The Fair Access in Renting, or F.A.I.R. Ordinance, went into effect in Portland on March 1, 2020. These are new requirements for tenant screening. The law went into effect almost immediately after it was passed, leaving landlords and property owners unsure about what that law means for them and their rental property.
We’re providing an overview of the most relevant parts of this complex new law, and if you have questions about what it means for your situation in particular, we’d be happy to talk to you about it.
Portland Tenant Screening and F.A.I.R.
Portland rental property owners have been provided with two options when it comes to screening applicants.
There’s a low barrier option, which has standard screening requirements that aren’t terribly strict and are open to residents of all financial and criminal backgrounds.
There is also an option for landlords to set up their own screening criteria instead of using the low barrier option. Your criteria, however, must comply with the regulations put into place by the City of Portland.
Rent to Income Ratios
Another part of the F.A.I.R. Ordinance is a restriction on what you can require for a rent to income ratio when you’re screening prospective tenants. You cannot impose your own requirements on how much income an applicant earns before being approved for your property. There’s a specific structure that you’ll have to use when deciding whether an applicant earns enough to rent your property.
Depending on whether you’re following the low barrier requirements or your own standards for approval, you’ll only be able to look for income that’s equal to two or two-and-a-half times the monthly rent. You are no longer allowed to deny residents if they don’t meet your higher income standards. If you were previously only renting to individuals who earned three times the monthly rent, this is no longer allowed.
This increases risk for many landlords, and it may feel like you’ll have a harder time finding a qualified tenant, or you’ll have to settle for a tenant who does not meet the high standards you once had in place. It may lead to a longer and more complicated screening and leasing process.
Denials Can Be Appealed by Portland Tenants
There’s also an appeals process available to tenants who have had an application denied. This process can take up to 30 days. If you move forward with another tenant, but the denied applicant wins the appeal, you have to allow them to rent another unit for which they will qualify. Again – this means extra work for landlords and, ultimately, a slower and more complicated leasing process.
The penalties for violating any part of the F.A.I.R. Ordinance are tough. Depending on the number of errors you make, you could find yourself paying thousands of dollars in fines.
This is still a new law, and we expect it to continue to evolve. If you have any questions about how this impacts your Portland rental property, or you have any questions about how professional Portland property management can help you, please contact us at Performance Properties.