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Editor's Note:  The following article was provided by Northwest ark Brokerage. For more information on manufactured home communities for sale or an assessment of your community call Bill Jackson of Northwest Park Brokerage at (206) 652-4100 or email Bill at: billj@nwparks.com.  

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Everybody is wondering what type of year 2020 will shape up to be.  Elections, international unrest, political infighting, tariffs, taxes and a laundry list of other issues has kept everyone guessing.  None of us know what the future will bring, but in the housing industry two things will help us stay healthy and grow steadily – low interest rates and a strong economy.  

CAP RATES. From what we have seen recently CAP rates can vary greatly, depending on the age and quality of the park/community and its location. 

Low interest rates combined with rising Net Operating Incomes are minimizing CAP rates in most areas of the country.  Coastal metropolitan areas account for lower CAP rates than other regions, where quality, larger communities are demanding CAP rates in the 4% range, and some have been sub-4%.  Buyers target high caliber parks in this CAP rate range, and they sell within weeks of listing.  This is something we haven’t seen before but there is limited inventory available for buyers targeting quality larger communities, and as private housing costs rise out of reach for many residents, demand for manufactured housing communities will continue to compress CAP rates.  If you are a potential seller of a larger quality community, we would love to talk to you.  We have the buyers.  Older communities in rural areas on septic systems and wells have seen CAP rates as high as the 7% range, but if they can be converted to central, local utilities they have a potential and there is still a strong demand for these properties.

INTEREST RATES.  In December the Federal Reserve signaled that it wants to hold off on further interest rate cuts for a while.  At its last meeting the Fed kept the federal funds rate between 1.5% and 1.75%.  Fed Chair Jerome Powell has been in his current position since November 2, 2017 and he expects that the economy will remain stable, but again emphasized that the future path of Fed actions will depend on many different possible events.  

The bond market has also been very stable, as rates have changed very little over the past few months.  The yield curve – the gap between rates on short-term and long-term bonds has maintained its historically normal upward sloping line.  This indicates that investors are not worried much about a possible recession occurring this year or next. 

If the economy slows the Fed will have a much smaller margin of error.  If market turmoil develops (think war or trade challenges) then the Fed will likely cut rates at least one more time.  However, that could result in the Fed gradually raising rates in 2021 according to a variety of economists and prognosticators. 

THE ECONOMY. Most economists seem to agree that the 2020 economy will look much like the 2019 economy.  Long gone are the days of 2007-2009 where real estate foreclosures and bank closures (remember Washington Mutual?) where the daily headline.  Today businesses are by-in-large doing well, unemployment is low, liquidity is plentiful, the stock market is steadily setting new records and many economists believe things will actually get even better in 2021.  The biggest area of uncertainty remains international trade and if that clears up 2020 might even be better than expected.

The “demand side” of the economy will be a little subpar, giving a small break to the supply side.  But when spending improves the supply limitations of low labor force growth and slow productivity growth will diminish, leading to increasing demand for products and services and a demand-supply balance.  Households are growing their incomes slightly more than they are growing their spending.  As a result, the savings rate is moving slowly upward.  That’s ideal, as a higher savings rate puts the economy on a more sustainable path.

Finally, the growth of income and spending has not been as great in 2019 as in 2018 because job gains are lower.  That results from the tight labor market.  Businesses would hire more if they could find additional qualified workers.  Wages have not risen much, so the income growth rate is lower than back in 2018.  However, the jobs picture is solid, leading to good incomes and a positive attitude among most consumers.  Look for them to continue growing their spending moderately in 2020 and into 2021.

Oregon Legislature

Senate Bill 586 Becomes Law on January 1, 2020

When Senate Bill 586 became law on 01/01/20 it amended several landlord-tenant laws.  Most industry representatives feel the new mediation aspects of this Bill are the most important. Notably, the provision that requires mandatory mediation if either the landlord or the tenant initiates a request for mediation.  They are most likely to be disputes relating to compliance with the rental agreement or modifications in the rules or regulations within the community. 

Interestingly, there are a number of types of disputes excluded from mandatory mediation, unless both parties agree otherwise.  They include facility closures, facility sales, rent increases, rent payments and/or amounts due, unauthorized occupants, disputes involving domestic violence or sexual assaults and disputes arising from termination of tenancy under ORS Chapter 90 (Oregon’s Residential Landlord-Tenant Law). 

If a community has a mediation policy, it must include a detailed process and format to initiate mediation, the names and contact information for mediation services made available by the Housing and Community Services Department, a clause stipulating that all communications during the mediation process be held in strict confidence, and it may include specific disputes between the landlord and one or more tenant, or a dispute between two or more tenants. 

All parties must participate in the mediation by making a good faith effort to schedule mediation within (30) days after it is initiated, attending and participating in the mediation process and cooperating with reasonable requests of the mediator. 

