Page 1

Professional Publishing, Inc



Vol. 17 Issue 2

Published 17 Years

February 2013

MONTHLY CIRCULATION TO MORE THAN 20,000 IN PORTLAND/VANCOUVER APARTMENT OWNERS, PROPERTY MANAGERS, ON-SITE & MAINTENANCE PERSONNEL Published in association with: METRO Multifamily Housing Association; Rental Housing Association of Oregon; IREM & Clark County Rental Association

2013 Forecast Good Fundamentals But Vacancies to Rise

This issue of the Barry Apartment Report is based on the recent speech given by Mark D. Barry, MAI, Apartment Appraiser, with research and professional contribution from Patrick O. Barry, Appraiser Assistant and Phillip E. Barry, Apartment Broker. In 2012, we started the year with optimism about an improving job market and broad economic recovery. The Portland area economy continued on a long slow path of recovery from the depths of the recession, though it has been excruciatingly slow. While Portland Metro is clearly doing better than many other metro areas, we continue to be impacted by a slow national recovery. So what is happening here? Portland Economy: Good news in 2012 includes Intel’s Continued on page 9

Name Change to Better Represent Membership

Portland, Oregon: At a recent strategic planning meeting the Board of Directors of Metro Multifamily Housing Association revealed the approved name change to Multifamily NW. This name change better reflects the current and future membership and work of the association. The new name was chosen to retain the associations brand equity while more broadly representing the industry’s varied and changing business climate. “Making the change to “Multifamily NW”- The association promoting quality rental housing Continued on page 3 Page 2

6 Questions with Heather Blume The Landlord TImes recently caught up with multifamily housing veteran and blogger, Heather Blume. Here’s what Heather has to say about apartment management, teaching, her mentor, marijuana, eating lunch and relationship artistry... TLT: What is it about multifamily and rental housing that has kept you motivated and interested? HB: I love the fact that no matter the background or skill set that you bring to the table in this industry, it’s valuable. For example, I was an artist, a photographer, a playwright, a florist, a radio disc jockey, and had more Professional Publishing, Inc PO Box 30327 Portland, OR 972943327

than a few retail jobs in my past, but all of those skills translated in this professional world as a powerful set of abilities. Leasing was the first job I ever held where I felt like I was bring something worthwhile to the job, rather than just learning from it. Knowing that I found a place in this world where I “fit” perfectly…that was a powerful motivator for me, and still is today.

TLT: What do you consider your greatest success in your career? HB: It’s cheesy, but the greatest success moments in my career are when I’m looking at a room of people, teaching something, and I can see the light bulb over one of their heads

Current Resident or

PRSRT STD US Postage PAID Portland, OR Permit #5460

switch on. They get this look and you just know that some how you’ve been able to reframe an idea or a concept in a way that they just…get it. Every single one of those moments are my greatest successes, because I know it makes someone’s career better. TLT: Who was the most influential person in the early part of your career? What did you learn from them? HB: Hands down, Lisa Trosien has been my beacon in this industry. Besides being one of the most talented and smartest people I know, she’s my mentor, my guide, my friend, my cheerleader, and, when I need it, the person who sticks a pin in my ego to deflate it back down to a normal level. I took my very first class in this industry from her when I started on site, and after watching her for less than 20 minutes I knew exactly what I wanted to do with my career. I remember approaching her after that class, introducing myself and asking her what steps I had to take to do the job she was doing. She inspired Continued on page 5


PRESIDENT'S MESSAGE Page 10 Chapter 29 Institute of Real Estate Management


Clark County Rental Association


MULTIFAMILY NW President • Paul Hoevet Past President • Jeff Denson Vice President • Pam McKenna Secretary • Kirsten Bailey Treasurer • Chris Hermanski


On January 22nd with a great deal of excitement our Association announced our new name. After long and thoughtful consideration by the Board of Directors, staff and membership we have changed our name Multifamily NW. As the current President I believe that the process has resulted in a good choice for a name that will take us into the future. . Our Association was founded 20 years ago by a group of dedicated

16083 SW Upper Boones Ferry Road, Suite 105, Tigard, OR 97224 503-213-1281, 503-213-1288 Fax

President's Message professionals from the Multifamily Housing Industry. At that time, these founding members were looking for better representation of the Multifamily Industry in the Portland Metropolitan area. They formed the Metro Multifamily Housing Association. Through their vision and devotion and with the commitment of their successors, the organization has grown to be the region’s premier resource for the Multifamily Industry.

looking to support our members’ needs for education and legislation regardless of where their properties are located in the region. Our new name, Multifamily NW, represents our growing membership, eliminates any misconception that we are part of the regional elected government in Portland and allows us to continue to expand our footprint and our influence throughout the region. We will continue to be the premier resource for the Multifamily Industry. We are now Multifamily NW – The Association Promoting Quality Rental Housing.

In the last twenty years, our Association has become the voice for Industry Advocacy work at various levels of state and local government. This increased advocacy resulted in confusion on the part of legislators when they heard the Metro part of the Association’s name. Often legislators in Oregon State Government would mistakenly associate us with Metro – the elected regional government. Over the last two decades, the Association membership has also grown substantially. Our membership both current and new is growing in all parts of the region. We are

Multifamily NW 2013 Events: MARK YOUR CALENDAR! February 20, 2013 12:00 PM - 1:00 PM - PDX Monthly Luncheon: Marijuana in Oregon and Washington - What is a landlord to do?

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The Landlord Times - Metro • February 2013

retains our brand and accurately reflects the growth and work of our membership,” states Immediate Past Board President, Jeff Denson. “It builds on our collective strength and will also make our individual businesses stronger in the long term. I believe this change will help the industry and association continue to focus on the issues of quality rental housing throughout the region,” he continues. According to Executive Director Deborah Imse, “Our membership is growing and this change reflects the forward movement of the association and the forward movement of

the markets we serve.” As a result of the name change Multifamily NW will also incorporate a new logo design and website which will soon be revealed. The website is updated frequently, with important technical resources, documents and forms, as well as educational and training. For more information about the benefits of Multifamily NW—The association promoting quality rental housing contact Executive Director, Deborah Imse @ 503. 213-1281 or visit www.

