The below article was written by John Triplett, a writer for the Rental Housing Journal.
Tensions are rising between landlords and property managers, and tenant activists. Landlords and managers have been bullied over rent increases. And they face unpleasant demonstrations from activists as Portland struggles with a shortage of housing and rapidly rising rents.
A Portland landlord says he and his property managers have been bullied and intimidated over rent increases after he purchased a small apartment building and had to raise existing rents to afford his new mortgage payments.
He said demonstrators have picketed his personal residence. They have placed notices on the doors of neighbors, camped overnight on his lawn, defecated on his lawn and marched into his property managers’ offices scaring the staff, according to his spokesman, John McIsaac.
The landlord, Landon Marsh, raised rents “only to the lower end of current market rates in Portland,” said McIsaac in a recent interview. Marsh has also written an op-ed style editorial here detailing his opinions on what happened.
McIsaac said the rent increases came after Marsh purchased the small apartment complex, did substantial work to improve the condition of the building and raised rents to cover his costs and mortgage. Unfortunately the rent for one tenant went up by 40 percent and the tenant complained to the Portland Tenants United group.
Telling the Landlords’ Side of the Story
McIsaac said he is speaking out because many in the landlord and property management industry do not feel their side of the story has been told, and that more attention has been focused on the activists’ demonstrations and what the tenants say. “I represent the landlords and property managers who do not want to have exorbitantly high rents, we want more housing stock.”.
“In Portland, 85 percent of the landlords are small operators. They might have their retirement tied up in these properties, but they don’t make a ton of money off of them. So the stereotype is that all of the property owners are huge, out-of-state multimillion-dollar concerns. That is not the case. A lot of these property owners have day jobs,” McIsaac said.
McIsaac said that with the hysteria over rent increases, “the activist group has targeted a couple of landlords in particular. They are not going after the big guys who own thousands of units. They are going after the little guys who own like 20 units.
“And this one guy, Landon Marsh, who is my client, is in the hospital interior-design business. He is a one-man consulting business. He does not do property development for a living. He has investment properties. They are small ones. All three buildings he owns combined make up 20 units.”
Where This All Started with Apartment Building Purchase
“He bought one building around seven or eight months ago out in a semi-blighted part of East Portland, a working-class area,” McIsaac said. “It was built about seven years ago. And it needed some repairs just from wear and tear. The tenants asked him to make these repairs and he said, ‘Yes I will do that.’ “So he set to making the repairs. But he had bought the building at market value. And market value right now is a hell of a lot higher than it was seven years ago – it’s a lot higher.
“He said that he was going to have to raise the rent. But he said he would keep the rents – and he stuck to this – at the very low end of market rates. So he’s not a profiteer by any stretch of the imagination,” McIsaac said. He said in his opinion, “This guy is a liberal, progressive classic Portlander. He is a caring, altruistic, sensitive man.”
Group Pushing Rent Control and End To No-Cause Evictions for Portland
Portland Tenants United is a growing tenants union dedicated to organizing tenants to take action to strengthen and enforce tenants’ rights and protections, according to their Facebook page.
At a recent press conference, Portland Tenants United and City Commissioner-elect Chloe Eudaly, promoting something called “Keep Portland Housed,” called for a freeze on rent and an end to no-cause evictions in Portland until there is a policy in place to improve conditions for renters.
Leader Says Group Wants Municipal Disobedience and Rent Control
“We’ve been in an officially declared housing emergency for over a year. Despite that, tenant protections – the most critical component to preventing homelessness – have not meaningfully improved, and conditions continue to worsen,” Eudaly said in a press release. “My election and the passage of Portland’s housing bond, present a clear and obvious mandate to City Council to act.”
Eudaly admits state laws prohibit local rent control measures. But she wants city commissioners to commit “municipal disobedience,” do it anyway and fight the resulting lawsuits, she told the Portland Tribune.
Portland Tenants United is focused on lowering the eviction rates in Portland by organizing tenants to vocalize their concerns. Gabriel Erbs, organizer for the group, insists the fight is far from over, according to a report on Portland Patch. “Tenants can be evicted, for whatever reason or no reason at all, at the landlord’s whim,” he said.
Landlord and Tenant Activists Have Clashed
Tensions escalated late in 2016 at the Portland Art Museum during an awards ceremony. Multifamily NW, an association promoting quality rental housing, was holding its annual ACE awards ceremony for its members when protestors from Portland Tenants United showed up.
Dozens of protesters gathered across the street from the museum. It didn’t take long for tempers to flare, according to koin.com.
The television station reported that, “Tensions were high. Some choice words were exchanged as well as some apparent shoving as protesters came face to face with ceremony attendees. Shouts calling the multifamily association attendees ‘parasite’ and ‘bloodsucker’ rang out from protesters.”
