well . Hi everybody . This is another osta update on hb 3054 . I'm bill bateman , part of the team here at osta , and we have a special guest today , another of our board members , rochelle love elder . Thank you , rochelle , for coming in . I know how busy you are and I appreciate your time absolutely .
Rocehlle Love ElderThank you for having me , Bill .
Bill BatemanOne of the things that's getting quite a bit of confusion on the bill and we thought having someone kind of talk you through it would be useful . First of all , what are the current rent limits for people who may not understand it and what are the proposed changes and how might that affect us both on a short-term and long-term ?
Well , the current law states that it's 7% annual increases plus CPI , which caps at 10% . Most people have been experiencing this 10% increase every year and rent has over doubled in the last five years and people in Social Security are having a hard time keeping up . So OSTA helped to draft a bill that would allow to lower that annual rent increase down to CPI only , which is what our hopes were , and I think everybody's a little dismayed that we didn't get exactly that , but we got it almost cut in half that , but we got it almost cut in half .
Bill BatemanSo the proposed amendments for HB 3054 would be 6% flat annual increase , no basis on CPI at all . That's a flat cap then . That's not plus a little , that's just a flat number .
Rocehlle Love ElderIt is . It's a flat number , which might be a good thing considering the economy . Right now . We don't know where CPI is going , so it might end up to our benefit more than we think . So 6% , that's almost half of what people are paying now . That's not a bad cut . Yeah , so that's where we're at with the annual rent increases .
Bill BatemanOkay and there was a provision kind of tacked on to that that every five years , if I have it correctly , the landlord could go up to 12% for maintenance , for emergency or unscheduled maintenance , and it had to have a vote of the tenants and an approval and there were supposed to be some guardrails put on it so they didn't just put on the increase . Then we never saw it , but there's been quite a bit of back and forth on that . I personally hate it but I don't run the circus . I know there's some people very much in favor of it . Can
you explain a little bit about what that 12% does and what that looks like over a long term as far as how it looks to the rent ?
Rocehlle Love ElderFor sure . One of the biggest issues that the landlord brought up at our hearing in Salem was that they have all these expenses for infrastructure that they have to pay for and with a CPI only increase it would be impossible to do that . So this is the proposed , you know , middle ground . It kind of feels like to us you know six of one and half a dozen of the other , but it actually still . Even if tenants voted on the 5% increase or the 12% increase every five years , if tenants voted on that over a 10 year period , it still ends up being cheaper than the current 10% . So the numbers look a little bit like this If you had the 10% annual increase , your rent would go from being $1,000 , starting at $1,000 and would end up at , in 10 years , $2,500 . It would be an increase of a total of drum roll , please . It would be a total increase of 159% over a 10-year period .
Bill BatemanAnd that's because of compounding , yes , so how would those numbers look over a 10-year period , comparing the two types of increases ?
Rocehlle Love ElderSo in scenario one with a 6% annual increase and a 12% increase every five years that's if the tenants voted on it we would be looking at an 89% increase in rent over a 10-year period , and then with the 10% annual increase we would be looking at 159% increase over a 10-year period . So even with the 12% increase , it's still cheaper then .
Bill BatemanOkay , I think one of the big concerns seems to be putting some guardrails or some controls on the use of the 12% , because many parks claim maintenance is not happening now with the 10% rate increase and this would just be a case for not doing , delaying , delaying , delaying until this 12 percent came in and then big ticket items would get rolled through . The big concern is would they get done ? What kind of teeth do we have ?
Rocehlle Love Elderbecause most of the uh oregon statutes have absolutely no teeth when it comes to uh landlords not following the rules yeah , well , even with the ones with teeth , it still requires a tenant to take the landlord to court to sue
them for it .
Rocehlle Love ElderSo and that wouldn't be any different here Whatever teeth they do put on , it is still going to require the tenant to take the landlord to court to or the whole park to take the landlord to court to be able to enact those teeth , I guess . So we're not really sure what exactly they're going to put on it . You know it'd probably be a refund of some sort of the money that was given , and my biggest fear , I think , is that landlords will use it as an excuse to blame the tenants if they don't vote in for the infrastructure improvement 12% increase . That's their fault that they're not getting the infrastructure improvement that they need , but it's really their job to do it anyway . So hopefully we'll have some good news on what type of teeth they're going to add on here . I think still , even with us not getting exactly what we're wanting out of this , almost half of what we're expecting to experience in rent increases is better than nothing , exactly .
Bill BatemanAnd I know maintenance is something that should happen all the time . This 12% is for extraordinary maintenance , like a power transformer blows out or there needs to be a sewage line replaced , not just every day trimming the trees and patching the streets . Am I correct on that ?
