May 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 Executive Director Message..............................................page 3 Dear Maintenance Men..............page 4 How to Handle Maintenance Issues in a Pandemic...................................page 5 Covid-19 Drives our Current Regional and National Economy........... ..................................................................page 6 Fake Pay Stubs Available for $8.99!.....................................................page 7 HUD to Enforce Fair Housing Policy...................................................page 10
Rental Housing Alliance Events & Classes DATE
EVENT
LOCATION
TIME
05/12
Board Meeting
Zoom
4:00pm
05/22
Mentor Round Table
Zoom
11:00am
05/31
Memorial Day
Closed
06/09
Board Meeting
Zoom
4:00pm
06/24
Mentor Round Table
Zoom
6:00pm
INFORMATION
RHA office will be close in Observance of Memorial Day
DATE
CLASSES
LOCATION
TIME
INSTRUCTORS
05/04
Online Tenant Screening Class
WebEX
11:00am
Marcia Gohman w/National Tenant Network
05/05
Improve Your Odds of Collecting COVID-Era Rent
Join.me
7:00pm
Rpbert Collier w/Landlord-Reference.com
05/13
Improve Your Odds of Collecting COVID-Era Rent
Join.me
7:00pm
Robert Collier w/Landlord-Reference.com
05/13
Marketing Rental Properties In a Pandemic
Zoom
6:30pm
Tamara Collins (John’s Waterproofing) and Katie O’Neal (Acorn Prop. Mgmt
05/14
Online Tenant Screening Class
WebEX
7:00pm
Marcia Gohman w/National Tenant Network
05/18
Improve Your Odds of Collecting COVID-Era Rent
Join.me
7:00pm
Robert Collier w/Landlord-Reference.com
05/20 Online Tenant Screening Class
WebEX
11:00am
Marcia Gohman w/National Tenant Network
05/20
How 1031 Exchange Delaware Statutory Trusts Work
Zoom
11:30am
Austin Bowlin, CPA w/Real Estate Transition Solutions
05/25
Online Tenant Screening Class
WebEX
7:00pm
Marcia Gohman w/National Tenant Network
05/25
Property Management Success Tactics
Zoom
6:30pm
Ron Garcia, RHA Oregon Executive Director
05/26
Improve Your Chances of Collecting Covid-Era Rent Join.me
7:00pm
Robert Collier w/LandlordReference.com
06/03
Improve Your Chances of Collecting Covid-Era Rent Join.me
7:00pm
Robert Collier w/LandlordReference.com
06/08 Online Tenant Screening Class
WebEx
11:00am
Marcia Gohman w/National Tenant Network
06/08 Your Chances of Collecting Covid-Era Rent
Join.me
7:00pm
Robert Collier w/Landlordreference.com
06/10
Online Tenant Screening Class
WebEX
7:00pm
Marcia Gohman w/National Tenant Network
06/10
Advertising, Screening, Deposits, OH MY!
Zoom
6:30pm
Anna McCormack w/Warren Allen
06/16
Improve Your Chances of Collecting Covid-Era Rent Join.me
7:00pm
Robert Collier w/Landlordreference.com
06/17
Marketing Rental Properties In a Pandemic
Zoom
11:30am
Tamara Collins (John’s Waterproofing) and Katie O’Neal (Acorn Prop.Mgmt.)
