A Better Solution

Several bills are currently being considered in Salem that would temporarily enhance the rights of tenants, add an unreasonable burden on landlords, and potentially have the unintended effect of lowering the availability and quality of affordable housing. 

Oregon state legislature has introduced several bills attempting to address the issue of lack of affordable and available housing:

HB 2001, 2003 and 2004 would remove the prohibition on rent control for cities, counties and the state.  HB2004 would also prohibit landlords from terminating month-to-month tenancies without cause except under certain circumstances with 90 days written notice and payment of relocation expenses.  It would also require fixed term leases to convert to month-to-month tenancies unless tenant agrees otherwise.

HB 2240 prohibits landlords to terminate a month-to-month tenancy without cause except under certain circumstances or if the landlord provides the tenant with relocation assistance equal to three months’ rent.  It also permits the tenant to renew the rental agreement if the landlord did not invoke exception or terminate for cause.

These bills address issues that were first considered by the City of Portland regarding increasing rents and limited affordable housing options.  The city was restricted in what it could do because of state laws the prohibit rent control.  Now legislators have introduced these bills in Salem to eliminate restrictions on rent control to address the Portland metro housing “crisis” in an effort that would provide a short-term fix with a long term detrimental impact on the very people they are trying to help.

The long-term impact will be lower quality housing, guaranteed annual rent increases (yes, many landlords do not raise rent every year especially if they have good tenants they want to keep), and a reduction in available affordable housing as owners choose to sell rather than deal with the owner restrictions.

Remember that owners/landlords usually have mortgages, taxes and insurance they must pay on a monthly or annual basis.  Secondly, they need to have funds in reserve to do maintenance and repairs.  Costs of repairs continue to climb and can cost hundreds to thousands of dollars.  If owners must set aside three months’ worth of rent, they are going to defer repairs and upgrades to the property.  Thirdly the cost of repairs and time lost between the time a tenant moves out and another tenant moves in has to be taken into account.  In addition, if there is an eviction or other legal action that takes place the landlord needs to consider the thousands of dollars he or she will need to pay even if the landlord wins. This, of course, is in addition to the lost rent while the eviction is taking place.  With all this taken into consideration, in many cases the owner’s profit margin is very thin.

True, rents are higher because of supply and demand.  It is also true that tenants need to come up with several thousand dollars to be able to pay first month’s rent and security deposits.  Housing supply is tight and affordable housing is disappearing as rents climb higher.  There is a better way than the solutions proposed by the above state house bills.  Unfortunately, the better way will take some hard work, time, commitment, and delayed gratification.

First, we need to realize each person from the landlord to the tenant has value (not just monetarily) as a person or persons.  Secondly, we all have needs and desires that need to be addressed.  Each side needs to be heard and pertinent issues addressed.  This requires a progressive, holistic, attentive, considerate mindset.  Progressive in the sense of valuing the needs and desires of both sides.  Holistic in thinking beyond the immediate issues and solutions and considering long term possibilities and solutions.  Attentive in truly paying attention to what each side has to say and engaging in dialogue that seeks and values clarity and understanding.  Considerate in working to understand the other side’s perspective and coming up with solutions that are a win/win for all.

Unfortunately, human nature tends to prevail as is currently seen in the City of Portland and in Salem.  Selective hearing, political agendas, and an eye toward future elections predominate.  It would be nice to see our elected representatives get down in the trenches and do the hard work to craft policies that benefit both sides and promote human flourishing.

How could this be done?

1.      Tax incentives for tenants and owners and builders. 

2.      Zoning/permit changes that would encourage low income housing development. 

3.      Jobs that would provide middle income wages and a ladder for personal income growth. 

4.      Targeted education for people whose jobs are or will be phased out and/or eliminated with changes in technology and the minimum wage increase.

5.      Development of neighborhood communities with a focus on accountability and help for one another that would foster a sense of care, concern and “ownership”. 

Oregon is not the only state dealing with this issue.  An article on Bloomberg outlines the problems and some potential solutions. https://www.bloomberg.com/news/articles/2017-03-23/renters-now-rule-half-of-u-s-cities

This is not easy.  Anything worthwhile takes effort, commitment and work.  We can do it, but it takes the right kind of leadership and commitment as well as those who are willing to do the hard work to bring it to fruition.

Battling Bats

A couple of years ago I received a distressing call from some tenants saying there was a bat flying around inside their house.  To make matters worse they had just brought home their newborn baby and were afraid this bat might have rabies and attack their baby.

