By Dani Romero

From Yahoo Finance

The for-rent housing market is starting to come down, with rent growth dropping in recent months.

“After four quarters of supply additions outpacing demand, the market is shifting with national asking rents declining over the last 90 days by 0.4%,” Jay Lybik, National Director of Multifamily Analytics, CoStar Group, stated in a press release.

CoStar Group Inc., through its Apartments.com platform, found rents declined 0.4% between August and September as the U.S. median rental price declined from $1,641 in August to $1,634 last month.

“We’ve just hit a very significant point in the current multi-family cycle,” Lybik told Yahoo Finance in a phone interview. “We have now seen rents decline quarter over quarter by $7, comparing the second quarter of 2022 to the third quarter of 2022. That’s a significant change in what we were seeing just even six months ago.”

On an annual basis, asking rents remained at 5.8% through September, the latest deceleration in rent growth after the market hit its peak earlier this year.

The same report also found that the national vacancy rose 5.4% at the end of September as the pace of newly delivered units nearly doubled to 120,000 units, signaling a shift in market conditions from just a year ago when demand significantly outpaced supply.

“This is the fourth quarter in a row in which new supply additions just significantly outpaced the demand. We’re still seeing a lack of cluster demand and the new supply is not getting absorbed. It’s putting upward pressure on the vacancy rate,” Lybik said.

As a result, landlords are “really desperate” to get tenants to occupy their units, Lybik explained, which is leading to rents nationally declining on a nominal basis as more tenants stay in their current apartments.

“The uncertainty in the economy right now has put so many potential households holding off making that decision about going out and renting an apartment, and they’re just continuing to stay to sit pat in whatever their current situation is,” Lybik said.

Rents are an important measure of inflation given their outsize share in most household budgets. Housing comprises about 30% of the headline consumer price index, and about 40% of the core index.

The consumer price index posted an annual rate of 8.3% in August, the highest figure in nearly 40 years, the Labor Department said, as shelter costs rose 0.7%.

“Market rents are cooling,” Realtor.com Chief Economist Danielle Hale told Yahoo Finance in a phone interview. “The growth rate is cooling.”

At the same time, given the surge in rents last year, many tenants are still paying relatively high amounts each month in their current leases.

“Sadly, there’s not a lot of relief on the horizon,” Hale added. “On a month to month basis, rents are coming down. They tend to do that in the fall. So there is a little bit of a seasonal relief this year.”

By Everton Bailey Jr.

From The Oregonian

Portland landlords must pay to move residential tenants who can’t afford any rent increase after the City Council unanimously agreed Wednesday to temporarily modify its renter relocation assistance policy.

The rule goes into effect immediately and applies to any rent increase between September and March 31, 2021. Tenants must provide written notice they can’t afford the higher rate and will need to move.

The previous policy applied only to rent increases of 10% or more. The rule calls for landlords to pay between $2,900 to $4,500 to help tenants move. The City Council plans to discuss later this year whether to keep the temporary revision through March or extend it further.

Portland requires landlords to give tenants at least 90 days’ notice of any rent increase. With the new rules, city leaders said landlords will have the option to rescind any September rent increase and refund any increased rent paid by the tenant. To qualify, tenants must provide written notice that they need assistance either 45 days after being given notice of the rent increase or until Sept. 30, whichever period is longer.

The proposal was announced by Mayor Ted Wheeler last week and the policy change was crafted by members of his office and the Portland Housing Bureau. He said it was necessary to help keep renters in their homes amid the coronavirus pandemic as the statewide eviction moratorium is slated to end Sept. 30.

If the deadline on the moratorium isn’t extended, March 31 marks the end of the six-month grace period for Oregonians to pay all of their outstanding rental payments. Wheeler and other council members acknowledged the new rule could further burden landlords and that even this provision and rent assistance funds from the city won’t be enough to more fully address issues faced by tenants and landlords without more significant state and federal aid.

“I want to be crystal clear about this. We aren’t saving anybody,” Wheeler said. “We’re temporarily suspending the coming eviction tidal wave and the potential loss of local building owners and landlords.”

Rent increases disproportionally impact households of color, city officials said. According to city data of around 264,000 Portland households, 47% are renters and the other 53% are homeowners. But 43% of white households in the Portland area are renters while as many as 74% of Black households rent.

Commissioner Chloe Eudaly, who was the architect behind the original relocation assistance policy, said she was disappointed rent and mortgage forgiveness programs haven’t caught traction among state and federal legislators. She said she felt the city had to prioritize more vulnerable Portlanders, noting that renters typically have fewer financial resources than landlords and rent increases without the option of relocation assistance would be “a recipe for displacement.”