About the Form: The Smoke Alarm/Carbon Monoxide Alarm form serves as the required written notice for the tenant to read and sign at lease-up. The form allows the landlord to specify the type of alarms, testing instructions, and battery replacement. It also informs the tenant of the $250 fine should the alarm be removed, tampered, or if the batteries taken out. It also specifies that it is the tenant’s responsibility to report any deficiency in either the smoke alarm or carbon monoxide alarm to the landlord immediately in writing. The Washington State version M005 WA has been updated for 2013 with the new requirement that nearly all rental properties in the state of Washington have carbon monoxide alarms installed. SMOKE ALARM / CARBON MONOXIDE ALARM DATE __________________________________________ PROPERTY NAME / NUMBER ___________________________________________________________________________________________________________________________________________________________________ RESIDENT NAME(S) ___________________________________________________________________________






UNIT NUMBER ___________________________________ STREET ADDRESS ___________________________________________________________________________________________________________________________________________________________________________ CITY ___________________________________________________________________________________________________________________________________________________ STATE ___________________________________ ZIP _____________________________________________________________

SMOKE ALARM A c 10-Year Battery c Electric c Electric with Battery Backup powered smoke alarm has been installed in the above-noted unit for resident protection. The smoke alarm was tested by the Owner/Agent on ____________________________________ and found to be in working DATE condition. CARBON MONOXIDE ALARM If required, a c Battery c Electric c Electric with Battery Backup powered carbon monoxide alarm has been installed in the above-noted unit for resident protection. The carbon monoxide alarm was tested by the Owner/Agent on ____________________________________ and DATE found to be in working condition.

Advertise in the Landlord Times Metro Circulated to over 20,000 Apartment owners, On-site, and Maintenance personnel monthly. Call 503-221-1260 for more information.

THE RESIDENT SHALL: TEST THE ALARMS AT LEAST EVERY SIX MONTHS AND REPLACE THE BATTERIES AS NEEDED; AND NOT REMOVE OR TAMPER WITH A PROPERLY WORKING SMOKE ALARM AND/OR A PROPERLY WORKING CARBON MONOXIDE ALARM, INCLUDING REMOVING WORKING BATTERIES. OWNER/AGENT MAY CHARGE RESIDENT A FEE OF UP TO $250.00 FOR ANY NON-COMPLIANCE WITH THESE DUTIES. TESTING THE SMOKE ALARM AND CARBON MONOXIDE ALARM Test by pushing the button on the cover. The alarm will sound if all electronic circuitry, horn and battery are working. If no alarm sounds, the unit has a defective battery or other failure. You can also test the smoke alarm by blowing smoke into it. SMOKE ALARM HUSH FEATURE If the smoke alarm has a hush feature, you can silence the alarm by pushing the hush button on the cover and holding for three seconds. BATTERY REPLACEMENT (where applicable) If the alarm is powered by a 10-year battery, it may not last for 10 years. The alarm has a low-battery indicator which will “chirp” at 30-second intervals for a minimum of 7 days. Replace the battery when chirping occurs. If the alarm is equipped with a 10-year battery, replace it only with a 10-year batt ery. If the alarm is electric with battery backup, use Mallory MN1604 or Eveready 552 9-volt alkaline battery or equivalent sold at most drug, department, hardware or electronic parts stores. Never use an ordinary or heavy-duty carbon-zinc battery. It is your responsibility to report any deficiency in either the smoke alarm or carbon monoxide alarm to the Owner/Agent immediately in writing. The Owner/Agent will correct the deficiency as soon as practical.

























The Landlord Times - Metro • February 2013







Form M005 OR Copyright © 2009 Metro Multifamily Housing Association.® NOT TO BE REPRODUCED WITHOUT WRITTEN PERMISSION. Revised 8/25/09.

Name Change ...continued from front page

Smoke Alarm/ Carbon Monoxide Alarm









“Let Lightning Spit Fire! Let the Rain Spray!” PCPM’s ultimate disaster vigilance Last week at our company’s monthly staff meeting, our boss responded to the annual complaints of on-call duty during the beginning stormy months of the winter season with the phrase “when it rains, it pours.” As anyone native to the Pacific Northwest knows, once those brief rays of August sunshine are over, it’s time to get the buckets out to collect the steady stream of water you can anticipate flooding your windowsill. Seasonal natural occurrences such as a rough and wet winter are bullet points on a list of management criteria that all companies have to acknowledge when drafting a successful business plan. To acknowledge the recent implications of Hurricane Sandy, it is even more drastically obvious how extensive and important these types of plans are to the survival of human kind and the organizations constructed within it. Being prepared for when disaster strikes is the number one credible attribute a company can have and boast about through social media and networking today. At Pacific Crest, our steps for disaster preparedness are to review, react and recover. We educate and promote this process as follows:


Review. Develop a plan for all people, pets and property potentially involved. Companies can successfully prepare for potential issues by first coordinating a disaster plan and implementing it into their business strategy. Survival is what is strived for among companies reacting to the brutal man-made and natural disasters which arise in life. When developing this plan you have to take into account the 3 P’s: People, Pets and Property. Make sure the safety of all is available and that there is a clear guide to follow for each in the case of a disaster. Adequate preparation ranges from as little as supplying bags of salt for de-icing at all of your properties to ensuring earthquake kits and other major emergency kits are available. Any company, whether new or experienced, is vulnerable to disasters and the best way to stay strong is to be able to respond to a situation with a planned out call of action. Review and practice this plan on a bi-annual basis to ensure that emergency and communication procedures will go smoothly under pressure. Companies need to determine their needs, evaluate their resources and build capacity. Coordination and utilizing employee experience is vital.

