Street Smart Economics | Monied interests are pushing a false narrative about Eviction Representation for All
Legal support for tenants has dramatically reduced eviction rates in cities around the country, combating poverty, homelessness, family breakups and loss of employment.
Currently, Multnomah County renters facing eviction have no right to a publicly funded court-appointed attorney as they would in criminal cases, despite the huge impact of losing your home at short notice. Tenants’ability to obtain an attorney hinges on being able to afford one, and find one quickly.
Tenants facing eviction, most often for falling behind on the rent, can rarely afford an attorney, so they’re forced to represent themselves. Landlords, on the other hand, can typically afford legal representation and, more often than not, opt for the significant upper hand an attorney provides them. When they don’t have a lawyer, they often have an experienced agent with them.
This power imbalance and the need to address it are clear in Multnomah County, where nearly half of households are renters, and evictions are surging. For the seven months from August 2022 through February 2023, landlords and property managers filed an average of 770 eviction cases a month in Multnomah County — double the monthly average of the previous seven months.
In May’s election, we have the chance to vote to provide attorneys for all tenants in eviction court to protect tenants, our community and our local economy. Evictions are too often illegal or discriminatory. Most evictions are avoidable if tenants have legal help to negotiate a reasonable agreement with their landlords after temporarily falling behind on the rent. But in January 2023, just 2% of tenants in eviction court in Multnomah County had attorneys, and only 3% did in February 2023.
Why are real estate industry groups opposing ERA? Hint: Follow the money! The true motivation of the real estate industry groups opposing ERA appears to be to protect their own capital gains — even from a tax of less than 1%. Easily identifiable real estate industry organizations have contributed more than half of the $500,000 raised to fight ERA, and more than half of the funding has come from out of state.
Our housing prices are soaring, creating huge paydays for big real estate investors who own multiple properties. The higher rents go, the higher sales prices they can get for the buildings they own. Big investors are making a lot of money by selling buildings at a much higher price than they originally paid for them, a form of profit called “capital gains income.” It’s common advice to landlords to push rents as high as possible for a big payoff when they’re ready to sell.
That’s why Eviction Representation for All, or ERA, will be funded with a tax on capital gains. We can claw back part of the money that big real estate investors are pulling out of our community and limit some of the harm resulting from skyrocketing rents. The ballot measure will fund emergency rental assistance, education and outreach, as well as attorneys based in local community organizations. A new Tenant Resource Office can do all that with a capital gains tax of less than 1%.
But out-of-state real estate investors and their local allies are funding a misleading campaign opposing ERA, claiming that the small capital gains tax funding tenant supports will hurt families and seniors, and prevent communities of color from building generational wealth. Until recently, their website falsely stated “all residents of Multnomah County” will pay the tax to fund new, much-needed services to stabilize our community.
Families with children, single mothers and people of color are over-represented among evicted households and are more likely to be evicted than others in similar circumstances. They are extremely under-represented among people with capital gains.
In fact, capital gains are concentrated on wealthy, white households. The Oregon Center for Public Policy reports 85% of capital gains in Oregon go to the highest income 5% of households. And, nationally, 92% of capital gains go to white, non-Latino households, according to the U.S. Treasury.
Real estate investors are seeing significant capital gains, buying and selling in a hot housing market like Portland’s. Realtors also profit when high rental prices help raise the sale price of residential properties since they earn a commission that’s a percentage of the sale price. The higher the price, the more money they make — whether they represent the seller or the buyer.
Meanwhile, local families, seniors and people of color are being priced out of Portland and are at increased risk of eviction. Most rental options in most neighborhoods in the city are now considered unaffordable for average Black, Indigenous, Latinx, single mother or senior families. Average rents are markedly higher than the standard measure of affordability, 30% of their monthly income, according to the Portland Housing Bureau’s latest State of Housing report. When rent takes too much of your income, even a small emergency can mean falling behind on the rent.
Once ERA passes and the county implements it in alignment with the state tax code, capital gains tax exemptions will ensure that everyday people will not be paying capital gains taxes.
We have the chance this May to Vote for Eviction Representation for All. We can stand with a volunteer coalition of over 60 local housing, labor, faith, legal and community-based organizations to do something locally about the destructive impact of surging evictions in our community.
We can prevent the negative impacts of eviction on the schooling, health, employment, income and economic stability of our neighbors and community.
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