Rental Housing Journal Metro March 2016

Circulated to over 6,000 apartment owners, on-site and maintenance

personnel monthly.

Call 503-221-1260 for more information

Advertise in Rental Housing Journal Metro

3. Why Buy Earthquake Insurance?

4. Fair Housing Facts & Tips

5. Maintenance is a Part of WhatWe Do

Published in association with: Multifamily NW; Rental Housing Association of Oregon; IREM & Clark County Association

www.rentalhousingjournal.com • Professional Publishing, Inc

Rental Housing Journal Metro March 2016

Portland/Vancouver

continued on page 9

6. Oregon Senate Passes Bipartisan Housing Legislation

8. Dear Maintenance Men – Water Heaters, Paint Prepping & Swimming Pools

12. Rents to Flatten in 2016

13. Oregon’s Bill 4134 and How it May E� ect You

18. Ask the Secret Shopper –Ready Vacants

continued on page 11


Payroll Job SummaryTotal Payrolls 1,134.4mAnnual Change 39.1m (3.6%)RCR 2016 Forecast 29.7m (2.7%)RCR 2017 Forecast 26.4m (2.3%)RCR 2018 Forecast 22.8m (2.0%)RCR 2019 Forecast 18.1m (1.5%)RCR 2020 Forecast 18.4m (1.5%)Unemployment (NSA) 4.7% (Dec.)

4Q15 Payroll Trends and ForecastPortland’s labor market continued to

outperform historical norms, adding to payrolls at a 39,100-job, 3.6% year on year rate, more than twice the Rose City’s 25-year historical average and the 20th con-secutive quarter of 2% growth or faster. Th is supercharged job creation was sus-tained with virtually no help from the typically procyclical construction sector, which added only about 500 (0.9%) jobs in 2015. Instead, manufacturing, trans-portation and all variety of skilled ser-vices led the charge, collectively hiring at a 28,700-job, 4.1% rate. Of note, the tech-heavy professional and technical services sub-sector contributed 3,300 jobs, a 4.7% annual advance.

Seasonally adjusted data also record-ed robust gains. Th is series indicates that establishments added 26,400 jobs July-to-December and 41,600 for the full year, the largest 12-month add recorded in Portland’s 26-year BLS series.

With Portland job creation running so far above normal, specifying an unbiased model that produces “reasonable” results can be challenging. In the end, RED Re-

Multifamily Housing Update

Portland, OR

4Q15 Market Overview

EPA Cracks Down On

Late last year the Environmental Pro-tection Agency (EPA) announced it took action against 75 renovation

contractors and others to protect people from harmful lead dust and debris expo-sure, as required by federal Lead-based Paint Renovation, Repair, and Painting (RRP) regulations.

By Jo Becker, Education/Outreach Specialist, Fair Housing Council of Oregon

Th ese cases show EPA is cracking down on businesses and renovators who ignore federal requirements that have been in ef-fect for several years now. Th ese require-ments apply to many repairs and renova-tions done to painted surfaces in homes and daycare facilities built prior to 1978. Pre-78 properties are of concern, as they

are a major source of lead exposure that can cause lead poisoning, especially in our nation’s young children.

Th e RRP Rule, which is part of the federal Toxic Substances Control Act, is intended to ensure that owners and oc-

Commercial Real Estate Experts

Moderate Expansion, Easing Prices Expected in 2016

Despite various global and domes-tic hurdles hindering econom-ic growth, steady job gains and

stable leasing demand should help keep commercial real estate activity expanding in 2016, according to the authors of an an-nual report published jointly by Situs Real

Estate Research Corporation (RERC), Deloitte and the National Association of Realtors®.

According to the report, Expectations & Market Realities in Real Estate 2016—Navigating through the Crosscurrents, commercial real estate activity is forecast

to gradually grow this year with demand for space holding steady across all com-mercial sectors. While commercial prop-erty values and price gains are expected to fl atten aft er surpassing 2007 peaks in

Lead Violations

Professional Publishing Inc.,PO Box 6244Beaverton, OR 97007

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SUCCESS STORIES ABOUT MULTIFAMILY PROPERTIES

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“We’ll save over $12,000 in energy bills each year because we upgraded to energy-ef cient

exhaust fans. Plus, Energy Trust of Oregon gave us $19,000 in cash incentives just for

upgrading. Our rst-year of energy savings, combined with Energy Trust cash incentives,

paid for our project costs.

Jeff Hart, senior maintenance specialist

College Housing Northwest, Portland, Oregon ”

+Get more from your energy. To learn more visit www.energytrust.org/multifamily or call 1.877.510.2130.

Serving customers of Portland General Electric, Pacifi c Power, NW Natural and Cascade Natural Gas.

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Rental Housing Journal Metro

Rental Housing Journal Metro · March 2016

Commercial and ResidentialVisit us at www.corderopaintinginc.com

or call us at 503-848-7788

Cordero Painting is a full-service family owned painting contractor in business since 1995.

We proudly serve the Portland/Seattle area. We are commited to quality workmanship for

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3




Why Buy Earthquake Insurance?By Cliff Hockley, President, Bluestone & Hockley Real Estate Services

Many of our clients have asked us over the years if they should purchase earth-quake insurance. This is a difficult question to answer specifically because every property is constructed differently (i.e. wood, masonry, concrete, met-

al) and is located on different soil(i.e. clay, rock, sand). The height of the building also makes a difference. Imagine the impact on a one story building versus a thirty story unreinforced masonry building. The age of the building, and the code requirements in every state and city, need to be taken into consideration as well.

Most importantly, building owners want to know what risks their buildings face located in the Cascadia subduction zone, a seismic area that encompasses the coastal areas of Northern California to Vancouver Island and inland to I-5.

The Impending RiskIn the cover story in the July 2015 edition of the New Yorker Magazine titled,“TheRe-

ally Big One: An earthquake will destroy a sizeable portion of the coastal Northwest.”-Author Kathryn Schulz pointed out, “we now know that the odds of the big Cascadia earthquake happening in the next fifty years are roughly one in three. The odds of the very big one are roughly one in ten.”

Chris Goldfinger, professor and paleoseismologistat Oregon State University, is an expert in seismic and tectonic studies and one of the main sources of the New Yorker article. In 2011, he also authored a comprehensive study on the Cascadia subduction zone for the US Geological Survey based on 13 years of research that exposed a pattern of earthquakes reflected in the region’s earthquake history.

“Over the past 10,000 years, there have been 19 earthquakes that extended along most of the margin, stretching from southern Vancouver Island to the Oregon-Cal-ifornia border,” Goldfinger noted in a 2012 OSU news release on the paper. “These would typically be of a magnitude from about 8.7 to 9.2 – really huge earthquakes. We’ve also determined that there have been 22 additional earthquakes that involved just the southern end of the fault,” he added. “We are assuming that these are slightly smaller – more like 8.0 – but not necessarily. They were still very large earthquakes that if they happened today could have a devastating impact.”

Jay Patton, a co-author on the study, added, “By the year 2060, if we have not had an earthquake, we will have exceeded 85 percent of all the known intervals of earth-quake recurrence in 10,000 years. The interval between earthquakes ranges from a few decades to thousands of years, but we already have exceeded about three-fourths of them.”The last major earthquake along the Cascadia subduction zone was estimated to have occurred in approximately 1700.

The Predicted ImpactWhat that mean to owners of Pacific Northwest properties is that there is a risk and

we need to prepare for it. A 2011 Cascadia earthquake study by the Federal Emergency Management Agency (FEMA) estimated that only 20 percent of the buildings located in the Portland Metro region would escape damage; the other 80 percent would suffer damage from slight to complete loss.