“I want to assert that in this moment of crisis, when we know that half of our renters were cost-burdened before COVID, we can’t balance landlord housing pressures on the backs of renters,” Eudaly said.

She also noted that the rule change doesn’t ban landlords from raising rent and that increases can still take place in the city for tenants who can afford it.

There was no public testimony on the proposal before the City Council vote. Wednesday marked the first City Council meeting with five members as Commissioner Dan Ryan took part. He was sworn in last week.

Ryan was elected last month to serve the remaining two years on the term of late Commissioner Nick Fish, who died in January of cancer.

By Liza Ramrayka

From HuffPost

Cincinnati native and resident Jeneya Lawrence dreams of living in a house with a garden big enough to fit a trampoline for her two young children, on a street with neighbors from diverse communities.

The 28-year-old community health worker and single mom is determined to stay in Cincinnati, near family and friends, despite gentrification and seeing average rents double over the past decade. When Lawrence found a rental unit earlier this year with separate bedrooms for her 12-year-old son and 9-year-old daughter, close to good schools and her work, she couldn’t believe her luck. Then the landlord asked for a $1,300 security deposit in advance.

“I just did not have that. I asked him if I could split it over two payments but he said no,” explained Lawrence, who then had to wait another six months to find a rental in a less-convenient location where she could afford the deposit.

Lawrence’s story is a familiar one for many lower-income renters across the U.S., who have found it increasingly difficult to find homes as the housing crisis tightens its grip on cities across the country.

But Cincinnati is trying to do something to ease the burden. In April this year, it became the first city in the U.S. to require landlords to accept alternatives to a security deposit. Cincinnati’s bold move has been hailed as a way to disrupt a broken system for renters. Other cities and states are now also offering deposit alternatives to make housing more accessible to low-income renters.

The new program, dubbed “renters’ choice,” came into effect too late for Lawrence to benefit from it when she was last looking to move. But she hopes it will make it easier for her and other lower-income renters to find homes in the future.

The program could also level the playing field for the city’s homeless population, said Kevin Finn, president and CEO of Strategies To End Homelessness.

“On any given day, we have 200 families that have a first month’s rent but they still can’t find an apartment,” he said. “Having a more realistic arrangement for what the deposit looks like will make it much easier to get those households into an apartment.”

Homelessness in Cincinnati disproportionately affects the city’s Black community (62% of the homeless population) and people under the age of 35 (55% of the homeless population). And the number of unhoused people is expected to increase this year and next due to the effects of COVID-19 on job losses and evictions.

Even before COVID-19 hit the U.S., millions of low-income renters were struggling. Nationwide, there should be at least 7 million more homes for those who earn the least. “For every 10 of the lowest-income renters, there are fewer than four apartments that are affordable and available to them,” Diane Yentel, president and CEO at the National Low Income Housing Coalition, told HuffPost.

The pandemic has exacerbated the situation. More than 40% of low- and moderate-income households in the U.S. said they had no emergency savings, while over 12% would not be able to pay for a $400 emergency expense, according to an April survey published by Brookings.

The Coronavirus Aid, Relief and Economic Security (CARES) Act, passed in March, added a weekly $600 federal supplement to unemployment payments and implemented a federal eviction moratorium. But both provisions expired in July.

More than 1 in 5 renters were behind on payments in July, and widespread evictions are expected unless states extend moratoriums or introduce rental assistance. The replacement lost wages benefit ― reliant on joint funding with states ― offers claimants a maximum $400 a week.

Cincinnati resident Seth Weber lost his job in March when the restaurant he worked at was shuttered due to COVID-19. He got work at a bakery — but the bakery burned down in August. He’ll be counting on unemployment benefits to make his monthly rent of $700. But Cincinnati is looking at an eviction crisis, and he’s aware that this fate could be just around the corner for him.

“That’s the worst thing a tenant can face,” said Weber, a volunteer for Cincinnati Tenants’ Union. “Once you have an eviction on your record, you’re only going to be able to get into substandard housing.”

Many renters avoid getting an eviction on their records by downgrading their housing ― perhaps moving from a two-bedroom to a one-bedroom ― but doing so requires having enough money saved to put down a security deposit. “The new legislation will help them be able to get into less-expensive housing and avoid getting an eviction on their record,” said Finn.

The new legislation could come in handy if Weber has to move soon to avoid eviction.

Councilmember P.G. Sittenfeld (D) introduced the legislation last November after reaching out to local tenants and landlords to address the city’s need for more affordable homes. He says renters’ choice will give low-income renters greater access to housing in a city where median household monthly income is around $2,800, and a two- or three-bedroom apartment can cost $1,000 or more.