React. Educate and inform employees and residents so that as much catastrophe is avoided as possible in a given situation. Educate and train employees and residents so that they are aware and informed of the plan. This awareness will facilitate mitigation of stress during catastrophe. Utilize the equipment provided from the disaster plan and cooperate with others in order for things to go smoothly. At Pacific Crest, the way that we ensure the equipment and belongings of the residents and property is safe is by enforcing renter’s insurance. It’s a safe and cost effective way of being precautious in the long run.

fear (or the least fear possible). This confidence will promote the credibility of your company and drive in more business. Following the process of reviewing, reacting and recovering is the most efficient way to effectively grasp potential disasters and truly be prepared as a strong company. By Lauren Ginder, Pacific Crest Property Management Contact info: Lauren can be reached at 206-812-9144 or via email at:

Recover. Get involved, train and work together. The best way for a company to survive atop a disaster is by helping each other, participating and working together. Train others on what to do now that you’ve learned more about situations that can arise. Get involved in the full recovery process and provide insight to others. As quoted in the title by Shakespeare, companies need to be aware of nature’s disasters and have no

The Landlord Times - Metro • February 2013

6 Questions

...continued from front page

my path through this industry and through my career, and I can never repay her enough for it. I’m confident in saying that I would not be the person I am today had our life paths not crossed in such a significant way. TLT: What are the biggest legislative topics/concerns right now? HB: In my home area, Washington state, we just legalized pot. As you might imagine, this presents some interesting challenges in the world of apartment management. One of the biggest confusion points that people have is thinking that smoking pot is now a protected class under Fair Housing – it’s not. Just because it’s legal to smoke it, doesn’t make it protected. It’s like cigarettes, and as we all know, those have nothing to do with the Fair Housing laws. For tax credit properties, it can get even more complicated. The new laws in the state of Washington have caused a bit of confusion…and most of that’s rooted in the fact that the laws aren’t even set yet. TLT: If you were talking to a multifamily newbie, what advice would you give them as they begin their career? HB: I’d tell them that the key to this industry and being successful in it boils down to relationship manage-

The Landlord Times - Metro • February 2013

ment. It’s not enough to just never burn your bridges. Anyone can avoid doing that if they’re smart. Strive to be someone who can take the common relationship where you say “hi” socially, but don’t really know anything in depth about the person besides that you want them to buy from you, and turn that in to a relationship where each person is giving as much as getting. You want to build relationships that are mutually beneficial, where respect and integrity are the cornerstones of the construction. A person that can achieve that is a relationship artist. Competency in relationship management is a must… Artistry in relationship management. TLT: Generally speaking, what 2 or 3 pieces of advice would you give to a room full of property managers? HB: First,for the love of all things holy, please take your lunch, take it away from your desk, and eat something that has a lot of protein in it. Because when you don’t eat or eat something that messes with your blood sugar and you get cranky at 4PM, your staff mirrors your mood… only they show it to your residents. Eat your lunch. Secondly, most managers already have learned this (some of them the hard way), but you can’t cut someone’s throat to get their job. This piece of advice is one that was told

to me during my first week in this industry, and it has served me well. Finally, in the same vein as number 2, if you’re afraid to teach your subordinates to do new duties because you “won’t have anything to do,” then you’re failing not only them, but yourself as well. You’re a manager. You got your job by being competent enough to convince someone that you deserved the promotion, so why let yourself feel threatened by someone else’s success? Your job is to build your team, not keep them down. The best managers I know are the ones who are secure in their own abilities, so they have no problem

helping someone else grow. Heather Blume is the Imagination In Charge at Behind the Leasing Desk Training & Consulting Services in Seattle, Washington. She works with clients across the country on a variety of topics in the multifamily and customer service industries, and her blog at is read by hundreds of property management professionals each month. Always accessible, you can reach her on Facebook, LinkedIn, Twitter, Google+, and, of course, via email at heather@behindtheleasingdesk. com


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President • Elizabeth Carpenter Past President • Phil Owen Vice President • Robin Lashbaugh Secretary • Lynne Whitney Treasurer • Jon Moon Office Manager • Alita Dougherty Member Services • Cari Pierce Bookkeeper • Pam Van Loon

10520 NE Weidler Portland, OR 97220 (503) 254-4723 • fax (503) 254-4821

The RHAGP has been actively working to participate in housing issues. The current focus of our work is within three stakeholder groups with the topics under discussion as described below. I think it says a lot that we are invited to participate in these conversations and that our ideas are considered both locally and statewide. Landlord Tenant Coalition - Phil Owen and Cindy Robert have been participating in these bimonthly meetings since last summer. While the conversation has not come to the point of a completed and agreed upon piece of legislation, the topics still on the table include renters insurance, guest definitions, criminal history consideration and the ability to assess fees for non-compliance of contract terms on such issues as pets and

President' s Message

smoking. Section 8 Voucher Program - House Speaker Tina Kotek convened a group last fall to discuss mandatory Section 8 program participation. This is an issue that has been discussed in many cities and states, sometimes without the landlords, so we are thankful that Speaker Kotek welcomed Phil and Cindy into the workgroup. City - RHAGP Board member Jerad Goughnour has been confirmed on the City of Portland's Housing Advisory Commission (PHAC). The Portland Housing Bureau looks to the PHAC members to bring ideas, analysis, and perspectives to the table; to highlight opportunities for influence between the City housing system and other systems, as well as to provide a forum for public input on housing issues.

Apartment Market At the CCIM (Certified Commercial Investment Member) monthly meeting for January the speaker was Mark Barry, MAI. Mark was very positive concerning the apartment rental market in the Portland Metro area. In his presentation Barry stated the vacancy rates will stay low, around 3.5% in most locations of Portland, until about 2015. At that time roughly 8,000 units/ doors will have been completed. Barry predicts vacancy rates will rise to 6% as a result, which has been the historical vacancy rate for the Portland area. Important to keep in mind is that Portland has an increase in population of about 20,000 to 25,000 each year. Further researching CCIM information, the average price for the Portland Area is $72,989 per unit,


which is lower than both the regional average of $127,901 per unit and the national average of $107,833 per unit. Cap rate in the Portland apartment market is an average capitalization rate of 6.2%, similar to the national average of 6.3% percent, and higher than the regional average of 5.8%. I have found for close-in Portland the cap rate to be around 4% to 5%, with outer areas from 5.5 to 7% capitalization rate. Most of the capitalization rate does depend on the condition of the property and area. The Urban Land Institute report states the multifamily sector is a solid development opportunity. ~Elizabeth Carpenter, President

Advertise in the Landlord Times - Metro Circulated to over 20,000 Apartment owners, On-site, and Maintenance personnel monthly. Call 503221-1260 for more information.