Californians Are Moving North

A new study by United Van Lines shows California is ranked among the top 10 of “most moved from states” last year, coming in at number 7.  One of the hot spots people are moving to?  Boise, Idaho.  According to the Boise Valley Economic Partnership, in a span of about five years approximately 7,200 Californians have moved to the Boise area.  And if you have visited Boise recently you can attest to this fact by navigating their increasing crowded roadways, bustling restaurants and newly constructed hotels, motels and shops. 

Forbes Magazine recently named Boise as the fastest growing metro area in the US, crediting the area’s robust tech sector and job growth.  The median home price is Boise is $332,698.  In San Francisco?  $1,325,000. 

Gas prices in Boise are a dollar less than in California and most of the other typical items that make up a family’s cost of living are all significantly less in Idaho.  Also, manufacturers are attracted to the Treasure Valley because of the favorable climate and geological attributes.  Boise is not an area where floods, earthquakes, tornados and hurricanes are a threat, and large companies find that very appealing when investing in large brick-and-mortar factories, data centers and distribution hubs.

Oregon is experiencing the same migration, but it’s been going on much longer.  Californians disproportionally move to southern and central Oregon when compared to other parts of the country.  Southern Oregon has been growing at a rate of about 5% per year, but 12% of net migration is from California.  Most other Californians move to the Portland area and the Willamette Valley.  On average 39,320 Californians move to Oregon annually.  But an average of 19,523 Oregonians also make the move south, leaving Oregon with a net gain of 19,797 new residents from California every year.  Also, in central Oregon, Bend has seen a net gain in population from Washington state in recent years.  This is unusual, but in each of the past few years, central Oregon has gained population from all parts of Washington including the Seattle area and SW Washington. 

THE NORTHWEST BENEFIT

All of this data bodes very well for the housing industry and in particular the manufactured housing industry.  There is a severe housing shortage in Oregon and the Boise, Idaho region, as well as parts of Washington state.  Manufactured housing can provide a quick, affordable, well built and energy efficient housing solution to all these former Californians looking for a better life up north.  This is evidenced by recent reports of increased new and pre-owned manufactured home sales and production. Retailers and manufactures report solid 4th quarter sales and production results in Oregon, Washington and Idaho. 

CrossMod – A New Class of Manufactured Home

The Manufactured Housing Institute – MHI – recently introduced the official name for the new class of manufactured homes.  “CrossMod is a reflection of the industries commitment to elevate the industry by bringing the quality and innovation that can be found in all off-site built housing, including Manufactured Homes, Modular Homes and now CrossMod homes, to even more home buyers” MHI said in a prepared statement.   The term was developed with involvement from multiple professional agencies and teams of industry participants to serve as a mark of distinction for this new HUD code home category. 

“As housing affordability challenges continue to grow, families of all economic backgrounds are searching for attainable, high-quality homes that do not create an unsustainable financial burden.  CrossMod homes are place on a permanent foundation, qualify for conventional financing, help challenge exclusionary zoning ordinances and are virtually undistinguishable from higher-price, site-built options.  Best of all, this new class of off-site built home can be appraised using comparable site-built homes.” 

MHI partnered with market research firm Landor to test a variety of names directly with over 1,000 consumers.  Their impression of the term CrossMod included “modern and sleek”, “combines different models and styles”, “sounds secure and safe” and is an “innovative and smart home”  While just 9% of respondents said they would consider purchasing a manufactured home, 46% said they would purchase a CrossMod. 

Find out more at www.manufacturedhousing.org  

Financing a Manufactured Home Community

The latest interest rates for manufactured housing community financing or refinancing on West Coast remain at or near these rates, which continue to fluctuate and have remained steady in the past few weeks.  Here are some of the lowest rates available for $1 - $10 Million:

Three-year fixed 4.40%, five-year fixed 4.161%, seven-year fixed 4.255%, ten-year fixed, 4.366% and fifteen-year fixed at 4.322%.  ARM’s are as low as 2.9%.  Rates can be found as high as 5.483% for 20-year fixed rate loans and underwriting requires complete and detailed historical operation data. Rate locks are available up to 90-days prior to close in most cases. 

The larger REIT’s and investment funds continue to offer and expand a variety of tax-saving and tax-deferred structures to sellers interested in something other than a 1031 tax-deferred “up leg” exchange or an all-out cash transaction.  Resident purchases are also on the rise.

4th Quarter Production Rises

According to official statistics compiled on behalf of the U.S. Department of Housing and Urban Development (HUD) and verified by the Manufactured Housing Association for Regulatory Reform (MHARR), HUD Code manufactured home production increased in October of 2019 according to the latest reports.  Just released statistics indicate that HUD Code manufacturers produced 9,415 homes in October 2019, up a strong 9.6% from the 8,588 new HUD Code manufactured homes produced during October of 2018. 

On a cumulative basis industry production for 2019 totaled 79,912 HUD Code homes, a decline of 3.6% from the 82,942 HUD Code homes produced during the same period in 2018. While this marks a decline in year-over-year production and shipments and margin has narrowed and industry experts are predicting stronger production and shipment numbers in 2020 as a result of newly introduced products and increased consumer awareness of the affordability and quality of today’s manufactured home. 