We asked the tenants to remove the baby from the house and immediately contacted several pest control vendors to find one who works with bats and would be able to come out right away and help us resolve this problem.  We had a selected vendor come out, evaluate the problem, and provide an estimate of what it would cost to exclude bats from the house.

Unlike most houses this one had open beam ceilings that continued past the exterior wall and supported large overhangs.  This was an older house with small openings where the beams met the exterior wall allowing bats at certain spots to enter the interior space between the sheet rock and the roof and make nests.  Inside the house the beams were covered with sheet rock creating vaulted ceilings with minimal insulation.  By watching at dusk for bat activity and examining the sides of the house near the openings for staining and the ground beneath the openings for bat guano, we determined several areas that needed to be treated for bat exclusion.

We notified the owners of the problem and their response was that it wasn't necessary to pay to have an expert treat for bats and that it would be more cost effective to have their handyman plug all the openings with caulking.  We communicated this to the bat exclusion vendor and were told this approach would only drive any bats nesting in the house into the house interior in search of an exit.

Because of this situation we decided to do some research on bat exclusion to educate ourselves and the owner as to the best and most cost effective approach to satisfactorily resolve this issue.  First we found out that only approximately 0.5 percent of bats are rabid.  While this is a very small percentage of the bat population you still don't want to run the chance that this bat inside your house may be rabid.  Secondly bats need access to food and water so they are going to normally exit to the outside of the house--not the interior.  Plugging holes on the exterior of a structure will keep the bats out, but will also drive those trapped inside to find other exits, usually into the inside of the house or, if no exit is found, to eventually die.

Instead of plugging the holes we built cones around the exterior openings using soft window netting and staples.  The trick is to design the cones so that the bats can get out of, but not come back into the opening.  Since the owner wanted to use his handyman I instructed him on what openings to plug and where and how to construct the cones.  We then had a bat exclusion expert come and inspect the work and verify that it was done correctly.

Since then we have had no problems with bats.  Upon review we agreed with the owner that although it was a great learning experience about bats and bat behavior  it probably would have been more cost effective to have a professional do the entire job.

 

Screening Without Social Security Numbers?

A week ago Friday I attended a day long conference in Salem hosted by the Graham Law Group PC.  We listed to presentations on the importance of lead based paint licensing and certification by contractors, rental property habitability issues and requirements, and property management agreement contracts.  In the afternoon we had a town hall type forum where various issues of concern to property managers were discussed.

One of the issues discussed that afternoon was an article published in a trade publication by a Fair Housing representative implying that as owners and property managers we can not turn down someone applying to rent a property we own and/or manage just because they do not have a social security number.  As stated in the article: "A refusal to review alternative documentation when a SSN is not available will have a negative and disparate impact on individuals whose national origin is not the US, thereby having a disparate impact on that protected class".

It was news to many attendees that people without a social security number were a protected class.  As owners and managers we have screening criteria that insure everyone applying will have an equal opportunity to rent from us provided they meet the requirements listed in the screening guidelines.  These guidelines have been designed, among other things, to meet Fair Housing requirements regarding protected classes.  These screening criteria are also designed to assure the owner that they will have tenants who are able to pay the rent in a timely manner, take care of the property, and live in a manner that will not detract from the quiet enjoyment of their neighbors.  Key parts of the screening process include credit and criminal background checks.  These background checks, to be done in a thorough and consistent manner, require a social security number.

There are situations where we do screen people who do not have social security numbers.  These are people who are here on a student or work visa and have someone sponsoring them such as a school or employer.  The key point is that these people are here legally and have been vetted to a certain degree by a school or employer, have a reliable, verifiable source of income and most likely do not have a criminal background.

Discussion with managers at the conference who have attempted to screen applicants without a social security number pointed out they have been unable to pull a credit report or do an adequate criminal background check. In addition the attempt to do so took a significant amount of time and resources with less that satisfactory results.  One manager who said they had turned down an applicant without a SSN had legal action initiated against them by the Oregon Bureau of Labor and Industry.

As property managers we have a fiducial and fiscal responsibility to manage each property in a manner that maintains and even increases the property's value.  We also have a responsibility to provide a place where tenants have a habitable environment that they can peacefully enjoy.  It strains credulity and common sense to now say we are required to consider those who do not meet the basic criteria we require of other applicants, require additional time and resources to screen, and in many cases have violated established law by being here illegally in the first place.  Is this really "fair" housing?