Table 1: Analytical Baseline Study for the Cascadia Earthquake and Tsunami (Source: FEMA, November 18, 2011)

Commercial None Slight Moderate Extensive Complete TotalMetro 6,759 10,106 12,270 4,647 461 4,242Outside Metro 14,333 7,596 11,878 7,904 3,072 44,785Total 21,092 17,702 24,148 12,551 3,533 79,027

Statewide, the report predicted that about 27 percent of commercial buildings would survive without damage, and 22 percent would suffer slight damage. The remaining buildings which would suffer moderate damage (31 percent) or extensive damage (16 percent)or will be completely destroyed(4 percent)will not be unusable for commercial purposes. More importantly, the Oregon and Washington coastline will most likely be swamped with a tsunami.

See you at the 2016 Maintenance Fair

We’ll be at Metro’s Recycle at Home booth. MF NW Maintenance Fair 2016Thursday, March 31, 20167:30 a.m. – 4 p.m.Oregon Convention Center, 777 NE Martin Luther King Blvd.

Get free materials and support to make your job easier. Keep your garbage and recycling program working for you and your residents.

Multifamily Resource Line: 503-823-7224

Online: www.portlandoregon.gov/bps/multifamily

Email: [email protected]

4



Fair Housing Facts & TipsThe Fair Housing Act protects peo-

ple from discrimination when they are renting, buying, or securing fi-

nancing for any housing transaction. The Fair Housing Act specifically cover’s dis-crimination because of race, color, nation-al origin, religion, sex, disability and the presence of children. (Provided by HUD)

Fair housing laws prohibit illegal housing discrimination.

Discrimination is illegal in any housing situation if it is based on, or adversely af-fects, a “protected class.” That is, if some-one is denied a home, is treated differ-ently, or is harassed because of one of the reasons listed below, it is illegal.

Consistency is Key!1. Remember to be consistent within

your daily job performance & Inter-actions when dealing with residents, prospective residents and their guests

2. Never make assumptions regardinga. Disabilitiesb. If an animal is a companion or petc. Treat everyone the same!

Discrimination is sometimes deliberate or unintentional due to lack of Fair Hous-ing knowledge toward residents, prospec-tive residents & their guests that fall into any protected class category

More often than not discrimination occurs during the leasing process while dealing with prospective residents. BE CAREFUL!

The information and purpose of leasing and Fair Housing is not to scare you out of the industry. It is an extremely import-

ant part of the job performance and ex-pectation. Fair Housing classes will give you the understanding of pitfalls of fall-ing into possible discrimination in Fair Housing. It also prepares and gives the tools necessary to help avoid complaints.

Here are a few examples that occur during leasing:

Example: Oh my, your children are beautiful! I have the perfect home for you on the ground floor by the playground! I am so excited to show you this apartment

Intention: More than likely the leasing associate has the best intentions for the prospective residents, it is still DISCRI-MATION.

Perception: This is discrimination in the form of Steering, and could prompt a complaint.

Correct Action: Anyone applying for an apartment can live in any available unit and must be show the same apart-ments as anyone applying

Prevention: EDUCATE, EDUCATE, EDUCATE! It is necessary to make cer-tain that the associates working for you are knowledgeable and trained to mini-mize the risk to you and your company

Discrimination is Discrimination! Unfortunately, even the best of in-

tentions of the leasing consultant can put them, the owner and Management Company at risk. Make no mistake, Fair Housing and discrimination is real and happens.

Ignorance Of The Law Is No Excuse!

Learn about the Federal, State and Lo-cal protected class on The Fair Housing website http://fhco.org

My best advice is Document, Doc-ument, and Document!

DocumentationHow does documentation have the po-

tential for a complaint?Example: You may have a star on

one guest card and not another or you may have written she is so sweet make a great resident!

Intention: You really liked that pros-pect and really thought they would make a great resident and noted as much on their guest card

Perception: This could be construed as discrimination base on the fact that these types of doodles and or comments were not present on all guest cards. These guest cards would be brought into question should a complaint be filed

Remember not to doodle or make marks on applications, guest cards or any paperwork related to prospect or resident

Fair Housing Laws apply to:

• Owner / Agents• Property Management Companies• Maintenance, Leasing &

Administrative staff• Outside Vendors such as

Landscapers, Painters,• Exterminators, Insurers, etc.• Real Estate Agents, Brokers, Lenders• Homeowners & Condo Associations

• Individuals, Corporate & Business Owners

• Architects, Builders, Developers, Engineers

• Responsibility is non-delegable• Ignorance of the law is no excuse A couple of thoughts, ask your asso-

ciates and how they would address these scenarios in the leasing process? (In red are common answers and or thoughts your will receive from the well intentioned leasing associates and are discriminatory, in my experience during training)

• Women with 2 young children? Do not make assumptions!

. This women and children will be quite, I can put them upstairs

• Married couple with 2 teen aged boys?. Those boy are going to be trouble

• Married couple with 1 teen aged girl?. Quite residents

Discrimination is real and can be prevented! by Dana Brown – EDGE Training – Full Spectrum Residential Services, LLC [email protected] or 503-740-8432

Advertise in Rental Housing Journal MetroCirculated to over 6,000 apartment owners, on-site and

maintenance personnel monthly.


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5Rental Housing Journal Metro · March 2016

John Sage,RHA Oregon President

10520 NE Weidler, Portland, OR 97220(503) 254-4723 • Fax (503) 254-4821

[email protected] • www.rhaoregon.org

President: John Sage Vice President: Phil Owen President Elect: Ron Garcia Past President: Elizabeth CarpenterSecretary: Lynne Whitney Treasurer: Elaine Elsea Offi ce Manager: Cari Pierce

Well, the weather is already warm and dry for this time of the year. I am sure that you, as

well as I, are ready to get started on proj-ects for our rentals and personal homes. It is time to start working on landscaping and other repairs. Maintenance is part of what we do as property owners. We weath-er the storm of winter, assess the damage, make repairs, and then get ready for the next year. Th is year there have been many storms of change to our industry resulting from the concerns revolving around sup-ply and demand of rental property. Main-ly low supply and high demand!! Rents have increased, and so have the number of people applying for rental housing. Th e city of Portland is experiencing pop-ulation growth, as the state of Oregon is the number one state in the nation people are moving to. New rental units are com-ing, but will it be enough to keep up with the demand? As a rental property owner, these are good problems to have, but they too can also be very frustrating. I talk with property owners every day about the prob-lems that they face. One of the things that I see is that coming together and talking about best practices makes all of us bet-ter at what we do. I don’t want to use all of my space this month talking about new bills currently being debated in the State

President’s Message

Legislature so I will just point out that to-gether we can and do make a diff erence on these issues.

