All Forum Posts by: Kelvin Lee

I agree with Steve totally. All these new ordinances if passed would only mow down all small rental property owners, which are the majority of rental housing supplier, and open the gate for the big developers taking over the rental market. The vulnerable low income tenants can only see forever increasing rent with this out of balance ecosystem. Big player won't be affected much by rent control as they have sufficient cash flow from over thousands of units. After all, Chloe Eudaly who uses low income people emotion to wipe out small owners, becomes a winning child to the City and State who successfully generates more revenue from and for the big players.

I spent 6 hrs watching the Moving Fee drama unfolded in the City Hall. The Moving Fee as a form of income to low income family is a toxic pill because 

1_the moving fee is taxable by the City and State 

2_Additional income could get their Earn Income Credit and Housing Assistance reduced and disqualified  

3_Additional income could make the low income family disqualified for Medical benefit which force them paying out of pocket for Obama care or penalized by IRS for being uninsured.

In that meeting, only small owners showed up giving testimonials and protest. No big player even bother to show up as none of these new ordinances can put them out of business. Chloe Eudaly simply took advantage of people emotion passing a moving fee ordinance knowing that it would only back fire the low income family as an "Unintended" consequences. 

At the end of the day, Chloe Eudaly is a politician. 

It's not about the easiness of throwing the deposit into interest-bearing account. Beware that this is just the beginning of Chloe Eudaly's game to drive the small owner up against the wall. No cause eviction, rent control, limited security deposit, moving fees...what else? And how does any of this new ordinances solve the affordable housing? I can't held thinking if Chloe Eudaly works with the big developers behind the scene wiping out small owners to help the big players monopolize the rental housing market. Just look around Portland these day with the new development of luxury apartment grows like a weed. Remember big developers pay big money every year to the City including development fee, property taxes and all sort of benefits behind. The small owner does not. 

Portland Commissioner Chloe Eudaly announced she plans to call for reform of rental housing deposit regulations and is considering:

(a) limiting the deposit amount;
(b) requiring that it be held in an interest-bearing account; and
(c) clarifying the definition of reasonable wear and tear.

In an article published in today's Portland Tribune, Eudaly claims to have set up a stakeholder committee meeting of landlords, tenants and housing advocates. Upon learning of the commissioner's plans, Multifamily NW -- the state's largest association of housing providers -- asked Eudaly's office to be allowed to participate. The request was declined. Sources report Eudaly's stakeholders have already held one of three planned meetings to discuss the issue prior to recommending reforms.

http://northwestapartmentinvestor.blogspot.com/201...

So now does the landlord is obligated to shop for the bank bearing highest interest for the tenants? Or the landlord will be penalized if fails to do so? How about paying tenants dividend or 10% captain gain as if they are the shareholder of your rental property? 

Chloe Eudaly needs to use her time on fixing the broken bridges getting ready for the BIG ONE and filling pot holes all over PDX.

My biggest concern is the same no cause eviction + moving fee would also be applied to the End of the Lease if the landlord doesn't offer a chance for renewal. Issue 10-99 for the moving cost to the tenant would be a good way to avoid the landlord getting abused. Here are the reasons.

One, the additional income will negatively affect the low income tenant who lives on welfares including food stamp, earn income credit and obama care etc. 

Second, the moving fee as a income to the tenant is taxable. 10% - 30% will go back to State and Fed and this is nothing the Commissioners can intervene. 

This new ordinance the City approved is 100% poison pill to the low income tenant. To the landlord, the moving fee is 100% tax deductible and can be carry over to years. At the end of the day, paying less tax means putting more equity back to the landlord's pocket. It might hurt the cash flow up front but the cash you pay out will be your tax credit. 

Never heard of non-rent controlled units. So the landlord can declare the property as non-rent controlled? Then the property as such got charged for higher property taxes? 

Terence W.

What is the percentage of Cash on Cash return in Bay Area with all this restriction? With rent control, no-cause eviction and moving fee, how do all these impact the property value, cap rate and appreciation of the property? Are you making it up with higher rent in every turnover since the tenant is going to be there forever unless there is a reason of cause violation?

Rent control, taking out no-cause eviction and now paying for moving fees? How about having landlord to cover tenant's medical bills, student loan and auto insurance for next? Since when the City of Portland becomes so real estate investor unfriendly and on the other hand crying out loud for housing crisis?

@Taj Tinsley Last time I talked to my realtor she used her Primary HELOC for building a 750 sq ft in the backyard at a cost about $150k. Though the interest rate of HELOC could swing as the Prime goes up. Another factors worth to mention are the vacancy lose and maintenance cost that entail in every turnover. That translate to you will have to pay the mortgage, insurance and utilities out of your own pocket which eventually affect the COC performance of the investment. 

I will vote for multi-family for getting my money leverage (OPM) from the bank with fixed terms as well as better financial safety net in case of vacancy and cost of maintenance.