06/22
Online Tentant Screening Class
WebEX
7:00pm
Marcia Gohman w/National Tenant Network
06/22
Landlording 102
Zoom
6:30pm
Christopher L. Tackett-Nelson w/Warren Allen
06/24
Online Tenant Screening Class
WebEx
11:00am
Marcia Gohman w/National Tenant Network
06/24
Improve Your Chances of Collecting Covid-Era Rent Join.me
7:00pm
Robert Collier w/LandlordReference.com
06/29
Improve Your Chances of Collecting Covid-Era Rent Join.me
7:00pm
Robert Collier w/ LandlordReference.com
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 May 2021
www.rhaoregon.org
Executive Director Message Ron Garcia, RHA Oregon Executive Director
Over the course of the last few years ago I have been one among a growing number of voices who have challenged Landlords in particular, and Legislators and Housing Organizations in general, on what changes need to take place for us as a community to stay on top of the housing industry and remain relevant and become more pro-actively engaged in this fast-evolving market. Everybody wants safe, affordable housing. But the question is: Are we using the best building blocks to create and maintain this infrastructure, either metaphorically or with actual construction plans? Anyone who has been a Rental Housing Provider in this decade has seen and felt how dramatically our business has shifted. These days, it seems that all too often Landlords show up at the party way too late to have much of a presence. Housing policy decisions with huge economic impacts are now routinely made even before the “invitations get sent out”. Rental Property Owners vie for limited space at the table; unincluded as part of the A-list of attendees; at times unrecognized as true stakeholders in the business that they themselves fund with their personal liabilities and ownership. This last decade we watched as Tenants’ rights activists found Tenants’ rights advocates who founded Tenants’ rights groups. They found Housing Policy legislators who now craft Housing Policy bills, that have become the foundation for a new era of Tenant Protection Policy. Much of the spirit of these policies is laudable with reasonable goals. But at the end of the day, as the newest regulations pile onto the previous newer ones, we are left with laws that we do not like; laws that compound the problems instead of fixing them. Yet if we choose not to comply with these new laws, we will pay substantial penalties. Or if we attempt to challenge them in court to prove our case, we will be left with substantial legal costs. So, if we decide to accept and adapt to them, they must then become our new reality by which to navigate. Justifiably Oregon Landlords are asking “Where can we turn for leadership and guidance?” To address these dynamic times, Rental Housing Alliance Oregon has made a remarkable commitment to Landlords and opted to change their structure for the first time in 92 years! On April 1, 2021 they hired their first Executive Director in recognition of the urgent need to address the process of providing the best services to assist, educate, motivate, and advocate for Oregon Rental Property Owners. Here is the premise: No matter what happens legislatively, Rental Property Owners will not be put out of business. As cynical as one may get, rental housing in Oregon will not become a socialized government product. Tenants need Landlords to succeed, and Landlords need Tenants to succeed. Our State, County and Local governments need the rental industry to succeed. The goal for Rental Housing Alliance Oregon is to be there for its membership. Landlords need them to be provided with the most up-to-date forms, the highest quality industry training, the easiest accessible helpdesk, the strongest legislative advocacy, and the most robust vendor referral directory available in today’s marketplace. So it is with great enthusiasm and a hefty dose of humility to say that I have been selected to this position of responsibility as your new Executive Director for the Rental Housing Alliance Oregon. I believe that a renewed commitment to our industry matters. We cannot keep doing the same things the same way. As an illustration, I sat in a friend’s new Tesla the other day. I had no idea how to drive it. I assumed there would be no gas gauge but was not prepared for the fact that there was no dashboard at all! (Just something that looked like an i-pad fastened to a bare counter). Can it really steer itself?!? Change is everywhere. It can cause us old timers to become disoriented. Thankfully, we have younger generations who are optimistically focused ahead, and I look forward to how they will help us in re-imagine our own industry. As we proceed to re-boot through this decade Rental Housing Alliance Oregon will begin to re-tool for another century of “landlords helping landlords”. But I plan on keeping our tag line: “Since 1927, Rental Housing Alliance Oregon has set the standard for community participation by Landlords providing affordable and fair housing.” Ron Garcia is the Executive Director of RHA and can be reached by phone at 503-254-4723 Ext 4 or email at ron@rhahoregon.org www.rhaoregon.org
RENTAL ALLIANCE UPDATE May 2021
3
Dear Maintenance Men by Jerry L’Ecuyer & Frank Alvarez
Dear Maintenance Men: I am trying to be on top of my preventive maintenance this year. It is spring, so what do you suggest I look at first? Mike Dear Mike: Summer is just around the corner and it may be a hot one. Prior to summer, it is essential to properly inspect and troubleshoot your HVAC (a/c) units whether they are window, wall or central. Most A/C units fail or work improperly due to nonexistent or improper maintenance and not age. Cleaning is your A/C is the most inexpensive and critical maintenance procedure you can perform. Here is our 4-point check list: 1:Turn on the A/C and listen for unusual noises. 2:Inspect/clean or replace filters. Filters should be cleaned or replaced at the beginning of each major season, such as before summer and before winter. 3:Clean & repair damaged or bent fins. (They can constrict proper air flow and decrease the cooling capacity of the A/C unit. 4:Clean out all dust and debris inside of the A/C pan or coils. On a central HVAC unit: cleaning or replacing the main and return filters, may be the limit on a DIY cleaning. A qualified technician should do any other work on a central heating and air unit.