For more information on manufactured home communities for sale or an assessment of your community call Bill Jackson of Northwest Park Brokerage at (206) 652-4100 or email Bill at: billj@nwparks.com

Pitfall: The ban on charging a fee for granting a requested reasonable accommodation also applies to charging fees or deposits for processing an accommodations request. Requesting processing or administrative fees is a common mistake, especially in the context of parking accommodations that entail monetary costs or additional liability risks to the landlord.

Example: A Pennsylvania senior housing provider had to shell out $80,000 to settle discrimination claims brought by mobility-impaired tenants and fair housing agencies, including for allegedly charging tenants with disabilities as much as $350 for designated parking spaces necessary to make their apartments accessible [Clover Group, May 2020].

Solution: Recognize that if an accommodation is reasonable, you must pay the associated costs out of your own pocket and not charge the requestor a fee or deposit to defray the associated expenses. In addition, you can’t deem a requested accommodation unreasonable simply because it costs time and money to provide.

To reject an accommodation as being unreasonable, the burden must be “undue,” based on the financial resources, the benefits to the requestor, and the availability of cheaper, easier alternatives that would effectively meet the requestor’s needs. Thus, for example, you don’t have to create extra parking spaces or enlarge your parking lot just to accommodate a single tenant.  

Answer: This may be a habitability issue which you will have to address. Here is what the statute says about the landlord's habitability duties in a manufactured housing park:

90.730 (Landlord duty to maintain rented space, vacant spaces and common areas in habitable condition.) provides:

(2) A landlord who rents a space for a manufactured dwelling or floating home shall at all times during the tenancy maintain the rented space, vacant spaces in the facility and the facility common areas in a habitable condition. The landlord does not have a duty to maintain a dwelling or home. A landlord's habitability duty under this section includes only the matters described in subsections (3) to (5) of this section.

(3) For purposes of this section, a rented space is considered uninhabitable if it substantially lacks:

(e) At the time of commencement of the rental agreement, buildings, grounds and appurtenances that are kept in every part safe for normal and reasonably foreseeable uses, clean, sanitary and free from all accumulations of debris, filth, rubbish, garbage, rodents and vermin;" (Underscore mine.)

This would seem to suggest that from a habitability standpoint, as long as the space was in good shape at the commencement of the tenancy, you no longer have any further duty to the resident. I think that conclusion would be a mistake.

Here, the condition of the space has deteriorated due to the proximity of the stream. Inasmuch as you own the ground, and the ground is failing, I would suggest that relocating the home is your responsibility. Alternatively, if the stream is on a part of the park property, you may want to explore stabilizing the lateral support of the side of the stream.

Look at it this way: If you do nothing, and the subsidence continues to the point of damaging the tenant's home, he or she will have a damage claim against the park. If you relocate the home or properly fix the stream bank, further risk of damage is greatly reduced if not eliminated.

If you do pay to relocate the home, make sure that you have a professional address the issue of any further erosion from the stream. You don't want to have to address this problem again a few years down the road.

By Elliot Njus | The Oregonian/OregonLive

Rent increases will be capped at 9.9% through 2020, the first full year Oregon’s new rent control law will be in effect, state economists announced Wednesday.

The Oregon Legislature this year passed Senate Bill 608, which imposed the nation’s first statewide rent control policy. The law caps rent increases at 7% plus the rate of inflation for the urban West. For 2019, that number came to 10.3%. 

Not all rentals are subject to the policy. The rent cap doesn’t apply to buildings that are less than 15 years old — an attempt to avoid a damper on housing construction — nor to government-subsidized rents. Landlords may raise rent without any cap if tenants leave of their own accord. 

Typical rents across Oregon are rising at a far slower rate than what’s allowed under the cap. 

But lawmakers who supported the policy said it would avert the biggest rent hikes that functioned as de facto evictions. Such increases, in which rents sometimes doubled or more, grabbed headlines in recent years, frequently after apartment buildings were sold to a new owner. 

The new law also requires most landlords to cite a cause, such as failure to pay rent or other lease violation, when evicting renters after the first year of tenancy.

Some “landlord-based” for-cause evictions are allowed, including the landlord moving in or a major renovation. In those cases, landlords are required to provide 90 days’ notice and pay one month’s rent to the tenant, though landlords with four or fewer units would be exempt from the payment.

-- Elliot Njus

Answer: Your park is private property and you may legally prohibit the use of all marijuana based on federal law, which still makes marijuana illegal. In addition, Oregon's new marijuana law (Measure 91) specifically includes a provision prohibiting its application to any state or federal law pertaining to landlord-tenant matters.

This means that because marijuana production or use is illegal under federal law, landlords may continue to prohibit it on rented premises. The Oregon Supreme Court has held that since marijuana remains illegal under the federal Controlled Substances Act, that Act preempts Oregon's Medical Marijuana Act with regard to both employment practices and housing discrimination claims under state law.