Are all of you taking advantage of the training and classes that RHA Oregon has available? Are you up on the current Fair Housing laws and how they apply to operating your business? Th e reason I ask is because of a recent conversation that I had with a rental property owner. Th is rental property owner had a no pet pol-icy with all his properties. However, an applicant recently requested an accom-modation for a companion animal. Th is owner was unaware of the Fair Housing laws concerning this issue and denied the applicant based on the companion animal and his own no pet policy. Since my day job is that of an insurance agent, I was, to say the least, aghast at the potential law-

suit that I could see on the horizon for this owner. Th ankfully, I recovered quickly from my shock and got him in touch with the RHA Oregon offi ce so that he could get some help. Once I found out he was not a member of RHA Oregon I recom-mended that he join the association so that he was sure to get future information and training to cut down on the potential for a loss or claim due to not knowing the current laws. Fortunately for him, RHA Oregon has a Fair Housing class by the Fair Housing Council of Oregon on April 7th. Property owners who are not aware of the laws and are operating improperly aff ect not only themselves, but in the long run all of us. Please, if you know of some-one who is in need of help or who could use some training let them know about RHA Oregon. Not only do we have the

Fair Housing Class in April, but coming March 10th and 22nd is Landlording 102 training taught by Attorney at Law Jef-frey Bennett. We also have several tenant screening classes throughout the months of March and April. You can go to our website and check our calendar for more details. Our offi ce team is also available to help guide you to needed information.

Th e State legislative session has started in Salem this month. As always, we are getting reports from Cindy Robert, our lobbyist for RHA Oregon, about upcom-ing bills. Cindy does a great job keeping us informed about those bills, which can have an eff ect on how we conduct our business as property owners. I would encourage you to check your emails and read the UPDATE for important informa-tion. Also, please make sure that we have your current email address for alerts and calls to action that may be coming. With 1800 members we can be a strong voice in the state for our industry, but only if we are taking the opportunity to make our voice heard.

Sincerely, John SagePresident RHA OregonStegmann Insurance Agency Inc.

Maintenance is Part of What We Do

Form of the Month & Event Calendar on page 6

6 Rental Housing Journal Metro · March 2016


16083 SW Upper Boones Ferry Rd, Suite 105, Tigard, OR 97224503-213-1281 | Fax 503-213-1288 | www.multifamilynw.org

DATE __________________________________________ PROPERTY NAME / NUMBER __________________________________________________ _________________________________________________________________________________________

RESIDENT NAME(S) ___________________________________________________________________________ ______________________________________________ _____ ___________________________________________________________________________

___________________________________________________________________________ _______________________________________________________ _____ ___________________________________________________________________________

UNIT NUMBER ___________________________________ STREET ADDRESS ________________________________ _____________________________ ____________________________________________________________________________________

CITY _________________________________________________________________________________________________________________________________ ATE __________ ________________ ZIP _____________________________________________________________

Due to the increased risk of fire, increased maintenance costs, andpossible health effects of secondhand smoke, Owner/Agent is adopthe following policy relating to smoking which covers all or a part of thepremises on which the dwelling unit is located (the “Premises”). Thefollowing terms, conditions and rules are hereby incorporated into theRental Agreement.1. PREMISES SUBJECT TO SMOKING POLICY

(Check paragraph that applies): c SMOKING PROHIBITED—ENTIRE PREMISES c SMOKING ALLOWED—ENTIRE PREMISES c SMOKING IS ALLOWED IN THE FOLLOWING LIMITED AREAS

(Check all that apply). ALL OTHER AREAS OF THE COMMUNITYARE NO-SMOKING:

c The smoking area located at: _______________________ ___________ ___ ___________

c Inside Residen p hed yard c Resident’s unit i ached yard c No ent’s es, patios and

(s) locate ____ ____ ___________________________________________

__ ___________________________________________________

c _______ _________________________________________________________

c Other: ___ _____________________________________________________________

Note: Smoke if smoking is allowed, will never beconsidered normal wear and tear.

2. DEFINITION OF SMOKING. The term “smoking” means inhaling,exhaling, breathing, carrying, or possessing any activated vapingdevice, lighted cigar, cigarette, pipe, other tobacco product or anyother similar lighted product in any manner or in any form.

3. IF SMOKING PROHIBITED. 3.1 (Entire Premises). Resident agrees and acknowledges that th

entire Premises has been designated as a no-smoking livinenvironment. Resident agrees that he/she will not smoanywhere on the Premises or adjacent to and within ___________ feet(if left blank, 10 feet in OR or 25 feet in WA) of any portiothe Premises. Resident will not permit any guests or visitoResident to do so.

3.2 (Smoking allowed in limited areas). Resident agrees andacknowledges that all areas of the Premi are no-s okingexcept for limited areas. Resident agre he wil onlysmoke in the areas of the Premi e wheresmoking is allowed and will only per rs tosmoke in smoking designated areas.

3.3 Resident agrees to inform all of his/her g i f theno-smoking policy and t ny g whoviolates the policy to l t is r theactions of his/her guest s.

WED—ENTIRE PREMISES. Oregon ands ibit smoking in any space “open to the public”

such as the rental office of the Premises or within 10 feet (OR) or25 feet (WA) of the entrances or windows of such public space.Resident agrees to comply with the applicable law and require his/her guests and visitors to comply also.

5. OWNER/AGENT NOT A GUARANTOR OF SMOKE-FREEENVIRONMENT. Resident acknowledges that Owner/Agent’sadoption of a policy relating to smoking, and the efforts to designateall or some of the Premises as non-smoking, do not make Owneror any of its managing agents the guarantor of Resident’s health or ofthe smoke-free condition of the non-smoking portions of thePremises. However, Owner/Agent will take reasonable steps toenforce the no-smoking policy. Owner/Agent is not required to takesteps in response to smoking unless Owner/Agent has actualknowledge of the smoking and the identity of the responsibleresident.

6. OWNER/AGENT DISCLAIMER. Res t acknowledges thatOwner/Agent’s adoption of a non-s g environment, andthe efforts to designate all or po e Premises as non-smoking, does not in any way ard of care thatOwner/Agent has under appli r Premises anysafer, more habitable or imp lit standardsthan any other rental premises. ic disclaimsany implied or express warranti ise have anyhigher or improved air quality st her rentalproperty. Owner/Agent cannot and d r promisethat the Premises will free from sec . Residentacknowledges that Ow Agent’s abilit , monitor orenforce this Addendum p ndent in g f p rt on voluntarycomplia nts and residents’ guests. Residents withrespi lergies or other conditions relating to smokeare Owner/Agent does not assume any higherd this Addendum than any other Owner/Agent

nd ental Agreement.NT RESIDENT. Resident acknowledges thatiding on the Premises under leases/rental

prior to adoption of this smoking policy may nott to this smoking policy. As current residents

nt leases expire or enter into new leases/e smoking policy will become effective for.

ACH. Resident understands and agrees with theterms and conditions of this Addendum and that failure to adhere toany of the terms of this Addendum will constitute both a materialnon-compliance with the Rental Agreement and a serious violationof the Rental Agreement. In addition, Resident will be responsiblefor all costs to remove smoke odor or residue upon any violation ofthis Addendum.

c If checked, the effective date of this Addendum will be_______________________________________ when the Premises is converting to no-smoking. If not checked, this Addendum is effective immediately.

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Upcoming Events with Multifamily NW

3/7/2016 Law and Rule Required Course (LARRC) (Portland)3/8/2016 CAMT: Heating (Portland)

3/11/2016 It’s the Law - Smokin’ Hot: Marijuana and Your Rights (Portland)3/15/2016 Curb Appeal (Portland)3/15/2016 NSPF® CPO® 2 day Certifi cation Class (Portland)3/16/2016 CAM: Human Resources Part I & II (Portland)3/17/2016 SOLD OUT – Fair Housing 150 (Portland)3/21/2016 Unit Inspections and Turnover Techniques (Corvallis)3/22/2016 CAMT: Air Conditioning (Portland)3/23/2016 CAM: Fair Housing (Portland)3/24/2016 Unit Inspections and Turnover Techniques (Portland)3/31/2016 Maintenance Fair 2016 (Portland)

4/42016 Washington Landlord Tenant Law (Vancouver)

Form of the MonthSmoking Policy Addendum

M155 OR

Take advantage of this es-sential move-in form to de-scribe in detail your smoking policy for your rental proper-ties. Whether it is completely banned, or permitted in cer-tain areas, this enables you to enforce your smoking policy and easily collect on subse-quent smoke damage from tenants’ noncompliance.