Dear Maintenance Men: I have a pool at my apartment building and my pool man is suggesting I convert to a salt system for sanitizing the water. Will the salt damage my pool or its equipment? How does a salt system work? Will swimming in the pool feel like an ocean swim? Rick Dear Rick: We are big fans of salt systems for swimming pools. They feel great to swim in and you don’t have that chlorine smell on you when you get out. A salt water system or “salt water chlorine generator” is used to replace liquid or pellet chlorine with chlorine produced from salt in the water. The salt dissolves in the water separating into sodium and chloride. By passing a low voltage electrical current between special metal plates and the water, the salt-cell will convert the chloride into chlorine in a process called electrolysis. The salt system will create the chlorine to sanitize the water, but without the chlorine smell, taste or feel. Not to mention, you will not need to handle or store a dangerous chemical. Swimming in a salt pool is not like swimming in the ocean. A salt pool contains 3000-4000 PPM of salt while the ocean is approximately 35,000 PPM. A better example is: a salt pool is like one tablespoon of salt in a gallon of water and the ocean is like 9 or 10 tablespoons of salt in the same gallon of water. The salt pool is closer to the salinity of your eye’s natural levels. A typical human eye’s salinity level is about 9000 PPM. While switching to a salt system pool has many advantages, there are a few downsides. If the pool if very old, using a salt system may further corrode the pool’s metal skimmer and return pipes faster. Older pool heaters may also be adversely affected. Calcium may build up on the tile work. Newer pools use plastic pipes and pumps; the salt will not cause any damage to these items. 4
RENTAL ALLIANCE UPDATE May 2021
Dear Maintenance Men: My units all have dishwashers. I am starting to get complaints from the residents that the dishwashers do not clean the dishes as well as they did when new. What is the problem and what can I do about it? Bill Dear Bill: A number of issues may cause this problem. 1:Check that the dishwasher’s filter or grates are not clogged. The filters are commonly found under the rotating spray arms at the bottom of the dishwasher. The filters normally snap in and out of place. Remove them gently and watch for broken glass. 2:Check the operation of the water inlet solenoid valve. It should open and close crisply. 3: Related to the inlet valve is the water level sensor. The sensor looks like a small upside down cup or float, normally located at the front corner of the tub. Calcium buildup can sometimes cause the water level sensor float to malfunction, causing too little water to be allowed into the dishwasher. Cleaning the float area with vinegar should help. 4:Check the temperature of the water going into the dishwasher. The water should be at least 140 degrees. 5:Hard water is most likely the biggest hindrance to having clean looking dishes. The dishes may actually be clean, but look dingy or milky. Hard water will cause calcium and mineral deposits to adhere to all wet areas of the dishwasher and over time the dishes themselves. The rotating spray arms may fill with mineral buildup and clog. To remove the hard water deposits, run the dishwasher empty on its longest setting, usually the pots & pans setting. Add a few cups of vinegar to the water without soap or dishes. Run the dishwasher with clear water through a short cycle to flush the vinegar before using again. 6: Installation of a soft water system will greatly improve the performance of any dishwasher, as will using name brand dishwashing soap. 7: Install a water softener. You may have hard water as described above. Soft water will make a huge difference in calcium buildup in the dishwasher as well as the water heater.
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) 9568371 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
How to Handle Maintenance Issues in a Pandemic by Rob Chiang
Maintenance issues are all urgent now. Landlords’ cannot wait for the COVID vaccine to replace a burnt-out light bulb in the laundry room. A broken toilet can no longer be fixed when someone gets back from work at 5 p.m. It needs to be fixed NOW. Everyone is home. We rarely need to make an appointment since everyone is home all day every day. On the other hand, tenants are more willing to perform maintenance items themselves if we proved the materials. Some tenants would prefer that no third party enters their unit unless it is extremely urgent. Smoke detectors via Amazon.com have become a common item sent to a tenant’s front door. Carbon monoxide detector batteries, pest spray, and heater filters are just a few examples of items that tenants are willing to install/apply if we supple them with the essential materials.