Rocehlle Love ElderYeah , this is for large infrastructure improvements and luckily there are some grants out there that will help parks pay for stuff like that . So it's possible that they'll still have the means to do these infrastructure repairs with or without the 12% increase , because I know most tenants aren't going to vote on that .
Bill BatemanWell , okay , today is the 2nd , 2nd of April . I know tomorrow is kind of a key day on the bill . In talking with John , he indicated that tomorrow is the day they had to make some sort of decision and try and vote and get it out of committee . It's a long road ahead of us , as I understand this is going to .
Rocehlle Love ElderIf we get it active in the house , then it has to go to the senate where this whole thing can start again with amendments and modifications yeah , I don't know how long exactly we're expecting it to be , and and even after that , it will take another 18 months , I believe , for it to even be um yeah , if passed it's going to kick in .
Bill BatemanI believe in uh 27 yeah , yeah .
Rocehlle Love ElderSo I mean , our hearts go out to people that are already experiencing , you know , evictions or not being able to meet their rent , and I wish there was a faster , better way of dealing with all of this . And you know we'll keep doing research into funding possibilities or grants that are available to the public that they might be able to take advantage of .
Bill BatemanOutstanding . And one thing I know I've brought up on every podcast and every place I'm printing a lot of the owners , a lot of these big
corporations , are saying oh , you know , we got all these costs , all these costs . And the residents are saying we're not seeing any work . I challenge them open your books . When I go to the bank and I ask for some money , they say well , bill , what do you got ? What are you spending on ? Are you spending wisely ? Are you saving wisely ? What do your books look like ? What are you spending now in maintenance ? You're getting these 10% increases . Are they going to park maintenance or are they going to board member profits ?
Rocehlle Love ElderWell , you know , some of that information is available . When you're looking at , let's see , Frontier Mobile Village , for instance , they're for sale online . So when you look at listings of manufactured home parks online , it shows you things about their net operating income , and that's the income after expenses , so that will tell you how much money they're actually pulling in . It doesn't include taxes , though , and it doesn't include loans , I believe , but that was something a landlord told me anyway but after expenses , so their regular maintenance costs are part of that , and so you'll see how much profit they're really pulling in .
Bill BatemanGood , I'd like to take a look at that . Thank you , that's good information . Well , is there anything else you'd like to share about the topic ? I know we just want to give little bites . It's like a pizza you can eat a whole pizza , but you've got to go a slice at a time .
Rocehlle Love ElderWell , you know there is some talk about the one of the amendments to the bill being that it's only for parks with 30 or more units , and some people are balking about that because they live in smaller parks . But one thing that they found was that the mom and pop parks the ones who are treating their tenants right tend to be the smaller parks . Investment firms are not that interested in larger parks or smaller parks , they want the big ones . Parks Investment firms are not that interested in larger parks or smaller parks , they want the big ones . So we're able to leave those mom and pop ones out of this , where they can still raise the rent like they need to to be able to afford to keep up
with rising costs , because they haven't been raising their rent for a long time , and we don't want to hurt those little guys and put them out of business .
Bill BatemanNo , we do not they're .
Rocehlle Love Elderthey're not the enemy and you know we can't make everybody happy , but this is the best um middle ground we could find .
Bill BatemanSo very good . Well , I understand that with we still have weeks to go . I don't want people to not write letters . I know if , uh , you are in one of the districts in on the house Representatives , there were one or two reps that were Democrats , that were on the fence or actually against this , and this bill has gone across party lines Democrat and Republican , with the Republicans , as I'm understanding it , against it because they're more big business oriented . If you're in one of those districts , there's absolutely no reason . I think you and I have been making calls to both people in the parks and to the actual representatives to get them in at least to listen to another side of the story .
Bill BatemanSo there's lots of times to stay active to write a letter , to make a phone call , to show up at a meeting .
Rocehlle Love ElderYeah , so April Dobson was one of those Democrats that we needed to get support . We needed her to get on board with this . So we're hoping that people that are in her district area they will call her , email her , write a letter as soon as possible because this goes to vote . You said tomorrow , right ?
Bill BatemanRight Tomorrow she's up in Clackamas , as I understand , Clackamas County area . Is that correct ?
Rocehlle Love ElderYeah , clackamas County , and it's , I think , 97006 , 97005 , something like that , 970015 , those area codes . So if you're in Clackamas and you're Happy Valley , those are the areas that we're needing to get on the get on the horn and collar okay , I will add her phone number at the state capital to the login for the chat and for the podcast here , thank you .
Bill BatemanThank you , rochelle , for coming in . I appreciate your time . Numbers are not my strong point either , so thank you and your spreadsheet , for helping us out .
Rocehlle Love ElderThanks for having me , Bill .
Bill BatemanThe preceding program was a presentation of Retired Guy Productions .