Hall Monitor: Dibs!

Chloe Eudaly Wants to Give Tenants and City Officials the First Shot At Buying Rental Properties

Comments

1
Great! So all the people who have been priced out over the last 15-20 years are gonna get the same assistance, right?

Oh! Only people lucky enough to already still be living in inner Portland neighborhoods? As in, a majority of them being newcomers in the last 3 years who never cared about Portland until they moved here, but now they are getting these protections?

I hate New Portland so much, and I resent how many newcomers do not take responsibility for the ways in which they have unduly impacted locals of 20-30 years, not just those who decided they wanted to "CHASE THAT HOOD LIFE," who refuse to examine their economic or social privileges. But hey, if you can suckle on the teat of Portland's market and still afford it, then YOU AS A NEWCOMER OVER THE LAST THREE YEARS WILL HAVE MORE PROTECTIONS than all people of the last 20 years put together.

SO HAPPY FOR YOU as a queer local priced out of Portland and back to my stomping grounds of Vancouver, WA. (Yes, I live there, and no, I don't shoot black people or dodge taxes, wouldn't you know!)
2
There doesn't seem to be any similarity to what's in place in Chicago or Boston. Both appear to relate only to condo conversions. Oregon already gives tenants who units are converted into condos the right to purchase the units (ORS 100.310).

The DC law does seem similar in broad concept. A cursory review of some recent articles highlights some problems with implementation. It seems to have created an entirely new market for both tenants and developers to exploit with regard to single family properties to the detriment (as in increased purchase price) of potential third party buyers. These third party buyers would presumably include first time home buyers so I'll be curious to see how the Commissioner's proposal offers tenant protections without increasing third party buyer's costs.
3
So the city is now going to tell you who you have to sell your private property to, and they'll determine the price as well. Neat.
4
Haha, Dirk, you must be kidding me. As Babygorilla already pointed out, this is literally nothing like what is on the books in other cities. Not even close. Don't pretend there is any precedent out there for this insane of a power grab by Eudaly and the angry renter contingent. I'm sure as a renter it makes you personally giddy, and that seems to have completely wrecked your ability to write coherently about this issue.

"Eudaly’s people believe that giving the PHB an opportunity to buy up apartment buildings at market rate—without having to chase them on the open market—will help officials meet their goals."

I honestly don't see how this passes muster in the courts under the takings clause - all of a sudden any rental contract has to contain a right-of-first-refusal clause in the event of a sale? And the City, by fiat, gets to declare itself the buyer of any new property on the market, regardless of whether the seller is willing, or has another would-be buyer that they prefer for a whole variety of reasons?

And how is "market value" going to be determined? Because the market value of any property is what the property sells for based on an agreement between the buyer and the seller. If you don't have other buyers bidding on the property, and why would they if the City or tenant has right-of-first-refusal, every single seller is going to get a lower price than they would if bidding were open (which the Eudaly contingent admits is specifically their goal - to grab the properties as cheaply as possible and cut out bidding competition). That is theft by the City, outright theft.

Can't wait to see how much the City wastes in lawsuits over this insanely idiotic and inappropriate policy. I would say "if it ever sees the light of day," but the current council is packed with morons backed by a greedy and ignorant populace, so I suppose Portland will get what it deserves.
5
Thanks BabyG. You're right Chicago and Boston are more geared toward condo conversions. I include them because they are frequently lumped in with this kind of plan. Eudaly's office says it is modeling its proposal on Washington DC's program—though that doesn't include a provision giving the city dibs as far as I can tell. Baltimore has a similar policy for single-family rentals.

To Flavio's question about how it would work, it's too soon to tell. I would note that in Washington, according to a report from Georgetown Law School: "As a practical matter, most notices to tenants occur after an owner reaches agreement with a third-party purchaser. Under these circumstances, the terms of the offer are set."

So the tenants/city would presumably be able to make a call based on those terms, if Portland follows suit. Here's the study: http://cdm16064.contentdm.oclc.org/cdm/r…
6
Dirk, that paper raises even more problems with such a proposed scheme.