On the flip side, we have even fielded requests to stop cleaning the parking lot because dust was blown around the carts and nearby windows left open. Normally, the parking lot would be empty, and tenants would come home to a clean parking lot. Normally, windows would be closed because people are at work in a physical office. Now they are complaining about their cleanup job. It is an unusual situation. Best way to deal with this? Sympathize with the tenants and talk a solution through with the tenant and vendor. We also started remodeling a vacant apartment during normal business hours and our tenant next door asked us to stop. Of course, we do not want to interrupt our tenant‘s important Zoom calls, but we must find a reasonable compromise. We asked our contractor to work as quickly as possible and then we discontinued with the apartment turnover work.
Case Studies
Case Study Example 1.) Early on in the pandemic, at one of our complexes, we noticed the water bill doubled from the previous month. We immediately took a survey and Maintenance is an essential business. Everyone needs a exterior physical inspection and there were no reported place to live. All tenants expect their included amenities to leaks. We heard a rumor that perhaps the City did an be fully functional. The main components of habitability estimate and would correct the mistake the following include but are not limited to: heat/AC, hot water, cold month. A couple of weeks later, we were contacted by a water, power, water, sewer, flooring, watertight roofing, tenant who stated she had a toilet constantly running. sealed doors/windows and openings. For example: If one Leaking toilets can be a horrible water waster. She of these critical components fails; a landlord should have reported the leak but would not let us enter until one the issue resolved or in progress within 24 hours. month later. She had a terrible fear from COVID-19 due to a senior citizen resident in the unit. This put us Take Precautions in a difficult situation. Should we use the keys fro entry Every tenant and vendor should wear a face mask, gloves with proper notice? Will the tenant pay for the utility overuse? Is secondary damage being caused by the leak? and use hand sanitizer before entry. Wearing foot booties After repeated requests to cooperate with us, the tenant is also recommended. This process has become quite finally committed to a firm entry date and the repairs wer standardized but is worth mentioning as a reminder. It is completed. Luckily, there was no secondary water damage. also a good idea to remind tenants to have an extra PPE Case Study Example 2.) California is burning again for supply for vendors entering the unit. We have also had how many years in a row now? Tenants cannot leave the some tenant s request that their unit be “sanitized” at our expense after a work order has been completed. When is a house because of COVID and can’t open the windows tenant being reasonable vs. paranoid? Hard to say, but just because of wildfires. Are we now forced to provide AC as a habitability issue? Well, the apartment didn’t come try and make the best decision for all parties involved. with AC so you don’t have to provide it. However it is Ask tenants to keep a distance while the vendor is onsite. good to keep tenants happy. There are reasonably priced, When tenants send a management company a work order through-the-wall units that run off 115-volt outlets. Some landlords have even purchased portable AC units they are usually pretty accommodating for the vendors. that they loan out to tenants on extreme heat days. Some It is best if the maintenance situation is described to the vendor and then they are given adequate air space to work. older properties combine multiple rooms on one 15amp circuit. One solution available to landlords is to first We also prefer if the tenant is home to open the door due check your subpanel. If your unit is occupied and if there to the sensitive nature of people nowadays. is space (empty breaker slots) on your subpanel, run a dedicated circuit directly below the subpanel. The tenant Tenants are ultra-sensitive in this pandemic. People will then be responsible to run their portable AC to the are home now more than ever. Your 40 unit apartment desired location. In a show of good faith, the landlord complex, (which previously did not allow business to be conducted on), now has 40 businesses running on multiple has provided a plug that they were not required to. With an occupied unit, it is best not to create any potential time zones. More cars are home, more utilities are being lead-based paint/asbestos dust in the apartment. In other used. More garbage piles up. Mountains and mountains words, if the subpanel is in the back bedroom closet and of Amazon boxes fill your garbage enclosure. You might the tenant wants their portable AC in the living room, have ordered an extra pickup and that is still not enough. Remind your tenants to chip in and break down the boxes. don’t agree to cut, patch and paint 40 feet of drywall www.rhaoregon.org
(continued on page 7) 5
RENTAL ALLIANCE UPDATE May 2021
Join us for RHA Oregon’s Membership Meeting
Where: Zoom Meeting
When: Wednesday May 19, 2021 at 6pm
FREE
Topic is Maintenance/Landlord Panel discussion
Covid-19 Drives our Current Regional and National Economy By: Cliff Hockley, President of Bluestone and Hockley Real Estate Services Executive Director, SVN | Bluestone and Hockley
Lest anyone be confused, COVID 19 is driving our current regional and national economy. The national election is over, and we have a new president and new legislators filling both national and statewide positions. Without overwhelming majorities in the House or Senate, President Biden will be trying to thread the political needle to save lives and the economy, at the same time. This is a critical time for all politicians and government agencies to cooperate with each other and deliver critical services to the American people.
