is:

  • regulated as affordable housing by a federal, state or local government;
  • Not rented to, or advertised for rental to the general public, including advertisements on online platforms with or without a fee;
  • Shared with a landlord, roommate, or a sub-lessor using the dwelling unit as a primary residence;
  • tenancies where the applicant would occupy one dwelling unit in a duplex where the landlord’s principal residence is the second dwelling unit in the same duplex;
  • tenancies where the applicant would occupy an accessory dwelling unit, as defined by PCC 33.205, that is subject to the Act in the City of Portland so long as the owner of the accessory dwelling unit lives on the site; or
  • tenancies where the owner occupies the accessory dwelling unit and the dwelling unit the applicant would occupy is on the site.

IMPORTANT: Wherever local, state, or federal funding or loan requirements for tenant screening conflict with any portion of Section 30.01.086, the funding or loan requirements will take precedence over only those portions in conflict.

Security Deposit Amounts (30.01.087)

If a landlord collects last month’s rent at move in, they can only require half of one month’s rent as a deposit. Alternatively, if a landlord doesn’t require last month’s rent, a security deposit of more than one month’s rent can be required. The additional amount above one month’s rent for deposit cannot exceed half of one month’s rent. The applicant must be allowed to pay the additional amount in installments up to 3 months after move in.

Rental Agreements (30.01.087)

Rental agreements must now include:

  • an itemized list of all landlord provided appliances, equipment, fixtures or personal property. List must include description, condition and replacement cost;
  • Banking institution name and address where deposits are held; and
  • provide a condition report to the tenant at move in.
Depreciated Value (30.01.087)

The depreciation schedule breaks down into the following categories:

  • Appliances or Equipment- 15 years of 6.67% per year;
  • Fixtures 1- 10 years of 10% per year. Includes carpet, vinyl, blinds, curtains, etc.
  • Fixtures 2- 20 years or 5% per year. Includes faucets, sink, toilet, cabinets, permanent flooring; and
  • Personal Property- 30 years or 3.34% per year.

A landlord may provide documentation reasonably acceptable to a tenant demonstrating why a different calculation is justified for a particular item so long as the documentation includes:

  • the current depreciated value;
  • an explanation of why the depreciated value is different; and
  • a justification of how the alternative value was calculated.
Condition Reports (30.01.087)

A tenant has 7 days to complete and submit to the landlord a condition report noting:

  • the condition of all fixtures, appliances, equipment and personal property listed in the rental agreement;
  • the condition of the leased premises; and
  • noting any damage.

An unresolved dispute as to the condition of the dwelling unit as of the commencement date will be resolved in favor of the tenant.

If a tenant does not complete a condition report, the landlord will complete and provide to the tenant a Condition Report, including digital photos of the premises, within 17 days following the first week of tenancy. The landlord must update the Condition Report to reflect all repairs and replacements impacting the dwelling unit during the term of the Rental Agreement and provide the updated Condition Report to the tenant.

Termination or Move Out (30.01.087)

Within 5 days of a termination notice being sent, by landlord or tenant, the landlord must complete a rental history form and give it to the tenant.

Within one week following the termination date the landlord must conduct a walk-through of the dwelling unit with the tenant or a tenant’s representative to document any damage beyond ordinary wear and tear not noted on the Condition Report (the “Final Inspection”).

The landlord must prepare an itemization describing any repair or replacement in accordance with the itemization incorporated into fixtures, appliances, equipment, or personal property identified in the Rental Agreement. Additionally, the landlord must document damage with photos and provide to the tenant with a written accounting. For any cost greater than $200, the landlord must provide documentation demonstrating that labor costs are reasonable and consistent with the typical hourly rates in the metropolitan region.

Security Deposit Changes (30.01.087)

A landlord may apply Security Deposit amounts only to actual costs reasonably incurred to repair the premises to move-in condition, not including:

  • routine maintenance;
  • ordinary wear and tear;
  • replacement of fixtures, appliances, equipment, or personal property or fixtures that failed or sustained damage due to causes other than the Tenant’s acts or omissions; and
  • for any cost that is reimbursed by a Landlord’s property or comprehensive general liability insurance or by a warranty.

A landlord may not apply the tenant security deposit to the cost of cleaning or repair of flooring material except as expressly provided in ORS 90.300 (7)(c) and only if additional cleaning or replacement is necessitated by use in excess of ordinary wear and tear and is limited to the costs of cleaning or replacement of the discrete impacted area and not for the other areas of the dwelling unit.

A landlord may not apply the tenant security deposit to the costs of interior painting of the leased premises, except to repair specific damage caused by the tenant in excess of ordinary wear and tear or to repaint walls that were painted by the tenant without permission.

A landlord may only apply security deposit funds for the repair and replacement of those fixtures, appliances, equipment, or personal property that are identified in the Rental Agreement and to which a depreciated value is attached in accordance with the depreciation schedule published on the Portland Housing Bureau website.

Notice of Rights (30.01.087)

Upon delivering a tenant their final accounting, a landlord will also need to include:

  • security deposit notice of rights;
  • contact information for the closest legal aid services of Oregon; and
  • physical address of the Oregon State Bar.
Damages

If a landlord fails to comply with all of the screening ordinances the applicant can seek $250 for each failure to comply.

