Could a rent freeze work in Oregon? Landlords, experts are skeptical
Portland's elected officials made a bold ask in early April.
In a letter addressed to their "State and Federal Elected Official Partners," the four City Council members asked for all residential and commercial rent and mortgage payments to be forgiven.
While the letter was cheered by some as an urgent demand for much-needed relief, it touched a nerve among those expecting these payments. Landlords and property managers were quick to argue that such a proposal, without mention of relief for them, would only push the economic pain caused by COVID-19 higher up the food chain.
"It's unfathomable to me that our city officials don't understand the domino effect that this will have," said Maureen McNabb, president of Capital Property Management, a management company that specializes in Portland-based apartments. "It is going to be an unleashing and backlash of epic proportions for this state."
Most landlords would benefit from a freeze that included mortgages along with rents. Their tenants wouldn't pay them, the thinking goes, but they also wouldn't owe anything to their lenders.
But owners of commercial and multifamily buildings say there are other expenses they must cover beyond just their own mortgage. This means a payment freeze could hurt them far more than it helped. Everyone on their payroll, they warned, would likely lose their jobs. Maintenance contracts — the ones that ensure buildings are cleaned and walls are painted — would be canceled. Gas, electric and water bills would go unpaid, as would property taxes. There would be no incentive, landlords say, for them to rent any units.
"It's a much bigger ecosphere than I think the city council likes to acknowledge," said Mark Paskill, a partner at Melvin Mark Capital, which finances commercial real estate.
In a letter fired off Thursday evening to Gov. Kate Brown, the executive director of Multifamily NW, which represents landlords and property managers across the state, warned that rent and mortgage forgiveness would send an "economic shockwave" through the city.
This OPB story is shared as part of a local media project to increase COVID-19 news coverage.
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