The Coronavirus pandemic has created a significant housing crisis across Oregon. In a recent study conducted by Portland State University, researchers estimated that approximately 89,000 Oregon households owed back rent. In September 2020, a separate report commissioned by the National Council of State Housing Finance Agencies “estimated that Oregon renters would miss between $249 million and $378 million in rent payments by January. Not only is this a terrible situation for tenants, but it also creates a significant burden for landlords.
Oregon’s eviction moratorium, along with other rent control laws passed by city and country governments, left many local landlords with few options to recover lost rent or recoup their investment costs. As a result, landlords have been subsidizing rent relief across the state since the pandemic began more than a year ago. Without significant help from the state, many feared the situation would grow progressively worse. And that would put both landlords and tenants in an increasingly perilous situation.
Oregon lawmakers finally heard these please for help. Late last year they passed HB 4401, which offered some relief to struggling landlords. The bill created a $150 million compensation fund that would pay landlords for lost rent. Property owners and managers could begin applying for the initial $50 million in compensation funds in mid-February. However, they needed to jump through several hoops before they could receive their money.
A Complicated Program
As part of the program, lawmakers created a scoring system to prioritize landlords with the greatest need. The program calculates applicant scores based on several qualifying factors, including the number of units owned and the percentage of rent tenants have paid. Landlords also needed to collect from struggling tenants a Declaration of Financial Hardship for Eviction Protection form and provide them to the state along with other critical documents like:
- Rent rolls, including all rent amounts collected and owed, from April 1st, 2020, through the application date.
- Tenant names and contact information for current tenants with past-due rent.
- IRS form W-9 to verify ownership.
- The number of units owned.
- Percent of rent owed for all rentals since April 1st, 2020.
Once landlords collected the necessary information, the state required them to upload their packet to an online application portal. The portal opened in mid-February, and landlords had until Match 5th to complete their applications for the initial $50 million in compensation funds. Application windows will reopen each month until the eviction moratorium ends in July 2021.
Landlords who accept compensation fund payments must agree to a few key provisions. Fund payments would cover 80% of a tenant’s back rent. However, they would not apply to utilities, damage, security deposits, or other fees related to rental costs. In return for accepting an 80% payment, landlords must also agree to forgive the tenant’s remaining debt. While the funds would not make property owners whole, something is certainly better than nothing.
Landlord Compensation Fund Update
When the online portal opened, many landlords rushed to submit their applications to receive first-round payments. While many landlords completed their applications successfully, others encountered technical problems and system glitches. A few landlords had difficulty navigating the online application process. In response, Oregon Housing and Community Services (OHCS), which is administering the Landlord Compensation Fund, announced that it would still consider all first-round applicants who encountered technical difficulties.
OHCS is now working to process applications while reaching out to applicants to verify submission data and request additional required information. In the meantime, OHCS will move the application portal into maintenance mode until the next application window opens in April and an additional $50 million in landlord assistance funds become available. Anyone who didn’t apply for the first round will still have an opportunity to submit in April for unpaid rents from tenants with financial hardships since April 2020.
Landlord Compensation Fund: By the Numbers
In its update, OHCS also provided information on the number of first-round applications the organization received:
- 2,500 property owners have submitted applications.
- 2,000 property managers have applied on behalf of owners.
- Property owners and managers have included rent for 7,000 tenants in their applications.
These numbers will likely increase as OHCS processes more first-round applications. It’s also unclear how many landlords were unable to submit their applications due to technical problems. OHCS has yet to announce how much of the $50 million it will award to first-round applicants.
We’re Working with Our Landlords
The team at Rent Portland Homes by Darla Andrew has been monitoring these changes as lawmakers continue responding to the Coronavirus crisis. We’re also working closely with our property managers to learn the ins and outs of the Landlord Compensation Fund and to process applications promptly. These program requirements are challenging for many property owners to manage. Fortunately, our extensive documentation practices make this process easier and save our clients many frustrating hours of work.
We don’t know everything in store for Portland property managers and owners in the coming year. Hopefully, the state’s compensation fund will make a difficult situation easier for both tenants and landlords. We’ll continue to monitor the program and provide updates when necessary. If you have questions about the state’s eviction moratorium policy, the landlord compensation fund, or our property management services, please contact Darla directly at (503) 515-3170 or fill out the contact form on our website.