Oregon Senate Passes Bipartisan

Salem, Ore. – Th e Oregon Senate ap-proved bipartisan legislation that will ad-dress the housing aff ordability crisis in-creasing funding for subsidized housing, and providing new policy tools to local governments. Earlier the Oregon House passed a set of new renter protections with a strong bipartisan vote.

Following the Senate vote, Multifamily NW, a nonprofi t association represent-

Housing Legislation

ing owners and operators of both subsi-dized aff ordable housing and market-rate apartment buildings across the state, is-sued a statement from Executive Director Deborah Imse:

“For weeks, we’ve been at the table with tenant advocates, aff ordable housing or-ganizations, and local governments to craft eff ective solutions that address the region’s housing aff ordability crisis. In the

end, we’ve landed on a balanced approach that will provide more housing options for families of all incomes and help to re-duce displacement. Th is legislation marks a signifi cant step forward by adding to the housing supply, enacting common-sense protections for tenants, and increasing funding for aff ordable housing.

“While these bills are meaningful, we need to remember that the conversation

Multifamily NW: New bills take positive steps to address the housing aff ordability crisis

doesn’t end here. Housing aff ordability is an ongoing challenge – and as an or-ganization, our members are ready and willing to spend the next several months assembling the tools needed to build stronger and more stable communities. “

Form of the Month & Event Calendar

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Partner With Wave G to BringGigabit to Your Building

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Dear Maintenance Men: I just replaced a water heater and boy

are they expensive! What are some tried and true ways to extend the life you a wa-ter heater or recommended preventive maintenance tips? Since I’m starting with a new heater I want to make this one last as long as I can.

Fred

Dear Fred:Th ere are a number of things you can

do to extend the life of a water heater, be it gas, electric, new or old. At least once a year, plan on fl ushing the tank to remove calcium deposits. First shut off the gas or breaker, let the water cool. Drain the tank and fl ush with a steady stream of water from the cold water inlet and let the wa-ter and debris drain from the drain valve until the water runs clear. If you have a 100 gallon or larger tank, use the clean out port to remove the calcium deposits. Removing the deposits keeps your water heater from working overtime. Th e more deposits in the tank, the harder the burn-er needs to work to keep the water hot.

Equally important is checking the “Anode Rod”. Th e anode rod is a long sacrifi cial zinc or magnesium rod that protects the metal tank from corrosion. Th is rod should be checked yearly and re-placed every 3 to 5 years. Th e rod can be found at the top of the tank and is held in place by a hex bolt head. To check the rod, turn off the water supply and let the water cool. With a wrench, turn the hex

bolt at the top of the tank and lift the rod out. If the rod is smooth and white in col-or, it is fi ne and can be reinserted ready to be inspected again in a years’ time. If the rod is corroded, brown, or looks like a rusted nail or missing all together; it is time to replace it. (Actually, it is well past time to replace it.) A new anode rod can be found at any plumbing supply house. If you have a low ceiling above the water tank, ask for a fl exible rod to ease the in-stallation. Smear Tefl on pipe thread seal-ant on the threads of the new rod before you install it. Don’t use tape, since it can reduce the eff ectiveness of the rod. Keep in mind that replacing the anode rod on a regular basis (every 3 to 5 years) could easily double the life of your water heater.

Dear Maintenance Men:I am getting ready to paint my property

and noticed a lot of mold or mildew in the shaded areas. I am worried that scrap-ing these areas when we prep for paint will cause the mold spores to spread. What do you recommend we do as prep for painting?

Marty,

Dear Marty:One item on your paint prep work will

be fi nding the cause of the mold or mil-dew in this part of the building. Check for excess moisture in the ground, walls or even a poorly placed sprinkler head. Trim any bushes or trees that stop air fl ow

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4Q15 Market Update ...continued from page 1


search settled on the simplest possible equation using two lags of the dependent variable and the rate of change of US pay-roll observations as independent vari-ables. Th e 97.1% adjusted R2 (SE=0.4%) model predictably projects gradually slowing job growth in keeping with fore-casted US conditions. Two percent or fast-er (20,000 to 30,000 jobs per year) growth is likely to be maintained through 2018.

Occupancy Rate SummaryOccupancy Rate (Reis) 95.0%RED 50 Rank 33rd

Annual Chg. (Reis) -1.3%RCR YE16 Forecast 95.5%RCR YE17 Forecast 96.3%RCR YE18 Forecast 96.3%RCR YE19 Forecast 95.7%RCR YE20 Forecast 95.3%

4Q15 Absorption and Occupancy Rate Trends

Portland apartment occupancy de-clined -130 basis points year-on-year to 95.0% in 2015, the worst performance among the RED 50 markets. Demand was not the issue — Reis report that renters absorbed 2,860 units in 2015, third larg-est annual total since 2001 — but supply was overwhelming. Developers delivered 4,551 units last year, representing the largest vintage recorded in 20 years.

By contrast, Axiometrics surveys of larger, professionally managed assets posted a smaller –30 bps y-o-y drop, both among the universe of all surveyed prop-erties (to 95.0%) and among the subset of stabilized, same-store assets (to 95.4%). Th e class-C segment maintained the

tightest market conditions (96.4%), while class-A succumbed to supply pressure, falling –130bps sequentially to 93.7%. Naturally, submarkets with the most ac-tive construction pipelines (Northeast, Northwest, Beaverton) suff ered the largest occupancy losses, while the mostly class-B-/C East Gresham submarket scratched out a small occupancy advance.

RCR again used a simple model to forecast demand, giving added weight to PORT’s recent performance. With cur-rent payroll and T-1 inventory growth as independent variables, we specifi ed a 95.0% ARS (SE=0.4%) equation that proj-ects above historical average absorption through 2018, allowing Rose City occu-pancy to recover to 96.3% by YE2017.

Eff ective Rent SummaryMean Rent (Reis) $1,006Annual Change 7.5%RED 50 Rent Change Rank 4th

RCR YE16 Forecast 5.5%RCR YE17 Forecast 4.9%RCR YE18 Forecast 4.5%RCR YE19 Forecast 3.9%RCR YE20 Forecast 3.7%

4Q15 Eff ective Rent TrendsRent trends went from strength to

strength during 4Q15, topping the pre-vious quarter’s 26-year Reis series record 7.1% year-on-year growth rate by 40 ba-sis points. Rents increased $15 (1.5%) se-quentially, down from seasonally stron-ger 3Q15’s $29 (3.0%) surge but superior to an $11 (1.2%) advance posted during the comparable period 2014; irrespec-tive of negligible rent growth in the sup-ply-heavy Northeast (0.0%) and lagging

Tigard (0.1%) submarkets.By way of comparison, Axiometrics

surveys unearthed considerably fast-er rent growth. Stabilized, same-store property rents increased 13.1% y-o-y, down from 15.7% during 3Q15. Class-B was fastest for the 10thstraight quarter (14.4%), while class-A (10.0%) trailed. Only two submarkets failed to reach a 12% advance — Northeast (7.6%) and Northwest (5.0%) — in each case due to supply pressures. Th e current RCR PORT rent model uses only the fi rst lag of the dependent variable; Baa-rated bond yields (-); the rate of Portland personal in-come growth (+); and the rate of change of RED 46 rent growth as independent variables. Th e 92.2% ARS (SE=0.7%) model projects exceptional 4.5% 5-year annual compound rent growth, ranking second among the RED 46; trailing only New York City (4.7%).