“The ‘north star’ for me throughout the crafting of this legislation was how can we remove an upfront barrier that is the traditional, steep, cash security deposit?” he said. “And can we replace it with something that lets people get into the housing they desire, while also still giving landlords the protection they need?”

For many people, especially those on limited incomes, it has long been all but impossible to find the cash for security deposits — often, one or even two months’ rent — that landlords require upfront but which aren’t covered by a tenant’s Section 8 housing support voucher.

“When you have such limited income, any extra expense ― such as security deposits or requirements to pay the first and last month’s rent upfront ― can be an insurmountable hurdle to finding an apartment you can afford,” said Yentel.

Cincinnati’s renters’ choice legislation applies to all landlords with 25 units or more and offers three options: an insurance premium, in which the tenant pays a small monthly, nonrefundable fee instead of an upfront deposit; an installment plan to spread the deposit equally over six months (or more if the landlord agrees); or a reduced security deposit, paid upfront, of no more than half the monthly rent.

Sittenfeld says security deposit insurance could mean a tenant paying just $5 a month to protect the landlord against damages or rent default, instead of a $1,000 security deposit. “I don’t pay $100,000 a year in health insurance premiums anticipating that I’m going to have a catastrophic heart attack. You pay a little bit each month, then it’s pooled risk.”

The “ongoing economic repercussions” of the pandemic — with thousands out of work or underemployed — only serve to highlight the need for renters’ choice legislation in Cincinnati, and across the country, says Sittenfeld.

Elected officials, nonprofits, and landlord groups are collaborating to publicize the new rules. “While it is still early on, we’re optimistic that the legislation will be successful in ensuring renters have the ability to secure an apartment without a large upfront cash security deposit,” said Sittenfeld, “and look forward to seeing the legislation expand across the country to help renters in cities large and small.”

Cincinnati’s legislation is part of a wider movement to disrupt what is arguably an outdated system, particularly where low-income housing is scarce.

New legislation in Virginia allows landlords to accept damage insurance in lieu of a security deposit. In Pennsylvania, a proposed amendment would require landlords to offer security deposit alternatives such as installment payments or insurance. (Both laws cap the sum of deposits and insurance at two months’ rent.) Representatives from several other cities and states including Alabama and North Carolina have committed to introducing renters’ choice legislation.

In 2019, New York state passed a law to cap security deposits to one month’s rent and require deposit return within 14 days. In March of this year, New York Gov. Andrew Cuomo’s pandemic-related executive order required landlords to allow certain tenants to use their security deposits to pay rent that is in arrears or due and to replenish the security deposit over time or “retain insurance that provides relief for the landlord in lieu of the monthly security deposit replenishment.”

Some landlords argue that an insurance-based system would create more problems since they’d have to extract funds from an insurer rather than having cash in hand to make any repairs necessary at the end of the lease. Charles Tassell, chief operating officer of the National Real Estate Investors Association, commented recently: “I’ve got to deal with an insurance claim and get my attorneys involved. And they’ve got their high-priced attorneys in-house.”

And others warn that over a year or more, the total paid in nonrefundable insurance premiums could exceed the upfront security deposit and that renters may be unaware that such insurance does not cover them against damages or repairs that exceed the policy’s coverage.

Weber worries that because the policy only applies to landlords with more than 25 units, it limits choices for tenants.

Finn adds that while tenants are learning of their options from housing nonprofits, landlords may still be in the dark, so cities and states need to do more to educate them about their new responsibilities.

Yentel says alternatives to security deposits provide creative and much-needed additional assistance to get families into homes. However, she argues that there is an urgent need to tackle the underlying issues contributing to the housing crisis. Solutions include more sustained, substantial federal investment in the Section 8 voucher program so all those in need receive help, and building more housing for low-income people through programs such as the National Housing Trust Fund.

In Cincinnati, where there is a 40,000-unit housing deficit, the city is hoping to help low-income renters with several new building projects. These include the Willkommen and Perseverance developments supported by the nonprofit Cincinnati Center City Development Corporation, which is working in partnership with the city to set aside 101 affordable rental units for those making 50-80% of the Cincinnati area median income.

Lawrence — who is still seeking out a rental that checks all the boxes — is optimistic that Cincinnati’s recent renters’ choice legislation will offer renters like her access to homes like these next time they need to move.

“I’m happy that we can pick where we want to stay but also have three options on the money side,” she said. “This time, I will look at places where I have the stores I need, the schools convenient for my children. As long as property owners are open-minded and not money-hungry, it won’t be hard.”