Buyer/seller agreements often include bargained-for concessions on both sides, such as a repair credit on the seller side (if, say, a major system repair needs to be done and the buyer wants to finance it as part of the purchase rather than pay for it after the fact), or an inspection or other contingency waiver in exchange for a lower purchase price (so the buyer is more pot-committed if the seller has a strict timeline in which they need to sell).

Would these types of provisions carry over exactly and without further negotiation to the mandatory tenant/city offer? Is that good for the tenants if the seller has a third party buyer willing to waive all inspection or financing contingencies and the tenants have to take or leave that type of sales contract and risk major issues with the property after the sale (precisely what an inspection contingency is for)?

And speaking of financing, it notes that in D.C., the owner is not allowed to determine whether the buyers can qualify to purchase (unless they are the ones making the purchase loan). If it's a multi-unit property sale, and one tenant out of four can't afford or doesn't want to purchase, then what happens? You can't sell 3/4 of a building. Or what about a single family house rented to multiple tenants who have different life priorities and financial status? The complexity this would introduce, especially given that the most "vulnerable" renters this policy is purportedly designed to protect are frequently the least financially sophisticated, is mind-boggling.

I could go on and on with the myriad ways in which this policy is guaranteed to be a huge clusterfuck. And again, this does nothing at all to address the actual root cause of Portland's rising housing prices - the fact that the demand has outpaced the supply for well over a decade. What on earth is Eudaly doing to accelerate the development of new housing, rather than scheming ways to just transfer existing housing ownership to incumbent renters through lifetime renewal guarantees, rent caps, and now the government dictating the price and buyer if you want to sell.

Complete fucking clown car time over at the City Council right now. And it sounds like they want to just ram this through without any public input or having a comprehensive discussion of the potential pitfalls. This is the kind of anti-democratic shit we decry when congressional Republicans pull it, yet apparently it's fine if it's Eudaly and the renter crowd? Unbelievable.
7
The more of these ideas that pop up at city hall the more likely landlords of single family units will be selling out. How much more can they do to dissuade people from investing in rental property. Relocation fines, right of first refusal, revoke no cause evictions. If I were in that boat the second the lease was up, the tenants would be out and the house on the market. I'd take my profits and walk away from it all. Too much hassle.
8
Velma, I personally know a couple landlords for whom that is the case. They are selling their rental properties in Portland to invest in rental properties in other states. And the buyers? All but one will be owner-occupied, so there are a half dozen fewer rental units on the market going forward, which will just drive competition and prices up even further.
9
They forgot the part where requiring people sell their private property to gov so that gov can turn around and sell it to another private party is illegal in Oregon. It's called a regulatory taking and is also known as a type of Condemnation called an "inverse condemnation". It's against ORS 35.015 Prohibition on condemnation of certain properties with intent to convey property to private party (non profits are also considered private parties). So that BS by Duhamel that this is to create home owner opportunities is a big fat fail.

Also, Dirk, dude, what Eudaly is proposing is nothing close to the City's you've mentioned - non of those cities require a gov 2nd right of refusal. And DC in particular is a wretched example to base this on because their program has not only been a flop to get tenants to become homeowners, but those tenants are using attorneys to purchase their first right offer, then a few months later flip the property to sell to the highest bidder. Google it. The program in DC has so many bad consequences, the City is on process of overhauling it. In Baltimore you are exempt if you use a licensed real estate agent as your selling agent, so that's not a good example either.

Me thinks neither Eudaly/Duhamel nor the Mercury bothered to do much research on this.

10
"Me thinks neither Eudaly/Duhamel nor the Mercury bothered to do much research on this."

Par for the course with literally every single one of Eudaly's housing proposals to date. You have a know-nothing legislator being championed by renter writers who are desperate for anything they think will lower their own personal bills, regardless of how bad and harmful the legislation is generally.