Radon In Your Home

Monday evening I attended a seminar on Radon gas and was surprised to hear that it occurs in 1 in 15 properties in the US and 1 in 4 properties in the Portland metro area.  I also found out that Radon gas is the second leading cause of lung cancer, behind cigarette smoke.  Radon gas emits alpha particles which, when inhaled, begin to damage lung tissue.  Continued exposure over time can lead to increased damage to lung tissue and eventually cancer. Radon gas is measured in pico curies per liter with the average outdoor level being 0.4 pCi/L and the EPA action level being 4.0 pCi/L.

Radon is the radioactive decay product of Uranium and Thorium and usually occurs in higher concentrations in alluvial sediments washed down from volcanic terrains such as light-colored volcanic rocks, granites, dark shales, sedimentary rocks that contain phosphate, and metamorphic rocks derived from these rocks.  In addition to being next to the Cascade Range and Mt Hood, Portland and the Willamette River valley had the privilege of being inundated during the last ice age with periodic floods from Lake Missoula that transported over 50 cubic miles of sediment from Canada and eastern Washington.  The Alameda neighborhood in NE Portland and Lake Oswego have two of the highest concentrations of radon gas in the Portland metro area.  Alamenda is built on a ridge of glacial debris deposited by the Missoula floods.

The source of sediments is only one factor of whether or not you may have elevated levels of radon in your home.  The other factors are the porosity of the soil and/or your basement flooring (if you have a basement)  and ventilation.  Even in neighborhoods with elevated levels of radon, concentrations of radon gas in individual properties may vary widely in part depending on the porosity of the soil at a given site.  Radon concentrations tend to go up in winter when we seal up our homes and turn on the furnace.  This creates a negative pressure in our homes and draws radon from the ground into our living spaces.

If you are curious as to where your property is located with regard to potential radon hazards in the Portland metro area the PSU geology dept has compiled a map by zip code that you may want to look at.  Please understand that this data is skewed in accuracy due to number of samples tested in each zip code and the fact that zip codes may cover several different types of geologic settings with wide variations between each setting.

  http://public.health.oregon.gov/HealthyEnvironments/RadiationProtection/RadonGas/Documents/2013%20Radon_EPHT%20Data%20Collaboration/PortlandRadonZIPCodeMap.jpg

If you have concerns about radon levels in your property you can purchase an over the counter do-it-yourself test kit at a place like Home Depot for around $15.  You collect the sample and mail it in for test results.  Make sure the price includes testing.  You can also have testing done professionally for around $160. 

If you have any questions about the levels of radon in your home it would be worthwhile to purchase the over the counter test kit.  It is inexpensive and will either give you peace of mind or alert you to further mitigation action to take to lower radon levels in your house. 

Fair Housing Trade Off

This last Friday at the monthly NARPM meeting we had a guest speaker discuss Fair Housing guidelines and issues.  It was a great presentation, much of which we already knew as well as some new developments.  As property managers we need to be aware of protected classes such as Race, Color, Religion, National Origin, Sex, Family Status, and Mental of Physical Disability at the Federal level as well as Source of Income, Marital Status, Sexual Orientation, and Gender Identity for the state of Oregon.  Then, depending on which county or city you live in you need to consider Type of Occupation, Ethnicity, Ancestry, Domestic Partnership, Domestic Violence Survivors and Section 8 Vouchers.  North of the border in Seattle you also cannot discriminate in renting based on Political Ideology.

These protected classes have been created to address wrongs that have been perpetuated intentionally or unintentionally in the past by landlords.  Most landlords now who are property managers or have taken Fair Housing courses are familiar with protected classes and Fair Housing guidelines. It did not help things when Fair Housing Council of Oregon audit results released in the spring of 2011 stated that 64% of Portland metro area landlords were discriminating against protected classes.  It was later determined that several landlords listed in the audit were not actually tested and BOLI (Bureau of Labor and Industry) confirmed the test conclusions were inaccurate (http://issuu.com/rhagp/docs/april2012_update?mode=window).  This does not serve to build trust or a cooperative spirit and dialogue between the Fair Housing Council and landlords.  The Fair Housing Council of Oregon has received a grant and is conducting a new audit.  Hopefully this audit will be conducted in a fair, consistent and ethical manner with results that reflect the actual residential rental industry status.