RHAGP Vendor Happy Hour Join us Thursday, February 21st at 6:30pm for a special vendor appreciation happy hour. Why: Learn how to get

the most of your Vendor membership, new marketing opportunities, share best practices and help brainstorm program improvements

Who: All current vendor

members and those looking to join

Where:RHAGP Office

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When: Thursday, 2/21/13 6:30pm

Cost: FREE! RSVP: Phone: 503/254-4723


For more information on the RHAGP and the Vendor Program, visit 6

The Landlord Times - Metro • February 2013

Dryer Vent & Chimney Cleanings: When? Why? Article submitted by Portland Chimney & Masonry, Inc. Why is it important to clean your chimneys and dryer vents and how often should this be done? Chimneys: The smoke of any wood-burning firplace is vented through the passage-way of a chimney called a flue. This is true opf brick chimneys or the newwer metal pipe chimneys. This smoke combined wit a chemical reaction caused by the burning leaves a residue on the inside of this passage called creosote. This creosotc is flammable and dangerous it becomes. This is why a chimney needs to be cleaned on a regular basis. How often is determined by usage; but in a rental situation where you, the owner of the property, are ultimately responsible for the maintenance and safety of the property, it is best to be prudent. In fact some insurance companies in order to insure a property, require annual inspections and cleanings. So it is always better to be safe than sorry. Also, any trained and qualified chimney sweep (especially if they are certified) can and should do a safety inspection to ensure that all is safe and up to code with the chimney and fireplace (or other heating

device) in the home and recommend solutions for things that are not. Dryer Vents: When clothes are being dried, the excess lint is exhausted through the vent of the dryer. This lint will build up if it is not cleaned out and can cause you, the property owner or manager two serious problems: 1) A clogged dryer vent will severely lessen the efficiency of the dryer causing it to take much longer than necessary to dry the clothes. This wastes electricity and money. 2) Also this built up lint is flammable and as such is a fire hazzard to your property. Again, this is a situation of being safe rather than sorry. When is the best time to clean our chimneys and dyer vents: Because your tenants are less likely to use their heating devises during the Spring and Summer, these are the best times to clean these chimneys. Also by doing this, you will be sure that the chimneys are clean and safe when they are needed during the heating season

(Fall and Winter). Dryer vents are not as seasonal, usually being used all your long. But very often you can get a discount for getting the chimneys and dryer vents at your properties cleaned at the same time and it is always more cost effective to clean these (both chimneys and dryer vents) in bulk rather than a few at a time.

So keep your properties cost effective and safe for your tenants. Get your chimneys and dryer vents cleaned and inspected regularly by a trained and qualified Chimney Professional. Article submitted by Portland Chimney & Masonry, Inc.




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The Landlord Times - Metro • February 2013



ecently I caught myself contemplating the importance of signs. Whether it’s to draw our eye to a new place of business, (Harry’s Hamburger Joint – Grand Opening!) remind us of a political candidate (Vote for Honest Abe!) or tell us what to do when we are driving, (merge, yield, slow, STOP!!), signs are everywhere, vying for our attention. Recently, while stuck in traffic, a daily occurrence for most of us, I was overwhelmed by the sheer volume of signs I noticed while inching along. Some were informational, like speed limit signs, exit names and numbers, and “low clearance,” while other signs provided instructions and issued warnings: “yield to oncoming traffic” and “right lane ends merge left,” as well as “proceed with caution.” You probably think I am leading up to a discussion of bright, brilliant, breathtaking signage to attract prospective renters to your communities. Right? Wrong! Here is MY question:

their permission before proceeding. For example: “Is it okay if I ask you a few questions so I will have a better understanding of what you need?” AND THEN: “Is there something specific you are looking for? What is most important to you in your new home?” To state that you have the “perfect” apartment for someone you know nothing about is presumptuous at best, rude and uncaring at worst. MAKING the time to discover what your clients need, will not only help you close the front door on a rental, but the back door on a lease renewal. Renters will remain residents for the very same reasons they leased in the first place. – It’s your job to know

what those reasons are, and regularly remind them! If you have a question or concern that you would like to see addressed, please ASK THE SECRET SHOPPER. Your questions, comments and suggestions are ALWAYS welcome! ASK THE SECRET SHOPPER Provided by: SHOPTALK SERVICE EVALUATIONS Phone: 425-424-8870 E-mail: Web site: Copyright © Shoptalk Service Evaluations

Advertise in the Landlord Times - Valley Circulated to over 5,000 Apartment owners, Onsite, and Maintenance personnel monthly. Call 503-221-1260 for more information.

Q: Wouldn’t it be great if everyone who came into your community was wearing a sign to clearly communicate their most important needs and preferences, as well as thoughts and feelings? - WANTED: 2 bedroom apartment with lots of closet space. I like to work out, ride my bike on sunny days and cozy up to a warm fireplace with a good book on a cold winter morning. WARNING: I am extremely allergic to cats, value my privacy and resent being asked basic, mundane qualifying questions for the sole purpose of filling out a guest card! HANDLE WITH CARE: My husband was just diagnosed with cancer and I need to rent an apartment near the hospital where he is having his surgery and ongoing treatments. AND, the list goes on . . . . A: I realize that it can be difficult

and uncomfortable to “qualify” prospective renters, as you may feel like you are being intrusive. – I commend you for respecting the privacy of your clients. However, you cannot determine what someone needs in a new home if you don’t take the time to get to know that person. Most people will naturally talk about themselves, their family, work, interests, etc., if given the opportunity to do so. They may even reveal the circumstances of their move. This will enable you to offer an apartment (or choice of apartments) to best meet their needs. You may also learn enough to sell them on (specific) benefits of your community, its location or the local area, that fulfill other requirements they have besides just housing. For those individuals who feel uncomfortable articulating their needs or just aren’t open to a lot of fact-finding questions, it’s best to seek 8 #

