Oregon's rental crisis strains renters, potential homeowners

The ceiling of the bathroom in Keith and Lee Anne Troutman 's Stayton apartment is sagging and cracked. The linoleum on the floor curls up, and the two-bedroom unit is so lacking in insulation that the monthly heating bill typically tops $400.

The Westown Manor apartments are not without their problems, but at least it's been a roof over their heads for the past five years. It won't be for long.

On Feb. 1, the Troutmans and their neighbors at the 15-unit complex were served eviction notices, ordering them to be out by April 1. If he and his wife don't find a new apartment by that deadline, Keith said, they don't know what they'll do.

"I'll be homeless," he said. "I don't have nowhere else to go."

The Troutmans are among thousands of Oregonians affected by rising rents and a shortage of affordable homes and apartments. The Salem area, long seen as the more affordable, less-cool cousin of Portland, is not exempt from the housing crisis.

Despite the addition of 320 new units in Salem, the apartment market remained "very tight," with a vacancy rate of 2.7 percent, according to a 2016 comprehensive market analysis by the U.S. Department of Housing and Urban Development.

According to data from Zillow, the current median rent is Salem $1,350 per month. It's well below the average Portland rent of $1,890 but still hundreds of dollars more than previous years. In 2010, a one-bedroom apartment cost about $693. By 2017, the average rent for a one-bedroom was up to $1,044 — a more than 50 percent increase, according to Zillow.

A commute, a roommate, and a garage?

The steep rental market is making it difficult for many young couples and college students to make it on their own.

When Kristin Eck , 20, a student at Western Oregon University, got married, she and her husband combed Salem for an affordable house, but her age and time living in college dorms made it impossible to provide a three-year rental history. Landlords are less willing to take a chance on younger students and millennials, she said. She and her husband resigned themselves to staying in Monmouth, where there's less selection but cheaper rents. They're paying $740 in rent for an apartment, and he's commuting to Salem for work.

Taylor Cheek and her boyfriend, both college students, struggled to keep their grades up and work enough hours to pay rent. She said she didn't always feel safe at their old apartment near State Street and 25th Street SE in Salem. People would knock on their doors at odd hours, and drug deals were commonplace, but at least they were able to afford the $465 rent. Over the years, their rent increased only slightly until they got a note stating rent would go up to about $725.

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The couple searched fruitlessly for a more affordable home and even made arrangements to live without heat in a friend's garage. Thankfully, she said, they found a nice, safer apartment in West Salem and a roommate to share the costs with. 

"But not a day goes by where I don't think about how lucky we are to have found this place, because we would have been in for a very long, cold winter if we had to spend it in a garage," she said.

At the Capitol

Oregon’s housing crisis has been years in the making, House Speaker Tina Kotek said.

“We didn’t build enough in the Great Recession and people keep moving to Oregon,” Kotek, D-Portland, said in a recent speech. It’s “a shortage not of any group’s making or intent, but one that is nonetheless harming real people’s lives every day.”

Lawmakers heard from many of those people earlier this month during a hearing on a bill that would repeal a statewide ban on rent control and prohibit no-cause evictions.

“We are getting jacked up by high unaffordable rents, in many cases our homes are crummy bug/mold infested housing,” said Deborah Olson of Gresham.

Oregon’s state economist estimates that across the state, 111,000 units would need to be built this year to make up the deficit of the past 10 years and keep up with the demand of new residents.

That’s six times the number of units that were built in 2016.

Kotek said she, along with many of her colleagues, are committed to addressing the crisis this legislative session.

That means preserving existing affordable housing stock; building more affordable and market-rate units; and protecting tenants who are experiencing immediate hardships.

At least a half-dozen tenant protection bills already are in committee. In addition to removing the statewide rent control ban and prohibiting no-cause evictions, they also propose capping rent increases statewide at 5 percent through July 1, 2018.

That’s not “old school” rent control that established hard ceilings on the amount of rent, Kotek said. Instead, it would regulate the amount and speed at which rents can be increased.

Additional legislation is targeted to improve home ownership, including a controversial bill that would revise the state’s mortgage interest deduction and use the savings for home ownership programs.

“If people can’t move from rentals to home ownership, if you have the ability to do that financially, that delay in getting into home ownership is also gumming up the rental market,” Kotek said.

And lawmakers will soon consider legislation that seeks to improve the housing supply.

Despite Oregon’s budget crisis, Kotek also hopes to find more money for affordable housing.

That would include $100 million for preservation; $50 million for emergency housing and shelter assistance; and $100 million for LIFT, a new affordable housing program that uses state bonding to finance construction of housing for low-income households.

Closer to home

"Housing affordability affects both higher- and lower-income households and is an important issue for Salem and the region," began a 2015 housing analysis for the city of Salem.

Much of the data used in the analysis dates back to 2012. Even then, the numbers hinted at a looming rental crisis. Salem had a lower share of homeowners than the state, and more than half of renters were "cost-burdened," meaning they spent more than 30 percent on their income on housing.

Not enough land was available for multi-family housing, leading to a projected deficit of 2,900 units if the population continues to grow and no new land is rezoned, according to the report.

Since the report, officials have been working to develop more apartments within the city and constructing affordable housing, said city spokesman Kenny Larson.