Trade & Return Summary$5mm+ / 80-unit+ Sales 13Approximate Proceeds $425mmAverage Cap Rate (FNM) 4.9%Average Price / Unit $170,302Expected Total Return 8.8%RED 46 ETR Rank 3rd

Risk-adjusted Index 5.21RED 46 RAI Rank 12th

4Q15 Property Markets and Total Returns

Property sales activity was moderately slower during the fourth quarter as 13 priced transactions closed during the pe-riod for gross proceeds of $425 million. Th is compares to 18 transactions valued

at $640mm during the previous period. Moreover, sales in 1Q16 appeared to get off to a sluggish start as only fi ve sales were recorded by the end of February. Slow sales velocity was largely attribut-able to a shortage of quality assets off ered for sale rather than weakening demand. Owners of investment quality assets ap-pear to prefer to further capitalize soar-ing rents before considering a liquidation of a precious core holding.

By way of pricing, investment quality suburban properties were priced to mid-4% to low-5% yields. Th e lone recent infi ll class-A transaction appears to have been priced to a materially sub-4% cap. Class-B/B– properties were priced to mid-5% yields and a handful of class-C or mar-ginally located assets sold to high-5% to 6% going-in cap rates.

In view of the supply/demand imbal-ance for PORT properties, RCR reduced the cap rate proxy from 5.2% to 4.75%. Even at this level metro assets off er an attractive 8.8% annual total return over a fi ve-year hold, based on model derived occupancy and rent point estimates; ranked third among the RED 46. Above average rent volatility reduces risk-ad-justed returns for which Portland ranks group #12.

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It predicted that the most dangerous impact at the 9.0 scale will be felt all along the Oregon coast and be particularly dev-astating to the coastal communities of Crescent City, California; Cannon Beach and Warrenton in Oregon; as well as the Moclips/Westport area in Washington. It will include a tsunami and the following impacts along the I-5 corridor.

Th is major FEMA study also in-cluded signifi cant details regarding the infrastructure impact of such a large earthquake:

Electric power: Extensive electric pow-er outages would be experienced through-out the region. Outages could last several weeks along coastal areas but most cus-tomers in other areas are expected to have power restored within 1 to 8 days.

Natural Gas: Damage to both the transmission and distribution pipeline networks in the aff ected region could cause the majority of customers in west-ern Washington and western Oregon to lose natural gas service. Many homes may lose all sources of heating due to the com-bined eff ects of natural gas and electric power outages.

Telecommunications: Major undersea transpacifi c cables are likely to be severed; disrupting communication service to East Asia as well as between Alaska and the contiguous United States, with a two- to three-month expected restoration time.

Transportation Fuels: A signifi cant number of pump stations along the Olympic and Oregon Line refi ned-prod-uct pipeline system, as well as a substan-tial number of refi ned product terminals in the region, are expected to sustain con-siderable damage; the inability to store and distribute fuels locally is likely to have

a major impact on regional fuel supplies.Road Transportation: Signifi cant

damage to roads can be expected, partic-ularly those along the coast and connect-ing the coast to the I-5 corridor. U.S. 101 is expected to suff er substantial damage due to both ground shaking and tsunami, resulting in a limited capacity to carry traffi c for several months. Nearby coastal areas may be isolated for a short period.

Water Transportation: Tsunami dam-age at the mouth of the Columbia River is likely to impact navigation and the ability to export agricultural commodities.

Rail Transportation: Long-term rail traffi c disruptions along the I -5 corridor and a complete loss of key rail bridges in the Olympia and Seattle area and down-town Portland are expected.

Banking and Finance: Loss of ma-jor transpacifi c undersea cable capacity would aff ect transoceanic commerce, settlement, and transpacifi c fi nancial market exchanges.

Emergency Services: Widespread damage to police stations, fi re stations, and hospitals along the coast is expected.

Health Care: Th e potential of 15,000 to 30,000 casualties and the expected loss due to damage of 15-27 hospitals comprising 524-1708 regular beds and 60-228 critical bed facilities concentrated near the coast would be suffi cient to saturate the excess capacity of other hospitals within a 250- mile range of the worst damage.

Water and Wastewater: Disruptions to potable water supply are expected with restoration times of three weeks to seven months with the greatest damage and restoration times occurring near the coastline.

It is clear that the impact for a 9.0 earth-quake will aff ect many businesses. Many small companies, because they lack the fi nancial resources to survive, will be put out of business. Th is will have a di-rect impact on residential and commer-cial investments since businesses leasing commercial space might fail due to a lack of power, fuel, and communications. If some commercial tenants fail due to the earthquake, then many people will be left without the income to pay residential rent with.

I believe all properties should be covered by earthquake insurance. In that vein, we have included some tips to consider when shopping for earthquake insurance.

Understanding Earthquake InsuranceTh ere are typically three (3) main parts

of the basic earthquake coverage, your property coverage which covers your property up to a certain amount, called the limit; personal property coverage; and loss of rents coverage.

Property coverage needs to be re-searched, as do deductibles. In Oregon, unlike California, there is no regulat-ed coverage and only a limited pool of providers. Choose a company that is strong,rated by A.M. Best or check with the Oregon insurance commissioner. Note that earthquake insurance may not cover landscaping, pools, fences, ma-sonry, and out buildings like storage or garages. If you rent or own a condo, you do not need this coverage as long as you make sure your association has the cov-erage.

Loss of rents coverage should be on an ”actual loss guaranteed basis” and ex-tend for at least 24 months, preferably 36

months(if you can fi nd it). Th e longer the better since aft er a major earthquake you may have trouble fi nding tenants.

Other coverages to consider include building code upgrade coverage or cover-age for limited debris removal, land resto-ration, and emergency repairs.

It is also important to know what your earthquake insurance policy does not cover. All insurance policies have exclu-sions. Have your insurance agent help you understand your policy. In general, earthquake insurance usually does not cover anything that your normal build-ing insurance policy already covers. You defi nitely need to check with your in-surance agent to confi rm where fi re and liability insurance leave off and where earthquake insurance kicks in. Common exclusions include:

Fire: Even if an earthquake causes the fi re, your building insurance policy cov-ers fi re damage.

Land: Usually, earthquake insurance does not cover damage to your land, such as sinkholes from erosion or other hidden openings under your land. You may be able to buy limited additional coverage to restore or stabilize land.

Vehicles: Earthquake insurance does not cover damage to your vehicles or your tenants’ vehicles. If you have a fl eet of ve-hicles that might be damaged you may want to check into additional insurance.

Flood: Even if you live near a lake that fl oods your home aft er an earthquake, wa-ter damage from fl oods, including those caused by a tsunami, are covered by fl ood insurance, not earthquake insurance.

When purchasing earthquake insur-ance, you may need to buy on a second-

Earthquake Insurance ...continued from page 3

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Commercial Real Estate Experts ...continued from page 1

some major markets, investors will still benefi t from the strong income fl ows gen-erated from new and existing leases.

Th e fi ft h annual release of the joint re-port draws on the three organizations’ respective research and expert analysis and off ers an objective outlook on com-mercial real estate through forecasts and commentary on the current economy, capital markets and commercial real es-tate property markets. A research-based assessment of the offi ce, industrial, apart-ment, retail and hotel property sectors is also provided.