By Becca Savransky, SeattlePI, Wednesday, May 6, 2020

Seattle City Council this week passed a bill offering more protections to prevent tenants unable to pay their rent from being evicted after the city and statewide eviction moratoriums are lifted.

The bill — passed in a 9-0 vote by the council — gives tenants a defense to use in eviction proceedings relating to not being able to pay rent for six months after Seattle’s moratorium on residential evictions is lifted. The moratorium is currently in effect through June 4. The bill is aimed at helping to keep the thousands of people impacted by the spread of the novel coronavirus safely housed.

“This legislation before us today can help people stay housed and that is the bottom line,” Council President M. Lorena González said during a council meeting.

The bill expands on the city’s just cause eviction ordinance, creating an addition tool a tenant can use in eviction court proceedings. The eviction defense applies to tenants who have been financially impacted by the pandemic and have therefore been unable to pay their rent.

“What we are doing is we are enhancing existing landlord and tenant laws to benefit tenants who are going to need additional time to get their feet grounded and to be able to continue to dig out of this economic crisis,” González said.

Under the bill, landlords can still take actions associated with evictions, but tenants can use this as a defense in court. Tenants will also still accrue debt and will be expected to pay the rent that is owed.

“Providing a defense to eviction for certain causes is necessary as an additional step to protect public health to support stable housing, decrease the likelihood that individuals and families will fall into homelessness, and decrease exposure while the COVID-19 emergency exists,” the legislation said.

Councilmember Andrew Lewis said rent relief continues to be a priority for the city, but there are hundreds of thousands of people across the state who are unemployed and need help during this crisis.

“As one of the two renters on the council, I think it’s critical that we extend protection to renters in this time to make sure that we can keep people inside, especially in a time of uncertainty, in addition to public health threats,” he said during a council meeting.

“We are in a period of immense and extreme uncertainty regarding how people are going to immediately make their rent and it puts a lot of Washingtonians in a position where, while they could ordinarily be able to pay their rent on time, it might take some folks a little bit more time to do it.”

During the council meeting, council members acknowledged this is just one piece of the relief people need due to the coronavirus outbreak. Rent assistance, along with more affordable housing, is still desperately needed in the city and across the county.

The novel coronavirus outbreak has led to thousands of people across the region losing their jobs. Without a steady income, workers have struggled to pay for rent and other basic expenses. More than half a million people across Washington have applied for unemployment benefits since the pandemic started.

In March, Seattle Mayor Jenny Durkan issued an emergency order to temporarily stop evictions in Seattle for residents, nonprofits and some small businesses. Gov. Jay Inslee shortly after issued a statewide moratorium on evictions for people who weren’t able to pay rent. In April, he extended the moratorium through June 4. But under the eviction moratorium, people will still accrue debt and are expected to pay the rent owed after the moratorium is lifted.

Several nonprofits have rental assistance programs in place to help people pay their rent and avoid eviction, but with a growing need, those programs have been overwhelmed.

United Way of King County last month launched an expanded rental assistance program with a $5 million investment to help people behind on their April rent. Within days, the program had thousands more applications than it had the funds to serve.

Last week, Inslee announced he was extending the state’s stay-at-home order through May 31 and would continue with a phased approach to reopening the economy. The state’s plan means many people will likely be out of work for some time longer, as industries gradually reopen at limited capacities over the next several months.

Inslee has also warned if the state sees another jump in cases and hospitalization, restrictions could be put back into place. The most recent data from the Washington State Department of Health shows more than 15,000 confirmed cases of the virus

The rent is just too darn high in these U.S. cities

By Adriana Belmonte,Yahoo Money

The cost of rent in the U.S., particularly in certain metro areas, is too darn high.

Nearly half of U.S. rental households are spending more than the recommended 30% of their income on rent, according to a report from Apartment List. (The national rate went from 49.5% in 2017 to 49.7% in 2018.)

And according to Apartment List, “in 19 of the nation’s 25 largest metros, a household earning the median renter income would be cost-burdened by the median rent. Of the 100 largest metros, the median renter would be burdened in 64 metros.”

Among the biggest metros in the U.S., Miami has the highest cost burden rate at 62.7% — this means that 62.7% of its renters are spending more than the recommended 30% on rent. Not far behind is New Orleans at 60.1% The two largest metros in the U.S. by population, New York and Los Angeles, are at 52.2% and 56.9% respectively. Given their size, NYC and LA house the highest number of cost-burdened individuals.