The same reasoning would apply to Measure 91 - marijuana is illegal under federal law. Therefore, tenants would not have any cause of action for "discrimination" claims under state law, nor under federal law (since landlords do not have to "reasonably accommodate" illegal activity under the Fair Housing Act). Unless federal law changes, Oregon's Bureau of Labor and Industries (BOLI) will also undoubtedly adhere to its position that it will not investigate any housing claims of discrimination pertaining to the use of marijuana.

As a practical matter, you may therefore implement and enforce a park rule that prohibits growing, producing or using marijuana anywhere on park property. You should also include this prohibition in your rental agreements.

There are several caveats to mention:

1. Consult with a knowledgeable attorney if you are implementing a new rule to ensure that you follow the proper legal steps to make it enforceable.

1. Do not deny a tenancy application solely because the applicant has a medical marijuana card (which could lead to a discrimination claim). However, even with a medical marijuana card, you can still prohibit the use of marijuana in the park by anyone, including the applicant.

1. It is still possible that an aggressive tenant with an aggressive attorney could sue the park for discrimination (i.e., anyone can sue anyone), but their case would not likely succeed based on current law.

As always, talk to an attorney concerning your specific park issues.

Fair Housing Testing - a tool used by enforcement officials and private fair housing organizations to ferret out unlawful housing discrimination. 

Fair housing testing involves paired testers—individuals with similar credentials but of different protected classes—who may contact your community by email, phone, your website, or by a site visit to check for differences in how they’re treated based on their race, national origin, or any other characteristics protected under federal, state, or local law.

Should you be worried that you could be targeted for fair housing testing? Not if you’re prepared—by ensuring your policies comply with fair housing law, treating all prospects fairly and consistently, thoroughly training your employees, and monitoring compliance on your own. Since it’s unlikely that you’ll know when an email, phone call, or a visit from a prospect is really from a fair housing tester, your best bet is to treat everyone contacting your community as if he or she is a fair housing tester.

In this issue, we’ll explain how fair housing testing works—and suggest seven rules to avoid problems if your community is ever subjected to fair housing testing. Then, you can take the Coach’s Quiz to see how much you’ve learned.

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) prohibits discrimination in housing because of race, color, religion, sex, national origin, familial status, or disability. In addition, many state and local fair housing laws ban discrimination based on source of income, sexual orientation and gender identity, and other characteristics.

HUD and the Justice Department are the federal agencies charged with enforcing the FHA; in states and local governments with fair housing laws substantially equivalent to the FHA, officials in those jurisdictions handle federal as well as state and local discrimination complaints. The law also allows individuals and private advocacy organizations to file a HUD complaint or file a lawsuit directly in federal court.

HUD continues to provide millions in funding to support a wide range of fair housing enforcement, education, and outreach activities. Earlier this year, HUD awarded $16.5 million to support dozens of fair housing organizations working to confront violations of fair housing law. These new grants are on top of the $23 million awarded by HUD to existing fair housing organizations last winter. Among other things, these grants allow the groups to provide fair housing enforcement through testing in the rental and sales markets, to file fair housing complaints to HUD, and to conduct investigations.

“HUD’s efforts to fight housing discrimination are force multiplied by local fair housing organizations across the country,” HUD Secretary Ben Carson said in a statement. “These grants allow our partners to carry out the important work of rooting out unfair policies and practices and enforcing our nation’s fair housing laws.”

Meanwhile, the Justice Department has its own fair housing testing program to identify and challenge cases involving a pattern or practice of housing discrimination. According to the department, the vast majority of lawsuits filed based on testing evidence involve allegations that individuals misrepresented the availability of rental units or offered different terms and conditions based on race, national origin, disability, or family status.

Fair housing testing may be triggered by a variety of circumstances. In complaint-based testing, it’s used to verify whether an individual who claims a particular community discriminated against him based on his race or other characteristic, has a legitimate complaint. If the results of testing support the individual’s claim, then the evidence gathered may be used in court or enforcement proceedings.

Example: In August 2019, the Fair Housing Center of Central Indiana (FHCCI) announced a settlement of a complaint alleging that a real estate management company’s occupancy policy at properties in Indiana and Illinois discriminated against families with children.

According to the complaint, it all started with a phone call by an Illinois woman looking for a two-bedroom unit at one of the company’s properties. Allegedly, a leasing agent told her that two-bedroom units were available, but upon learning that that she would be living there with her spouse and three children, the leasing agent allegedly said that a family of five couldn’t live in a two-bedroom unit and refused to even schedule an appointment for a viewing.

The woman contacted HOPE Fair Housing Center, a private fair housing organization, which launched an investigation into the community’s policies. A tester posed as a married woman seeking a two-bedroom apartment for her family of two adults and three children. Allegedly, an employee told her that the community couldn’t rent a two-bedroom unit to more than four people because of “fair housing laws.” That lead to a broader investigation involving fair housing testing at four other properties managed by the company in Illinois, allegedly yielding similar results.

During the course of its investigation, HOPE contacted the FHCCI to similarly investigate company’s properties in Indiana. Allegedly, FHCCI’s testing indicated that the company enforced the same two-person-per-bedroom policy in Indiana as the woman and HOPE encountered in Illinois.