Metro Apartment October 2013 2008 The Landlord Times Manager - Metro • •February

2013 Forecast ...continued from front page announcement that it will double the size of it’s initial $3 billion plant under construc-tion in Hillsboro, with 800 to 1,000 jobs; Evraz North America restarting their Portland steel mill; opening a branch office; two new call centers in Washington County; and some major construc-tion projects including the Kaiser Hospital in Hillsboro, the OHSU building in the south waterfront, and light rail projects. The latest employment report shows that we added 9,300 jobs over the last year, with unemployment dropping from 8.7% to 7.8%. From the peak in 2008 to the trough in early 2010 Portland metro lost 80,000 jobs. However, in 2012 we also saw unprecedented challenges in green industries, with layoffs at SolarWorld and Vestas, and the bankruptcy of ReVolt Technology. We are now four years into the recovery, with just 37,000 new jobs from the trough. Apartment Construction: 2012 saw the beginning of a new apartment construction cycle. When the final figures are in, expect to see permits for 3,100 new apartment units in the four county metro area for 2012 vs. 2,045 in 2011. This is in comparison with an average of around 4,700 units per year for the metro area for the five years prior to 2009. Around 60% of the 2012 apartment construc-tion activity is in the city of Portland, with 25% in

Washington County, 10% in Clackamas County, 5% in Clark County. Single Family Market: The median sales price is $228,000 as of late 2012, which is up 6.3% in the last year. There are just 4.2 months of inventory vs. 6.2 months a year ago. Single family constriction is showing some signs of life. We will see permits for almost 4,500 new homes in 2012 . This is in comparison with an average of 9,400 homes built per year from 2003 to 2007. However, unbeknownst to most, the US Census figures show that the rate of home ownership has increased in Portland metro from 63.7% in 2010 to 66.3% as of the third quarter of 2012. Apartment Vacancies and Rental Rates: The US Census Bureau reports that the Portland area has the 10th lowest apartment vacancy rate in the nation as of the end of the third quarter. The Fall 2012 MMHA Apartment Report shows a 3.6% apartment vacancy fac-tor. Of the 20 submarkets surveyed, 18 are showing an apartment vacancy factor of 5% or less. The highest vacancies are in outer SE Portland and Hillsboro. While turnover rents are up around 8% over the last year, the actual income at most apartments we see is up between 4% and 6%.

Apartment Expenses: Most expense categories were stable in 2012. Property taxes were up an average of around 4%. The school and library bond meas-ures passed in November 2012 plus normal increases should result in an 8% to 10% increase in property taxes. Ad-vertising expenses are non-existent at most apartments. Water and sewer rates continue to rise, though natural gas expenses have declined. Apartment Values: Apartment values for the metro area as a whole were up 6% in 2012 in comparison with 2011. However, the rate of increase for apart-ment

values varied widely in different areas. Suffice it to say apartment values for newer units and units in the urban area were strong, while values for older subur-ban units were flat. The Co- Star figures show a 6.76% median cap rate for 2012 vs. 6.68% in 2011, and 6.75% in 2010. Overall cap rates have been stable the last four years. Apartment Sales Volume: 2012 was the second strong year in a row for apart-ment sales. The final figures for 2012 should show around $880 million in apartment sales, with 180 sales repre-senting 8,700 units. Continued on page 11

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President • Christina DuCote’, CPM, RPA President Elect • Cammie Allie, CPM, ARM Vice President-Member Services • Kimberly Fuhrer, CPM Vice President-Communications • Jocelyn Burmester, CPMC Vice President Education • Kathi Pearce, CPM Vice President-Finance • Stephanie MacPherson, CPMC IREM Chapter #29 11575 SW Pacific Hwy Suite 210 Tigard, OR 97223 (503) 228-0002 (503) 406-2003 fax

IREM® Looks Back on Positive 2012 Legislative Results

The Institute of Real Estate Management (IREM®), strongly committed to legislative advocacy, helped to generate significant legislative results in 2012 of benefit to its members, other commercial real estate professionals and allied interest groups. Among the most notable of these victories, some achieved in collaboration with the NATIONAL ASSOCIATION OF REALTORS® (NAR) and other groups, are these: Lease Accounting IREM has strongly opposed proposed changes that would require businesses to recognize assets and liabilities arising from lease contracts, certain that they could lead to bloated balance sheets and a host of other potential problems. These changes differ from current regulations that allow leases to be considered operating expenses that do not appear on balance sheets. During a visit by 265 IREM® Members to Capitol Hill last April, the members took the accounting issue to their elected officials. Specifically, they requested that their legislators sign onto a bipartisan lease accounting “Dear Colleague”

letter, which encourages the Financial Accounting Standards Board (FASB) to complete a comprehensive and detailed economic impact study to better understand the major implications of the new lease accounting proposal. Following the meetings, 61 Congressional members signed onto the letter. In June of 2012, FASB and the International Accounting Standards Board (IASB) discussed a new proposal which is expected to be released in 2013 that potentially may be more reasonable. Carried Interest The carried interest issue has long been on IREM’s radar screen. In addition to participating in a coalition monitoring potential changes to carried interest policy, IREM® Members lobbied this issue on Capitol Hill in April. Members urged Congress to vote against any legislation that would change tax rates in ways that may discourage future commercial real estate investment, particularly in an already fragile market. IREM was successful in heightening legislators’ awareness of this issue and keeping carried interest rates unchanged throughout 2012.

