Editorial: The unintended consequences that Portland isn’t tracking

Portland City Council always cautioned that it might have to revise the sweeping set of tenant protections it passed in 2019. The policies, which imposed new restrictions on how landlords can screen prospective tenants and handle security deposits, were billed at the time as the “most comprehensive screening criteria reform policy in the country.” While tenants cheered the changes, landlords decried the severe administrative burden posed by the new ordinance, which mandates such minutiae as recording the date and time that a landlord receives an application.

So, Portland City Council’s revisions last week to the “Fair Access in Renting” ordinance should not come as a surprise. The changes, adopted as part of an agreement to settle a lawsuit brought by landlords, include dropping an onerous requirement that landlords give new tenants a list of the depreciated value of every appliance or fixture in their units. While tenants needed greater protections on how much landlords can deduct from their security deposits, the solution offered by the city traded one unfair structure for another.

What should be a surprise, however? That the city, after adopting such untested reforms to manipulate a severely-stressed housing market, failed to conduct an analysis of how those reforms were playing out – even though the City Council specifically required such annual audits from the housing bureau. More than two years after these policies went into effect, the bureau has no assessment of whether these tenant protections have helped or harmed the rental market – either by reining in unscrupulous landlords or by chasing out mom-and-pop operators with overly burdensome requirements. Considering that Portland is in the seventh year of a city-declared housing emergency, such failure to monitor the effects of such aggressive policy changes is inexcusable ­­– and depressingly familiar.

Housing Bureau spokeswoman Martha Calhoon defended the lack of a review of the FAIR ordinance, saying that the bureau’s “current ability to report on the impacts of state or local landlord-tenant law is significantly limited. State and local law create the legal framework for private party to private party legal agreements around rental units, but there is no requirement to report these agreements or various landlord-tenant interactions to the City.”

This is a cop-out. Not only does the city have a rental registry, with landlord and unit information that can help inform surveys, but the fact that individual lease agreements aren’t reported to the city is simply irrelevant to whether a city should analyze the impact of policies in such a high-priority area as housing. The lack of access to individual rental agreements did not stop the city from taking action in the first place – nor should it. Ensuring that landlords are using fair criteria for evaluating tenants and returning security deposits is clearly a matter of public interest.

But the question of whether city policy is making a situation worse is also clearly a matter of public interest. In 2019, then City Commissioner Amanda Fritz cast the lone vote against the FAIR ordinance, noting her concerns about the unintended consequences of such increased burdens, as she heard from mom-and-pop landlords who were getting out of the rental business by selling to large firms or putting their homes on the market. Just two years earlier, the city had passed an ordinance requiring landlords to pay between $2,900 and $4,500 to tenants in “rent relocation” if they choose not to renew a lease – another protection believed to be a first-in-the-nation policy.

It may be easy to pass off such warnings or anecdotes as fearmongering. But that’s why further analysis is necessary – especially in a city in desperate need of keeping and growing its stock of rental units. Unfortunately, no one from the housing bureau was available for additional questions about how the audit fell by the wayside.

But the obligation for ensuring this follow-up also belongs to Mayor Ted Wheeler and City Commissioner Dan Ryan, both of whom oversaw the housing bureau at different stretches of the past three years. And it belongs to the council as a whole, which seems routinely unwilling to ask how well a city initiative is working.

The stark truth is that our housing crisis is not abating. While the city is content to ignore its responsibilities, an ECONorthwest study released earlier this year found that nearly 4,000 single-family homes in Portland have been taken off the rental market between 2015 and 2020 – a 14% reduction. While the rental market across the Portland metro area also lost single-family homes, Portland lost such units at twice the rate of the three-county region, the study found. And over the same time period, Portland only gained 450 multi-family units with three bedrooms or more.

Certainly, the hot real estate market, which has driven up the median price of homes in recent years, may explain some of the decline. But it’s also worth answering the question of how city regulations, such as rent relocation and the FAIR ordinance, may be playing a role in driving down the supply of rental homes. Unfortunately for Portland’s tenants, landlords and anyone in search of a saner housing market, the city can only shrug.

-The Oregonian/OregonLive Editorial Board

Disclosure: A member of the editorial board owns a rental unit in Portland.