March 2021
A monthly newsletter published by the Rental Housing Alliance Oregon
rha est. 1927
www.rhaoregon.org
In this issue:
RHA Calendar of Events............................................page 2 President’s Message.............page 3 Dear Maintenance Men....................... ...........................................................page 4 Portland Metro Challenges...................................page 5 Tax Deductible Info................page 6 7 Ways to get Smoking Undercontrol..............................page 9 Look to the Past for a Glimpse of the Future.................................page 10
Rental Housing Alliance Events & Classes
Join us for RHA Oregon’s Membership Meeting Where: Zoom Meeting When: Wednesday March 17th at 6pm
FREE
Adam Abplanalp at Cobalt P.C. will be discussing rental property taxes and changes to the rules that may effect you.
DATE
EVENT
LOCATION
TIME
03/10
Board Meeting
Zoom
4:00pm
03/20
Mentor Round Table
Zoom
11:00am
04/14
Board Meeting
Zoom
4:00pm
04/22
Mentor Round Table
Zoom
6:00pm
INFORMATION
DATE
CLASSES
LOCATION
TIME
INSTRUCTORS
03/09
Online Tenant Screening Class
WebEX
11:00am
Marcia Gohman w/National Tenant Network
03/11
Is it Time to Hire a Property Manager?
Zoom
6:30pm
Kurt Lane w/Chroma Property Management
03/11
Online Tenant Screening Class
WebEX
7:00pm
Marcia Gohman w/National Tenant Network
03/18
Is it Time to Hire a Property Manager?
Zoom
11:30am
Kurt Lane w/Chroma Property Management
03/23
Online Tenant Screening Class
WebEX
7:00pm
Marcia Gohman w/National Tenant Network
03/23
Applicant Screening/F.A.I.R.
Zoom
6:30pm
Amber Clark w/The Garcia Group
03/25
Online Tenant Screening Class
WebEX
11:00am
Marcia Gohman w/National Tenant Network
04/06 Online Tenant Screening Class
WebEX
11:00am
Marcia Gohman w/National Tenant Network
04/08 Online Tenant Screening Class
WebEX
7:00pm
Marcia Gohman w/National Tenant Network
04/15
Managing During the Moratorium
Zoom
6:30pm
Charles Kovas w/Charles Kovas Law
04/22
Online Tenant Screening Class
WebEX
11:00am
Marcia Gohman w/National Tenant Network
04/22
Applicant Screening/F.A.I.R.
Zoom
11:30
Amber Clark w/The Garcia Group
04/27
Online Tenant Screening Class
WebEX
7:00pm
Marcia Gohman w/National Tenant Network
For additional class/event information visit: https://rhaoregon.org/education All educational classes/seminars are open to members in good standing and the general public. A member in good standing may register and pay for an invited guest at the member rate for the educational class. General public must pay at the time of registration and at the non-member rate. To qualify for the early bird registration rate you must have your registration into the RHA office no later than 4:59pm on the listed early registration date in the advertising for the event. Deadline for refund/credit or cancellation of registration is up until 48 hours prior to the date and time of the class/seminar, up until 48 hours prior you will be refunded 100% of the cost to attend. If a registered guest/member does not cancel and/or does not show to the scheduled class/seminar then the registered guest/member will be required to pay the full amount of the class/seminar. All registrations are non-transferable. Currently all classes are in Zoom meeting format. RHA Oregon is not responsible for attendee’s inability to log into Zoom meeting. The Zoom invite will go out as an email to all those registered. Please check your spam folder email settings to make sure you receive the email invite. RHA is not responsible for lost or spammed emails.
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RENTAL ALLIANCE UPDATE March 2021
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President’s Message Ron Garcia, RHA Oregon President
“March comes in like a lion and out like a lamb.” Adages stick through time because they are true. Lions are fearsome and found in jungles and caged in a zoo. Lambs are gentle grazing in fields and on grasses they chew. So, what are we afraid of - and what are we looking forward to? (Pardon my dumb poem for the year – whew!)