National Flood Insurance Extension IREM strongly supported the extension of this vital program, an extension which President Obama signed into law effective through 2017. This is a multifaceted victory for homeowners, businesses, banks and real estate professionals for it assures coverage, where necessary, to obtain a mortgage. Marketplace Equity Act IREM has been advocating for more equitable sales tax policies, such as the Marketplace Equity Act (H.R. 3179 and S. 1832). This legislation would simplify and streamline the tax collection process for online retailers. Many online retailers have an unfair advantage in that their tax collection is not required or regulated, while brick and mortar stores must charge and record a sales tax. This inequity encourages consumers to buy more products online, ignoring physical establishments. Last spring, IREM® Members lobbied Congress on this issue. As a consequence, they helped to secure at least five new co-sponsors to proposed legislation by the House of

Representatives supportive of IREM’s position. Additionally, they motivated many more members to take interest in the issue. Lead-based Paint in Commercial Building This issue has long been a concern to IREM and its membership. In 2012, IREM and the coalition it joined were successful in stalling any movement to finalize and implement new rules for lead-based paint dust in commercial buildings. The U.S. Environmental Protection Agency has until December 31, 2016 (moved back from an original date of February, 2014 for paint on the exterior of a building) to finalize regulations to address lead-paint dust. IREM will continue to fight for fair and reasonable regulations for commercial and multifamily real estate management.

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2013 Forecast ...continued from page 9 This is in comparison with $978 million in apartment sales and 155 transactions in 2011, but just $600 million and 115 transactions in 2010. FORECAST FOR 2013 So where is our apartment market going in 2013? Some thoughts are as follows: Economy: The economy has been crawl-ing along, with a growth rate of 2% in GDP. While the housing sector, construc-tion, and autos are now a bright spot, ex-ports and business fixed investment are no longer leading the recovery. There are at least six reputable organizations that forecast employment figures for Oregon. If you assume that employment in the Port-land area will grow consistent with the state, the consensus forecasts are for around 22,000 new wage and salary jobs here in the Portland metropolitan area in 2013, and 24,000 new jobs in 2014, and that employment will reach pre-recession levels by late 2014 or 2015. Apartment Construction: New apartment developments seem to be coming out of the woodwork! While there are a lot of pipeline reports floating around town, we expect there will be a total of 8,000 new units in 2013 and 2014, with half of the construc-tion activity

The Landlord Times - Metro • February 2013

in Multnomah County. Only limited apartment construction will have public sponsorship. Apartment Vacancies and Rental Income: With increased apartment construction and increases in the ratio of home owners to renters, apartment vacancies are expected to gradually increase in mid 2013, and be at 5.0% to 5.5% by late 2014. In 2013, apartment income will be up by 2% to 4%, with most of this increase in the first half of the year. There will be a shift from a landlords market to a market in balance by late 2014. Apartment Values: Apartment values gradually increased in 2011 and 2012. We expect that apartment values will remain stable in 2013 due to low interest rates, and stable apartment income. The real con-cern is that interest rates will increase, with a corresponding increase in cap rates. How-ever, the feds have indicated that interest rate will remain low until unemployment reaches 6.5%, which won’t happen until 2015. Apartment Sales Volume: Apartments remain as the favored asset class for investors in Portland and across the nation. In 2013, we expect to see $800 million to $1.0 billion in apartment sales, and 175 to

200 apartment sale transactions . Risks: The biggest risk facing the apartment market is felt to be an increase in interest rates, which usually translates into higher cap rates, and could result in lower values. Other risks include the sovereign debt crisis in Europe, a double dip reces-sion, fiscal pitfalls, and a stronger than expected improvement in the single family market. CONCLUSION: We expect a continued slow recovery in 2013 , but we will have to wait

until 2014 and 2015 for any significant economic recovery. Apartment construction will be strong in 2013 and 2014, which will result in increases in apartment vacancies in 2013 and 2014, and more modest in-creases in income. The apartment market had everything go-ing for it in 2012, with increasing rents, increasing income, low vacancies, readily available financing, relatively little new inventory coming on the market, and good investor demand. In addition, the word is out that apartments are the place to be and are the favored Continued on page 13

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2013 Forecast ...continued from page 11 asset class among investors, and Portland has one of the healthiest apartment markets in the nation. This will continue in 2013. I think we are still going to be in a sweet spot in the market and the real estate cycle in 2013. As the year progresses, I expect apartment vacancies will increase, and that by the end of the year and into 2014 we will see some shift from a landlord market to a market more in balance. HEARD ON THE STREET “The Portland City Council should intervene, either with an expedited code change or a temporary, narrowly tailored moratorium on large multifamily apartment projects with no off street parking. The law permits it and basic quality of like demands it.” Oregonian Editorial of November 16th. “One area where we are not seeing an in-crease in pricing and lowering of cap rates is in the C and lower properties. There is weak buyer demand for such properties. Buyers are looking for quality, and lower end proper-ties need a compelling story to attract buy-ers.” Greg Frick, IREM Forecast Breakfast. “The sustainable-equitable-yadayada planning cabal keeps packing in the city's neighborhoods with junk infill on the theory that millions of people are moving to Portland any minute now, but that premise is sim-

ply false. The net in-migration to the city over the past year was a mere 2,070 people.” Jack Bog’s Blog. “When citizens get their property tax bills next November, there’s going to be some sticker shock—we passed three money measures in one ballot.” Portland Mayor Charlie Hales. “The tide has changed. People feel it is OK to go back into residential real estate—it’s no longer taboo— and that change in sentiment could have a very powerful effect.” Ivy Zel-man, Zelman & Associates. “Pump all those numbers into a “rent versus own” calculator, and home ownership looks very, very competitive. Further rent increases will add to the temptation of home ownership.” National Real Estate Investor News. “Pricing has probably peaked and rent growth will subside in markets with an up-surge in multifamily development activity.” Urban Land Institute 2013 Emerging Trends in Real Estate. “By bringing down interest rates to nil, you have penalized those who play by the rules, saved money, and particularly those who are aging people like me who are baby boomers.” Richard Harris, Presi-dent, Federal Reserve Bank of Dallas. “Over the past two decades, government and nonprofits in the city have built over a thousand shelter

beds and provided numerous services, including transition programs, to the homeless. Yet the homeless population continues to rise. They’re not coming for the weather. Portland has justly gained a reputation as a place with a high tolerance for vagrancy.” Ethan Epstein, Wall Street Journal. “There are a lot of proposed infill sites going through permitting on the east side. None are significant enough in size to cause an oversupply; they may just keep rental growth at bay.” Robert Black, NAI Norris Beggs & Simpson.

