Oregon lawmakers consider landlord guarantee funds. One’s a bright light; another fixes ‘abuse’ by landlords
Rent Well Administrator Caitlyn Kennedy and others spoke at the Oregon House Committee on Human Services and Housing Feb. 23 in support of HB2724, which directs Oregon Housing and Community Services to create a “Rent Guarantee Program,” essentially taking the Rent Well program model to a statewide level.
House Speaker Tina Kotek also testified on behalf of another bill that day, HB2944, an “update” to another landlord guarantee fund she says has been “abused” by Section 8 landlords since it was passed in 2013.
The testimony at the two initial hearings offered a first look at two programs that have a vast impact on the state’s most vulnerable renters.
Sponsored by Rep. Alissa Keny-Guyer and Sen. Michael Dembrow — both of whom represent districts in NE and SE Portland with many neighborhoods that have seen waves of evictions and displacement of renters—HB2724 would “implement Rent Guarantee Program to provide incentives and financial assistance to landlords that rent or lease to low income households by guaranteeing payments to landlords for unpaid rent and for eviction and property damage costs.”
In other words, it would create a guarantee fund that would benefit programs like Rent Well, which Kennedy oversees for Transition Projects Inc. in the Portland metro area, and a parallel curriculum that has shared roots, Ready to Rent.
“I just want to see this succeed,” Kennedy says.
The bill’s in its initial stages and a decision isn’t expected for months, before the end of the session in June.
As part of the hearing, a Poor for a Minute blog post about the program and Crystal O’Connor’s story was made part of the official record of the House Committee on Human Services and Housing.
“ I don’t think that anybody expected [Rent Well] to grow in the way that it has,” Kennedy, a Transitions Project staffer, said. “It’s a great place to be at, because even landlords are excited for the opportunity to get their hands on more funds. The only thing that worries me is, how do [lawmakers] find the money in the budget?”
Tenant education is now offered in the majority of counties in Oregon, as shown on the map above, but funding problems have meant some counties — including Washington County, at the moment — are unable to offer a landlord guarantee fund.
Materials prepared by Kennedy and TPI for state lawmakers note that “since the program began in 2009, over 7,500 participants have graduated from classes taught by our 50+ certified partner agencies. This program is so successful that less than 1% of landlords ever need to access the guarantee.”
Ready to Rent’s website notes that curriculum has had “over 30,000 graduates” throughout the United States and Canada.
Testifying in support of the bill were Kennedy, Zoi Coppiano and Alexandra Appleton, according to state records.
The Rent Well curriculum is a City of Portland-funded program that was administered by Home Forward, Multnomah County’s housing authority, until last July, when TPI took over. TPI now administers the program in Multnomah, Washington, Clackamas, Clark and Cowlitz counties.
The 15-hour classes centralizes low income tenants with barriers such as poor credit, evictions and landlord debt. It offer participants the chance to learn about landlord-tenant law, fair housing law and build a “housing portfolio” with a Rent Well Graduation Certificate, a sample rental application, copies of ID, cover letter, reference letters and other tools used to address specific barriers such as a budget or certificate.
Reimbursement for landlords under the statewide program lawmakers are considering would be a maximum of $2,000 for unpaid rent and $5,000 total — for example, if a housing unit was left with significant damages.
Kennedy said the funding request at this early stage is for $1.1 million, which would include money to reimburse landlords across the state and pay for a part-time administrator at the state level.
Appleton gave emotional testimony to the way in which the program had helped her pull herself out of homelessness. She’s now been in an apartment for “over three years” — and already seen three rent increases—and teaches Rent Well.
In particular, she notes, the program is a life raft for people trying to reintegrate into society after incarceration: “They come out and they’re like, ‘How am I going to find housing?’”
“The [Rent Well] program is very empowering,” she says. “I have seen people within two weeks, the little bells start going off. Disabled families in cars find housing. People with criminal histories find housing. The program not only teaches you how to find housing, but it helps you maintain housing.”