But imagine: Abundant Covid vaccinations could show up. Counties might re-open and schools and restaurants and sports and public events resume. Students have graduation ceremonies. Couples get married. Grandparents spend time with family. Tenants all go back to work to and/or prosper in their endeavors. Rents are all paid on time. The eviction moratoriums end. Landlord’s are reimbursed through the state Landlord Compensation Fund. Yes - the economy shall flourish, and hotels get packed. Airplanes get booked and miles get tracked. Resorts grow crowded. Blockbusters movies are shown! Storms turn away. Our portfolios have grown. Okay, maybe that does not all happen to all of us all at once (or by the end of this month, anyway). But give it time and we will all look back and remember what it was like when we used to have to wear a mask or worry about rent payments being made and eat at home every night. So here is an unrelated (but timely) question: Given all this uncertainty: Is it still a good time to be a landlord? There are four ways to financially prosper over time when owning rental property. 1.Rental income. Positive cash flow is one source of revenue. 2.Debt reduction. Mortgages that get paid off create larger equity reserves. 3.Property appreciation. Valuations rise over time and create wealth. 4.Depreciation schedules. Deductions from taxes defer losses and help retain income. It has never been common for most (especially smaller) landlords to realize all four sources of income growth at once. But over a little time, it all works out. One day (in 2022?) we will look back and remember when we got cold feet and had the jitters before the great thaw occurred and springtime once more reappeared. It will be a time to sing “The Great Apartment Song”. (You don’t know the lyrics? Oh, I’ll teach them to you next month). Ron Garcia RHA Oregon President www.rhaoregon.org
RENTAL ALLIANCE UPDATE March 2021
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Dear Maintenance Men by Jerry L’Ecuyer & Frank Alvarez
Dear Maintenance Men: I am installing safety grab bars in all of my showers & bathtubs and I need some guidance on the installation procedure. What do I need to know to install these bars correctly? David Dear David: The use of handrails and safety bars help provide stability and extra support required by the elderly and people with limited mobility. Approved ADA grab bars are available in a wide variety of configurations, colors and finishes. The most common is the stainless steel or chrome finish. The grab-bars must be able to support a dead weight pull of 250 pounds. The preferred method is to bolt directly into the wall studs. This is not always practical, as the stud might not line up where they are needed. Grabbars can be mounted vertically or at an angle to match wall stud spacing. If finding studs becomes a problem, alternate installation methods are available. If your walls are in good condition, you may use large toggle bolts or if you have access to the backside of the shower or bath walls, insert a backer plate or add a new stud for an anchor point. Safety grab bars can be located at any local hardware store. It is advisable that you check ADA requirements with local, state and federal agencies for regulations governing height, distance & angle of the bars. Dear Maintenance Men: I am trying to do my part to conserve water and have found my toilets are the biggest offenders. The toilet constantly fills every five or ten minutes. I have replaced the fill & flapper valves but the problems persist. I’m at my wits end about this! What can I do besides replacing the toilets? Benjamin Dear Benjamin: Leaks at the Flush Valve are possibly caused by a damaged flush valve seat which may have a hole or the rim is pitted or cracked. The seat is the large drain hole at the bottom of the tank. A temporary repair may be to sand the seat with a steel wool pad or wet/dry sandpaper. This will remove the calcium build-up. If the seat is damaged, replacing the seat will be the next option. “Fluidmaster, Inc” makes a Flusher Fixer Kit that can be cemented directly on top of your old worn flush valve seat. This is a quick fix that may not work on all toilets. If the seat kit does not work, you will need to replace the valve seat. This can be accomplished by removing the tank from the base of the toilet: Turn off the water to the fill valve, disconnect the water line and remove any water from the tank. Unscrew the two or three brass bolts under the tank and carefully lift the tank off. Once the tank is removed, turn it upside down. Remove the rubber “Spud” washer from the tank. Spin the large nut from the threads and then push the valve seat through the tank. Reverse the procedure when installing the new valve seat. Always install a new “Spud” washer and new brass bolts and 4