The advocacy groups filed a HUD complaint, accusing the company of systemic discrimination against families with children by enforcing an occupancy policy of no more than two people per bedroom in each apartment, regardless of the unit’s square footage or whether that unit has a den, office, loft, or other feature that could provide an additional bedroom or living area for a child. HUD didn’t make a determination as to the validity of the allegations.

The company denied any wrongdoing but agreed to settle the case. Under the settlement, the company agreed to pay $60,000 in costs and damages, to change their occupancy policy so that the policy is no more restrictive than the applicable local occupancy code, and to train their employees and agents on fair housing laws and responsibilities, along with other terms to ensure compliance with fair housing laws.

Sometimes, testing isn’t triggered by a complaint, but conducted as part of a larger fair housing investigation. Testing may be initiated by a fair housing organization on its own or at the behest of federal, state, or local enforcement officials to check whether discriminatory policies or practices are a problem at one or more communities within a geographical area.

Example: In August 2019, a Virginia community agreed to settle a lawsuit brought by the ACLU, the ACLU of Virginia, and Housing Opportunities Made Equal of Virginia, Inc. (HOME), alleging that its criminal background screening policy discriminated against people on the basis of race.

The case dates back to 2017 when HOME conducted a series of tests to assess the types and severity of the barriers individuals with criminal histories face when seeking housing in Virginia. As part of this effort, the complaint alleged that HOME investigated the criminal records policy maintained at the community, including by reviewing application materials and conducting testing. 

According to the complaint, HOME conducted a series of tests, including phone calls and site visits involving HOME workers who posed as a potential tenant with a felony conviction applying for housing at the community. In each instance, an agent allegedly told the tester that because of the felony conviction, the tester’s application would automatically be rejected. 

Under the settlement, the community agreed to change its criminal record screening policy. The revised policy considers only specific categories of offenses, excludes misdemeanor convictions, and doesn’t treat people differently based on whether the applicant is on probation or parole. The policy also ensures individualized consideration for every applicant, allowing a prospect to share information as part of the application review process, including the facts or circumstances surrounding his criminal conduct, proof of rehabilitation efforts, and evidence of a good tenant or employment history before or after the conviction or conduct.

Also, as part of the settlement, the community agreed to train employees in fair housing and make a $15,000 donation to HOME to continue HOME’s systemic work to uncover and address housing discrimination. The community also will pay damages and attorney’s fees related to the matter.

7 RULES FOR BEING PREPARED FOR FAIR HOUSING TESTERS

Rule #1: Treat Everyone as a Possible Fair Housing Tester

On any given day, you’re likely to have many interactions with prospects, including phone calls, email inquiries, Internet communications, or visits to your community. They may be inquiries about advertised vacancies or the availability of certain types of units at the community.

Our fair housing experts warn that you may never know when one of these encounters is part of a fair housing test. That’s because enforcement agencies and fair housing organizations generally exercise caution in selecting and training fair housing testers.

In any given geographical area, local fair housing organizations may maintain a pool of trained fair housing testers, who are called upon infrequently to preserve their anonymity. In general, they’re volunteers who may receive a stipend for their time and travel. Because of the potential that they may be a party or witness in any resulting litigation, they’re likely to be screened for criminal history and any conflicts of interest. In fact, HUD enforcement officials go to great pains to safeguard the confidentiality of a tester’s identity. 

So even if you have an inkling that a particular prospect is a tester—because of the type of questions being asked, the way he carries himself, or the timing of similar contacts—you really can’t be sure if a given encounter is part of a fair housing test. Testers posing as prospects may call or email your office or visit the property to check for differences in treatment based on race, national origin, disability, familial status—or other characteristics protected under state or local laws.

So why take chances? Your best bet is to treat everyone contacting or visiting your community as if he or she were part of a fair housing test. Keep personal biases out of the leasing office and treat all prospects with professional courtesy, starting with the initial contact—whether online, in an email, on the phone, or during visits to your property.

Rule #2: Incorporate Fair Housing into Your Community’s SOP

Make compliance with fair housing an integral part of your community’s standard operating procedures. No doubt, you have numerous policies, practices, and procedures governing the marketing, leasing, maintenance, and other critical operations within your community. Many are based on business decisions, while others reflect legal requirements, such as landlord-tenant laws, health and safety codes, and other regulatory obligations.

Incorporating fair housing requirements serves both—it’s not only a legal requirement, but it’s a good business decision. Making your community available to any prospect who meets objective criteria to rent meets your legal obligations under fair housing laws. And by distinguishing your reputation as an equal housing provider, you’ll decrease the risk of being targeted for fair housing testing based on suspicions about discriminatory policies or practices.

Maintain a formal written fair housing policy, affirmatively stating that your community does not discriminate on the basis of race, color, religion, national origin, sex, disability, or familial status. Be sure to include any characteristics protected under state and local laws, such as sexual orientation, marital status, or source of income. Review your policies periodically, and revise them as necessary, to reflect changing rules or trends likely to be the subject of fair housing testing. Include your fair housing policy in your rental applications and leasing agreements, and post it in your office, alongside the fair housing poster required under HUD regulations. 