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The Landlord Times - Metro • February 2013

The Power and Variety of Aid Animals By Jo Becker, Education/Outreach Specialist, Fair Housing Council Serving Oregon and SW Washington Caller: The one bedroom, one bath was on the third floor? Housing Provider: Yes. Caller: Okay. And what is the deposit? Housing Provider: It’s a $250 deposit, plus there’s a $100 non-refundable administration fee. And the application fee is $45. Caller: Okay. Now, I do have a service animal. Housing Provider: You do have a service animal? Caller: Uh-huh. Housing Provider: Okay. Well… you have a form that you’re supposed to fill out. Caller: Well, I have a prescription. Housing Provider: Okay. That would be a $900 deposit on the dog. Is it a dog? Caller: My service animal? Housing Provider: Yeah. Caller: Yeah. Housing Provider: It would be $900 on the pet and then a $100 non-refundable on that. Caller: With the doctor’s note, right? Housing Provider: Right. The above exchange was part of the evidence sited in a fair housing case in Idaho. What’s wrong with this interaction? Well, as stated in

the case documents, a plain reading of the federal Fair Housing Act (FHA) “suggests that imposing an additional security deposit <or any other financial fee or penalty > for a service animal made necessary by a <resident’s> handicap is <illegally> discriminatory. Requiring such a deposit <or any other financial fee or penalty> constitutes a failure to provide the reasonable accommodation of waiving a general pet deposit or no-pet policy.” The spirit behind fair housing laws is to advance equal access to housing for all without regard to protected class status. In this case, the protected class in question is disability. For a broader perspective on disability protections in housing visit www. Here we’re going to dive into some nuances of aid animals under the FHA. First of all, in housing under the FHA, it does not matter what you call the animal – service animal, companion animal, assistance animal, therapy animal, working animal, aid animal, etc. Legally they are not pets if they exist to serve their person with a disability. It should be noted that this is distinctly different than what you may have heard of under the American

with Disabilities Act (ADA). The ADA’s definition of a service animal as it relates to public accommodation was changed in 2011 to be narrowly defined as only a dog, sometimes a miniature pony*. This definition, in no way, affects or limits the broader definition of aid animal under the FHA. There are additional distinctions between Jan, the ADA and the FHA Mar, May, as it relates to aid animals but suffice it to say, when dealing with housing, you need to know and follow the

FHA. You can find additional informaVALLEY, tion about METRO, aid animals ARIZONA in housing at serviceanimals. htm. There are even links to information about the ADA, just be careful not to confuse the two. Posted on that page is an exceptional handout by the Dept. of Justice (DOJ) entitled “Revised ADA Requirements: SerJul, Sep, Nov, vice Animals.” This document states that even under the more narrow Continued on page 17

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The Landlord Times - Metro • February 2013


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How To Manage A Difficult Property Management Employee! © By Ernest F. Oriente, The Coach Having to manage a difficult employee is never fun and can be the most challenging part of your responsibilities as a property management professional. While never easy, this article will address a step-by-step way to consistently and confidently handle the most

challenging employee situations. In addition, how you handle a difficult employee will send a strong and powerful message to those who still work for your property management company.

Addressing the problem: When you first realize you are having a problem with one of the members of your property management team, bring this individual behind closed doors and discuss your specific concerns. The conversation should be brief and to the point, making certain your employee understands the concerns you have and the improvements you expect. Be specific with your comments and only address the business concerns you have, setting aside any personal issues. Of course, always look to support this member of your team in any way possible with the intention of a positive outcome. Tip From The Coach: As this is the first meeting you are having with your employee to discuss your concerns, take notes during this meeting, record the date on your notes, and place them into this person’s employee file. This will serve as a reminder of the problems you expressed during this meeting and will document the first time you asked this employee to specifically improve their performance. This first meeting is also the perfect time to review together this person’s written job description as another way to clarify your expectations.

Continuing problems: If similar problems persist with this same employee, bring this individual again behind closed doors and present a written memo recapping your concerns. In this memo, list the day/date of your first meeting when you discussed your initial problems with this individual’s performance and list the specific areas of improvement, which must happen. Remember, when you are requesting improved performance, the improvements must be measurable and must have a time frame or date when these improvements will be measured and reviewed again. Tip From The Coach: After you present your written memo outlining your concerns, have your employee sign and date this document which validates the points discussed during this meeting. In your memo, be certain to include the words, “failure to improve your performance, may lead to termination.” This makes your intentions perfectly clear. Of course, always consult with your immediate supervisor, your human resource department and your legal counsel, prior to presenting your memo, so everyone is in the loop.

Continued on page 18

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The Power ...continued from page 15 provisions of the ADA: “When it is not obvious what service an animal provides, only limited inquiries are allowed. Staff may ask two questions: 1) is the dog a service animal required because of a disability, and 2) what work or task has the dog been trained to perform. (Note: this is not an allowed inquiring under the FHA as, in fact, some aid animals do not have specific training). Staff cannot ask about the person’s disability, require medical documentations <i.e., copies of medical records>, require a special identification card or training documentation for the dog, or ask that the dog demonstrate its ability to perform the work or task.” Certainly doing more than this is a sure way to find oneself in hot water as a housing provider bound by the FHA. The DOJ document also states that (again, under the narrower ADA regulations) “allergies and fear of dogs are not valid reasons for denying access or refusing service to people using service animals…” The same is true under the more liberal FHA. So, you know (or perhaps now know) that, in housing, aid animals are not legally pets and must be reasonably accommodated. You know that, in housing, aid animals could, potentially, be any animal that assists its person with his / her disability. In fact, we’ve seen fair housing cases

involving dogs, cats, birds, miniature ponies*, iguanas, snakes… You know that, in housing, you can’t charge anything upfront for an aid animal (of course, if the animal causes damage the housing consumer is responsible for that damage). You know that you can’t deny an aid animal in housing simply because you or others are allergic or fearful of animals. This and much more is discussed in greater detail, including the process of reviewing a reasonable accommodation request and seeking appropriate disability verification at htm but do you know what aid animals can do for their people? Do you know what aid animals can do for their people? As the saying goes, a picture is worth a thousand words. If this is true, then videos can be nothing short of astonishing. Please allow me to recommend some short videos that may open your eyes to the power and variety of aid animals. The only thing I ask is that while you watch you suspend suspicion and imagine that someone you love needs the assistance these animals can provide. “Wonder Dogs” by Melissa Fay Greene, The New York Times View the video at www.FHCO. org/serviceanimals.htm.