RENTAL ALLIANCE UPDATE March 2021
washers. Be sure your toilet tank is installed level, as this will aid in its operation. The new flush valve will give the rubber flapper a smooth seat for a positive seal. Dear Maintenance Men: My current vacancy was long occupied by a heavy smoker. Every surface is sticky with brown nicotine and the smell of smoke is overwhelming. How do I get rid of the smell and keep it from coming back? George Dear George: Cigarette smell is very hard to remove even after painting and cleaning the carpets. Chances are if the resident was long term, the carpets, drapes or blinds will need to be replaced. Remove the carpets, pad and tack strips. The tack strips are wood and can absorb and release the smell of smoke, urine etc. Thoroughly clean the floors with soapy water mixed with bleach. After cleaning the floors, it is not a bad idea to paint or use a primer to coat the flooring. One of the best ways to remove the nicotine residue from the walls is using old-fashioned elbow grease! Again, wash the walls with soapy water using a brush or rag. Adding TSP (a powdered cleaning solution available at most hardware stores) or using a degreasing agent will help in the cleaning. If you have flat ceilings, wash them too. If you have “acoustical” or “pop-corn” type ceiling, that’s a problem. By its nature, acoustical ceiling material cannot be cleaned. Encapsulating the acoustical ceiling with spray paint may solve the problem. You will need a primer coat and a minimum of two coats of paint. If the smell is still present, give it another coat of paint and let the unit air as much as possible. Don’t forget to wash the windows and window frames. You will be amazed at how clean the aluminum or vinyl windows will look after a good cleaning.
WE NEED Maintenance Questions!!! If you would like to see your maintenance question in the “Dear Maintenance Men:” column, please send in your questions to: DearMaintenanceMen@gmail.com Bio: If you need maintenance work or consultation for your building or project, please feel free to contact us. We are available throughout Southern California. For an appointment please call Buffalo Maintenance, Inc. at 714 956-8371 Frank Alvarez is licensed contractor and the Operations Director and co-owner of Buffalo Maintenance, Inc. He has been involved with apartment maintenance & construction for over 30 years. Frankie is President of the Apartment Association of Orange County and a lecturer, educational instructor and Chair of the Education Committee of the AAOC. He is also Chairman of the Product Service Counsel. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance.com For more info please go to: www.BuffaloMaintenance.com Jerry L’Ecuyer is a real estate broker. He is currently a Director Emeritus and Past President of the Apartment Association of Orange County and past Chairman of the association’s Education Committee. Jerry has been involved with apartments as a professional since 1988. www.rhaoregon.org
Portland Metro faced with challenges as it starts to recover
By Cliff Hockley, President of Bluestone and Hockley Real Estate Services Executive Director, SVN | Bluestone and Hockley A review of the issues facing us in 2021 With the re-election of Mayor Ted Wheeler and Mingus Maps and Dan Ryan as City Commissioners, the city of Portland has turned a corner towards moderation, and it is not a moment too soon. Portland has been gripped by so many challenges this year that it makes your head spin. This overview will give you a taste of some of the challenges ahead for the next twenty-four months.
