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Economic study says most landlords will pass the cost onto renters, hurting lower-income households the most

WHAT IS HAPPENING? This Wednesday the City Council will consider imposing a fee on landlords of $60 per year on rental units in Portland to fund the Office of Rental Services. Regulated units that are affordable to families earning 60% or less of the region's median family income would be exempt. Multifamily NW, the largest organization representing landlords in the region, opposes the fee.

WHAT DOES THE OFFICE DO? The council created the office within the Portland Housing Bureau in 2017 to register all rental units in Portland and to provide a range of services to renters. The services include: education on landlord-tenant laws and policies; enforcement of fair housing laws; legal assistance; relocation assistance; mediation services and more.

WHY IS THE FEE NEEDED? The council funded the office this year with $2.8 million in general fund and one-time dollars, including cannabis tax funds. The council directed the office to recommend a fee structure that would make it self-sufficient.

The office has determined there are 121,000 rental units in Portland. Of those, 20,000 are affordable to households earning 60% or less of the regional MFI. That leaves 101,000 for the fee to be applied to. The $60 per year fee would raise $3.6 million for the next fiscal year, which is what the office will be requesting.

With the current average market rate rent in Portland at $1,425 per month, the office says the fee equals approximately one-third of 1% of the average Portland rent collected annually. The fee would increase each year for inflation.

HOW DOES THE FEE COMPARE TO OTHER CITIES? Many other cities charge similar annual fees. Some are higher, some are lower. According to the office, Boston charges $25 ($15 renewal), Los Angeles charges $43.32, Seattle charges $175 plus $2 per unit, and Minneapolis charges between $70 and $700 plus $5 per unit.

WHAT DO CRITICS SAY? When Multifamily NW learned the fee was going to be proposed, it commissioned a study of its potential effects by the local Johnson Economics consulting firm. The report says that most landlords will raise rents $60 per year to pay the fee, increasing housing costs for renters. Because the fee is a flat $60 per year, the increase will be regressive, meaning lower-income renters will pay more of their earnings to cover it than wealthier renters.

"Apparently the City Council has forgotten we are in a housing crisis," said Multifamily NW Executive Director Deborah Imse.

Some landlords also complain that the fee will be on top of other cost increases generated by the council, including mandatory relocation assistance in certain situations and new application screening requirements.

"We're doing everything we can as a housing provider to keep costs affordable, but these new policies are pushing prices in the other direction," said Jessica Greenlee, director of operations for Affinity Property Management.

WHAT CAN I DO? You can read the ordinance on the agenda page of the city's website. You also can find contact information for all council members at the website, which is portlandoregon.gov.


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