REBROADCAST: Rent Control

REPRESENTED

Think Out Loud is traveling to cities and towns across the state to hear about the policy issues that matter to Oregonians. How do the decisions of lawmakers in Salem affect our lives? See our full series coverage here.

The Tenant

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When Coya Crespin started looking for a place to rent in the St. John's neighborhood five years ago, it took months to find an apartment.

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The Landlord

an class="s1">Michaele Armstrong and her husband moved to Portland from Pittsburgh a little over a year ago. They came to the city as renters and soon realized that the single-family home they'd been dreaming of buying would put them back nearly half a million dollars — a  prohibitively expensive prospect, especially as Armstrong was having a difficult time finding full employment.

But then, in early February, the city of Portland passed a new ordinance requiring that landlords pay relocation costs up to $4,500 for tenants evicted without cause.

"I have to increase the rents and provide what I consider is substandard housing. That was never my plan."

The Developer

Eric Cress is one of the founders of Urban Development Partners (UDP) — a company best known to the Portland layman for the many apartment building it has constructed along Division Street.

UDP is small by investment capital standards, but according to the "Portland Business Journal," the company still ranks in the top 15 of the city's biggest metro-area development firms. Still, Cress laughs when asked if he introduces himself as a developer at cocktail parties.

"I don't think it's been fashionable to say you're a developer for probably 100 years in the United States, unfortunately."

And Cress doesn't toe the ideological line one might expect of a developer, either. When evicting some 70 tenants from one of his buildings earlier this year, Cress offered financial compensation — even before a city ordinance required him to do so. He says he's sensitive to the plight of renters in the city.

"We're in a crisis. We know we're in an affordability crisis. And I think it's in all of our interests to reduce that crisis level."

That crisis, Cress says, shouldn't come as a surprise.

"Whenever you have a metropolitan area that's had an anemic supply of housing ... and you have really strong growth in incomes and really strong employment growth, you're really creating a perfect storm for housing affordability."

"In some sense, we're really the victims of our own successful economic policy."

The solutions on the table at the state legislature would hit Cress in the pocketbook. Still, he said some action on housing policy could be an effective means of ensuring stability in Oregon's rapidly rising market. But there are practical problems in expecting large-scale investors and developers to pitch in on a humanitarian solution.

"They can just go invest in Denver or Austin or Seattle," he says. "They don't really have a stake in necessarily having to solve Portland's problems."

Many big real estate investors, Cress said, aren't the boogeymen they're made out to be. They're retirement funds — like PERS and CALPERS — looking for a blue-chip investment that will pay out for teachers, firefighters, and government social workers who entrusted their retirement to the state. And they follow the flow of capital to fulfill that fiduciary responsibility.

According to Cress, policies that scare investors away from Portland could be bad news for affordability in the long run.

"They're like a herd of gazelle. When they see policies like this, it's like a lion baring teeth. They're just gonna run ... and then we've lost a source of private capital to build our housing infrastructure. And if we reduce our supply over the long term, that impacts the affordability of housing."

Cress is no stranger to hot markets — or to controversial housing policies like rent control. He moved to Portland from the Bay Area, where housing debates have been raging for more than 40 years.

He said he wants to see Oregonians do a better job of building productive discourse and unity around this hot, political issue than Californians have since the 1970s.

"Lines were drawn, relatively rash bills were passed, ordinances were passed, lawsuits were created — and it really was an unproductive conversation for years,"he said. "And I guess the disheartening thing is I see Portland starting down that same path ... I don't think we have to go that way."

The Lawmaker

There are several bills up for consideration in Salem aiming to address the housing crisis. Karin Power, the Democrat representing House District 41, is sponsoring two of these bills. Her district covers Milwaukie and parts of Southeast Portland.

A lack of affordable housing is an issue she first witnessed as a Milwaukie city councilor, but it’s something that she says isn’t only happening in metro areas of the state.

“I think it’s a testament to the number of lawmakers who have signed on to these bills to help stabilize housing that this is not just one thing facing one of our districts,” Power said. “It’s happening all across Oregon and it’s something that’s been affecting people for some time.”

House Bills 2003 would repeal the statewide ban on rent control, making it possible for cities or counties to establish ordinances or resolutions to that effect.

And while she knows giving local governments this control won’t be a “silver bullet solution,” Power says it will be a start – “bringing in a measure of predictability and foresee-ability as to how your rent’s going to go up month to month or year to year.”

And to further ensure this predictability, Power is also sponsoring a bill that would effectively get rid of no-cause evictions, something she says would protect people like Coya Crespin from having their lives uprooted unexpectedly.

“Talking about no-cause evictions, or evictions in general, is a really personal thing,” Power said. “It’s one of the most destabilizing events that can happen to somebody, you’ve got very little time to find somewhere else to move in to and to save enough for another security deposit.”

House Bill 2004, would prohibit no-cause terminations of month-to-month leases except in certain circumstances, and with 90 days written notice and a relocation payment – among other provisions.

Power said these circumstances – being called “business reasons” by lawmakers – would include things like necessary rehabilitation of units, having a family member move in or the landlord themselves needing to move into the unit. But this measure is different, she says, than the recent Portland ordinance that landlord Michaele Armstrong says came up for her and is now causing her to lose money.

“[HB 2004] is different. It shares some common themes with the Portland ordinance in trying to get at the root cause of some of this housing instability,” Power says. “But to me, from what I’ve heard and the way that Mayor Wheeler has talked about the ordinance is that it’s a stop-gap measure, intended to take quick effect and I could hear [Armstrong] say it caught her off guard, it wasn’t part of her business plan in coming into this unit.”

Conversely, Power said the bill would give landlords around the state enough notice if the do rules change.

“I think we heard from some of these stories that it’s really difficult to make ends meet without stable housing,” she said. “If some of these policies we’re thinking about at the state level can provide stable housing, then I think that’s good for all of us.”

UPDATE: Since we first broadcast this show in February, HB 2004, which would prohibit most no-cause evictions, passed in the House, and the Senate held a hearing on the bill last week (May 3). HB 2003, which would repeal the state's rent-control ban, did not pass out of the House.