General Overview
Economic risks are driven by the pandemic: •The Pandemic is still raging. •New virus strain adds more stress to an already challenged economic picture. •Most vaccines will not be available until mid to late 2021. •Many businesses are stalled or in a go-slow mode. •Economy will slow noticeably this winter. •As vaccines are distributed, the Oregon Governor is trying to get teachers immunized so students can go back to school. Unfortunately, the return to in person learning may not occur until the fall of 2021. •Once schools are in session, growth will accelerate resulting in a faster overall recovery. Parents need to get back to work. •The key is minimizing permanent economic damage and dislocation. •Air travel and leisure will come back once the majority
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6
RENTAL ALLIANCE UPDATE May 2021
of Americans and travelers from outside of the United States are immunized. Vaccination and negative test results as part of travel documents may become common.
Portland Has Not Recovered
•Lack of business and holiday travel is one of many reasons that Portland is struggling to recover. •In the Portland Metro area, most people are working from home that lessens foot traffic downtown, crippling retailers. •Downtown protests, civil unrest and the resulting national publicity have made Portland a less desirable destination for businesses. •Increased city taxes and additional rental regulations/ restrictions have not helped. •Rural employment is down 5.5% while Portland MSA employment is down 1.1 % from the same time frame last year. •The state expects labor and productivity to grow over the long run. •Job losses are predominantly focused in lower wage jobs, food, hospitality, etc. •Workers do not face good job prospects until the pandemic is over. •State and federal funding for unemployment benefits is critical. •Federal pandemic related (such as CARES Act and PPP) funding are positive for the state. Cares Act Is Doing Its Job. •Individual incomes are growing. •We are spending as much as we can. •Spending less on health, dentist and travel. •Excess savings in accounts exceed $2 trillion across the United States. •People are ready to spend when it is safe for us to do so. •People are chomping at the bit; cabin fever is real. •Asset growth and home equity growth is growing. (continued on page 8) •Further stimulus will help Oregon www.rhaoregon.org
Fake Pay Stubs Available for $8.99! By: Patricia A. Harris
By simply searching the Internet, one can find a variety of websites selling fake pay stub templates. All the purchaser has to do is download the template and simply “fill in the blanks” entering in any information they desire. Some sites even offer a choice of different template styles and colors along with options to generate W2s as well. Other sites have a 24-hour support team to walk one through the process and answer any questions. A fake pay stub can be generated in only a few minutes and they can look very authentic. Say, for instance, that your rental is listed at $1,500 per month and you require a 3-1 income to rent ratio. The applicant can simply generate a pay stub showing their actual employer with a listed income of $4,500 per month or more regardless of what they make. It’s All Legal! It’s not illegal to create fake pay stubs. It is, however, illegal to provide them to anyone as proof of income. As soon as one is provided to obtain housing, apply for a loan, to evade taxes or to avoid paying child support, then that is fraud, which IS against the law. How to Spot Fake Pay Stubs These sites actually inform the person creating one several ways that others can spot a fake pay stub, offering even more suggestions to overcome being detected. Below are some examples: •Spelling errors •Forgetting to replace a “generic” entry such as date of birth or occupation •Digits and decimal points not lined up properly •No clear difference between the letter o and the number 0 •Too many numbers rounded up to zero that look unrealistic •Illegible and hard to understand •Miscalculations of federal and other withholdings •Poor printing quality or formatting Use Proper and Thorough Screening During your screening process, be certain to verify income in ways other than the pay stub. Let the applicant know that you will be checking employment references- if they object, there’s your first red flag. •Always check employment references by speaking directly with their employer and/or the personnel department of the company. www.rhaoregon.org
