The Housing Crisis Is A Problem The City Helped Create

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A landlord's view on the Portland housing crisis

Landlord Landon Marsh provides this editorial opinion on the housing crisis and his thoughts on the recent controversy between his rental increase, his property management company and the tenant activists. See the full background and story here.

By Landon Marsh

Portland Landlord

When I read Oregon State Representative Tina Kotek’s op-ed piece, “Oregon's housing crisis too big to ignore, back in October, it stopped me in my tracks. Not because the headline or the overall sentiment was incorrect, but because she has oversimplified a complex issue with nearly Donald Trump-like rhetoric, and that’s just not fair to renters, property managers or building owners.

This fall I found myself unwittingly tossed into a lions’ den of controversy centered on landlords vs. tenants, specifically regarding a 12-unit building I purchased in mid-2016 in East Portland on S.E. Ash Street. I own three small multifamily properties, each in a different neighborhood throughout the Portland Metro Area. My tenants are longstanding, and we have an open line of communication and have always enjoyed good relations.

When I bought the S.E. Ash property I was asked by several tenants to make improvements to it, so I set to replacing flooring and making other upgrades per their request. I should also mention I purchased the building at today’s market value, which, if you’ve been following Portland’s real estate market, is significantly higher than it was even five years ago. In simple terms this means that, in order to make my monthly mortgage payment on the building, I would need to raise rents to market value. That, coupled with the improvements I was asked to make to the property, basically meant I’d have to pass along some of the market-driven increase to my tenants.

Bringing rents to market value

I discussed this with the management firm who handles the leasing of my properties, A&G Rental Management, and we decided to bring the tenants whose leases were about to expire up to the low end of market-value rent. For most of my tenants this wasn’t an unreasonable increase. But for one, who had paid the same rent for the past three years, it meant a 45-percent raise in rent. I can understand that might be hard to swallow. But, again, I was only increasing the rent to the low end of market rates, I was significantly improving the building, and I had to pay my mortgage. I guess that was lost on the tenant whose rent went up 45 percent.

The next thing I knew, I was a target of Portland Tenants United, the activist tenants’ rights group. PTU demonstrated outside my S.E. Ash building, showed up at A&G Management and barged into its offices, yelling and disrupting employees, and set up a demonstration in my neighborhood of residence, trying to convince my longtime neighbors I was a bad man by handing out flyers and marching up and down my block.

I offered my tenants who were moving out free rent through October of 2016, while we worked out an arrangement—either a new lease or a move-out. I thought we’d reached somewhat of an agreement, but apparently I was too optimistic: PTU members camped-out overnight in front of my house and defecated on my lawn. That’s how the “opposition” to rent increases is handling this situation.

I want to re-emphasize something: I own only three small rental buildings. Yes, they are investment properties for the long haul, but they’re not a truly profitable enterprise at present. That was never my intention. I own a very small interior architecture business, and that’s where I derive my income. I’m a very small operator, and 80 percent of Portland’s property owners are just like me—small. The housing crisis is not making us rich. At all.

I try to do right by my renters

I try—and have always tried—to do right by my renters. I want them to be long-term tenants, and I do everything I can to ensure that. I think the vast majority of property owners probably feel the same way. But when properties are significantly improved—or a new property is purchased at market value—rents must be raised to pay the cost. That’s simply fair.

I’m also a liberal, progressive Portlander, not an “evil landlord.” Representative Kotek mentioned “property owners making excessive profit and benefitting from this housing crisis” in her op-ed. I have neither benefitted nor seen excessive profit from the housing crisis. In fact, it has only given me grief.

The housing crisis is a problem the city helped create

Looking at the big picture, we need to build more new affordable housing throughout the Portland area and beyond. But from what I’ve experienced, the City’s permitting and licensing processes are byzantine—to put it diplomatically—and only serve to slow the process down, oftentimes for inexplicable reasons. Representative Kotek wants to hang the onus on property owners and managers, but it’s a market-driven situation, aggravated by archaic city bureaucracy that’s far out of step with today’s Portland. That’s what truly needs to be fixed; the market’s health is a good thing overall.

For the sake of tenants, managers and owners, and all of those affected by this incredibly uncomfortable situation, I implore the city and state to work with owners and managers to fast-track the development of more affordable housing. It’s the only real solution for stabilizing this rental market.

Landon Marsh

Owner

S.E. 119th & Ash Street Apartments

Resources:

Want to lower housing costs? Increase the supply

Portland Tenants United Picket Housing PAC

Multifamily NW The high cost of rent control

East Portland tenants plaster landlord’s neighborhood with flyers

National Multifamily Housing Council

Ash Street Tenants Association letter to landlord Landon Marsh

Portland tenants publicly shame their landlord

Portland Tenants United protest housing awards

John McIsaac Communications and Public Relations

Oregon's housing crisis too big to ignore - opinion.

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