Homelessness
The Homelessness problem has grown in leaps and bounds over the last few years. Portland and Seattle seem to have become meccas for homeless people. There are shelters, warm food, medical care, and organizations standing by to help. Word is on the street, so to speak, that homeless people can set up camp in the public right of way and not face arrest. There are so many homeless, that even if they were arrested, they would be released the next day because there is not enough jail space. It appears that the city and Multnomah County have finally arrived at a strategy of encouraging homeless people off of tenants in the city’s right of way and parks, and into buildings and camps, where services such as clean water, power and restrooms exist. This takes many of the homeless off of the street and is a good start. The next necessary step is to reduce the cost and regulations involved with new construction of workforce housing, in order to deliver rental units to the marketplace for lower-income renters. The mayor has a plan: Move the tents and campers into large, managed camps. “We’re also gonna have to look at bigger strategies, like extending our managed camp system, potentially creating areas that are safe camp areas where people know that if they pitch a tent and there are some areas – perhaps out by the airport – there are some areas closer to the central city, if we identify those places and say look, in a pinch you can camp here,” he said. Additionally, the Bybee Lakes Hope Center has opened in North Portland which could house close to 500 people in emergency and long-term beds once renovations are completed. At this moment close to 25 people are living and working on their recovery in what was once the Wapato jail. Founder Alan Evans said the Bybee Lakes Hope Center is transitioning to operating as a homeless shelter in North Portland. The number of occupants is far lower than the goal, because of ongoing COVID-19 restrictions. The goal of this program is to transition homeless people off the streets. It provides services to those experiencing homelessness who are ready to make sustainable changes to achieve self-sufficiency. They serve men, women, and children and operate sober campuses. They have two eligibility requirements for their clients: they must be willing to be clean and sober and they cannot be a registered sex offender. In addition, METRO the regional government for the Portland metro area is raising a tax base of upwards of $250 million per year to support people experiencing homelessness in the www.rhaoregon.org
Portland region. It will enact two new taxes starting in January 2021: •1% marginal income tax on individuals earning more than $125,000 annually or couples who earn more than $200,000; and •1% tax on the profits of businesses with annual gross receipts of more than $5 million. Those taxes will be distributed to the tri-county area based on population and will fund services including case management, rental assistance, and addiction and mental health treatment.
Civil Unrest
Riots affected downtown Portland after the death of George Floyd. Many buildings in downtown, close to the justice center and the police headquarters were damaged and spray painted. With the advent of the winter and the cold weather, and the increasing Covid cases, the riots have slowed, but not evaporated. Originally started as a response to the Black Lives Matter, the movement has been challenged by anarchists protesting against big business, who prefer to damage property rather than march peacefully to accomplish change. The protests are limited to commercial areas of the central business district and the inner northeast and southeast sides of town, but they are a threat to businesses and are a sober reminder that it continues to be difficult to do business in Portland. The word has spread across America, via press coverage, and national businesses are hesitant to invest in Portland until the protests and concomitant property damage is stopped. The city council recognizes this and is working through solutions to this problem.
Covid
What can one say about COVID-19? The world is locked down and businesses, especially downtown businesses in office and retail buildings, have encouraged their staff to work from home. This is good and bad. A double-edged sword so to speak. With no workers downtown, retail businesses are having trouble staying open because they lack sales. At the same time, those workers are better able to protect themselves from Covid. Unfortunately, reduced sales revenues mean more layoffs and a reduced tax base as well. Oregon’s governor issued Executive Order 20-65 on the 17th of November 2020 that instituted a “Temporary Freeze” to control the surging Covid 19 cases. This Order intended to reduce the circulation of Oregonians and protect the most vulnerable from Covid 19 and included new limitations on gatherings of people, with a particular focus on Holiday gatherings, travel, and work. On December 2nd, the date Executive Order 20-65 was set to expire, the Governor issued Executive Order 20-66 which replaced the previous Order and provided for a county-bycounty risk-based metics approach. The biggest challenge to this order is the restriction on food and drinking establishments, basically limiting them to delivery service options and outside (continued on page 6) dining. This is a repeat of a former RENTAL ALLIANCE UPDATE March 2021
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The Rental Housing Alliance Oregon is a 501(c)(6) corporation. As such, we are allowed to lobby to influence legislation. A portion of the annual dues are utilized for lobbying activities on behalf of our members. Your membership dues payments may be tax deductible as a necessary trade or business expense. The portion of your dues utilized for lobbying activities is not deductible. Dues paid to the Rental Housing Alliance Oregon are not deductible as a charitable contribution but may be deductible as a business expense; however, the RHA Oregon estimates that 15.87% of the dues payment is not deductible as a business expense because of RHA Oregon’s lobbying activities on behalf of its members. The figure shown above represents the portion of your 2020 dues utilized for lobbying activities at both the state and local level. Please consult with your tax advisor regarding the proper treatment of your dues for income tax purposes.