“Certainly, the worst offenders — places like Los Angeles, Boston, San Diego, Miami — these are places where it’s not always easy to build as many houses as you’d like, but also their economies have been very strong, so the increases in rental [costs] become an unfortunate byproduct of that,” Igor Popov, chief economist at Apartment List, told Yahoo Finance.

By state, Florida has the highest cost burden rate at 56.5%. Other high cost-burdened states include New York, New Jersey, California, Colorado, Louisiana, and Connecticut — notably places along the coasts.

“We’re seeing that especially coastal cities — where adding new housing is difficult but economies are booming — those are the places where affordability issues are stacking up the most,” Popov said. “With that said, it is a national problem so even cities that aren’t necessarily in the housing affordability debate every day still have a lot of renters who are struggling.”

Because of high rents in many of these cities, residents often turn to surrounding areas to reside for more financially feasible places to live. This is the case of Riverside, Calif., a city near Los Angeles, where the median rent accounts for approximately 36% of a person’s income.

“Riverside is actually seeing a lot of people who are migrating from the LA metro in search of more affordable options, but that demand is, in turn, driving up the price there as well,” Popov said.

‘I guess we went in the wrong direction’

Supply and demand wasn’t the only factor that affected the increase in rent-burdened households last year. Rental increases also outpaced wage growth in 2018, the first time since 2011.

“There’s a lot of factors for why that might be but on a very macro level, I think this economic expansion has been one that hasn’t [benefited] low-income households very well,” Popov said. “That shift was a bit surprising especially given that … we’ve seen a lot of high-income renters flooding in the rental market. In some ways, they’ve been padding the stats, so to speak, because they’ve come in and they’ve typically been able to afford their rentals, so they’ve made it look like things are getting better but this year, I guess we went in the wrong direction.”

From 2017 to 2018, there were nearly 300,000 more cost-burdened rental households throughout the U.S., which Popov described as “a big change in the number of people that have gone from being able to afford their housing to technically living in a place that they’re unable to afford.”

“You risk them moving away and that could both affect the economy and the economic diversity of a city when the renters move away, and you risk not being able to attract talent to grow the economy, and you risk not having basically that next generation being able to come and move to the city to keep it vibrant,” Popov said. “I think of this on a city-by-city basis and on that level, there are a lot of markets where maybe the flag isn’t being raised for the first time — maybe it’s been raised for a while.”

Bucking the luxury housing trend, $500M in new apartments designed to help Seattle’s shrinking middle class

Renters Now Rule Half of U.S. Cities

Patrick Clark Thu, Mar 23 2:00 AM PDT

“Today’s vote is a significant step towards increasing fair access to rental housing,” said Councilmember Lisa Herbold. According to Seattle’s Renting Crisis Report from the Washington Community Action Network, “48% of individuals who pay for rent with Social Security Disability Insurance or Social Security retirement income said that discrimination prevents them from having successful rental applications.”

Councilmember Kshama Sawant said, “The movement of tenants in Seattle continues to win victories toward a full-fledged Tenants’ Bill of Rights. Thank you to Councilmember Herbold and tenant activists for this important protection against housing discrimination.”

Councilmember Mike O’Brien applauded the bill. “We are living through a housing affordability crisis. It’s essential to protect low-income renters from being displaced. Today’s legislation is directly based on what we heard from communities most impacted by discriminatory landlord practices.”

Sponsored by Councilmember Herbold, the Source of Income Discrimination legislation was unanimously voted out of the Civil Rights, Utilities, Economic Development and Arts Committee. Currently it is illegal to discriminate against a prospective renter whose primary source of income is a Section 8 voucher.  This bill expands the legally protected classes to include alternate sources of income such as a pension, Social Security, unemployment, child support or any other governmental or non-profit subsidy.

The Committee discussed the bill on May 24 and June 14. In light of these discussions, the legislation was amended to add further protections:

1. First-Come, First-Served Screening Practice

Prevents housing providers from giving applicants with alternative sources of income a lower priority. It requires landlords to review applications one at a time, on a first-come, first-served basis.

2. New Eviction Protections

Ensures that tenants can fully utilize community resources to prevent eviction. Landlords will be required to accept pledges from community-based organizations to remedy nonpayment of rent if funds are received within 5 days of an eviction notice.

3. Preferred Employer Programs Banned

Encourages landlords to offer non-discriminatory move-in incentives. In 2015, both media and community members reported discounts on deposits and other move-in fees for rental applicants working for preferred employers. The Seattle Office of Civil Rights recently concluded that some preferred employer programs that provide discounts or other terms and conditions in rental housing to certain groups over others may constitute discrimination under Seattle’s Open Housing Ordinance (SMC 14.08).