If a landlord fails to comply with all of the security deposit ordinances, a tenant would be eligible for:

  • an amount which is double their deposit;
  • reasonable attorney fees; and
  • actual damages.
As you can see, the new ordinances are very extensive and will require sweeping changes for landlords. If you have questions, do not hesitate to reach out to Bluestone & Hockley at 503-222-3800!

Read more news from Bluestone & Hockley HERE!

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Oregon Law Changes Impacting Residential Landlords & Tenants https://www.bluestonehockley.com/oregon-law-changes-impacting-residential-landlords-tenants/ https://www.bluestonehockley.com/oregon-law-changes-impacting-residential-landlords-tenants/#respond Mon, 24 Feb 2020 09:00:05 +0000 https://www.bluestonehockley.com/?p=27392 Introduction 2019 was an eventful year for the Oregon legislature. Oregon opened with a bang in February passing statewide rent control, continuing with new mobile home park rules and finishing with some more state taxes. Portland was also busy with the passage of the Fair Access in Renting (FAIR) ordinances which will dramatically alter application... Read more ›

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Introduction

2019 was an eventful year for the Oregon legislature. Oregon opened with a bang in February passing statewide rent control, continuing with new mobile home park rules and finishing with some more state taxes. Portland was also busy with the passage of the Fair Access in Renting (FAIR) ordinances which will dramatically alter application screening and security deposits beginning in late March. All of these changes have made us take a close look at our operations to make sure we are in compliance. In this article, we will be addressing major legislative changes that impact residential rentals. However, we will not cover the FAIR Ordinances in this newsletter but will provide an article in the coming weeks.

Rent Control: Senate Bill 608

Senate Bill 608 caps rent increases at 7% per year + consumer price index (published annually by the Oregon Department of Administrative Services on September 30th, currently 2.9%); restricts no-cause terminations to the first year of the tenant’s occupancy; and establishes a relocation fee equal to one month’s rent for tenants being displaced.

Note: Under the law, one may levy a 9.9% increase and a separate increase for utilities. However, this is not the case in the City of Portland where the total of all increases, rent and utilities, may not exceed 10% without triggering Portland relocation assistance.

Senate Bill 608 does provide landlords some relief by:

  • keeping the state’s preemption over local rent control regulations;
  • creating a new “tool” to terminate leases after three violations in a year; and
  • defining landlord-based exemptions to terminate a tenancy (with the payment of a relocation fee to equal to one month’s rent*) to:
    • demolish or repurpose a dwelling within a reasonable time;
    • renovate or repair premises that are or will be unsafe or unfit for occupancy within a reasonable time; and
    • occupy a premises as a primary residence for self or immediate family.

* Owner-occupied units, owner-occupied duplexes and landlords with four or fewer rental are exempt from paying relocation fees.

Residential Rental Registration & Tax (City of Portland)

In July 2018, Portland passed a city code that requires owners to register all of their rental properties and pay a 60/unit tax. 2020 is the first that the tax is due and enforceable.

Applicant Screening Changes (Senate Bill 484)

Impact: Restricts a landlord’s ability to charge multiple screening fees.

It is common practice for applicants to pay a screening fee. These costs can add up quickly when applying for multiple apartments. This law limits a landlord to charging a single screening fee in a 60-day period for unit owned or managed by the same landlord.

Additionally, the law provides that an applicant may not recover a screening charge if the tenant refuses an offer from the landlord to rent the dwelling unit.

Marijuana Screening Criteria (Senate Bill 970)

Senate Bill 970 is primarily related to manufactured dwelling park statutes and “facility landlords” and prohibits all residential landlords from considering minor marijuana convictions, possession of a medical marijuana card, or status as a medical marijuana patient when evaluating rental applications.

Military Veteran Services Notification (House Bill 2530)

Impact: Requires residential landlords to notify veterans of special services available to them upon eviction or foreclosure.

Disclosures shall include contact information for county veterans’ service office, community action agency or 2-1-1 referral service.

Housing & Community Services Department Grant (House Bill 2006)

Impact: Corrects Senate Bill 608 and funds housing-related support services to low-income Oregonians.

The bill appropriates $3 million from the General Fund to the Housing & Community Services Department to support programs that help people to obtain and retain housing. Examples include tenant education programs, technology solutions that help low income people find available housing, fair housing training for tenants and landlords, and assists victims of domestic violence and sexual assault with housing needs.

This bill also clarifies that units owned by a landlord, but not used as a rental (i.e., private residence, vacation home, etc.) do not count toward the 4-unit threshold for exemption from the relocation assistance requirement.

Rent Guarantee Program (Senate Bill 278)

Impact: Extends eligibility of program that helps low-income tenants qualify for rental housing.

Rent Well is a tenant education course that helps low-income individuals who have poor credit, past evictions, or criminal history and who are at risk of homelessness or currently homeless. Graduates receive a certificate giving their landlords access to the Rent Well Landlord Guarantee Fund, which may cover damages, unpaid rent or eviction cost.

Senate Bill 278 extends eligibility for the Rent Guarantee Program to individuals between 16 and 27 years of age who were wards of the juvenile court within the past ten years.

Summary

As you can see, there were a lot of legislative changes in 2019 that impact 2020 and beyond! On the other hand, there were many bills that did not pass. The goal of this article is to give visibility to the massive amount of change owners of real estate faced in this last legislative session. The biggest challenges for all of us will be to review these bills and change policies to meet the new regulations.

Links to full text of legislation

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