Some new rules are proposed for Portland’s fair access in renting ordinance so Ron Garcia offers his opinion.
By Ron Garcia
The Garcia Group
“We’re in the middle of one the greatest transformational periods of our lifetime. We get to write the future. And the city (of Portland) will be proudly at the center of that transformation.” On July 30, Mayor Ted Wheeler made this opening remark addressing a news conference (held online due to COVID-19 restrictions of assembly). It was staged to address the controversial deployment of federal troops stationed in Portland to stop the nightly rioting in front of the federal courthouse.
I believe his statement is revealing as to the nature of our current city council’s self-vision toward the leadership roles they have assumed as they navigate our city through uncharted areas of governance. Whether it’s an effort to install more green bike boxes, or to “de-fund” the police force, or requiring landlords to pay large relocation fees to tenants in order to reclaim their property, the Portland City Council has been on a trek to re-engineer social norms for some time now.
And while most current news from city hall is focused on the frenzied chaos in the streets, there is still much happening behind its boarded-up doors and windows. On March 1, Portland adopted its Fair Access In Renting (FAIR) ordinance. This law landed on the community just as quarantine rules began to take effect and the pandemic absorbed our full attention. The FAIR ordinance became even further disregarded with the death of George Floyd and the escalation of protests and social unrest. Yet quiet, it is not dormant, and now this new law is actually growing!
The mayor’s bold proclamation to stand up for Portland community values came just 24 hours after the Portland Housing Bureau (under his command) proposed new, additional administrative rules to its FAIR law. These additions and the resolve to carry this ordinance forward are sure to antagonize Portland rental-property owners and create deeper divisions between tenants and landlords. These protests may not be as loud, but are likely still to come (if not on the streets, maybe in the courthouses left standing).
As city leaders speak proudly of their dreams for our future, it is worth noting that FAIR has been roundly criticized by landlords and industry associations as over-reaching and onerous. Many argue that it does nothing to alleviate our well-publicized affordable-housing shortage and, in fact, may hinder any real efforts to address the issue. This is a law that when written had claimed to seek professional input, but upon implementation summarily dismissed all the recommendations that were offered. And however it is read, it is obviously intended to re-engineer long-held established industry standards of practice. It is an ordinance without precedence in any other city of America. Does that qualify it as an apt centerpiece of transformation? You be the judge.
What does FAIR do? It regulates two activities:
- Rental-housing application and screening procedures, and
- Rental-housing security-deposit accounting.
You may wonder if those topics are not already regulated; the answer is a resounding yes. Local, state and federal housing laws abound. So, you may ask, why must they be further regulated? Simply put, the authors believe that tenants are abused and routinely taken advantage of. They believe that the existing laws present insurmountable barriers to vulnerable segments of our society trying to find a home. They want to stamp out homelessness. Okay, that sounds “fair,” right?
Imagine if there were a movement to cure hunger – but it required that all restaurants in a city were to book all parties at all requested times in their eateries, no matter what style food they serve and at what prices they charge. If the diner was late, they could not give the table to someone in line until they allowed three missed mealtimes over the course of the day (effectively holding the table for a no-show). Imagine further that if the diner didn’t like the food or was allergic to the ingredients, the chef would be required to change the meal to fit their needs. Or if they couldn’t afford the bill, the owner would be required to pay the tab on behalf of the customer.
Not only that, imagine that all restaurants would be required to post all of the rules and regulations and options for all of the diners on all of their advertising at all times to insure that all the people who came into contact with it were made aware of all of their rights, including the penalties they might seek for any misunderstanding or oversight (long waits, no water refills, dirty silverware, and so on) that may occur from any actions or statements of any of their staff at the establishment.
Enter FAIR. This is how it treats landlords. Are these rules made with good intentions? Maybe, but they’re all a bit Draconian and confrontational. Do I exaggerate? What is really bad about the Fair Access In Rentals law in Portland, you ask? Google it. The first thing you will notice is how confusing it is, and how many conditions it addresses.
Fair access in renting ordinance changes
On March 1st one section (of many) read: “If a landlord simultaneously advertised the availability of more than one dwelling unit in the same property, the landlord can fulfill the requirements (of the ordinance) by publishing notices at least 72 hours prior to the open application period for rental of the available dwelling units through a combined notice that specifies… ( and it then lists 7 specific conditions).
Today, the proposed rule adds more conditions: “If a landlord publishes multiple notices at different times or through different methods for the same availability and same dwelling unit, the open application period must be at least 72 hours after publishing the initial notice of dwelling-unit availability.” Got it? Hmm. Me neither. The pamphlet the city publishes to explain how to screen a tenant is 24 pages long.
The rules for security deposits in the fair access in renting ordinance are even more challenging. They require specific depreciation schedules for damages that they define, and specific timelines when the value must be established with the tenant (prior to the “commencement date”), new provisions now proposed include: F. 3: “ Within one week following the termination date, as defined in Subsection B.10 of the Rental Housing Security Deposit Administrative Rule, a landlord shall conduct a final inspection to document any damage beyond ordinary wear and tear not noted on the condition report.” Sounds easy, right? Add to that the documentation process: “2. The landlord shall update the condition report to reflect all repairs and replacements impacting the dwelling unit during the term of the rental agreement that the landlord intends to apply against the tenant security deposit. The landlord shall provide to the tenant the updated condition report within 10 business days of repair or replacement…. “
The penalties for noncompliance are stiff. There are eight sections to this rule (A through H). In Section C, they establish the time frames from which the new accounting methods they demand must take effect. Section C – 4. states: “For rental agreements entered into prior to March 1, 2020, PCC 30.01.087 (FAIR ordinance) subsections C.2, C.4, C.5, E, F, G and H apply…” In other words, the law is essentially retroactive.
Does it sound a little scary? I repeat, Google it. The link I am working from here is this: https://www.portland.gov/phb/rental-services/news/2020/7/29/public-comment-proposed-permanent-administrative-rules-fair
As a property-management firm, at The Garcia Group, we are doing everything to digest, learn and implement the best practices to comply with the law. It’s our business. I recommend any self-managing landlord to take a class as soon as possible to learn what they need to do to implement this law. It’s either that or sign up to become (voluntarily or non-voluntarily) the test case in court. (It could be safer to volunteer for a drug trial.)
It’s not a new epiphany on this particular mayor’s part to push Portland’s trajectory in the path of daring social reasoning. Remember (it was about 10 years ago) when the green bike lanes were first painted on our streets by the city? At that time, they were challenged by ODOT as non-compliant with Oregon traffic codes. Drivers were confused. Many bicyclists worried they’d be more vulnerable. Tourists had (and still have) no clue what they mean…. But to their credit, the green lanes and boxes have remained, and we car drivers have learned to navigate around and through them as best as we can and to respect their directions. Maybe FAIR will seem that transformational and tame in 10 years from now too. (Or not).
About the author:
Ron Garcia, C.R.B. is principal broker for The GARCIA Group and OR & WA Real Estate Service and Rental Property Management 503-595-4747 Ext. 4, www.GarciaGrp.com, 5331 SW Macadam Avenue, Ste 361 Portland, OR 97239