) FAIR RENTS IN OUR FUTURE, OR IS IT ONLY CONDO WASTELANDT By Lenny Dee A housing emergency: the Department of Housing and Urban Development defines it as a rental vacancy rate below 5 percent. Here in Portland the rental vacancy rate hovers between 2 and 3 percent. And that’s not all. A recent study by the Northwest District Association shows that 44 percent of the people who move out of Northwest Portland do so because they can no longer afford the rents. Thirty-five hundred people in the city are on a waiting list for public housing. New construction in the metropolitan area is down 30 percent in the last year while interest rates for builders approach 20 percent and the price of a new house has increased 23 percent. We are in the throes of a crisis. Looking for a cause for the crisis is like trying to decipher the fate of Cambodia where a morass of factors— American bombing, the Vietnamese invasion, the cruelty of the country’s leadership—created the horrors we are now witnessing. Is Portland’s housing crisis the product of avaricious real estate speculators stoking the inflationary stove? Is it the result of the government's middle-class bias which denies that any problem exists? Or is it the fault of renters themselves who comprise 45 percent of the population and yet have never organized to any significant degree? Local government's role in the crisis is a curious one. There is some question about that role in the displacement of poor people on the city’s west side. The housing program manager for the Office of Planning and Development, Bruce Martin, callously describes this displacement as the natural play of market forces that has occurred throughout history as the rich have chosen the most desirable places to live. Others concerned with housing policy suggest that city government has abetted this “natural play” with a variation of redlining policy by which certain areas are open to middle-class development at the expense of other, poorer areas. One source claimed that the Office of Planning and Development used to feature a colored wall map of Portland. Shaded yellow were the Northwest, Corbett and Irvington, areas inundated with PDC money and in which $100,000 is now cheap for a used house. In orange were Sunnyside, Buckman and Richmond, areas which are targeted by the PDC for upgrading (with outrageous market values sure to follow). Finally there was a red portion: Albina, inner Northeast and Lents, all areas too poor to be helped to middle-class stability. The dream of home ownership is fading fast for a large portion of our population. Dick Kusick, of the Metropolitan Human Relations Committee, reports that only 5 percent of Portland’s 170,000 renters will be able to afford to move up to their own median-priced homes in 1979. Furthermore, there are fewer existing one- and two-person rental units than there are one- and two-person households. If you think that building more multifamily dwellings is a likely solution, you should talk to Burton Weast of the Home Builders Association. Mr. Weast pointed out that builders are unable to borrow money because of pressures on trad itional lending sources: savings banks. Because of the three-headed monster called inflation, people are no longer putting their money into savings accounts so banks have no money to loan. President Carter’s raising of the interest rates has put the cost of borrowing at close to 20 percent. Top this off with spiraling costs in all areas, and it is no wonder that new construction is off so much. Mr. Weast suggests that the government should subsidize loans to where builders are paying only 8 percent and would then find it advantageous to build low-income multifamily dwellings. The alternative, he predicts, is that ticky-tacky developments will be the wave of the future. No one knows the extent of the housing crisis better than renters. By federal standa rds, 21,153 renter households were “ in need”—paying over 25 percent of their incomes for housing—in 1978. Fifteen percent of Po r tland ’s housing stock —27,000 units—do not meet minimum housing codes. Public housing has a waiting list of over thirty-five hundred people and, while welfare runs a section eight program to subsidize families wishing to rent homes, the waiting list is open only two days a year. One significant step is being taken to alleviate the crisis, and it is being promoted by an organization of renters, the Portland Housing Coalition. Their idea for relief—for all concerned: renters, landlords and builders alike—is the Fair Rents Ordinance, which the Coalition would like to see included in Portland’s comprehensive planning. The Ordinance establishes a five-person board which would be appointed by the city council and would include two tenants, two landlords and an impartial third party. The duties of the board would be to oversee all rent increases and disputes over maintenance, evictions and any other landlord-tenant disagreements. Exempted from the Ordinance would be new construction, owner-occupied dwellings of three or less units, plus hotels, motels and dormitories. Basically, the Ordinance freezes rents on the day of its implementation. Increases cannot exceed one-half of the Consumer Price Index for the year, a reasonable amount since many of a landlord’s costs are fixed. Any increase in excess of this amount would be handled through the board after the landlord filed for an individual rental adjustment hearing. Tenants could contest an increase; however, the board would assess how fair the return on the landlord’s investment is, based on several factors: operating costs, property taxes, the condition of the property and so forth. Demolition of existing rental property or its conversion to non-residentia) use would also come under the purview of the Ordinance. No property could be removed from the rental market unless the board certified that it was vacant and unhabitable, or that it would be replaced with similar units affordable by low- and moderateincome people. If a landlord wished to convert a controlled-rental unit to condominiums, a permit would be required from the board. In making its decision, the board would have to consider, among other things, the income of the tenants in the existing unit, the investment return to the landlord on the unit, and how the conversion would affect the supply of rental housing available in the city. Under such a plan, it is likely that the condo fever that has ravaged Seattle and San Francisco would bypass Portland. Portland’s housing crisis makes the implementation of a Fair Rents Ordinance imperative. It provides rent control protection, leaves room for adequate return on investment, and encourages new construction. Visionary leadership at City Hall would include such an ordinance in Portland’s twenty-year comprehensive plan or risk sacrificing the city to the “natural play” of the rich, the developers and their pals in city government. A pricy, tacky playland is the last thing Portlanders want their city to become. The growing clamor over Portland’s OPEN Weekdays 11-6 Saturday 1-6 AVALON ANTIQUES S.E. 37TH &HAWTHORNE 235-4896 CASH FOR RECORDS BIRD'S SUITE RECORDS 720 S.W. SALMON ST. 3736 S.E. HAWTHORNE 222-3086 235-6224 10
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