The students find that they are so resourceful, and that’s what we forget. … This class empowers the students.”
“It’s been a joy to have people stop me on the street and say, ‘If it wasn’t for you I wouldn’t be in housing.’”
House Speaker Tina Kotek and others also spoke that day in support of a parallel bill she’s sponsoring, HB2944.
HB2944 updates a different guarantee fund first passed in 2013 for landlords owed money by renters using the “Section 8” or “Housing Choice” voucher program, funded at a total of $175 million per year statewide.
There’s a key difference between the two programs: eviction court.
Unlike the way Rent Well works, in which landlords register for the landlord guarantee fund by applying directly to the organization that manages the fund, the HB2944 process has played out in the courts — with some mixed results, Kotek says.
“It’s come to our attention that the structure of how we put that fund together has left it vulnerable to abuse by some landlords,” Kotek testified. “Under the current structure, such judgments [against tenants] can be obtained without any evidence of actual wrongdoing.”
Over 80 percent of cases related to this fund are default judgments, Kotek noted, “in part because many low-income tenants just can’t get to court.”
“So, as it stands right now, a landlord can bring a faulty claim, win on a default judgment and claim up to $5,000 out of this fund,” Kotek testified. “Meanwhile, that judgment goes on the tenant’s record, and also the agency has the authority to send the tenant to collections for the damages.”
“It was not our intent to allow an innocent tenant to get a judgment for a landlord who could be just covering basic costs of just owning a property,” Kotek says.
In other words, a program intended to help reduce barriers for low-income Section 8 tenants by convincing landlords to rent to them has actually increased long-term barriers to renting for some.
Under the updated version of the bill, the landlord has to actually “prove” the amount of damages, Kotek said. Subsequent testimony revealed the difference between the proposed “update” of the program and the way it’s been working for three years is that a judge — not a court clerk — will review a landlord’s evidence before damages are determined.
54 percent of 170 landlord claims in the three years the program has been in operation were for the full amount of the claim, and ten percent came from a single landlord, testimony for the updated bill noted.
“Why aren’t people showing up [to court] that are voucher holders?” asked Jill Smith of Clackamas County. “These are folks that are moving for various reasons in a housing crisis. … 80 percent of the people being served by the voucher program are extremely low income … about 65 percent of them statewide are elderly or disabled people. … They’re also in the moving process, and they are under a lot of stress.”
“Their ability to mentally be prepared and show up and defend themselves in court is highly unlikely.”
In Multnomah County, observers have likened eviction court to a “mill,” tilted away from tenants in fundamental ways. Requiring landlords who have rented to Section 8 voucher holders to prove damages awarded to them before a judge makes sense, but the program is likely to continue to award a high percentage of default judgments against the roughly 80 percent of tenants who simply don’t show up to court.
By comparison, HB2724, the new tenant education “Rent Guarantee Program,” gives landlords a financial incentive to rent to tenants with barriers, but never requires a trip to court.
“We attempt to avoid the court system altogether,” testified Kennedy, who oversees Multnomah County’s fund. “I will even go see units if I need to.”
So far in 2017, she said, amidst a steady stream of graduates getting back into rentals, landlords have requested no funds at all.
It’s an idea, a fund, and a program that can help give desperately struggling, would-be renters with barriers such as criminal history, poor credit or evictions some real hope, and important tools to get back into housing.
It’s a small step that could help many across Oregon like Crystal O’Connor, who may not be on the streets but are “doubled up,” or “couch surfing” and still fit the HUD definition of homeless. In 2015 that was about 12,000 people in Multnomah County alone, according to the last Point-in-Time count of homeless for which numbers are available. (A new count was carried out last week, and is likely to show higher numbers.)
In the middle of a housing and homelessness crisis that affects us all, there’s an even simpler way to characterize it.
A good idea.