Salem City Council adopted a five-year, three-phase work plan in 2016, and city staff are in the midst of the first phase: allowing accessory dwelling units and permitting more multifamily housing in single-family zones.

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In January, the city announced the development of a 180-unit affordable housing complex on Portland Road NE. Larson said the apartments are expected to open in fall 2018. 

About 3,500 people are currently housed with help from the Salem Housing Authority, and demand is growing. The wait list for housing assistance is about three years long.

Since 2015, the city's planning division has approved more than 1,200 new apartment units, which are in various stages of permitting, construction and completion.

Projects are currently underway to make it easier to develop more multifamily housing in downtown near State Street and along Wallace Road NW in West Salem, Larson said.

Changes concern landlords

A proposed bill in the legislature barring landlords from evicting tenants without cause concerns Mark Bidwell, the landlord of a four-plex in South Salem and a 27-unit apartment complex in Keizer.

On Tuesday, he was rehabilitating one of the units. One of the tenants had recently been evicted, and the carpet was destroyed, and the whole interior needed repainting. He said he usually spends about $300 to spruce up homes between tenants. This one would probably cost $2,000.

What many people misunderstand about no-cause evictions is how useful they can be in addressing safety and livability concerns, Bidwell said. He received repeated complaints about one unit at the Keizer complex. Several people were living in the apartment and trafficking in and out of it into the early morning hours.

"(The tenants) were particularly menacing towards other neighbors," he said.

Many residents pulled him aside and spoke in hushed tones about the issues, afraid of being retaliated against. A for-cause eviction would have required the neighbors to testify before a trial. Bidwell said it could be uncomfortable and potentially unsafe for the intimidated neighbors. Using a no-cause eviction, he was able to get the disruptive tenants to move out. They left behind a mess and two cats, he added. As Bidwell was rehabbing the unit, he said one of the neighbors stopped by and thanked him profusely for "making the neighborhood a neighborhood again."

A for-cause eviction goes on a tenant's rental history and can be much more damaging. A no-cause eviction does not add an eviction judgment against them.

Proposed legislation could remove that helpful tool for keeping neighborhoods safe, he said. Bidwell, a Salem resident since the 1970s, said many smaller complexes are like his — locally and family owned. Landlords want to keep their property occupied. He increases rent gradually as gas, taxes, water rates and sewer rates go up, and he keeps money on hand to provide emergency repairs and appliance replacement.

James Priddy, the owner of six rental homes in the Salem area and a landlord since 1987, said he tries to rent to people who normally have a rough time finding a home to call their own.

"I have a soft place in my heart for people who are struggling," he said. "I know it's hard."

He doesn't charge rent in December as a Christmas gift, and he doesn't increase the rent of existing tenants.

"We appreciate good tenants, and we reward them," Priddy said.

But sometimes having a soft heart leaves him in a precarious situation. Two of his renters with felony convictions ended up back in jail, and a person not on the lease was living in the house.

A no-cause eviction is often the easiest and most cost effective solution to those tough scenarios, he said. A law barring no-cause evictions would make him more risk-averse and less likely to take a chance on tenants.

"I worked on my houses myself after work and weekends," he said. "My blood and sweat paid for them. I'm now on disability, and these are my retirement."

Nowhere to go

Construction crews were at the Westown Manor apartments in Stayton on Wednesday afternoon, working on some of the already vacated units. The previous owner of the complex was based in California. He let the place fall into disrepair, Keith Troutman said. The bathroom, with the sagging ceiling and curling up floors, seemed to be closing in on itself. Something is wrong with the pipes, Lee Anne said. The toilet fills up with sewage, and it smells all the time.

A representative with Try Investments, the new owners of the property, declined to comment on whether and why any evictions were taking place.

Lee Anne came home Wednesday after another day of apartment hunting.

"I've had a very long day," she said.

Both she and Keith are on disability, and it's difficult to find even a studio that leaves money for gas, food and utilities.

Her upstairs neighbor, Desi Hatcher, said she's spent days driving through Stayton and the surrounding cities looking for a new home for her husband, their four kids and two small dogs.

"I've paid hundred and hundreds of dollars in application fees while still paying rent here to avoid an eviction on my record," Hatcher said.

She found a house in Albany for $1,200 but she would be the sixth person to turn in an application. With rents going up, those who don't make as much or who have bad credit, dogs or a conviction on their record are often picked last for places, she said.

Hatcher said she's worried about moving her son, who's excited about joining the track team; her 12-year-old twins with autism having to leave their great teachers; and her 10-year-old daughter, who's already started packing her clothes, to a new home and new school.

"We've done nothing wrong," she said. "I get it — the place is a piece of crap," she said. "But that leaves me and my four kids on the street."

Lee Anne is planning to sell her appliances before she moves. Hatcher is packing her dishes, cutting down on groceries and eating off paper plates. Both are trying not to panic as April 1 moves closer and closer.

"We're good people," Hatcher said. "We don't party. We don't do drugs. We're being treated like we've done something horribly wrong to end up like this. My kids shouldn't have to deal with that. They're stressed out. We're stressed out. What am I supposed to do..."

Hatcher trailed off and shook her head. She headed upstairs. She had more apartment hunting to do.

For questions, comments and news tips, email reporter Whitney Woodworth at wmwoodwort@statesmanjournal.com, call 503-399-6884 or follow on Twitter @wmwoodworth