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Portland Metro Challenges Cont. CONTINUED FROM PAGE 5
order and squeezing the surviving restaurants and bars bottom lines, not to say anything about increasing the unemployment statistics. As you can see from the four-county dashboard of cases (focusing on Oregon’s counties that make up the Portland Metro area), Covid Cases are hitting a winter high and as a result, the state legislature passed several bills in a special session on December 21st. Chief among them is Senate Bill 5731 and House Bill 4401 which provide for an $800 million relief package for Oregonians impacted by the pandemic and this summers’ wildfires. The bills include a six-month extension of the residential eviction moratorium that will now stretch until the end of June, $50 million in rental relief, and $150 million to pay landlords up to 80% of what they are owed by struggling renters. Landlords who accept the assistance will have to forgive the other 20%, at least for now. The restaurant industry also received a boost with the passage of SB 1801 which will allow restaurants to start selling cocktails and single servings of wine to go. In the near term, COVID -19 is here to stay until the country is immunized. The direct impact is a slowdown of the national and regional economy, but the silver lining is that businesses are retooling and finding other ways to continue operating in Portland, the region, and the world. Below are several links to relevant articles on this subject. •https://www.bain.com/insights/the-great-retooling-fm-blog/ •https://www.bizjournals.com/portland/news/2020/10/30/covid-manufacturing.html •https://www.wweek.com/promotions/2020/06/16/from-socks-to-reusable-face-masks-a-port (continued on page 8)
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7 Ways to Get Smoking Under Control in Non-Smoking Rentals By Justin Becker Seek out partners who are working on related projects within the housing community already. This way, you Landlords and building managers have to deal with have trusted resources at your disposal. Some examples several kinds of issues daily. Most of these are routine: a include asthma programs, health workers, etc. Above all, leaky faucet, a faulty smoke alarm, and so on. However, these meetings will allow you to give residents information in view of the current pandemic, the issue of smoking about cessation resources. You’ll be acknowledging their (especially when you have a non-smoking building) is concerns and addressing them in the best way possible. more serious than ever. People living in your apartments for rent will probably a more closely knit community as a result. There will Here’s what’s going on right now: A lot more people are at have be more related advantages when this occurs, including home every single day. The concept of remote working will the smoke-free aspect. become even more common in the future. Plus, people are becoming more attuned to their health issues, especially 5. SHARING STORIES when it comes to their respiratory system. Previously, it Whether it’s at these meetings or just when seeing them wasn’t exactly ethical when secondhand smoke from one in general, encourage your residents to share whatever tenant affected the apartment of their neighbors. Today, a stories they have about secondhand smoke. Their homes landlord could get sued for the same. and everyday lives are being changed by the new policies. So, they deserve to be empowered and acknowledged. Not sure how to get that smoking issue under control? What’s more, getting to know everyone’s perspective Here are a few ways to get you started. will also gain more traction for fi nally adopting the new policies. This may result in more buy-in from the residents’ 1. CONDUCTING RESIDENT SURVEYS part as well. You can start off by conducting resident surveys about the issues of secondhand smoke and how to combat it. 6. HAVING APPROPRIATE OUTREACH This way, you can learn what your residents think about All the community meetings, information, surveys, the smoking policy as it stands now. You’ll also be able to and signage you use needs to be sensitive and culturally receive feedback on any potential restrictions on smoking appropriate. This means having the text printed in different in the future. By collecting this information, it will be languages. It also includes having bilingual and people possible to learn about the concerns, potential points of of color invited to speak at the meetings. Neglecting this confl ict, and questions that your residents might have. aspect of reaching out can alienate some residents and When you do start implementing the changes, it will be weaken the impact of your efforts. easier to enforce them when you keep all concerns in mind. 7. GETTING INTO COLLABORATIONS Think about how the existing programs can work with 2. EDUCATING THE RESIDENTS new efforts to go smokefree. It’s important to get in touch It’s also a good idea to educate the people who will be with community leaders and stakeholders who agree with affected by the non-smoking policies. After all, having apartments for rent doesn’t mean that you just sit back and your views on providing smoke-free housing. collect money. It also means that you have a responsibility Having partnerships with such groups will also give to give people the information they need to work as a you the benefit of their trust, goodwill, experience, and community. Start by releasing educational messages that connections with both the residents as well as housing will affect the residents’ way of thinking and also prepare providers. them mentally for the changes. Include information on how secondhand smoke affects the health of the whole When you sit down with such groups, address the areas family. Getting secondhand smoke under control might where you have common concerns and how all parties even help reduce asthma in children. Once you wake can collaborate to achieve their goals. At this point, it’s people up to their basic right to a clean, healthy, and safe also essential to discuss how the parties can share their living environment, it will signal a lot of ease for future recourse, including time and expertise. rules. 3. CLEARING UP CONFUSION When you tell a smoker that they can’t enjoy their pipe or cigarette, it often triggers some feelings of rebellion. Make sure that the smoking residents in your apartment buildings don’t feel like they’re being controlled or that the new policies are extreme. Instead, clarify how smokers don’t have to give up that habit right away, nor do they have to find a new place to live. All the new policies mean is that they won’t be able to smoke in certain areas for the good of the community. The policy should also be worded in such a way that the smoke is held up as the culprit, not the smokers.
