Portland Landlords Sue To Halt Ordinance Requiring Payment To Move Evicted Tenants

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Landlords sue City of Portland over ordinance requiring landlords to pay moving expenses in no cause evictions

Portland landlords have sued the City of Portland to stop an ordinance that requires landlords who evict tenants without cause to pay moving expenses for the tenants, effective immediately.

The “relocation assistance” ordinance mandates that if a landlord raises the rent on a tenant by more than 10 percent or evicts a tenant without cause, the tenant can then demand the landlord reimburse them for moving costs up to $4,500, according to news reports.

Two Portland landlords, Phillip E. Owen, of Owen Properties, LLC and Michael L. Feves have sued the City of Portland in Circuit Court of Multnomah County asking for an injunction arguing the ordinance is invalid because it violates state law in several ways, including state laws against rent control.

Landlords lawsuit

The lawsuit states, “Plaintiffs are adversely affected by the enactment and enforcement of the amendments to the Ordinance, which both effectively restrict the amount of rent may increase in a given year and places significant financial penalties in the form of relocation assistance that burden plaintiffs’ use of no-cause terminations. The Ordinance also applies by its express terms to existing leases and rental agreements to which Plaintiffs are parties, thereby impairing existing contractual rights of Plaintiffs.” Read the full lawsuit here.

Also attorneys with Multifamily Northwest, which represents landlords in the Portland area, said before the city council's vote that they would sue the city if the ordinance passed, according to kgw.com.

The group called the ordinance vague and said the fee of $4,500 will bankrupt small landlords, who raise rents to keep up with rising property taxes and the cost of maintaining their properties.

“You can’t paint all landlords with the same brush, and I feel like the media thing… and the rhetoric around the city of Portland, we’ve been demonized as a class,” said Christopher Frick, a landlord of 20 years in Portland, according to kgw.com. “It’s not only unfair. It’s punitive, and it’s unproductive.”

The ordinance says, “The average monthly rent in Portland rose 7 percent between 2015 and 2016, with increases between 12-18 percent in 1, 2, and 3-bedroom units. This is now the fourth consecutive year that Portland has seen an annual rent increase in excess of 5 percent, with the average rent increasing nearly 30 percent since 2012.” The city declared a housing emergency in October 2015 and has extended it through October 2017.

The ordinance also says:

  • At least 45% of the population of Portland are tenants. Over 52% of tenants in Portland are considered “cost-burdened” (paying over 30% of their gross monthly income on rent). The average Portland tenant is paying between 45% to 49% of their income in rent which puts them at significant risk of becoming “severely cost-burdened” (paying over 50% of their gross monthly income on rent).
  • Rent increases of 10% and higher have the effect of constructively evicting tenants (“Economic Evictions”) resulting in involuntary economic displacement.
  • Involuntary displacement occurs not only as a result of Economic Evictions, but also when a tenant is forced to leave their home through no fault of their own due to a no-cause eviction.
  • Involuntary displacements have contributed to a significant increase in homelessness. Point-in-Time Counts for 2015 indicate a 26.8% increase in newly homeless individuals including a 48% increase in persons of color and a 24% increase in families with children.
  • Relocation expenses associated involuntary displacement, such as application fees, security deposits, double rent, moving supplies, storage, and lost wages present a significant financial burden to an average Portland tenant.
  • Relocation assistance is essential to allow tenants to manage the unexpected relocation expenses that result from involuntary displacements.

The measure will only be valid as long as the city remains under its official “housing emergency," which is set to expire in October.

Landlords' attorney John DiLorenzo argues in the suit that penalizing landlords for a rent hike amounts to rent control, which is preempted by state law. And he says landlords like Owen and Feves are less able to protect their "responsible" tenants under the law, since they'll now want to avoid no-cause evictions, according to the Portland Mercury.

Resources:

Portland Landlords Sue To Kill Renter Protections

City of Portland Ordinance On Relocation Assistance

Read the full ordinance here.

Point-in-time from HUD

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