A small group of protesters stormed past security into the museum to disrupt the event. They were soon removed by security, according to katu.com.
Deborah Imse, Executive Director of Multifamily NW, said in response to the protest, “Over the past few years, rents in Oregon have risen while incomes have lagged behind, creating an urgent housing crisis. In order to thrive, the region needs to work together to create more quality housing options for families of all incomes.
“With demand for housing continuing to increase, we must take action to reduce rental costs by increasing the variety of housing types available to people of all incomes and creating more subsidized affordable and market-rate units,” Imse said in the statement.
Property Management Groups Say More Apartment Units Needed
Any solutions to the Portland housing issue, property management organizations say, should be market-based. A spring 2016 apartment report released by Multifamily NW says that “Portland’s current development pipeline includes an impressive 21,600 proposed units.”
“More housing is the solution, and our priorities are to help increase supply and educate politicians on the fact that simply adding fees and making business harder has the reverse effect on the problem they want to solve,” Multifamily NW’s Imse wrote in an email to the Portland Mercury.
“As the organization representing property owners and managers, Multifamily NW has adopted a solutions-oriented approach to address the housing shortage. The market data we collect, along with reviews of affordable housing policies across the country and the experience of our members, have shown us the best way to create affordability in the housing market: adopting proven strategies that add to the housing supply,” Imse wrote in an article on Oregonlive.com in early 2016.
Barrier to Constructing New Apartments Need to Be Removed
“To increase the overall housing supply, we need to remove barriers to building. This includes updating zoning codes to allow for a wider variety of housing types at a range of price levels.
“At the same time, we should streamline the process for development review and permitting new construction while retaining standards for high-quality buildings. Under the current process, approvals can take a year or more, adding to project costs and delaying the construction of much-needed market-rate and affordable units,” Imse wrote.
McIsaac said Marsh tried to work with the existing tenants on payment plans and provide plenty of lead time and help moving if they decided not to pay the rent increases. Most tenants decided to stay, he said. No lawsuits have been filed.
“But they have come up with some non-factual statements about how he has treated tenants and what he has said to them. And he has bent over backwards, and so has the rental company, to make it easier for tenants,” McIsaac said.
“So it is interesting here in Portland the media has not jumped on him, they have been extremely neutral on him. The head of the tenants union has taken it upon herself to negotiate with landlords on behalf of the tenants and she is not a lawyer, not a property owner, she’s just an activist,” McIsaac said.
Activists were protesting at one event and then went over to the office of the property management company Marsh had been using to handle his rentals. “They marched into the A&G Rental Management LLC office and intimidated the people working there – drove some of them from the main area back into their offices. They had to lock themselves in their offices. And the principals were not in the office at the time, so they basically attacked the support staff – not physically – but screaming, bullhorns, stomping, just marching through this office. It’s not very big, maybe a grand total of 1,000 square feet. 30 of them came in there so it was pretty unpleasant,” McIsaac said.
Challenge of Buying Apartments at Market Rates
“The bottom line is if somebody buys a new rental property at market rate from somebody else who owned it for 10 years, the owner is going to sell it at market value. The new owner is going to have to raise the rents to make the monthly mortgage. If you do away with no-cause evictions, then you also do away with the ability to evict bad actors who are drug dealers or domestic abusers, because that is what the law exists for,” McIsaac said.
“His (Marsh’s) other properties have long-term tenants – his other two properties – and so it’s just a crazy, uncomfortable situation. I think the property managers and the landlords are really willing to work with tenants because of the type of city we have here – but the tenants union has refused conversations and any negotiations that are not absolutely in their favor,” he said.
“And they have a couple of politicians on their side,” McIsaac said. “Some politicians support no-cause evictions and rent control. But they don’t know the facts. If they did, they would not do it. The Portland Tenants Union is funded by the national Service Employees International Union (SEIU). No-cause evictions are No. 1 and rental control is No. 2 but I think there are other things lurking underneath if they can get these laws passed.
“If you have rent control you cannot improve your buildings. You have to be an altruistic millionaire to improve a building with rent control because rent is where you derive your income.”
[Dan’s Note: Notice to All Housing Providers – Please make a copy of this article and send it to your favorite politician. They seldom get to view our side of the rental business and maybe an article like this will open some eyes. Thank you!]
John Triplett is a writer for the RentalHousingJournal.com which is an interactive community of multi-famliy investors, independent rental home owners, residential property management professionals and other rental housing and real estate professionals. It is one of the most comprehensive sources for news and information for the rental housing industry. Their website features exclusive articles and blogs on real estate investing, apartment market trends, property management best practices, landlord tenant laws, apartment marketing, maintenance and more.