Redbank tenants told the South Portland City Council on Tuesday they have been slapped with hidden fees and poor living conditions since the city put a moratorium on evictions in place in June and the owner of their apartment complex is not providing them with any answers.
Tenants at the 500-unit Redbank Village Apartments received notice in May of monthly rent increases of up to $598, spurring the City Council in June to enact the moratorium while it explores a rent stabilization ordinance. The moratorium expires Nov. 27, and the council, saying Tuesday it needs more time to craft the ordinance, plans to extend it.
Redbank tenants said they are still having problems with the owner, California-based real estate investment company JRK Property Holdings. Councilors were concerned the company may be trying to find a workaround for the moratorium, which puts a 10% cap on rent increases and prevents landlords from evicting or fining tenants for not paying a “prohibited rent increase,” or anything over 10% of an increase on a lease they signed after April 1.
Julio Rodriguez, a tenant for 32 years, handed councilors a copy of his most recent water bill from JRK Holdings for “a so-called ‘pest control’” fee of $13 per month, which he has paid for the past two months. He reached out to JRK over a month ago about it and has yet to receive a response, he said.
“Why do I have to pay the $13 for the pest control?” Rodriguez asked. “This is going to be on a monthly basis? Am I going to have this pest control issue in my house every month? I don’t think so.”
Cheryl Harkins said she and other tenants are regularly receiving $60 late fees on rent payments, “even when we’re locked out of the portal system” through which tenants pay their monthly rent.
In the moratorium passed in June, fees included in the lease that are not directly imposed by landlords, such as sewer and electricity, are exempt from the 10% cap. The cap applies to rent and nonvoluntary fees, such as the pest control charge in Rodriguez’s case.
“It would be helpful for the city’s legal resources to take a look at that,” Councilor Katherine Lewis said. “If it’s out of line, then it seems we should be working toward a solution there.”
Harkins also said requests for repairs to JRK Holdings go unanswered.
“Most of the basements leak profusely, and the constant dampness creates black mold, which keeps returning no matter how much you clean it,” Harkins told the council. “The air flows through the loose windows and the doors, and there’s no insulation in the walls.”
City Manager Scott Morelli advised residents to reach out to his office if they think JRK Holdings, or any other landlords, are not abiding by the moratorium. If tenants believe their unit is not up to code, they should call the code enforcement office, he said.
Rent control
With an extension of the moratorium likely at the end of October, the council scheduled a fourth rent control workshop for Jan. 10.
“I would really be in favor of extending the moratorium and having another workshop on this,” said Councilor Jocelyn Leighton. “I don’t think we’re ready to go to a first reading. I think we need time to do this well.”
The council so far has homed in on different aspects of a rent control ordinance, such as rent increase caps, exemptions and how far in advance a tenant should be notified of a rent increase.
This chart shows what a cap on rent increases in a CPI-U plus 7% format would have been annually between 2008 and 2022. City of South Portland
Rather than the 10% increase cap imposed in the moratorium, the council is considering a “CPI-U plus 7%” cap. CPI-U stands for Commercial Price Index for All Urban Consumers and is used to measure the rate of inflation by the Bureau of Labor Statistics in areas around cities or towns with populations of at least 10,000. Oregon adopted the model in 2019, becoming the first state to enact a cap on rent increases, and South Portland councilors have been studying it.
A hard cap of 10%, Morelli said, doesn’t allow landlords to keep up when inflation is rapidly on the rise, as it is today. Using statistics specific to the Northeast, the CPI-U plus 7% model would allow South Portland landlords to raise rents by 13.2% in 2022, he said.
A hard cap of 10% could also see tenants charged more when inflation changes are low. For example, the plus 7% model in 2020 would have limited rent increases to 8.3%.
Councilors indicated that they would prefer the plus 7% model over the 10% hard cap. However, not all were sold on implementing a rent cap in general.
“I have real heartache for the people who are seeing these huge rent increases, but I’ve never been in favor of government getting involved in rent control,” said Councilor Linda Cohen. “I’m not sure at this point I’ve had my mind changed on that.”
Landlords on Tuesday reiterated their concerns about the impact of rent stabilization on small, responsible landlords. Those with 10 units or fewer are exempted from the moratorium.
“I consider anyone with 30 units or less a small landlord,” said resident and landlord Phil Notis. He later added, “I hope this is just the beginning of the discussion because there’s a lot here that needs to be discussed.”
Councilors also are leaning toward increasing the currently required 75-day notice of a rent increase to 9o days and allowing tenants at least 45 days to tell their landlord whether they plan to accept the increase or move elsewhere.
Those items will also be voted upon when the council votes on extending the moratorium, Assistant City Manager Joshua Reny said. A likely extension of 180 days would give the council time after the Jan. 10 rent stabilization workshop to enact an ordinance. A vote on the extension could come as soon as late October, Reny said.
“Let’s keep this conversation going,” Mayor Deqa Dhalac said. “Let’s just pass this moratorium and take time to make sure we are protecting our families in our city.”
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