If you invest in multifamily real estate, you can’t have missed recent legislation passed in Portland and proposed statewide that has landlords concerned. In this share, Speaker of the Oregon House Tina Kotek is interviewed by Gordon R. Friedman of The Oregonian. She talks about tenant protections and pushback she’s heard from landlords.
Portland’s Tina Kotek explains her rent control plans – and landlord pains
It hasn’t been easy for House Speaker Tina Kotek to carry the torch on boosting renter protections. The Portland Democrat has successfully pushed tenant-friendly legislation, much to the chagrin of some area landlords.
Friedman notes, early on, that:
Though landlords and politicians including Kotek agree that Oregon is in the throes of an affordable housing crisis, they diverge on how to solve it
Rent control, a key element of Kotek’s plans, is, Friendman says “particularly taboo for landlords”. Friedman says Kotek’s proposal:
…would repeal a longstanding statewide ban on rent caps — allowing cities and counties to pass their own rent control policies — and, for one year, bar rent increases above 5 percent.
Kotek offered an example of why she thinks legislation like this is needed:
…two of the complexes in my own district. One is the Normandy Apartments. The new owner bought it and jacked up the rent by 100 percent. That’s just impossible to deal with. People are being economically evicted.
Here’s a particularly intriguing exchange in the interview:
Friedman: Do you see how some might say your bill allows cities and counties to decide how much profit landlords can make?
Kotek: For a local program to be established it would have to go through a process of having open, transparent public hearings on how best to set the policy in place. In terms of profit, if you own a property, you’re going to have to be able to raise the rent to maintain it and have a reasonable rate of return. I suppose some would say you’re trying to define profit. We’re trying to define predictability in the market.
Fast Forward to July 2017
This winter the City of Portland enacted an ordinance to address no-fault evictions and renters who are forced to move because of increased rents. (In some cases, landlords will be forced to pay renter thousands toward their relocation costs). While this has area landlords and multifamily real estate investors grumbling and waiting to find out the impact on their bottom line, those outside Portland have reason to be hopeful.
The larger specter of rent control—prohibited under state law for many years—through Speaker Kotek’s efforts emerged as a bill in the state legislature and in April passed the Oregon House.
However, due to a variety of factors like political in-fighting and a crowded legislative calendar, the bill narrowly failed in the Oregon Senate, effectively taking rent control off the table for the time being.
The Multifamily Real Estate Market’s Never Been Changing Faster
Whether it’s efforts to impose rent control or the huge under-supply of available units, multifamily is changing at a bewildering rate. But you don’t have to worry, the multifamily real estate experts at Pacwest Commercial Real Estate are up to date on everything affecting their clients’ investments. Visit eugene-commercial.com or give them a call at (541) 912-6583 today!
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