It’s also best to include all your staff in this kind of planning. Give them the training they need to properly implement, enforce, and uphold the new policies. Staff members should be aware of what the new smoke-free rules entail, when they start, and how they can help residents with their issues and queries.
4. HOLDING MEETINGS It’s helpful if you host community meetings to give out the information we’ve mentioned above. This will also provide a platform where concerned residents can ask questions, discuss answers, and generally reach a mutual agreement about making the air cleaner. Hold these meetings when you’re considering a certain policy or when the new policy is being implemented.
The only solution here is to make the housing system smoke-free. You’ll be safe on the legal front, along with a reduction in fire risk and turnover costs. It’s a win-win all around. So, consider following these steps today. You’ll feel the difference soon.
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THE TAKEAWAY Secondhand smoke is harmful to both kids and adults. In condominiums and apartment buildings, this concern is even more pressing due to the pandemic. Ventilation systems, wall cracks, and even plumbing could take the smoke from one place to another.
Justin Becker is a property owner in the state of Michigan and has a passion for managing communities. He owns apartment complexes and mobile home communities, and has been writing his own blogs for his properties for several years. RENTAL ALLIANCE UPDATE March 2021
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Portland Metro Challenges Cont. CONTINUED FROM PAGE 6
land-business-pivots-in-the-wake-of-covid-19/ •https://www.tigard-or.gov/business/spotlight.php
in 2026, depending on the needs of the program, which the county expects to be serving 7,000 new students by that time.
Taxes The combined tax measures in 2019 and 2020 many effective in 2021 and 2022 significantly increase the cost of living and working in the Portland, Oregon metro, especially those individuals with a high net worth.
•Measure 26-215 – the Portland Schools Bond passed – This bond measure provides $1.2 billion in funding for facilities and educational investments. The measure is not expected to increase tax rates above previous targets, because debt service is scheduled to decline.
Oregon •Corporate Activity Tax Modified Receipts: The CAT is applied to taxable Oregon commercial activity in excess of $1 million (Gross receipts – some subtraction for Cost of Goods sold). The tax is computed as $250 plus 0.57 percent of taxable Oregon commercial activity of more than $1 million. Only taxpayers with more than $1 million of taxable Oregon commercial activity will have a payment obligation.57%. If you collect or make over $1,000,000 in annual rent expect to have to pay some of this tax.
Where does this leave Portland and Multnomah County? As we reported in the December Quick Facts edition, 2021 Portland Tax Changes, local and state tax increases of over 40% over three years are making high net worth individuals very nervous. We have been told that as soon as their leases expire, businesses are moving out of Multnomah County to seek financial relief in other states and counties. This will significantly impact the money available to fund the aftermath of the pandemic. 2021 will be a benchmark year as immunizations take hold and the potential for economic recovery takes root. We recommend reading this article for more information on the impact of tax increases on businesses.