“Historically low interest rates, espe-cially in treasuries, combined with com-mercial real estate’s stable prices and value make this asset an attractive investment,” says Ken Riggs, president of Situs RERC. “Looking into 2016, the commercial real estate market should moderate, which could stabilize prices.”

Vacancies are expected to continue to decline slightly in 2016 for all prop-erty types, except in the apartment sec-tor, where they are forecast to increase modestly by the end of the year as more new project completions come onto the market. Continued job growth, demand exceeding supply and limited new con-struction (outside of multifamily) should lead to rising rents and steady investor re-

turns, which overall will shift away from capital appreciation as price growth levels off in many markets.

Continuing on the same slow trajecto-ry seen for many years, the U.S. economy – facing headwinds from a rising dollar, fi nancial market volatility and geopoliti-cal concerns – is forecast to grow at a rate of 2 percent to 3 percent in 2016, which is stronger than most global economies and enough to generate around two million net new jobs over the next year. Defl a-tionary pressures related to low gasoline and energy prices are expected to dimin-ish by mid-2016, in part because of robust growth in apartment rents.

“Supported by solid hiring in most parts of the country, the demand for own-ership and rental housing will continue to increase in 2016 despite another year of meager economic expansion,” says Law-rence Yun, NAR chief economist. “While supply shortages will weigh on housing aff ordability and push home prices and rents higher, the housing sector will keep the U.S. economy afl oat and lead the res-idential investment component of GDP growth by up to 10 percent this year.”

SOURCE National Association of Realtors

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Rents to Flatten in 2016Aft er years of record rent appre-

ciation, Zillow’s rental forecast shows relief in sight for cash-

strapped renters.

• National median rent at the end of 2015 was $1,381, and is expected to increase slightly to $1,396 over the next 12 months.

• Th e slowdown in rents means that, by the end of the year, they will be rising at a slower pace than incomes in many markets.

• In December, home values rose 4 percent to a Zillow Home Value Index of $183,500.

Rent appreciation will level off over the next 12 months, slowing to an annual rate of 1.1 percent by December 2016, accord-ing to the new Zillow® Rent Forecasti. Th e national Zillow Rent Indexii at the end of 2016 is projected to be $1,396 -- compared

to $1,381 in December 2015. Zillow is forecasting a decrease in the

rate of rental appreciation amid a rent-al aff ordability crisis that has renters in some markets spending almost half of their income on rent. Some of the fastest

growing metros had double-digit annual rental appreciation at the end of 2015.

Zillow expects rental appreciation to slow down most signifi cantly in Nash-ville, Tenn., San Francisco, Portland, Ore. and Denver. Rents in San Francisco saw 12.5 percent appreciation in 2015. Zillow forecasts rent in San Francisco will grow half as fast in 2016 -- 5.9 percent.

Even with the slowdown, rents will remain unaff ordable in many of the ma-jor markets across the U.S., especially on the West Coast. Renters in San Fran-cisco and Los Angeles can expect to spend 40 percent of their income on a rental paymentiii.

“Hot markets are still going to be hot in 2016, but rents won’t rise as quickly as they have been,” said Zillow Chief Econ-omist Dr. Svenja Gudell. “Th e slowdown in rental appreciation will provide some relief for renters who’ve been seeing their rents rise dramatically every single year for the past few years. However, the situ-ation remains tough on the ground: rents are still rising and renters are struggling to keep up.”

Th e slowdown in rental appreciation indicates that supply of new multi-fami-ly homes is catching up to demand. Sub-stantial new housing supply is becoming available in Atlanta, Denver, Portland, Seattle, and other markets.

Th e Zillow Home Value Index rose 4 percent year-over-year in December 2015, to $183,500, according to the Zillow® De-cember Real Estate Market Reportsiv.

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13



Oregon’s House Bill 4143 and How It May Aff ect You

If you have been following Oregon’s 2016 legislative session, you know that there have been two hotly debated bills

brought before our elected offi cials that will have an impact on real estate. One be-ing the Oregon’s new minimum wage in-crease which was signed into law by Gov. Kate Brown on March, 2nd 2016. Th e oth-er being HB 4143 which addresses sever-al topics having to do with rent increases and evictions. HB 4143 as of the writing of this article has passed the Oregon House and Senate and is expected by most to be-come signed into law by Gov. Brown. Law makers have added the following emer-gency declaration as the last piece of that bill making it eff ective immediately upon its signing.

“Th is 2016 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is

declared to exist, and this 2016 Act takes eff ect on its passage.”

Our fi rm has had many discussions over these two bills with the general public, property owners, and other real estate in-dustry professionals and it is the opinion of most that the momentum was driven by historically low vacancies and rapidly rising rents. Th ese trends were primarily eff ecting the Portland and Bend rental markets in recent years but have made their way down the Willamette Valley into the Salem-Keizer area.

According to the speaker at an event I recently attended put on by the Salem Rental Housing Association, renters are becoming more organized. HB 4143 is the tip of the iceberg and is actually a combi-nation of HB 4143/HB 4001. Ideas from both bills were combined to make them more palatable for law makers to pass. As

the calls grow louder and more frequent for tenant protections, Oregon’s law mak-ers will undoubtedly be introducing more legislation in the coming years to appease their constituents.

With the minimum wage scheduled to rise over the next several years many ten-ants will fi nd themselves with additional income. Property owners that have been apprehensive to raise rents in lieu of scar-ing away their long term tenants may now fi nd themselves more comfortable with the idea of moving their rents to current market values. For those owners, there are a couple of important items to factor in now that HB 4143 has passed with regards to noticing tenants including no rent in-creases within the fi rst year of month to month tenancy and 90 day notice aft er that period. Also changing is the increase to 90 days notice for no cause evictions.

If you are confi dent in your manage-ment abilities and enjoy the income these properties produce for you, I would en-courage you to do a couple things. First would be to educate yourself. Make sure that you are up to snuff with changing landlord/tenant laws. If you are not well

versed, join a local association like Ore-gon Rental Housing Association. Th ey have several local chapters throughout the state and can help you with the forms and knowledge that you need to protect yourself from liability. If you don’t have the time or desire to learn, seek the help of a professional management company.

For owners who self-manage and are fed up with the increasing diffi culties that new “tenant protection” legislation is cre-ating, it is my opinion that now is the ide-al time to plan your exit strategy and take advantage of a strong sellers’ market. In addition to the rents moving up, we are seeing a signifi cant rise in property values for 2-4 unit multifamily properties in the Mid-Valley.

Chris Salaz is Small Plex Broker at SMI Commercial Real Es-tate, LLC . Please contact Chris if you would be interested in receiving SMI’s free bi-annual newsletter which includes the most comprehensive rent and

vacancy survey in the mid-valley, the SMI Apart-ment Update.

Information Resources From the Multifamily NW website to regular communications and monthly newsletters we keep our members informed on the industry. Our biannual Apartment Report gives you the latest rent and vacancy data to stay competitive.

Professional Rental Forms Multifamily NW offers a full suite of Single-Family and Multifamily rental forms that are reviewed quarterly by a committee of experts and legal counsel. With over 100 different forms, we have you covered!

Professional Development Property Management has many facets. Whether you manage single-family or multifamily we are here to provide great opportunities for Leasing, Marketing, Financial Management, Forms Training and more! Nationally Recognized Designations through NAA are a great way to show your management expertise in the industry.