•Verify dates of employment and actual income. •If the employer is unable to verify income via telephone, ask the applicant to sign an authorization and verification of employment form. An applicant who has submitted a fake or falsified pay stub will most likely not be willing to do this. Big red flag! •Credit reports will sometimes show a place of employment, so be sure to look for that on all of your ordered reports. Fake Pay Stub Consequences Using fake pay stubs to defraud can lead to serious legal issues. There are fines that could total more than $1 million and they could even face jail time. If you suspect an applicant has submitted a fraudulent pay stub, contact an attorney or the Federal Trade Commission at 1-877-FTC-HELP. 1-877-ID-THEFT, or online at www.ftc. gov. Patricia Harris is the Senior Editor or the Apartment Owners Association News and Buyers Guide. Permission to reprint: Reprinted with permission of the Apartment Owners Association of California, Inc. http://www.aoausa.com How to Handle Maintenance Issues in a Pandemic CONTINUED FROM PAGE 6
unless you know all of the risks. Try to find a solution to the problem without exposing yourself to legal issues. Furthermore, make sure that the tenant’s AC is set up properly and not creating mold or water damage from the condensation exit. Do not allow window AC units to hang off second story windows.
Conclusion
What has changed since the pandemic? The procedure to change a garbage disposal has not changed. The tools and parts are the same. The appointments, personal protective equipment and attitudes have changed. With the rental market turning on its head, tenants are now in charge. Landlords should do reasonable upgrades to the apartments while the units are occupied. If a landlord can get a tenant to renew for one year by installing new appliances in the unit (at a cost less than one month without rent), that is a good decision. Disclaimer: I hold a Real Estate Broker and CA General Contractor’s license. However, I am not a lawyer, or CPA. Each owner’s situation is individual and unique. I recommend you consult with your legal or tax professional for advice that fits your situation. The information given in this article comes from a practical perspective. We love all our clients, tenants and fellow landlords. If apartments are operated properly, owners, tenants and landlords are all on one team. This article is written from the viewpoint of the landlord. For more information, contact Robb Chiang, CEO or RC Real Estate at www. AptsManager.com 408-646-4218 or chiangtrust@gmail.com RENTAL ALLIANCE UPDATE May 2021
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Covid-19 CONTINUED FROM PAGE 6
and all of its inhabitants.
People Are Spending Money Because of Low Interest Rates It is estimated 4%-7% of home equity is being spent in some of the following areas: •Home improvements. •General spending. •Business capital. •Baby boomers are paying off homes and planning on using savings for retirement. •Retirements/long term care (Baby boomers). •Lots of remodeling activity (especially for those working at home). •Furniture purchases are at a very high level.
Business Growth
•Hard to track. •According to KGW 10% of the restaurants in Oregon have closed due to COVID. PPP and outdoor dining have helped the rest limp by. •Liquor licenses for restaurants are at about 98% renewal rate to 92% renewal of liquor licenses through the fall. •New start-ups show strong business formation activity. https://sos.oregon.gov/business/Documents/businessreports-current/1220.pdf
Population Growth
•People move for jobs, with Covid, we have fewer job opportunities and see less in-migration. •Oregon’s ability to attract and retain working-age households is expected to remain intact. •Home sales data is very strong. •2020’s will be a strong decade for home ownership due to changing demographics. •Millennials are growing into home ownership; Generation Z will be moving into apartments. •Not a lot of growth in apartment demand in the next 10 years because the Gen Z demographics are similar to Millennials who are moving into homes. •Fewer apartments will be built in PDX due to tighter COVID related lending standards and city regulations. •Interest rates may increase in 2022 vs 2023 due to inflation fears, and the expectation for a strong rebound of the economy.