•Metro: In May 2020 voters in greater Portland approved a measure to raise money for supportive housing services for people experiencing homelessness or at risk of experiencing homelessness. The program is funded by a 1% tax on taxable income of more than $125,000 for individuals and $200,000 for couples filing jointly, and a 1% tax on profits from businesses with gross receipts of more than $5 million. They expect to generate $250 Million a year in revenue. Portland •City of Portland rental tax–$60/Unit, which is similar to a tax charged by Gresham to inspect units for habitability.
Local political leaders need to take a careful look at how they handle all of the above-outlined issues. There are no easy answers to the challenges caused by homelessness, riots, coronavirus response, and the current tax policies. The challenges are significant, the decisions difficult, the risk is high. Only time will tell if the correct decisions will be made.
•Measure 26-211 City of Portland – Library Bond. The passage will increase library space by 50% through the expansion of seven library branches and the development of a new East County flagship library in Gresham. The bond measure will cost $387 million and cost property owners an average of $0.61 per $1,000 in assessed property value for eight years. For a property that is valued at $2,000,000, they will pay an additional $1,220 on their property taxes in 2021. •Measure 26-213, the new Parks and Recreation Bond measure passed. The levy will prevent ongoing reductions to park services and recreation programs, preserve and restore park and natural area health, and center equity and affordable access for all. Levy is $0.80 per $1,000 assessed value. For a property that is valued at $2,000,000, they will pay an additional $1,600 on their property taxes in 2021. •Multnomah County: Measure 26-214 Tuition-free preschool, (effective Jan 2021). – The “preschool for all” initiative will be funded by an income tax on higherincome earners: individuals with an income over $125,000 will be taxed at 1.5%, and another 1.5% on county residents who earn more than $250,000 for a total of 3%. That rate could rise another 0.8% to 2.3% in each category, 8
RENTAL ALLIANCE UPDATE March 2021
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RENTAL ALLIANCE UPDATE March 2021
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LANDLORDS
“If smokers smoked outside their dwellings and extinguished their cigarette butts safely in water or sand, we would save thousands of dollars, and even more importantly, lives.” — Paul Corah Portland Fire & Rescue
Your rental properties are an important investment. Why put everything at risk of fire? M A K E YO U R R E N TA L P R O P E R T I E S S A F E R:
Put a no-smoking rule in your lease. Seven out of 10 Oregon renters want a smokefree place to live. • Find sample lease language and other tools at www.smokefreehousinginfo.com.
Enforce your no-smoking policy as you would any other rule (such as no pets or quiet hours). The safest approach is to prohibit smoking on the entire property. If smoking is allowed outside: • Make sure people don’t smoke near barkdust or planters and are at least 25 feet away from entrances, doors, stairways, windows and air intake vents. • Make sure cigarette butts are disposed of in a non-combustible container with water or sand to completely extinguish cigarettes. • Add a clause to the lease requiring proper disposal of cigarettes.
To educate your residents, download our SmokeFree/FireSafe Resident flier at www.smokefreehousinginfo.com. For help implementing a no-smoking policy for your rentals, contact the tobacco prevention coordinator at your local health department.