Legislative Action Government & Public Affairs Committee meets monthly to discuss the current issues facing the industry and provide support on behalf of our members. Legislative Alerts are regularly provided to members so that all are informed and ready for action.

Commitment to Charity Charity Events are a very important part of the Multifamily NW agenda. Annual golf events support housing charities around the state and the Service Committee hosts charity drives and events throughout the year.

Networking Opportunities Multifamily NW offers regular networking events throughout the year. It’s the perfect chance to connect with your peers to learn the tips and tricks that make your job easier.

Annual Events With 8 large annual events and counting, Multifamily NW is second to none for educational and networking resources. We offer great sponsorship opportunities to promote your business and are committed to promoting Members Using Members (MUM).

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14



EPA Cracks Down on Lead ...continued from page 1Dear Maintenance Man ...continued from page 8

cupants of pre-1978 “target housing” and “child-occupied facilities” receive infor-mation on lead-based paint hazards be-fore renovations begin, that individuals performing such renovations are properly trained and certifi ed, and that renovators follow specifi cally prescribed lead-safe work practices to reduce the potential for exposure to lead for all, including workers.

Renovators are required to give the pamphlet to property owners and oc-cupants within 60 days before starting a renovation. Housing providers, simi-larly, have obligations to notify residents prior to covered repairs and renovations, to share informational literature with them, including a disclosure form, and to be lead-safe certifi ed or hire a contractor who is.

To protect yourself and your invest-ment, it’s important, that you assure the contractors you hire are in fact lead-safe certifi ed and complying with the EPA’s safe work practice requirements. To learn more about what repairs are covered and what these work-safe practices are, visit http://www.epa.gov/sites/produc-tion/files/documents/renovaterightbro-chure.pdf.

Th e EPA reported that rough two-thirds of the cases they recently settled in-volved failure to obtain EPA certifi cation prior to conducting renovations. Over half the cases were related to violations of required safe work practice standards.

Th e EPA states its aim in seeking penal-ties against RRP violators is to help deter other violations and to level the playing fi eld for companies that do follow the law. Such fi nes and settlements help eliminate the fi nancial advantage a violator may

get by underbidding competitors that are compliant.

You can read the full EPA me-dia release here: http://yosemite.epa.gov/opa/admpress.nsf/0/0D3D2DBE-30561BAD85257EEB00698FC7

‘Looking for a lead-safe contractor or want to become certifi ed yourself in or-der to do work on your own properties? Call the Leadline for free information at 503/988-4000.

A reminder that although lead poison-ing is especially dangerous for kids, the fear of lead poisoning or liability does not give housing providers the right to deny or discourage families with children away from pre-1978 housing. Familial status is a protected class under federal fair hous-ing law1 and doing anything to deny or discourage otherwise qualifi ed families is illegal. Visit www.FHCO.org for more information on this topic.

Th is article brought to you by the Fair Housing Council; a civil rights organiza-tion. All rights reserved © 2016.

Federally protected classes under the Fair Housing Act include: race, color, national origin, religion, sex, familial status (children), and disability. Oregon law also protects marital status, source of income, sexual orientation, and domestic violence survivors. Additional protect-ed classes have been added in particular geographic areas; visit www.FHCO.org for more information.

or cause too much shade in these areas. Th e best way to remove the mildew

safely is to use a power washer with a soapy solution that contains a mildew-cide. Once the building is cleaned prop-erly with the power washer, regular prep work can begin and the property painted.

Dear Maintenance Men:I have just purchased an apartment

property with a swimming pool. Th e pool is in very poor condition and I am debating fi lling it in and putting in grass over the top. What is the procedure for fi lling in a pool?

Rena

Dear Rena:In our opinion a fi lled in apartment

swimming pool is a good apartment swimming pool and an excellent use of dirt! First, before fi lling in a pool, check with your city or county, permits and pro-cedures may diff er. Drain all of the water out of the pool and pour concrete into the skimmer, main bottom drain and into any pipes leading into the pool. Th is will stop any water or creatures from using the pipes as a runway into the pool equipment area. If your pool is surrounded by con-crete, try to save the water fi ll line into the pool, it can be used as a future sprinkler water line. Using a jackhammer, poke a number of holes in the bottom of the pool to help in drainage. Th ese holes should be at least twelve inched wide and all the way through the pool bottom. Keep in mind the pool bottom can be a foot thick or more. Leave all the jackhammer debris in the bottom of the pool; it will help in fu-ture drainage. If your coping around the pool is in good condition, you can leave it, but we recommend that it be removed.

Th e coping can easily be detached by sledge or jackhammer. Just let the coping fall into the pool it will also help in drain-age. One half to three quarters of the back fi ll material should be sand or grav-el at the bottom of the pool. Th e balance of the fi ll should be clean dirt and topsoil level with the existing grade. Water the dirt as you back fi ll the pool to help in compressing the soil. Th e topsoil should be pack down with a tamper. Water the soil regularly for about a week, fi lling in any low spots. Seed or landscape as you wish aft er the soil has stabilized. Lastly, contact your insurance company and tell them the good news about your newly fi lled in pool, your rates might just come down a little.

Bio:Please call: Buff alo Maintenance, Inc for mainte-nance work or consultation. JLE Property Management, Inc for management service or consultationFrankie Alvarez at 714 956-8371 Jerry L’Ecuyer at 714 778-0480 CA contractor lic: #797645, EPA Real Estate lic. #: 01460075Certifi ed Renovation Company www.Buff aloMaintenance.comwww.ContactJLE.comwww.Facebook.com/Buff aloMaintenance

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The information contained in this report was prepared for general information purposes only and is not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell curren-cies or securities or to engage in any specific transactions. Information has been gathered from third party sources and has not been independently verified or accepted by RED Capital Group. RED makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. RED cannot be held responsible for any errors-or mis-representations contained in the report or in the information gathered from third party sources. Under no circumstances should any information contained herein be used or considered as an offer or a solic-itation of an offer to participate in any particular transaction or strategy. Any reliance upon this infor-mation is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed herein are subject to change without notice due to market conditions and other factors.

4Q15 Market Overview ...continued from page 9

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Do I have to have a screening criteria? Do I have to send out a denial to every applicant I screen? Can my tenant deny me entry even when I have given proper 24-hour notice to enter? Is charging a pet deposit on a service animal legal? Is there a legal deadline for the Final Accounting Form? How do I screen Section 8 applicants for income?

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4Q15 Market Overview ...continued from page 15

17



Earthquake Insurance ...continued from page 10

ary market. Ask your insurance agent to scour the market and make sure that you are getting the best deal you possibly can. Don’t be surprised if the deductibles run from 15 – 25%. Consider how much cash you will have on hand to jump start a re-pair process. Aft er a 9.0 earthquake it may take 6 – 8 months before the city will clear your building for occupancy.

Earthquake insurance premiums vary depending on many factors, including the age of your building, the rent collect-ed, the location, the kind of soil, the cost to rebuild, and the deductible. Don’t be shocked if it is expensive.

What else can you do to protect your property and manage your risk from a major earthquake?

• Bolt the property to the foundation.• Brace any chimneys.• Strap water heaters to the wall.• Put in automatic gas shut-off valves.• Advise tenants to screw bookshelves

and book cases into the wall.• Research the location of the

property on a local hazard map to assess your risk.

• Follow government issued earthquake proofi ng recommendations.

• Reserve funds for earthquake proofi ng capital projects.

• Tie the roof to the studs during roof replacements.