Coach’s Tip: HUD’s fair housing poster affirms that your community does business in accordance with the federal fair housing law. The poster is available on HUD’s website at https://www.hud.gov/sites/documents/FAIR_HOUSING_POSTER_ENG.PDF.

Rule #3: Watch What You Say in Your Advertising

Pay particular attention to your advertising and marketing policies to avoid triggering a fair housing investigation. Fair housing law bans discriminatory statements, including advertising, whether online or in other forms of media, so you should make sure your website, ads, brochures, and other media—whether in print or online—reflect your fair housing policy.

Fair housing organizations are actively monitoring online advertising for discriminatory statements, so you should avoid questionable phrases or buzzwords that suggest a preference for or against prospective renters based on characteristics protected under federal, state, or local law. For example, you shouldn’t use words or phrases that express a preference against members of protected groups—such as “no kids”—or a preference for others—such as “perfect for singles.” Federal fair housing law prohibits housing providers from denying or limiting housing to families with children under age 18, including refusing to negotiate, making discriminatory statements, and publishing discriminatory advertisements based on familial status.

Example: In August 2019, HUD charged the owners and manager of a Colorado condo community with refusing to rent to persons under 35 years of age in violation of the FHA, which prohibits discrimination based on familial status. According to HUD’s charge, the condo management team allegedly refused to rent a unit to a fair housing tester who claimed to have a 4-year-old child.

The case came to HUD’s attention when the Denver Metro Fair Housing Center filed a complaint alleging that the owners of the condominium complex discriminated against families with children when they posted ads in a local newspaper. HUD’s charge alleges that the ads described the complex as a “private, restricted adult … community” where renters must be 35 years or older. The charge further alleges that the condominium management team refused to rent a unit to a fair housing tester who claimed to have a 4-year-old child. The charge will be heard by a U.S. administrative law judge unless any party elects for the case to be heard in federal court.

Example: In April 2019, the owner of a Maine rental property and its rental agent agreed to pay $18,000 to settle allegations that they denied housing to families with children. The case came to HUD’s attention when Pine Tree Legal Assistance, Inc., filed a complaint accusing the owner and rental agent of discrimination based on familial status by refusing to negotiate with fair housing testers posing as families with children, posting discriminatory advertisements indicating that children weren’t allowed, and making discriminatory statements to fair housing testers.

“It’s hard enough for families to find places to live that meet their needs without being denied suitable housing because they have children,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “HUD is committed to working to ensure that housing providers comply with their Fair Housing Act obligation to treat all applicants the same, including families with children.”

Rule #4: Ensure Consistency in the Leasing Office

Focusing attention on the initial stages of the leasing process may also help you pass muster if your community is ever the subject of fair housing testing. At communities across the country, fair housing enforcement officials and advocacy groups are dispatching testers to check for differences in the way prospects are treated—in phone calls, emails, and site visits—based on protected class. Of course, differences don’t always mean discrimination, but it’s easy to jump to the conclusion that they do. That’s why it’s so important to avoid even the appearance of discriminatory intent in the way that prospects are treated.

Testing is often focused on differences in the information provided to prospects about the availability of units, so it’s important to ensure that leasing agents have accurate, up-to-date information about vacancies. The FHA makes it unlawful to discriminate against applicants for housing because of their race, color, national origin, religion, sex, familial status, or disability, including by providing different and false information about terms, conditions, and availability of rental properties.

Example: HUD recently approved a settlement between Housing Rights Center (HRC), a fair housing advocacy organization in Los Angeles, and a Virginia-based real estate investment trust company to resolve allegations that the company’s rental practices discriminated against applicants based on their race.

The case came to HUD’s attention when HRC filed a complaint alleging that the company, which operates numerous properties in the Los Angeles area, repeatedly provided more information about available units to white HRC fair housing testers who posed as prospective tenants than to black HRC testers. The company denied the allegations of racial discrimination but agreed to settle the case.

Under the settlement, the company agreed to pay $20,000 to the fair housing organization. In addition, its management and leasing staff who work with tenants at the subject property will attend fair housing training.

“Denying a rental application because of someone’s race not only robs them of a place to call home, it is also unlawful,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “Hopefully today’s settlement will convince other housing providers of the importance of meeting their obligation to comply with the nation’s fair housing laws.”

Similarly, be sure to give prospects the same information about the terms and conditions of tenancy, such as screening criteria, rental terms, security deposits and fees, and any other relevant information. Quoting more stringent lease terms or higher rental payments to prospects based on a protected characteristic is a violation of fair housing law.

Testers also may be looking for signs of unlawful steering—that is, guiding, directing, or discouraging prospects from living in your community or certain parts of the community based on a protected characteristic. For example, it’s a violation of fair housing law to tell Hispanic prospects that they would not be happy living in your community—or showing them only units in undesirable locations.

Example: In July 2019, HUD approved a $10,000 settlement between a California fair housing group and the agents and mortgage company for a California townhome community to resolve allegations of discrimination against African-American home seekers.