Low Birthrate Forecast
•The working cadre between the ages of 25 – 64 show demographic slowdowns •After the pandemic there will be a severe shortage of 8
RENTAL ALLIANCE UPDATE May 2021
workers in Oregon. •We will see higher wage growth as the $15 minimum wage takes hold and as the employee shortages grow.
Remote Work is Here to Stay
•About 7% of the work force worked from home before the pandemic, that jumped to 25% during the pandemic. This is forecasted to adjust closer to 10% after the pandemic and slowly grow to 15% over the next five years. •We are the number 2 state in the union for the ability to work from home. That gives strength to the Oregon economy. •Hood River and Bend have some of the highest number of people working from home in the nation. •After the Pandemic we can expect employees to be working from at the office 1 – 2 days a week, with a focus on remote work. •Some employees may choose to work out of local coworking spaces rather than commuting to the office.
Oregon Construction Outlook
•Rise in single family construction will offset the loss in multifamily construction for 2021 – 2022. •Tight budgets for government agencies will limit public building construction. •Demand is for Industrial buildings, but not for office or retail. This may slow down the construction demand cycle. •Fewer businesses going under bodes well for Oregon business stability.
Interest Rate Expectations
•The Federal Reserve will keep rates at near zero till the end of 2021. •Interest rates may go up in 2022, and a little more in 2023 because of the economic stimulation and the expected inflation caused by government borrowing needs.
Forecasted State Revenues
•According to the Oregon Office of Economic Analysis, tax revenues are higher than expected, and there is no longer a huge revenue hole. •There is no recessionary hole in the budget from a revenue perspective, but five years of revenue being forecasted as flat. •Lodging taxes in Portland are down 80% while in Bend only 10%. •Vice revenue is doing well; alcohol and marijuana taxes are up. •Lottery revenue has stayed stable in this COVID-19 driven recession. Bottom line, there is light at the end of the tunnel, we just have to get to the end of the tunnel! www.rhaoregon.org
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Before 1031: Landlords
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Sold Rental Property. Performed a 1031 Exchange. Deferred $423K in gains tax.
Invested in 3 passive management 1031 DST properties with monthly income potential.
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Learn more about 1031 Exchange DST property investments and fractional real estate ownership. Speak to a licensed 1031 Advisor at Real Estate Transition Solutions by calling 503-946-5656. This is for informational purposes only, does not constitute as investment advice, and is not legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk. DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney. Real Estate Transition Solutions offers securities through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services through Concorde Asset Management, LLC (CAM), an SEC-registered investment adviser. Real Estate Transition Solutions is independent of CIS and CAM. The company depicted in the photographs herein may have proprietary interests in their name and trademark. Nothing herein shall be considered an endorsement, authorization or approval of RETS, CIS, and CAM or the investment vehicles they may offer, of the aforementioned company. Further, none of the aforementioned company is affiliated with RETS, CIS, and CAM in any manner.
Real Estate Transition Solutions | www.re-transition.com | info@re-transition.com | 503-946-5656 www.rhaoregon.org
RENTAL ALLIANCE UPDATE May 2021
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HUD to Enforce Fair Housing Policy Banning Bias over Sexual Orientation, Gender Identity by Rental Housing Journal
The U.S. Department of Housing and Urban Development (HUD) has announced a new directive to begin implementation of the policy set forth in President Joe Biden’s executive order to prevent and combat sexual orientation and gender identity-based discrimination under Fair Housing rules. HUD’s Office of Fair Housing and Equal Opportunity (FHEO) issued a memorandum stating that HUD interprets the Fair Housing Act to bar discrimination on the basis of sexual orientation and gender identity and directing HUD offices and recipients of HUD funds to enforce the act accordingly. The memorandum begins implementation of the policy set forth in President Biden’s Executive Order 13988 on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation (executive Order), which directed executive branch agencies to examine further steps that could be taken to combat such discrimination. “Housing discrimination on the basis of sexual orientation and gender identity demands urgent enforcement action,” said Assistant Secretary of FHEO Jeanine M. Worden in a release. “That is why HUD, under the Biden