The new owner of the Mariposa Townhomes says he must increase rents by hundreds of dollars a month to recover his investment. Not surprisingly, tenants forced to find other housing in an overheated market are not inclined to accept that explanation.
Ronald Deluca puchased the 101-unit complex on State Street in September. Among the tenants are low-income senior citizens who are now confronting rent increases as large as 40 percent.
CPM, the property management company Deluca hired, notified tenants in a letter Nov. 27 that rents would increase effective March 1. For a number of Mariposa residents, the increases mean they cannot afford to stay and must find new places to live. But in a rental market with a vacancy rate of less than 2 percent, it's tough to find available units at any price.
In a statement on the CPM website, Deluca says many units are run-down after years of neglect.
"The business side of purchasing a neglected property like Mariposa Townhomes is to bring the property back to a healthy standard and increase the value resulting in a positive return on investment," he wrote.
That's how business works, but residents may be forgiven for wondering why they must bear the burden of making Deluca's deal pencil out.
Among Mariposa's tenants are people on government housing assistance vouchers that allow them to afford the rent they pay now. On March 1, one tenant will see her monthly rent go from $645 to $915. Another, who now pays $750, will be paying $1,075 when her lease runs out in August.
Deluca and CPM are offering existing residents a $50 break on rent if they stay, but that doesn't help much if your rent is going up by more than $300. The website statement also notes that residents are getting five months without a rent increase from the date Deluca closed the deal on Sept. 18. But tenants were officially notified Nov. 27, just over three months before the increases take effect.
That's the minimum permitted under a new law passed by the Oregon Legislature that requires 90 days' notice of rent increases for month-to-month tenants who have been in their homes for at least a year.
For vulnerable tenants like many of those living in the relatively low-priced Mariposa apartments, even three-months notice is of little help. Where will they go in 90 days? Even if they could find a place, the move in itself is a threatening proposition, particularly to the older tenants.
In his statement, Deluca writes, "Mariposa Townhomes rents were hundreds of dollars below local market value at the time of purchase. ... At the price I purchased the property, it is necessary for me to get the rent closer to where the market is."
Deluca has every right to buy any property he chooses, and to set rents where he pleases to recoup his investment. It's fair to ask, however, whether he paid too much for the property given its condition, and residents are justified in wondering why they must pay the price for that decision.
We would encourage him to, at a minimum, give the tenants more time to find housing or, even better, significantly reduce the increase in rent for those who simply cannot afford it. It's the right thing to do.