The case came to HUD’s attention when the Fair Housing Council of Riverside County (FHCRC) filed a complaint alleging that fair housing tests it conducted showed that real estate agents treated testers posing as African-American home seekers less favorably than testers posing as white home seekers. Specifically, FHCRC alleged that its tests showed that African-American testers were told that there were no homes available when there were and were required to meet tougher prequalification requirements than white testers. The community and its agents denied having engaged in any discriminatory behavior.

“A person’s race should never be a factor in determining whether they have the opportunity to obtain the housing of their choice,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “Today’s settlement represents HUD’s ongoing commitment to ensuring that individuals in positions to affect access to housing meet their obligation to comply with the Fair Housing Act.”

Rule #5: Provide Fair Housing Training to All Employees

All your employees, from your leasing staff to service workers in your maintenance, housekeeping, and landscaping operations, should receive periodic fair housing training. Although most testing efforts are addressed to your leasing office, interactions with any employee who interacts with the public could lead to a discrimination complaint, which in turn could trigger a fair housing test.

The training should cover the fundamentals of fair housing, including who is protected under federal law as well as any applicable state and local laws. It should also explain your community’s policies and what employees can and can’t do under fair housing law. Reinforce the importance of keeping personal biases out of the workplace and treating everyone at the community with courtesy and professionalism. Make sure employees understand the chain of command so they know where to go for help or to report any fair housing concerns or observations.

Managers should monitor how the leasing staff, particularly new employees, interacts with prospects on the phone, in site visits, and in Internet communications. Consider an open-door policy for management staff, so managers can hear what’s going on in the office—and encourage them to periodically sit in on phone calls or meetings with prospects and to tag along on tours.

Managers should reinforce good habits in employees, so good management means checking up from time to time on sales presentations, tours, applications, and so on, to see what staff members are doing. And it’s a good idea to have all employees sign an acknowledgement saying that they agree to abide by fair housing laws and that they understand that they may be monitored and recorded for training and compliance purposes.

Coach’s Tip: Our experts warn that you shouldn’t allow new hires to interact with the public without at least a basic understanding of fair housing law. Otherwise, they may inadvertently make well-intentioned, but inappropriate comments when answering the phone or meeting prospects. For example, an inexperienced employee could be overly curious about the nature of a prospect’s disability or cultural differences reflected in the prospect’s accent or appearance—just the type of conduct that could draw the attention of fair housing testers. For more information, see the Coach’s September 2019 lesson, “Fair Housing Boot Camp: Basic Training for New Hires.”

Rule #6: Shop Your Property

Shopping yourself—either by internal means or by hiring an outside shopping service—is one of the best ways to ensure that you won’t be caught off-guard from the results of a fair housing test. It’s an effective tool to monitor whether your employees are complying with fair housing laws and to identify any weaknesses—either in an employee’s performance or in the effectiveness of your training program.

You can do it informally, by asking people you know to pose as rental prospects, but many communities hire outside shopping services to contact the leasing office to monitor sales and marketing as well as fair housing issues.

Whatever means you use, it’s important to follow up to determine the root cause of any deficiencies detected during the shop. There could be a number of reasons why a leasing consultant may respond inappropriately to a shopper’s question. If it’s because the employee truly acted improperly, you should respond with disciplinary action. If the employee simply misunderstood fair housing requirements, you’ll know that the employee needs additional training.

Alternatively, the results of a shopping test may reveal a larger problem, for example, that your policy or training on a particular issue is unclear or incorrect. If that’s the case, you’ll have an opportunity to rectify the problem on your own—rather than having to address it after the fact if it surfaces for the first time during a fair housing test.

Rule #7: Keep Good Records

Good record keeping is important so you can respond accurately to complaints if, despite your best efforts, fair housing testing raises questions about seemingly discriminatory behavior. Retain records of all contacts, even if they don’t result in the rental of a unit or follow-up on initial inquiries. Keep copies of phone logs, guest cards, unit availability records, application forms and supporting documents, screening results, and any other document related to the application process.

It’s also important to keep good records to document when and how your community keeps track of available units. There’s a risk of a discrimination claim any time a prospect is told that there are no units available within a community. And it’s hard to defend against such claims if it turns out that the information was faulty, or if a prospect is turned away on the same day as another prospect was told that a unit was available. To ensure accurate, consistent responses to inquiries about available units, establish a process to document when units become available, and make sure everyone on your staff has up-to-date information.

Coach’s Tip: Keep your written records for as long as possible, so you can use them to defend yourself if you’re sued. Fair housing complainants have up to two years after the discrimination occurs to file in federal court or up to one year to file with HUD. And some prospects or testers may have up to six years to file a civil rights lawsuit. So it’s a good idea to check with your attorney before discarding old records.

• Fair Housing Act: 42 USC §3601 et seq.

MHCO.ORG Note:  Pressure continues to build to provide more renter rights and legalize some form of rent control or rent justification.  Portland City Council's action this afternoon is yet another precursor of more to come in the Oregon Legislature.  Stay tuned - this issue is not going away anytime soon.

