The Portland residential property management industry has faced more disruption in 2020 than perhaps any year prior. Even before the COVID-19 crisis upended our lives, property managers adjusted to major legislative efforts from state and local governments. In this post, we’ll recap the changes currently impacting our industry the most.
Portland’s Fair Housing Ordinance
In early March, the Portland City Council passed its Fair Access in Renting or FAIR ordinance. The legislation sought to level the playing field between landlord and tenant by making significant changes to screening and security deposit requirements. Major provisions of the new ordinance include:
- A landlord can no longer deny a renter’s application if their credit score is lower than 500. Insufficient credit history is also no longer an acceptable reason to reject and application.
- Landlords may only screen for court-ordered evictions within the last three years.
- The new ordinance limits felony criminal background checks to seven years and misdemeanor checks to three.
- Managers must list a property for at least 72 hours before a landlord can select a tenant. Then, the selection process must follow the order in which the applications came in.
The FAIR ordinance also changes how Portland residential property management groups should handle tenant security deposits.
- The ordinance limits what landlords can charge for security deposits, with amounts based on whether they require prepayment of the last month’s rent.
- Landlords must keep security deposit funds in separate bank accounts and return the deposit with interest (minus a small administrative fee) when the lease ends.
- Portland residential property management groups must also maintain condition reports for all fixtures, appliances, equipment, and personal property listed in the rental agreement.
- The ordinance also limits the amount landlords can deduct from the security deposit to repair damaged or worn-out property.
These new requirements place substantial record-keeping burdens on investment property owners, which could be problematic for part-time owners to manage. You can read more about screening, security deposit, and depreciation requirements here, here, and here.
Statewide Eviction Moratorium
As the COVID-19 pandemic spread throughout the country, local and state governments reacted with efforts to support renters who were struggling due to lost income. On April 1st, 2020, Oregon Governor Kate Brown used the power granted to her under a declared state of emergency to issue a statewide moratorium on residential evictions for nonpayment. The City of Portland and Multnomah County took those orders one step further by establishing a six-month grace period for tenants to repay missed rent and avoid eviction once the COVID-19 emergency ends.
The state eviction moratorium expires at the end of September. So far, there’s been no indication that the state government plans to expand the moratorium. Multnomah County recently acted to expand its eviction moratorium through March 31st, 2021. Lawmakers also extended the repayment grace period through July 2021. Large-scale investment property owners are in a better position to deal with long-term revenue disruptions. However, these moratoriums could place tremendous financial pressure on landlords who own only a few rental homes. You can read more about local eviction moratoriums here and here.
Oregon’s Foreclosure Moratorium
Homeowners aren’t immune from the financial fallout of COVID-19. That’s why, in addition to protecting renters, Oregon Governor Kate Brown also issued a statewide foreclosure moratorium until December 31st, 2020. The governor’s order applied not only to residential properties but to commercial spaces as well. Part of Governor Brown’s rationale for the ruling was that it would assist renters along with homeowners. This was at least a tacit admission of the downstream effects the eviction moratorium would have on investment property owners. Read more about Governor Brown’s orders here.
Section 8 Rent Increases Barred
COVID-19 continued to reverberate through the Portland residential property management industry in August. That’s when Home Forward — the organization administering Multnomah County’s Section 8 program — announced that they would not accept rent increase in 2021. According to Home Forward’s reports, over 2,600 landlords and nearly 9,400 households currently participate in the Section 8 program. What’s more, the program contributes over $50 million in Multnomah Country rents annually. With so much local influence, these rent increase prohibitions will undoubtedly have a large impact on the local rental market. You can read more about the announcement here.
Portland Relocation Assistance Changes
Most recently, Portland Mayor Ted Wheeler made waves by announcing changes to the city’s landmark relocation assistance law. Previously, this ordinance required landlords to pay substantial relocation payments to tenants who left their homes due to several specific conditions. One of those conditions was a rent increase of 10% or more. In late September, Mayor Wheeler announced that any rent increase that takes effect through March 31st, 2021, will now trigger a required relocation payment. Mayor Wheeler justified these changes by saying stable housing is a critical public health issue amid pandemic. However, these required payments are significant and could put a significant burden on many landlords. They vary depending on the rental unit’s size:
- Studio or single-room occupancy: $2,900
- 1 bedroom: $3,300
- 2 bedroom: $4,200
- 3 bedroom: $4,500
A Portland Residential Property Management Company You Can Trust
After even this brief recap, it’s easy to see the significant changes the Portland residential property management industry has absorbed over just the last six months. Now, imagine how challenging it would be for even well-meaning self-managed property owners to stay in compliance. Fortunately, investment property owners can gain powerful support by partnering with professional property managers. Not only will these groups help owners keep track of changes in local laws, but they’ll also handle the day-to-day details that make rental ownership so challenging.
If you’re a Portland property owner seeking a qualified property management partner, look no further than Rent Portland Homes by Darla Andrew. Our experienced team has decades of combined industry experience. We’ll ensure your home complies with all local, state, and federal housing laws. We’ll also handle daily tasks like screening tenants, collecting rent, and handling legal documents. Our team can also take care of routine maintenance and repair tasks, as well as more significant remodels. If you’d like to learn more, call (503) 515-3170 or fill out the contact page on our website. You can also follow Rent Portland Homes by Darla Andrew on Facebook, Instagram, and YouTube for regular listings and tons of insider tips.