Portland Landlords, Tenants Face Off Over Ballot Measure To Stem Rent Hikes

Oct 24, 2017

After almost a decade of red-hot growth, rents in Portland may have reached a plateau. But it’s a high plateau, and one group is trying to put a lid on it with a proposed ballot item to limit rent hikes and create a tenant-dominated oversight board.

The measure faces opposition from a well-financed campaign by landlords and, perhaps less intuitively, some advocates of affordable housing.

Winston Lumpkins was 21 when he arrived in Portland almost five years ago, with a dream of making it in the city’s charismatic culinary scene. He got an $11-an-hour baking job, and he’s making more now. But he has hopped through a series of rooms rented in city apartments, chased from one to the next, he says, by rent hikes every six months or so of 10 percent and sometimes more.

“So that was frustrating, especially because when you live in Portland it feels like the food industry is the lifeblood of the city,” he says.

Lumpkins is one supporter of a rent-limits proposal who turned out for a forum in the city’s Munjoy Hill neighborhood last week. That’s a scenic residential section high on the city’s peninsula, full of single-family homes, three-deckers and, increasingly, boxy condos.

Starting early this decade a real estate tidal wave pushed rents up here by some 40 percent in five years, leading a trend that washed over the entire city and then spilled over to neighboring communities.

Winston Lumpkins supports Portland's rent-limits referendum. A baker in the city, he says rising rents have chased him from one apartment to another.
Credit Fred Bever / Maine Public

“And what I’ve seen, visiting friends, living in the city, in multiple units owned by multiple landlords of about this scale, like nine to 15 units, is they don’t fix anything. They raise it to reach market and the building slowly collapses. Which concerns me as someone who really does want to make my career here,” Lumpkins says.

He’s supporting a ballot item pushed by a group called Fair Rent Portland. Broadly speaking, it would limit rent hikes by landlords who own six or more units under a formula tied to hikes in property tax rates and inflation. Landlords who’ve improved a unit could petition for more, with a hard cap of 10 percent. Decisions on that would be made by a new, seven-member board, which would include four tenants.

Landlords are fighting back, hard. They say they cannot afford to improve Portland’s aging housing stock without being able to recoup more than the ordinance would allow.

“I own 30 units. I don’t take one penny out of the units I own. They are retirement,” says Brit Vitalius, the director of the Southern Maine Landlord Association who’s spearheading a $140,000 campaign, financed by landlords near and far, against the rent-limit proposal. “I work very hard to make my buildings habitable. Many were not habitable before I bought them.”

Vitalius, other landlords and some data-sources say rent hikes slowed this year, as the recent construction boom has brought more supply online. And it’s not just for-profit landlords who think the ballot item is a bad idea: the leaders of several affordable housing initiatives agree.

Dana Totman, CEO of Avesta Housing, which operates some 800 subsidized housing units in Portland, sees the proposal mainly benefiting people who can, in fact, afford higher rent.

“I think there’ll be a tendency for higher-income people to get the units and stay there and not ever move, because they’ve got a good deal. And that’s going to sort of push out lower-income people. So there won’t be the turnover that you normally would have,” he says.

“Ultimately rent stabilization can’t stop the process of gentrification. What it does is slows the rate and makes it a more humane rate. So basically this is both effective and compassionate,” says Jack O’Brien, a Bowdoin statistician and a leader in the rent-limits campaign.

O’Brien argues that this is far from rent control, and that it includes some fail-safe mechanisms to avert sudden changes in the city’s marketplace. It exempts buildings constructed this year and after, for instance, to thaw any potential chill on financing for construction of new units; it sunsets in seven years; and it exempts subsidized housing and smaller landlords who live in their buildings from most of its strictures.

And for the 18,000 units that could be affected?

“Over time rents are going to rise and there’s very little that this can do to stop it. What it can do is make sure that that happens on a time-scale that makes sense for tenants rather than for-profits. The second thing is Portland has a real unique small-business economy — the highest rate of small businesses of any city in the country. Those businesses rely on long-term workers being able to have stable housing near to them,” O’Brien says.

Some observers say there’s a lot more in play than the profit motive alone, and there’s an important underlying factor: People who can afford higher rents want to live in Portland.

Richard Barringer, former director of the Muskie School, in his downtown Portland apartment in a recently constructed upscale building. "This is how cities grow," he says.
Credit Fred Bever / Maine Public

“Portland Maine is enjoying perhaps its greatest prosperity since before the civil war,” says Richard Barringer, former director of the University of Southern Maine Muskie School and lead author of the just-released “Greater Portland Tomorrow,” a document outlining the present city’s challenges and opportunities.

Barringer describes a swirl of demographic and economic factors at work: the end of the Great Recession; aging baby boomers and millennials looking for new urban options away from superexpensive Boston and New York; big companies such as WEX and Idexx establishing new white-collar opportunities; and foodie entrepreneurs creating entry-level jobs — plus a stock of run-down and, momentarily, cheap housing stock with potential.

“This is the way cities grow - it’s that simple, And you have to allow for the re-creation of a city over time,” Barringer says.

Back on Munjoy Hill, Leylie Johnson has watched the re-creation in real-time.

“This was a forgotten street. There was nothing,” she says.

Johnson bought her house here 20 years ago with the help of a federal program that targeted low-income workers for home ownership in marginal neighborhoods.

“This was a two-tone house with duct tape on the windows,” she says. “It was infested with fleas. I loved it because it got sun all day long.”

Johnson rents two units in her building, and she’s the kind of landlord who gets unsolicited raves from tenants. She recently took part-ownership of four more units next door, likely bringing her within the confines set by the rent-limit proposal.

As with many landlords of all sizes, Johnson is most worried that it would create new eviction rules that could extend the stays of destructive tenants.

“As you can see here we’ve got these three buildings — this little communal living situation, everybody comes and goes, everybody’s got dogs. If we have a bad tenant and we can’t get rid of them, we’ll lose all the tenants. They’ll leave,” she says.

The fate of the proposal could hinge on exactly who turns out in this off-year election. Landlords have some relatively big campaign money to work with. But supporters are hoping they have one clear advantage — more than 60 percent of city voters are renters, not owners.

This story was originally published Oct. 23, 2017 at 6:04 p.m. ET.