Landlords Ask For More Changes to Proposed Portland Tenant-Screening Ordinance

Landlords Ask For More Changes to Proposed Portland Tenant-Screening Ordinance

Landlords again pushed back against a proposed Portland City Ordinance on tenant-screening criteria in a public hearing in late May asking for more changes and sharing concerns.

The council has set a vote on the ordinance for June 12. Commissioner Chloe Eudaly, sponsor of the measure, added an amendment to move implementation of the ordinance from October 2019 to March of 2020. The measure includes controversial rent-to-income ratios as well as criminal-background check requirements.

Some of the highlights of the landlord testimony included mom-and-pop landlords, larger corporate landlords and landlord organizations.

‘I did not know I was evil’

One landlord, Diane Ponti, told the council in the public hearing that she is a schoolteacher and that over 45 years she and her husband, also a schoolteacher, had bought nine rental properties.

“Tenants and landlords are both people. Like teaching school and grading papers, you can look at a bell curve and just like students you will find thoughtful and responsible landlords and tenants on one end of a bell curve. At the other end of the curve you frankly find tenants and landlords who give the industry a bad name.

“The proposed regulations do not take into account that most landlords and tenants fall somewhere on that bell curve as opposed to landlords at one end and tenants at the other. All landlords are evil and all tenants are good,” is what she is hearing.

“I did not know I was evil until I started reading the newspaper about how horrible landlords were. I came to this meeting with trepidation because I feel like the face of evil. I am a landlord. It is challenging to read that about myself. I care about the tenants I have rented to over the last 45 years. I care about the houses I bought and that the house is in good shape. And that my tenants and neighbors will get along.

“I have had tenants who have stayed in my homes for decades. I have had years where there have been no rent raises at all.  Rents have stayed flat,” Ponti said.

Landlords Ask For More Changes to Proposed Portland Tenant-Screening Ordinance
One of the slides presented at the hearing on the Portland tenant screening ordinance by Jamey Duhamel, Director of Policy, for Commissioner Eudaly.

Unintended consequences for the proposed Portland tenant screening ordinance

“The proposed regulations remind me of the bank standards that were lowered in the early 2000s when people who could not really afford to buy faced foreclosure,” Ponti told the council. “These regulations with lower income requirements are going to put tenants one paycheck away from eviction when a financial crisis arises and they cannot pay their rent.

“Mom-and-pop landlords like me will sell. I read the regulations five or six times and they are confusing, they are daunting, they are scary and they are expensive. And, I think you will reduce affordable housing when landlords like me sell,” she said.

Ward Green, an attorney in Portland, said he agrees “we share a moral obligation to provide affordable housing” but doubts this package of ordinances is the way to do it. “I know I won’t be popular when I say I would like to see the political will to raise taxes, especially on wealthy Portlanders, and business. The city is doing well. Many of us are doing well.”

He suggested “we allow more density,” more ADUs, faster, cheaper building permits for people who want to construct rental properties, to create a fast track. “We need to create more housing,” he said, using the example of rearranging the deck chairs on the Titanic.

Referring to the first-come, first-served provision of the Portland tenant screening ordinance, he said letting someone come ahead of someone else in the rental process “is not going to create more housing.

“I think this ordinance is wrong. I think it is demonizing landlords. And I think it is not going to increase the number of available rentals. I think it is going to encourage some private landlords to get out of the business,” he said.

Concern about having to take tenants who may not be able to afford the rent

Landlords objected in particular to having to wait 72 hours to advertise a unit before it can be rented, as well as new caps on the income-to-rent ratio landlords can require.

Jim Rostel, sales director for Anchor Property Group, said allowing someone to pay 50 percent of their income for a rental is just setting them up for failure. His company has 2,200 units in Portland.

The ordinance sets out two and a half times the rent for cheaper units that meet a federal standard of being affordable to someone making 80% of the area median income, or two times the rent for more expensive units.

“We had discussions this morning. Do we move to another market? Do we move to Boise and build in Boise?”  said Rostel of Anchor, a Portland area company that builds and manages apartments across the city.

Council should not water down consumer protections

Deborah Imse, executive director for Multifamily NW said, “While we share the city council’s goal of improving access to housing for vulnerable populations, we do not believe eliminating or watering down basic consumer financial protections is the way to accomplish that objective.

Landlords Ask For More Changes to Proposed Portland Tenant-Screening Ordinance

“What this proposal is doing is watering down industry safeguards that protect consumers from entering into housing contracts that they cannot afford. Contrary to the political messaging around this bill, a requirement that tenants earn three times (the) monthly rent is not designed to protect landlords. It is to prevent consumers from entering into housing contracts they cannot afford.

“When someone moves into housing that they do not have the income to support, they are far more likely to fail to make rent payments and ultimately to be evicted. We see this frequently even for tenants who earn more than three times the monthly rent. By eliminating that protection you are ensuring that the more vulnerable Portlanders will enter into housing contracts they cannot afford. That more Portlanders will be evicted. And those same exact Portlanders will then have a much harder time securing housing as a result of a ‘forlcause’ eviction. The chain of events will logically lead to more housing instability and ultimately homelessness. Please do not go down this path.

“Similarly, discretion in renting to individuals with egregious criminal backgrounds, in particular sexual offenders and violent domestic abuse crimes, is not to protect landlords. Most of our members do not reside in the communities that they operate. The discretion is to protect other tenants, including young families, seniors, and survivors of domestic abuse whose safety we also believe is incredibly important. I do believe it is important to acknowledge the deep racial disparities that exist in our criminal justice system and to also affirm that all criminal backgrounds are not equal. This is a very sensitive, difficult question that we all must work together to resolve. But this proposal addresses it in a way that is extremely unclear and essentially forces the housing provider to act as judge and jury on each individual case.  It will result in improper screening in and out, and ironically could ultimately lead to more discrimination.”

She urged the council to slow things down and take a more measured approach.

And “despite the political rhetoric of the past several years, we remain deeply open to partnering with the city and stakeholders on policies that will expand housing access while protecting the right and safety of Portlanders,” Imse said.

Final public hearing on Portland tenant screening ordinance

Eudaly said no further public testimony would be taken in order not to delay any further the June 12 vote.

The council had delayed action on the ordinance back in April.

At the beginning of the council meeting, Eudaly mentioned a “disappointing hearing” at the U.S. Department of Housing and Urban Development, saying potential rent increases and other statements by officials, such as removing “free from discrimination” from the HUD mission statement, were troubling.

Eudaly began by saying, “The federal government is not going to save us. The state government is not going to save us. The market is not going to save us. We need to take ongoing action to assert our local power on multiple fronts to solve our housing crisis.

She said robo-calls that went out in Portland during May were disappointing and spread misinformation. “I am requesting we stick to the facts and debate this on its merits.”