Quitting smoking is not easy. If you or someone you know is ready to quit, the Oregon Tobacco Quit Line can help:
1-800-QUIT-NOW (784-8669) - 1-877-266-3863 (Spanish) - www.quitnow.net/oregon This work is funded by the Oregon Public Health Division
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www.rhaoregon.org
Look to the Past for a Glimpse of the Future By David Pickron
With the advent of DNA testing, more and more people are looking at their ancestry and learning vital information. What is their heritage? Do they have a direct line to royalty? Are there certain markers in their genetics that expose them to specific illnesses or maladies? It is often by looking backward that we can discover and prepare for our future. By applying that same methodology to the business of being a landlord, I have discovered the answer to the question I am repeatedly hearing from hundreds of landlords: What do you think 2021 will bring? Let me begin with a positive response: Great things are around the corner. I also caution that we must prepare for challenges, as the liberal policies that will inevitably come from seemingly united legislative and executive branches of government will directly affect our industry. As a private investigator, if I were hired to do a background check on the more liberal parts of our country in an effort to better understand the how and why of where they are in relation to landlords, I’d simply need to look back at the recent history of actions of city councils, state legislatures and federal agencies across the United States to determine what we can expect in the future. THE DEGRADATION OF AMERICA’S GREAT CITIES If you’ve recently visited some of the most notable cities in the country, you see they are riddled with homeless individuals, many mentally ill, some addicted to drugs, some with lengthy criminal records. While it’s an admirable position to help where we can, the programs and allowances given to these individuals has created a very challenging environment for landlords in these cities. The shortcoming of government assistance and programs is they rarely fix anything. The government shut down mental institutions in the ‘70s, leaving no alternative for many who ended up on the streets. Programs to eliminate illegal drugs seem ineffective, as drugs pour over our borders in record numbers. With the legalization of gateway drugs, more and more users could end up committing crimes and eventually joining the ranks of the homeless. On the legal side, courts are deferring and dismissing most cases that come through the court, removing the consequences of illegal behaviors. For example, if you steal something in San Francisco that is valued under $750 and claim it was an act of survival, then in the eyes of the law, no crime was committed. So, who pays for these changes of the past? Not the government. Business owners, like landlords, are seen as the source of funds to subsidize for the effects of these criminal acts. It’s a modern-day Robin Hood if I’ve ever seen one. It’s almost as if these government entities are saying “we can’t fix it,” so let’s make landlords responsible for the fix. Here are a few examples of how landlords are being treated in cities governed by liberal policies around the country: •Chicago: Windy City landlords have to follow a precise on boarding process dictated by the city. A landlord must first run an applicant’s credit and give a preliminary approval. After that they can run a criminal history, but if you deny them as a tenant, you must provide a reason as to why that crime would affect the rental. www.rhaoregon.org
•Portland: Rose City landlords may raise rent only seven percent per year. Landlords can terminate a month-tomonth lease for any reason for the first year, but after that, you must have a justified reason to ask your tenant to leave or you will be forced to pay the tenant’s relocation cost, which is $4,500 for a three-bedroom. •Seattle: Landlords in the Emerald City must rent to the tenant who has the first qualifying application, called firstin-time, and they cannot perform a criminal background check on a potential tenant. The city controls almost every rent, deposit, and fee you can imagine •Colorado: Centennial State landlords must accept Section 8 housing; they have no choice. They cannot discriminate against “source of income” or who pays the rent. •Nationally: Landlords have been forced to carry tenants for months without being able to evict due to several eviction moratorium decisions handed down through the U.S. Legislature and executive branch. These are just a few of hundreds of laws stacked against landlords around the country. As you can see, they are coming from all levels of government: city, state and national. LANDLORDS IN LOCKSTEP As a group, how can smaller landlords even compete with the massive strength of these government entities? This is the year of banding together. If you are not part of a local or national association, it’s time. We need representatives in our local, state, and federal government to fight for us. We need attorneys filing lawsuits and taking our cause to the Supreme Court. I believe property rights will be on the table, and possibly hang in the balance, in the next 4 years. It’s not all doom and gloom … just the opposite. Landlords are smart and, in the end, we will win. Being a landlord is the best job in the world, we just have to be willing to pivot and know we will have some fights that start at city hall and make their way to the highest courts in the land. By banding together, arm in arm, we can overcome any challenge the government throws at us. I am grateful for the amazing years I took for granted, but my instinct says we must roll up our sleeves and get to work; but we as landlords are used to that. In the end, the Constitution drafted by our founders will be the saving grace, as they were wise enough to know that property rights are at the core of being American. Make 2021 the year of getting your house in order and then banding together with others in your local, state and national landlord associations. To find your local REIA go to https://nationalreia. org/find-a-reia/ David Pickron is president of Rent Perfect, is a private investigator, and a fellow landlord who manages several short- and long-term rentals. Subscribe to his weekly Rent Perfect Podcast (available on YouTube, Spotify, and Apple Podcasts) to stay up to date on the latest industry news and for expert tips on how to manage your properties. Reprinted with permission from the Rental Housing Journal. RENTAL ALLIANCE UPDATE March 2021
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