Note: The article associated with this video is also quite amazing. “Assistance Dogs for Combat Veterans” View the video at www.FHCO. org/serviceanimals.htm. For a personal success story watch Fox News’ “Group gives wounded vets service animals to help heal” at htm. “Monkey College” Sit in on monkey training sessions at htm. For a personal, success story watch “Judy and Sophie's Story” at www. *And what about those service ponies anyway? Well, who doesn’t want a pony, eh? Seriously, there are a myriad of pros to miniature service ponies. Among the winning arguments is that highly trained service animals such as seeing-eye animals can cost many, many thousands of dollars to train and, at that, seeingeye dogs can only work an average of seven to twelve years. Seeing-eye miniature ponies, on the other hand, can live and work an average of 2040 years. Check out a couple miniature service pony videos here: • Get a sneak peek into clicker training for service ponies at www. • …and read up on miniature ser-

vice pony facts from the Guide Horse Foundation at ‘A final reminder that not all aid animals are highly trained like those profiled in the videos above. Nontrained animals are, none-the-less, able to naturally provide the unconditional love, emotional support, interaction, and sense of accountability that can assist individuals with a multitude of disabilities. Please do visit and, or call our Fair Housing Hotline at 800/424-3247 Ext. 2, for more information. This article brought to you by the Fair Housing Council; a nonprofit serving the state of Oregon and SW Washington. Learn more and / or sign up for our free, periodic newsletter at Qs about your rights and responsibilities under fair housing laws? Visit or call 1-800424-3247 Ext. 2. Qs about this article? ‘Interested in articles for your company or trade association? Contact Jo Becker at jbecker@FHCO. org or 800/424-3247 Ext. 150 Want to schedule an in-office fair housing training program or speaker for corporate or association functions? Visit pdf

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How To ...continued from page 16 Terminating this employee: If necessary, termination of this employee may be required. If so, make the termination, swiftly. This person’s attitude can be detrimental to the morale of your property management team and their attitude might be affecting those around them. A termination meeting should be done at the end of the day so this person’s departure will not disrupt others. Lastly, make certain this termination meeting is brief, state exactly why this person is being terminated and have all final paperwork ready for signature.

position, did we give this person proper training, could I have done anything to change the course of this situation?” In asking these questions, sometimes very positive improvements can be made. Employee terminations and the investment to hire a new person, is expensive and should not be taken lightly. Want to ask some additional questions about how to handle a difficult employee? Send an E-mail to ernest@ and The Coach will Email you a free PowerHour invitation. Author’s note: Ernest F. Oriente, a business coach since 1995 [29,900 hours], a property management industry professional since 1988--the author of SmartMatch Alliances--and the founder of PowerHour... [ and and ], has a passion for coaching his clients on executive

Tip From The Coach: Sadly, the termination of an employee is not a pleasant part of being in property management. On a positive note, take the time to analyze what went wrong and look for possible solutions. Ask yourself, “was this person the perfect fit for the

leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competitive sales strategies, and high leverage alliances for property management teams and their leaders. He provides private and group coaching for property management companies around North America, executive recruiting, investment banking, national utility bill auditing [ propertymanagement/utilitybillaudit.html ] national real estate and apartment building insurance [ ], SEO/SEM web strategies, national WiFi solutions [ ], powerful tools for hiring property management SuperStars and building dynamic teams, employee policy manuals [ propertymanagement/employeepolicymanuals.html ] and social media strategic solutions [

tymanagement/socialmedialeadership.html ]. Ernest worked for Motorola, Primedia and is certified in the Xerox sales methodologies. Recent interviews and articles have appeared more than 7000 times in business and trade publications and in a wide variety of leading magazines and newspapers, including Smart Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self Employed America and The Financial Times. Since 1995, Ernest has written 200+ articles for the property management industry and created 350+ property management forms, business and marketing checklists, sales letters and presentation tools. To subscribe to his free property management newsletter go to: PowerHour® is based in Olympic-town… Park City, Utah, at 435-615-8486, by Email or visit their website:

Upgrade ...continued from page 12 existing electric heat.3 Taking advantage of these incentives can significantly reduce your payback period. Contact PGE to get started We can help you find out if ductless heating and cooling is right for you. Call our Energy Experts at 800-822-1077 to find out more. You can also sign up for a free energy-efficiency consultation at 1Individual results and savings will

vary. 2Includes basic installation of Friedrich single-zone ductless heat pump model MR12Y3H, which is ENERGY STAR qualified. Excludes permits; condensate pump; and structural, electrical, or cosmetic repairs or modifications. 3System must replace electric resistance heat (baseboard, ceiling and wall heat or electric forced-air furnace) as the primary heat source. Contact Energy Trust about other requirements at 1-866368-7878 or

If you have questions you’d like to have answered in future “Ask the Energy Expert” columns, please e-mail

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The Landlord Times - Metro • February 2013

Serving the Portland/Vancouver Multifamily Housing Industry More than 21,000 Distributed Monthly www. The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, comport an endorsement of or support for the products or services offered. Metro Apartment Manager is produced monthly and is published by Professional Publishing Inc. An Oregon Corporation. PO Box 30327 Portland, OR 97294-3327. (503) 221-1260 • (800) 398-6751 Copyright 2013. All rights reserved.


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The Landlord TImes - Metro - February 2013  

News and information for aprtment owners, property managers and other real estate professionals doing business in the greater Portland, Or a...

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