The goal of the Fair Housing Council " to eliminate illegal housing discrimination through enforcement and education across Oregon and southwest Washington." It is noble in its intent and desire that each person who desires to rent a place of their choosing may be able to do so on a fair and level playing field.  Yet in their zeal to enforce fairness they also harm many of the people they are seeking to help.  The mantra you hear from landlords now is to treat everyone the same.  If you don't it may mean you face a fine or lawsuit.  However, treating everyone the same means you repress your desire to help individual tenants in their unique situations.  This means you don't offer helpful suggestions to a prospective tenant because that might be construed as "steering".  It means you always charge late fees even if that long term tenant that has always paid their rent on time had some unexpected medical bills and will have to pay their rent late and you would like to waive the fee.  In seeking to be fair and conform the letter of the law we squeeze out compassion, concern and care for our fellow human beings. The challenge is to adhere to the law yet view and treat each person, not as a potential lawsuit, but with respect and dignity and a genuine concern for their well being.

Questionable Dogs

So many of us have pets that we truly love and enjoy.  Often a lot of planning and thought goes toward the purchase or acquisition of a pet.  We were tossing the idea back and forth as to whether or not to get a dog or cat for our next pet until a stray "pre-teen" cat walked into our hearts and lives.  When she was young and frisky she loved to chase and harass the Pomeranians and Chihuahuas in her life.

Working as a property manager I have had the privilege of meeting many wonderful people and their pets.  I once rented to a vet tech who had several "special" dogs.  They were all very well tempered and well socialized, even the pit bull. 

Many owners and property managers won't even consider renting to people with "questionable" dogs.  Dogs like Staffordshire Terriers, Rottweilers, Dobbermans, etc. raise red flags with thoughts of lacerations, mangled corpses and potential lawsuits.  Many owners and property managers have a blanket policy that excludes potentially dangerous types of animals. These concerns are not without merit and are definitely a consideration when evaluating potential renters and their impact on the community.  When I rent to anyone I want to meet everyone who will be living at the property.  This includes pets.  Even pets can have an impact for positive or negative in the surrounding community and I want to be sure it is positive.

Did I mention the vet tech's pit bull was an eleven year old rescue dog that had had cancer surgery.  She was well tempered, friendly and mellow.  Yes, you need to carefully consider certain pets with greater caution and scrutiny, but a blanket policy may exclude not only some potentially great renters, but also some wonderful pets as well.

Just A Neighbor

There was one time I received a property to manage that was way out in the country.  I had set up an appointment to meet with the tenant and go around the property to discuss any repairs that needed to be made.  When I arrived the tenant wasn't there (I found out later they had thought our appointment was the following day). 

As I was getting ready to leave I noticed in the distance an older gentleman walking toward me along the property line.  I surmised he was probably the neighbor and was wondering what I was doing here.  I thought "Great! I get to meet a neighbor and get some more background information about the surrounding neighborhood."

I introduced myself, told him why I was here and asked if he lived next door.  He said yes, he owned the adjacent property and at one time owned the property we were standing on.  He had given it to his son who had sold it to the neighbor across the street.  He told me at one time he had run a very successful excavating business from this property and we discussed the pros and cons of running your own business.

I asked him if he lived in that house across the field and he said he did.  He told me after his wife had died his son had invited him to move to a nearby town and live with him, but he just couldn't do it.  He said that house across the field held too many memories of his wife who had passed away three years ago. There were some tears as he recalled how full of life she had been and how they had worked together to build their business until cancer had claimed her.  He did most of the talking and I said what little I could to comfort and encourage him.  I left with a deeper insight into a life well lived and a greater appreciation of the depth and beauty of a committed lifelong relationship.

Often in managing property we focus on the material issues and down play the human side.  Each person has value and has something to contribute.  Yes we want to manage each property to obtain the highest value for the owner and provide a comfortable living space for each tenant, but it is people that provide the property, it is people that live in the property, it is people that work on maintaining the property and it is people who live in community around the property.  Each person has a story no matter how insignificant it may seem.  Each person is trying to make their way in this world as best they know how.  We are directly or indirectly a part of each of those stories.  It may not be much, but we have an opportunity in our own way to impact each person for better or worse.  We strive for the better.

Cats and Supplemental Dining

This last Sunday morning I was lying half asleep in bed when our cat, Autumn, bumped open the door and jumped up onto our bed.  She came over, rubbed her head against mine, kneaded my neck with her claws and settled down comfortably on my chest.

