It Doesn’t Do What They Say Ordinance Summary Portland Referendum On the Ballot, November 7th, 2017

Misconceptions What It’s Not Not just for large owners Not targeted to benefit low income tenants Not a rent reset when the tenant leaves or the property sells Not just about the rent control

Three Distinct Sections Rewrite of Landlord-Tenant Law 16 Page Ordinance Three Distinct Sections Rewrite of Landlord-Tenant Law 3) Creates a volunteer Rent Board with expansive powers Controls rents 2) Alters eviction law Units owned by a landlord who owns more than 5 units in the City All units (except owner occupied 2 & 3 units, municipal housing authorities, new construction after Jan 1, 2017…)

7 Person Panel Appointed By City Council Jurisdiction of the Rent Board The majority of residential rental units in Portland will be under the control of the Rent Board 18,000 rental units in Portland 3,000 owners Covered Units: all units except owner occupied 2 & 3 units, municipal housing authorities, new construction after Jan 1, 2017…

“…shall serve without compensation” Fair Rent Portland’s Recommended 7 Member Rental Board Landlord 1 Tenants 4 Other People 2 “The City shall take reasonable steps, but is not required, to appoint to the Rent Board at lease one (1) Landlord and at least four (4) tenants.” “…shall serve without compensation”

Rent Control - How Does it Work? Rent Control Restrictions Rent Control - How Does it Work? Base Rent is set for each Covered Unit on November 1, 2017 The Base Rent amount is the rent charged on that date Units must be registered, with proof of rent charged (rental agreement, rent payment receipt, etc.) Unit registration fee increased from $35/unit to $65/unit

Rent Control Restrictions Rent Increase Limitations Rent Restrictions apply to Covered Units and do NOT reset when a tenant vacates Rent cannot be increased more than CPI and Tax Rate Rent Adjustment, unless specifically permitted After a renovation or other improvements, “a landlord may apply to the Rent Board for a determination of the appropriate increase in rent.” Hard cap of 10% increase, including the CPI and Tax Adjustments Example: A $900/month unit in disrepair could only be increased to $990/month after renovation A tenant can appeal an increase to the Rent Board; the Board can impose fines.

Creates Leases Without End Leases are prohibited from terminating. “No Rental Agreement may state, nor may any tenancy established under such a Rental Agreement be terminated for any ground other than…” Lease termination is the most important tool owners have for evicting disruptive and dangerous tenants.

Eviction Extensions Property owners must give 60 days to evict (extended from State’s 30 days) May only evict on following grounds*: Substantial breach of a material term of the rental agreement, followed by a failure to cure the breach within 30 days [+ 60 days = 90 days to remove] Nuisance, waste or illegal conduct caused by tenant and/or guests 5 complaints substantiated by the police in a 60 day period shall he considered proof of such conduct A tenant can appeal an eviction to the Rent Board *Failure to pay rent preserves state statutory requirement for 30 days or 7 days

Rent Board - Authority & Responsibility 7 Person Panel Appointed By City Council Rent Board - Authority & Responsibility Landlord applications for rent increases Landlord application for base rent increases Review eviction notices Tenant eviction appeals Requests for extension of time by landlord Mediating landlord/tenant disputes Impose fines Recommend amendments to ordinance Prepare annual report to Council

What Will Happen? Bad for Affordable Housing There is no guarantee that a low income tenant will get a rent controlled unit Decrease in available housing Tenants with low credit score, low income, or lack of references will be at the end of the line for available rentals Increase rental fee hits low income housing providers the hardest

What Will Happen? Bad for Portland Rental units will not be improved because the rental increase is predetermined The most neglected properties will remain as a blight on neighborhoods Less work for contractors (floor sanders, painters, installers, etc) Likely increase in property tax for single family home owners Stratification between old, rent controlled housing and new, exempt high-end developments

What Will Happen? Legal Challenges – Substantive sections are not legal Eviction changes conflict with State Statutes. From the City of Portland’s Corporation Counsel: “Under Maine law, a municipality does not have the authority to impose or alter the burden of proof or alter the writ of possession process in a Forcible Entry and Detainer (“FED”) action.”* A lay board may not impose fines on other citizens per City and State law Rent Board is tasked with recommending amendments to the ordinance, but the ordiance cannot be changed for 5 years The Bureaucratic Nightmare 7 person volunteer board, composed by a majority of tenants administering complex landlord- tenant law over nearly 18,000 units *From Memorandum to City of Portland Housing Committee from Danielle P. West-Chuhta, Coporation Counsel on 9/9/2016

It Doesn’t Do What They Say Ordinance Summary Portland Referendum On the Ballot, November 7th, 2017