• Tie the roof structure to the wall structure.

Th e main recommendation in all docu-ments regarding the impending Cascadia earthquake stress preparation and plan-

ning. We may not have the power to pre-vent the earthquake, but we do have the knowledge and technology to reduce the damages it may infl ict. Even if you own one of the 20 percent of properties not aff ected, you still will be faced with the infrastructure problems such as a lack of power and telecommunications for days or weeks resulting in tenants unable to pay the rent. All buildings will be aff ected and all building owners need to prepare. Th e fi rst step to mitigating your risk is to buy earthquake insurance.

ResourcesThe Oregon Resilience Plan https://multco.us/em/oregon-resilience-planThe City of Portland Hazard Map: https://www.portlandoregon.gov/pbem/58572#mapsStory: Historic Earthquakes, Teara: The Encyclo-pedia of New Zealand http://www.teara.govt.nz/en/historic-earthquakes/page-13The Really Big One: An earthquake will destroy a sizeable portion of the coastal Northwest, The New Yorker http://www.newyorker.com/maga-zine/2015/07/20/the-really-big-oneTurbidite Event History—Methods and Implica-tions for Holocene Paleoseismicity of the Cas-cadia Subduction Zone, U.S. Geological Survey http://pubs.usgs.gov/pp/pp1661f/ 13-year Casca-dia study complete – and earthquake risk looms large, OSU News & Research Communications http://oregonstate.edu/ua/ncs/archives/2012/ju-l/13-year-cascadia-studycomplete-%E2%80%93-and-earthquake-risk-looms-largeAnalytical Baseline Study for the Cascadia Earth-quake and Tsunami, Department of Homeland Security https://www.bluestonehockley.com/wp-content/uploads/2016/01/FEMA-earthquak-estudy.pdf

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higher. Th e consultant also helped me vi-sualize what type of furniture would fi t in each room.

When the apartment “presentation” was completed, the consultant walked me over to the location of the upcoming apartment. She pointed out and described the amenities we saw along the way and discussed the proximity of each one to the apartment. She indicated where I and my guests could park. Standing outside the apartment, the consultant pointed out other advantages to this location. She drew my attention to the private patio, nearby fountain and lush landscaping. She also mentioned the friendly neigh-bors upstairs and next door.

Once the leasing consultant confi rmed I was pleased with what I had learned about the apartment and community, she asked if I would like to put a hold on the apartment until it was ready to view. When I declined, she told me she under-stood my hesitation since I had not ac-tually seen the apartment. However, she reminded me it was the only one she had coming available; without a deposit she couldn’t hold it for me. As I continued to hesitate, she told me my deposit would be fully refundable if I did not like the apart-ment once I saw it.

As you can see, having no apartment to show did not hamper the leasing consul-tant’s ability to sell AND close the sale! In fact, it was quite the opposite: She became even more creative in selling her product! She had the opportunity to go the extra mile and “create a visual,” and she took

sk The Secret ShopperReady Vacants

While market conditions remain strong, there may be times when you fi nd yourself in a sit-

uation where you have no apartments to show. Maybe you don’t have a model or you’re in a make ready process with the vacant apartments that are available. Here is the question:

QI know I shouldn’t show an apartment

that isn’t ready, but I hate to ask someone to come back. Everyone is so busy I just don’t think they’ll make the time to come back for another visit. What can I do?

AFirst of all, you do not have to show an

apartment in order to rent one. While many people are “visual” and having a model or vacant apartment to show may seem like an advantage, it is not the only sales tool you have at your disposal. Here is what can happen when there is no apartment available to show:

With a diagram of a 2 bedroom, the consultant “walked me through” the apartment as though we were inside. She used the terms “you” and “yours” during the entire “visual” tour. She pointed out the various storage areas, and also showed me the shelf and cabinet over the wash-er and dryer. Th e consultant used de-scriptive words like “oak cabinetry” and “spacious breakfast bar.” She mentioned the wood-burning fi replace and vaulted ceilings, and pointed out the fi replace and indicated where the ceiling begins to get

advantage of it. Th e prospective renter in this situation got a more comprehensive tour when there was no apartment avail-able to show!

Remember: You only get one chance to make a good fi rst impression. Selling what you have to off er will increase your leasing ratio. Rather than demonstrating a dirty apartment or asking the client to come back, put your product knowledge to the test: Give a thorough presentation with whatever sales tools you have at your disposal, and then close the sale. Once you rent that last vacant apartment sight unseen, you will have the confi dence to prelease all those upcoming notices . . .

If you are interested in leasing training or have a question or concern you would like to see addressed, please reach out to me via e-mail. Otherwise, please con-tact Jancyn for your employee evaluation needs: www.jancyn.com

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Rents to Flatten in 2016 ...continued from page 12

Metropolitan Area Dec. 2015 ZHVI Dec. 2015 ZRI ZRI Forecast for Dec. 2016 Forecasted Diff erence Between Dec. 2015 ZRI and Dec. 2016 ZRI

United States $183,500 $1,381 $1,396 1.1%New York/Northern New Jersey $381,200 $2,384 $2,400 0.7%

Los Angeles, CA $554,700 $2,491 $2,561 2.8%Chicago, IL $193,000 $1,633 $1,611 -1.4%

Dallas-Fort Worth, TX $177,200 $1,500 $1,532 2.1%Philadelphia, PA $203,100 $1,558 $1,550 -0.5%

Houston, TX $170,100 $1,579 $1,619 2.5%Washington, DC $357,800 $2,107 $2,118 0.5%

Miami-Fort Lauderdale, FL $225,700 $1,822 $1,886 3.5%Atlanta, GA $160,000 $1,274 $1,280 0.5%Boston, MA $382,900 $2,247 $2,309 2.7%

San Francisco, CA $785,800 $3,338 $3,536 5.9%Detroit, MI $121,800 $1,132 $1,128 -0.4%

Riverside, CA $298,200 $1,691 $1,723 1.9%Phoenix, AZ $216,000 $1,249 $1,266 1.4%Seattle, WA $368,700 $1,931 $2,018 4.5%

Minneapolis-St. Paul, MN $214,300 $1,500 $1,511 0.8%San Diego, CA $499,900 $2,316 $2,348 1.4%St. Louis, MO $141,000 $1,123 $1,115 -0.7%

Tampa, FL $160,100 $1,296 $1,302 0.5%Baltimore, MD $242,300 $1,714 $1,702 -0.7%

Denver, CO $320,800 $1,952 $2,031 4.0%Pittsburgh, PA $126,700 $1,090 $1,079 -1.0%Portland, OR $310,200 $1,689 $1,753 3.8%Charlotte, NC $157,800 $1,221 $1,250 2.4%

Sacramento, CA $331,500 $1,599 $1,654 3.4%San Antonio, TX $148,000 $1,301 $1,306 0.4%

Orlando, FL $180,600 $1,343 $1,373 2.2%Cincinnati, OH $141,800 $1,225 $1,243 1.5%Cleveland, OH $124,300 $1,124 $1,117 -0.6%

Kansas City, MO $146,600 $1,199 $1,228 2.4%Las Vegas, NV $199,800 $1,212 $1,191 -1.8%Columbus, OH $150,900 $1,271 $1,289 1.4%

Indianapolis, IN $130,100 $1,181 $1,138 -3.6%San Jose, CA $933,000 $3,431 $3,699 7.8%Austin, TX $242,900 $1,683 $1,741 3.4%

Source Zillow

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Documents

Rental Housing Journal Metro March 2016