Coincidentally, about the same time a fly started buzzing around between the curtain and window behind our bed.  Autumn's head shot up and looked around  at the window.  She slowly got up and climbed behind the curtain.  We heard the fly buzz followed by some bumping, a minute of quiet, some more buzzing, some more bumping around, and then silence.  A minute later Autumn emerged from between the curtains, walked down the length of the bed, jumped off and walked out the door.  As soon as she left, I parted the curtains and looked for the fly.  I couldn't find any fly.

It's nice to know our cat can supplement her diet of dried cat food with fly appetizers.  Since she is an indoor/outdoor cat we know she also catches mice and occasionally a bird.  I was a dog person and still am, but our previous cat and Autumn have captured my heart.  Not only do they have great personalities, but they have a certain practical appeal in that they help keep the mice and rat population under control.

A rental I have managed was built in a beautiful forest setting.  A developer came in and bought the adjacent property, cleared out the trees, and built about 10 houses.  The tenants living in the house at that time said they saw waves of mice head toward the house and the remaining forest.  I asked them what happened to the mice and they said they trapped a few and the cat got the rest.  Needless to say, the cat looked well fed.  Those tenants moved out and some new tenants moved in who were allergic to cats.  Since they moved, in I have had the pest control people out multiple times to bait and trap mice.  Some people don't like cats for various reasons, but in certain situations they can be very useful and cost effective in keeping the rodent population under control and out of your house.

Property Crimes - A Story Against SB 91

The Oregon Senate is considering Bill SB 91 (see below) that would not allow property owners or property managers to take into consideration a person's previous criminal convictions if they are only related to property crimes.  The following story, while anecdotal, serves to illustrate the point of why it is crucial to be able to consider previous property crime convictions.

About eight years ago I received a phone call in the middle of the night from a tenant in a fourplex I had just started managing.  There was a fire and I needed to come over right away.  When I arrived, the fire department had put out the fire and were starting to clean up.  The fire had gutted over half of the fourplex and destroyed almost all the possessions of the tenant living over the unit where the fire had started.

In talking with the fire department, we discovered the fire started in a wastebasket in the living room.  The cause of the fire was a cigarette that had dropped in a trash can when the person holding the lit cigarette fell asleep and it slipped from his fingers. 

The problem here was not the fire (although that was a several hundred thousand dollar problem) but the person who caused the fire was not a tenant.  In fact the former tenants had just been evicted that day for non payment of rent and tagging. The person who started the fire was a friend of theirs who they said could stay over night.  Fortunately no one was killed or seriously hurt, but the tenant upstairs said he never heard the fire alarm (it could have been disabled by the former tenants) and barely got out in time.

There are obviously other issues involved here that we could talk about, but the point is that people who don't respect other people's property can have a direct and sometimes devastating impact on the surrounding community.  Being able to evaluate potential tenants for previous property crimes is important not only for the property owner, but for the entire community.

Below is the section of SB 91 this discussion is addressing.  Parts of this section are sufficiently vague that they would most likely  require litigation to parse where the distinction between personal and property crimes begin and end.  Litigation is expensive, time consuming and messy. It would do little to resolve the issue this legislation is trying to address and add to the cost of affordable housing in the form of higher rents and/or security deposits.

SECTION TWO.

(1)   A landlord may not consider an action for possession pursuant to ORS 105.105 to 105.168 in evaluating an applicant if:

a.      The action was dismissed or resulted in general judgment for the applicant prior to the application. This subsection does not apply if the prior action has not resulted in a dismissal or general judgment at the time of the application.

b.      The action resulted in general judgment against the applicant, if such judgment was entered 5 or more years prior to the application.

(2)   A landlord may not consider arrest history in evaluating an applicant, where the arrest did not result in a conviction. This subsection does not apply if the arrest has resulted in charges for criminal behavior as defined by subsection (3) of this section that have not been dismissed at the time of the application.

 (3) A landlord may only consider criminal conviction and charging history in evaluating an applicant if the conviction or pending charge is for criminal behavior that is:

(a) A drug related crime;

            (b) A person crime;

            (c) A sex offense; or

(d) Any other crime, if the nature of the criminal conduct for which the applicant was convicted would adversely affect the landlord or other tenants’ property, or the health, safety, or right to peaceful enjoyment of the premises by other residents, the landlord or the landlord’s agent.