An Oregon association representing more than 25,000 members and over 270,000 rental units, Multifamily NW, has communicated with Governor Kate Brown, requesting a resolution to the hundreds of millions of dollars in unpaid rent owed to real estate owners. These arrearages were created by state policies on housing, including eviction moratoria and lack of tenant requirements for proof of hardship. Spurred by the recent discussion by the Governor's Council of Economic Advisors, the letter, authored by Multifamily NW Executive Director, Deborah Imse calls out the advisors for their inability to address the problem.

Oregonian renters and housing providers would be angered and disheartened by the response you received from economist Tim Duy, and your apparent agreement with his statement: “I don’t know that it’s possible for the state to make that investment, it’s probably too big, and I would probably let the bankruptcy courts deal with it and let the banks deal with it....you are going to have to accept that there are going to be costs to this pandemic that cannot be dealt with effectively by the state”

The costs referred to by the economist amount to more than $250 300 million, but housing providers maintain they are higher. In an ironic twist, some of the loudest voices in favor of the eviction moratorium, which involves the state intervention on a private contract, are the same voices that point out the inviolability of a contract when PERS reform is discussed.

Not content with merely complaining to the Governor, Multifamily NW offers several solutions that the upcoming legislature could use to provide relief.

• Design systems to distribute Rental Assistance efficiently and impartially across the state. If necessary, borrow to ensure that the rental assistance adequately covers the need. Note that the potential losses to housing providers is far more than the $250 – 300 million cited above.
• Design a short-term loan program for households that cannot afford rent, with flexible repayment terms. (Note: Landlords are effectively being forced to act as an interest free lender to tenants.)
• Pass LC 881
• Design a State Income Tax Credit to substantially defray pandemic legislation-related losses using future, rather than present revenue.
• Consider Property Tax Relief for Property owners who have been subject to state takings.

There is a proposal on the table for mitigating the damages done to housing providers, currently known as Legislative Concept 18. In another letter, addressed to "Speaker Kotek and Members of the Democratic Caucus," the association points out several flaws in LC 18, including:

• The proposal suggests that eligibility will be tied to the “number of units a landlord must own” or the “percentage or amount of total rent that must be unpaid.” These criteria are entirely unrelated to tenant need and should not be used to determine which property receives assistance. Denying families access because they live at larger properties is not justifiable.
• The proposal provides that a tenant can decline to pay rent until July 1, 2021 by merely signing a Declaration of Financial Hardship. There is no due process or legal mechanism to evaluate the validity of this form, in fact challenging the form would expose a landlord to 3 months’ rent penalty. The proposal permits deferral of rent for virtually any reason, even if it is not causally related to the COVID-19 Pandemic or the Governor’s executive orders.
• The Declaration can be tendered at any time, even up to the point a judgement is going to be made in court on the facts of an eviction. Further the notice does not define the magnitude of the hardships declared, opening the potential for fraud.
• LC 18 re-writes other sections of the landlord/tenant law unrelated to the pandemic. The proposal extends the 72- and 144-hour notices for nonpayment of rent to nearly 30 days for no discernable reason and permits notices that would typically be delivered in written form to be sent by text message.
• Under fear of outsized penalties, HB4213 cut off critical communication between housing providers and tenants during the pandemic. This proposal does not address this issue.

38% of all residential real estate in Oregon is renter occupied, so the dollar figure of any impact on rental properties quickly balloons. Often accused of picking winners and losers, Democrats in the person of the Governor and the majority party in the legislature have created a massive welfare program -- with a wealth transfer of possibly nearly half a billion dollars -- and placed the cost of that welfare program squarely on the shoulder of one sector of society. Ask a housing provider if "We are all in this together."


--Staff Reports

Post Date: 2020-12-03 18:10:02

Last Update: 2020-12-03 19:49:27