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By Jessica Floum

The Oregonian/OregonLive

Exceptions to Portland land use rules, protections for city renters facing eviction or big rent hikes, and political pressure to devote taxpayer and donor money to affordable housing will continue for the foreseeable future, following a unanimous Portland City Council vote Wednesday.

All those measures are intended to curb Portland's critical shortage of affordable housing and spike in homelessness.

The council voted Wednesday to extend for a second time its a declared "housing emergency." It also voted to extend a renter protection policy adopted in February by six months to give city officials time to implement a permanent renter's rights policy.

Instituted in 2015, the emergency declaration has encouraged spending on housing, allowed for flexibility in where city and county officials can open shelters and fast-tracked building permits for affordable housing projects. The council extended the declaration by 18 months and charged the Portland Housing Bureau and the city and county's Joint Office on Homeless Services to develop criteria for when the city should lift the temporary rules.

Commissioners hope to implement permanent rules in the city's zoning codes by then. They might include permanent zoning exemptions that allow for homeless camps such as Right 2 Dream Too or emergency homeless shelters in the winter.

"There's more we need to do to stabilize the systems that impact housing and homelessness in our community," Mayor Ted Wheeler said. "This is an emergency that requires action now."

Led by former housing advocate and city Commissioner Chloe Eudaly early this year, the council adopted a tenant protection rule that requires landlords to pay $2,900 to $4,500 in relocation costs to renters whom they evict without cause or who must move as the result of a rent increase of 10 percent or more.

The council extended that policy, set to expire Friday, by six months. Wheeler, the housing commissioner, pledged to bring a permanent renter protection rule back to the council on December 6.

Dozens of renters urged the council Wednesday to take the rule further.

They shared experiences of landlords finding ways around the rule such as increasing rents by 9.97 percent instead of 10 percent and requiring renters to pay for utilities that the landlord previously covered.

They advocated for closing an exemption for "mom and pop" landlords who only rent one unit. The impact on the renters is harmful, regardless of who the landlord is, they said.

Many of the most vulnerable tenants rent from smaller landlords because they can't access "mainstream" rental opportunities due to criminal histories or other "troubled records," said Katrina Holland, executive director of renter advocacy group Community Alliance of Tenants.

As a community manager, you will normally be charged with accepting or rejecting prospective residents. This is one of the most important functions that you will perform as a manager of a manufactured home community. Done properly and effectively, the rental application and screening process will minimize potential problems in landlord - resident relations. If the process is done incorrectly the seeds of future problems will be sown. Every prospective resident should be given sufficient information to make an informed decision about living in a manufactured home community.

When an individual stops by the manufactured home community office inquiring on the possibility of becoming a resident, always give them an application packet. Anyone who is interested in applying should be given the application packet - inconsistency in giving out application packets could lead to cause of action by the resident selling the home in the community or a fair housing violation.

The application packet is your opportunity to sell the prospective resident on your community. Include in the application packet an application and "Minimum Criteria Standards", optional information may include what homes are available in the community, a community newsletter, information on the history of the community, the advantages of living in a manufactured home community etc. You may also want to include at this time a copy of the rental/lease agreement, rules and regulations, rent history, and statement of policy. Remember, you want to sell the prospective resident on your community, but you also want them to make a well informed decision.

Providing a prospective resident's with extensive information regarding your manufactured home community allows the applicant to evaluate for themselves if they qualify. Including what your expectations are in order to qualify and expectations and requirements to maintain residency in the community allows the prospective resident to self qualify.

The overall rental application process should include:

1. Review application to make sure it has been completely filled out.
2. Check to make sure that the applicant has included social security number, driver license information etc.
3. Provide the applicant with a copy of the Statement of Policy (keep a signed copy or receipt for your file), the rent history of the space, Rental Agreement/Lease, Park Rules & Regulations, RV Storage Agreement and Pet Agreement (if applicable), and a Flood Plain Notice. None of these documents should be signed by the community owner or manager until the application process is complete and the prospective resident is accepted.
4. Collect application fee.
5. Provide prospective resident with application fee receipt.
6. Conduct credit, rental and criminal check.
7. Attach copies of credit, rental and criminal check to application
8. If credit, rental and criminal checks are acceptable contact prospective resident.
9. If they are denied and they are purchasing an existing home in the park, send them an application denial form. Also, send a copy to the resident selling the home and one for the tenant's file.

Under current Oregon law you will have not more than 7 days to accept or reject a prospective resident. The 7 days begins on the day of receipt of a complete and accurate written application. The landlord and the prospective resident may agree to a longer time period for the landlord to evaluate the prospective resident's application to address any failure to meet the landlord's screening or admission criteria.

If the existing resident fails to give the required 10 day notice in writing prior to the sale of the home, the landlord may extend the written application process by 10 days. (ORS 90.680)

An application is not complete until the prospective purchaser pays any required applicant screening charge and provides the landlord with all information and documentation required pursuant to ORS 90.510 including any financial data and references.