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Oregon landlords whose tenants are behind can apply for relief

Landlords in Oregon whose tenants have fallen behind on rent during the pandemic can apply for relief from the state.

Applications for Oregon’s new landlord compensation fund opened Wednesday, nearly two months after state lawmakers allocated $150 million to seed the program.

Landlords can apply for relief to cover 80% of the rent they are owed by residential tenants dating back to April 2020. However, they will be required to forgive 20% of unpaid rent. Tenants whose landlords are approved for the money will have their unpaid rent bill forgiven for the months the landlord receives funding.

Nicole Stingh, a spokesman for Oregon Housing and Community Services, which is administering the fund, said her agency will make $50 million available during the first round of funding. Applications for the first round of funding will be open until March 2. The agency expects to offer at least three rounds of funding before the end of June.

With limited money available, the state has opted to prioritize landlords owed the greatest percentage of rent and those with fewer properties. The state will make funding decisions after the application window closes.

Tenants must sign a declaration of financial hardship for landlords to submit with their applications, a requirement that some landlords raised concerns about during conversations with Oregon Housing and Community Services in January. Those landlords worried about losing out on the opportunity to receive relief if their tenants didn’t sign the declaration.

Oregon lawmakers created the new landlord compensation fund in December as part of legislation that extended the state’s eviction moratorium through June for renters who declare they are experiencing financial hardship.

Along with allocating $150 million to the new fund, lawmakers provided an additional $50 million to existing rent relief programs. Tenants can find out how to apply for that relief through local community action agencies or by calling 211. That assistance will also be paid directly to landlords to cover past due rent.

Oregon Housing and Community Services is also receiving roughly $200 million more in rent assistance from the federal government, Stingh said last month. She said the agency was waiting on additional guidance before allocating those funds.

Earlier this month, Sen. Lynn Findley, R-Vale, and Sen. Betsy Johnson, D-Scappoose, introduced a separate bill that would offer tax credits over a five-year period to landlords who forgive past-due rent. Landlords would be allowed to sell credits to other Oregon taxpayers.

Multifamily NW, a rental industry group whose members include mostly large landlords and property managers, expressed support for the bill when Johnson first floated the idea ahead of the December special session. But lawmakers ultimately only took up legislation in December to extend the eviction moratorium and create the landlord compensation fund.

During public testimony in December, some landlords raised concerns about key elements of the new fund.

Violet Wilson, a property owner and landlord in Keizer, said at the time that she had seven tenants who owed a combined $30,000 in back rent and expected their debt to double in the next six months. She criticized the requirement that landlords forgive 20% of rent owed to access the assistance and expressed worry that the assistance wouldn’t reach landlords quickly enough.

“I understand this is being done to stretch dollars, but we can’t do the same,” Wilson said.

Her worry about not being able to quickly access assistance appears to have been justified.

Landlords approved for funding through the new compensation fund are unlikely to see any money until at least mid-March, a year after the state imposed its first eviction moratorium in response to the pandemic.

Stingh had expressed hope in January that the application process for the funding could open as early as the first week of February, but the agency spent several extra weeks speaking with landlord groups and testing out the online application site before officially opening the fund this week. Once landlords apply, it could take several weeks for the state to make funding decisions before money is released to local housing authorities to distribute.

It’s also unclear how many landlords who are owed rent will actually be able to access money through the new fund.

A September 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. That number is sure to rise as the pandemic continues, and the landlord compensation fund won’t come close to covering that amount of past due rent.

Oregon tenants who are unable to access rent relief on their own or whose landlords don’t receive funding through the state’s new compensation fund will be obligated to pay the entirety of their past due rent when the state eviction moratorium ends in late June, potentially leaving tens of thousands in an impossible situation.

Portland State University’s Homelessness Research & Action Collaborative estimated in a February report that approximately 89,000 Oregon households owed back rent and that it could cost the state up to $3.3 billion to respond to mass evictions if those renters aren’t offered the support they need to avoid being evicted.

Lawmakers have extended the state’s eviction moratorium multiple times over the last year and could take steps to do that again before June, but any further extension of the moratorium would likely face intense pushback from landlords, many of whom are feeling the strain of going nearly a year without payments. That has been particularly tough on small independent landlords who rely on monthly payments to pay their own bills.

A group of landlords filed a lawsuit against Gov. Kate Brown, the state of Oregon, Multnomah County and the city of Portland in federal court in December, in an attempt in invalidate the state’s most recent extension of the eviction moratorium. The lawsuit is still ongoing.

A view of the Oregon Capitol in Salem. AP PHOTO.