The COVID-19 pandemic has changed the face of the rental market for tenants and landlords alike. Financial hardship fell hard on both groups. Tenants lost their jobs in the early months of the pandemic and landlords were cut off from their income. As soon as the economic impact of COVID-19 became clear, federal and state legislature leaped into action to protect tenants from eviction during a global health crisis. Rental property owners, on the other hand, were left behind until late 2020. The Landlord Compensation Fund was the Oregon government’s eventual answer to landlords struggling under the burden of COVID-19.
While the promise of financial aid for struggling landlords was initially cause for celebration, the reality was more complicated. Since the Landlord Compensation Fund opened in December 2020, technical difficulties and delays plagued the program. As of mid-August, less than half of the funds allocated for the fund have actually reached landlords in need. Of the $121 million the state committed to the Landlord Compensation Fund, only $55.6 million has thus far been distributed. The last round of the Landlord Compensation Fund concluded on June 23.
With an uncertain road ahead for those still awaiting aid, owners and tenants alike find themselves in a difficult position. Between eviction moratoriums and the ongoing promise of support, the financial future for many landlords is still unclear.
Technical Difficulties and Delays
The Landlord Compensation fund got off to a rocky start. Early in the program’s lifespan, many landlords experienced serious problems submitting their applications. A common glitch made it impossible for landlords to attach necessary paperwork, resulting in confusion and processing delays. In the wake of those problems, Oregon hired the software company Allita 360 to design a central application system for the program for a cost exceeding $350,000. With so many issues to unravel, the state also delayed the second and third rounds of the fund.
Even with the application window closed, the logistics of getting relief money to qualifying landlords has been painfully slow. The combination of glitches and confusing error messages with the slow pace of payouts has caused even more stress for landlords who applied.
The difficulties with getting financial aid to landlords mirror those faced by renters. The Oregon Emergency Rental Assistance Program (OERAP) has also floundered in the massive tide of applications submitted this year. Despite paying the same software vendor an additional $395,000 to design a system for its rental assistance program, OERAP has not been able to connect renters with the aid they applied for in a timely manner. The temporary eviction bans instated by Multnomah County Ordinance 1296 aimed to stem the impending flood of evictions by giving renters more time to receive rental assistance. As of the most recent accounting in mid-August, $13.4 million of the requested $185 million has been distributed to 2,232 households: only 9 percent of OERAP applications.
Landlords Will Receive Additional Money
Late changes to the Landlord Compensation Fund will bring welcome relief to landlords–given time. Initially, landlords needed to forgive 20 percent of their tenants’ past-due rent in exchange for a payout of the remaining 80 percent. SB 278 updated that arrangement. Now landlords will receive the remaining 20 percent in addition to the initial 80. However, those additional payments won’t begin until later in 2021. Given the delays in obtaining the initial money, most landlords should expect to wait.
Most landlords who applied for the first round of funding have received their checks. However, the second and third rounds still lag behind. As of the last update, the program has distributed 61 percent of second-round financing and only 15 percent of the third.
Oregon renters must pay past-due rent by February 2022 before current legislation protecting them from eviction expires. While that timeframe was once luxuriously long, the slow pace of financial aid makes that deadline loom fast. It’s unclear whether OERAP and the Landlord Compensation Fund can distribute funds to all applicants before eviction protections expire. Landlords who evict their tenants for nonpayment of rent may not be able to collect those missing funds from government programs, and their tenants will be without a home. If that happens, everyone loses. On the other side of the coin, many mom-and-pop landlords cannot continue to shoulder the weight of unpaid rent forever. As of right now, the Portland rental market is a challenging field to navigate.
Rent Portland Homes Has Your Back
When looking at the current patchwork of legislation and emergency funds, it can be hard not to feel discouraged. The current state of the Oregon rental market remains balanced between eviction bans and stalled government aid. As we continue to battle the COVID-19 pandemic, it becomes less certain how the rental crisis will resolve.
Having a knowledgeable advocate at your side can make all the difference during uncertain times. Rent Portland Homes by Darla Andrew has worked throughout the pandemic to connect owners and renters with the financial aid they need. Our scrupulous documentation helps landlords and tenants quickly and efficiently apply for support without worrying about missing a crucial piece of paperwork.
Of course, while waiting for government aid, landlords can’t just twirl their thumbs. Our sterling maintenance and repair team is a valuable asset to owners who don’t want to deal with the minutiae of managing a property. Rent Portland Homes can handle all of the details, keeping your property investment successful without the hassle. We focus on tenant retention rather than constant turnover. Our commitment to finding the absolute best renters for your property each and every time is part of what makes our management style so successful. We look to the long term and are always just a phone call or email away. If you’d like to hear more, call or text us any time at (503) 515-3170 or contact us through our website. Find out how we can transform your property into a successful and stress-free rental!