administration, will fully enforce the Fair Housing Act to prohibit discrimination on the basis of gender identity or sexual orientation. Every person should be able to secure a roof over their head free from discrimination, and the action we are taking today will move us close to that goal.” SIGNIFICANCE OF THE ACTION The HUD release said the significance of this action is underscored by a number of housing-discrimination studies which indicate that same-sex couples and transgender persons in communities across the country experience demonstrably less favorable treatment than their straight and cisgender counterparts when seeking rental housing. Despite this reality, the HUD has been constrained in its efforts to address housing discrimination on the basis of sexual orientation and gender identity by legal uncertainty about whether most such discrimination was with HUD’s reach. The memorandum relies on “HUD’s legal conclusion that the Fair Housing Act’s sex-discrimination provisions are comparable in text and purpose to those of Title VII of the Civil Rights Act, which bars sex discrimination in the workplace. In Bostock v Clayton County, the Supreme Court held that workplace prohibitions on sex discrimination include discrimination because of sexual orientation and gender identity. HUD has now determined that the Fair Housing Act’s prohibition on sex discrimination in housing likewise includes discrimination on the basis of sexual orientation and gender identity. Accordingly, and consistent with President Biden’s executive order, HUD will enforce the Fair Housing Act to prevent and combat such discrimination.” “Enforcing the Fair Housing Act to combat housing discrimination based on sexual orientation and gender identity isn’t just the right thing to do-it’s the correct reading of the law after Bostock,” said Damon Y. Smith, principal deputy general counsel, in the release. “We are simply saying that the same discrimination that the Supreme Court has said is illegal in the workplace is also illegal in the housing market.” SPECIFICS OF THE DIRECTIVE The memorandum directs actions by HUD’s Office of Fair Housing and Equal Opportunity and HUD-funded fair housing partners to enforce the Fair Housing Act to prohibit discrimination on the basis of gender identity or sexual orientation. Specifically, the memorandum directs the following: •HUD will accept and investigate all jurisdictional complaints of sex discrimination, including discrimination because of gender identity or sexual orientation, and enforce the Fair Housing Act where it finds such discrimination occurred. •HUD will conduct all activities involving the application, interpretation, and enforcement of the Fair Housing Act’s prohibition on sex discrimination consistent with its conclusion that such discrimination includes discrimination because of sexual orientation and gender identity. (continued on page 11) 10
RENTAL ALLIANCE UPDATE May 2021
www.rhaoregon.org
Enforcing Fair Housing Policy CONTINUED FROM PAGE 6
•State and local jurisdictions funded by HUD’s Fair Housing Assistance Program (FHAP) that enforce the Fair Housing Act through their HUD-certified substantially equivalent laws will be required to administer those laws to prohibit discrimination because of gender identity and sexual orientation. •Organizations and agencies that receive grants through the department’s Fair Housing Initiative Program (FHIP) must carry out their funded activities to also prevent and combat discrimination because of sexual orientation and gender identity. •FHEO Regional Offices, FHAP agencies, and FHIP grantees are instructed to review, within 30 days, all records of allegations (inquiries, complaints, phone logs, etc.) received since January 20, 2020, and notify persons who alleged discrimination because of gender identity or sexual orientation that their claims may be timely and jurisdictional for filing under this memorandum.
www.rhaoregon.org
RENTAL ALLIANCE UPDATE May 2021
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Tualatin Valley Fire & Rescue
Monthly Fire Safety Tip
Apartment Matters
503.649.8577
Fire Up the Grill...Not the Patio As temperatures begin to warm up, so do the barbecues. Keep it safe this year by following the tips below. Residents should also check with their landlord to ensure barbecues are allowed on decks or patios.
Read your Owners Manual prior to operating any grill.
Never leave your barbecue unattended. Always have a hose, bucket of water, or fire extinguisher nearby in case of fire.
If you use a barbecue lighter, do not leave it out where children can access it.
Use charcoal lighter fluid only — sparingly and with caution.
Briquettes can stay hot for several days and burn through paper or plastic bags. It is safest to wait at least three full days before transferring briquettes/ashes to a METAL can. Store the METAL can away from things that can burn such as decks or wood siding.
If using a propane barbecue, open the lid while igniting it. For more fire safety tips, visit tvfr.com.
