04/09/1980 Meeting - Laserfiche WebLink

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Mr. Croteau stated that the task force has come up with a bas ic framework r' for regulating the conversion of condominiums. He referred to the April 3 memo from the Planning and HCC staffs. The task force has noted an alternative to condominium conversion, that of forming housing cooperatives.~ This possibility will require much more time and study than the task .: force has available during the six-month moratorium. They would like the council to direct the Joint Housing Committee and the downtown housing group to study ways to help facilitate formation of cooperative housing. Mr. Croteau said that various techniques for rental market protection were presented to the task force. They have agreed to a formula that protects the rental market yet still allows some conversion to occur. The method is to: 1) estimate the expected number of new units which would be constructed in the next year: and 2) subtract the expected growth in the rental demand due to increased population; the difference is the net number of units which can be converted. If this process had been used in 1980, it would have allowed 1,400 units to be converted. Since the number allowed will vary from year to year, it is felt that provision for carry- over from year to year of surpluses or deficits in the net number allowed, would be appropriate. The maximum carry-over of the net units could be for a three-year period. In regard to purchaser protection and incentives to tenants to buy their units, Mr. Croteau said there would be a requirement mandating a housing code inspection, prior to sale, and disclosure of inspection reports to all prospective purchasers. In addition, an engineer would need to certify the present condition of the structural components. Another requirement might be that the developer warrant, for a two-year ~ period, the common elements of the condominium (major mechanical systems, ,., foundation, roof, exterior walls, etc.) and provide a reserve account to cover major defects during this period. The task force also recommended that the homeowners' association be required to maintain a reserve account after the warranty expires. Mr. Croteau stated that to protect subsequent buyers of a converted condominium, a requirement is made that full disclosure be made upon resale of the unit to prospective buyers. Also when selling a unit, there is the requirement that detailed informa- tion be provided to prospective condominium purchasers, detailing the advantages and disadvantages of this type of housing. There is also a requirement to fully inform purchasers that tenants may have certain rights under the City's Code. In regard to displaced persons, Mr. Croteau said there would be a require- ment that all tenants in a condominium to be converted be given a l80-day notice and that no eviction would be allowed during that time without cause. There is also a rent increase. limitation during that, period which is tied to the Portland overall consumer price index. 4/9/80--6 e