Lake Oswego’s Short Term Rental Rules Are Widely Ignored; Are Other Cities in the Same Boat?

Any scofflaws in upscale Lake Oswego?

Widespread abuse of Lake Oswego, Oregon’s short-term rentals program proves the point.

In 2019, Lake Oswego tried to get a handle on controversial short-term rentals (STRs) by enacting Ordinance 2815. The ordinance allows STRs (rentals of less than 31 days) of certain residential properties.

Residents who want to operate a STR are required to obtain a business license from the city and pay an $80 annual fee. They’re also required to see to it that the city is paid Transient Lodging Taxes equal to 6% of taxable income from the STR. The tax revenue is used for the promotion and development of tourism and visitor programs for Lake Oswego.

Sounds pretty simple. If you own a property being used for STRs, you need to get a business license and pay taxes on your revenue. But a review of city data on STR business licenses and prominent STR websites shows a lot of people are ignoring the ordinance. 

According to information obtained from the city in response to a public records request, there were 42 active STR business licenses as of Dec. 1, 2022. However, a review of just two high use STR websites, Airbnb and VRBO, turned up 75 STRs with Lake Oswego addresses. 

Separately, AirDNA, a STR marketing firm, reported that as of Dec. 8, 2022 there were 90 active STRs in Lake Oswego, with 88% being entire home rentals and 12% private rooms.

Of the 90 STR’s counted by AirDNA, 96% had internet access and 8% had pools. Although some Lake Oswego properties are quite expensive, the average daily rate is just $170, generating average revenue per property of $2,682 during Jan -July 2022. The highest average monthly revenue was $3,333 in July 2022. 

Of the 90 STRs, 69% were listed on Airbnb, 17% on VRBO and 14% on both. 

The Lake Oswego STRs that pop up include everything from a $75-a-night cottage and $47-a-night private room to a “Modern, kid-friendly, walkable” $405-a-night 3-bedroom home and a $1467-a-night massive luxurious estate with 8 bedrooms and a pool. 

It’s not possible to identify the addresses of all the properties without trying to book them one by one. Website maps, reveal, however, that they are spread all over Lake Oswego. 

Clearly, a lot of people in Lake Oswego are cheating, diminishing themselves, feeding a culture of dishonesty and disrespecting their neighbors.

If a STR is found to be in violation of City Code, the City may suspend or revoke its business license, if it has one. The property owner may also be cited and have to pay a fine or appear in Municipal Court.

It’s time for city government to lay down the law.

Is Home Selling Greed Hitting A Wall? Lake Oswego May Offer a Hint.

Is the frenzied home selling market slowing down?

I just did a sample of home pricing in Lake Oswego, OR, a high-income, largely white-collar town. It may have been small, but I wonder if it’s telling us something.

People are listing their homes at high prices and, with no offers, lowering their asking price, and still waiting for a sale. Instead of greeting lines of eager prospective buyers the day after listing, many homeowners appear to be anxiously awaiting offers.

  • A 4-bedroom 5-bathroom 4,050 house on Westlake Drive was listed on June 29, 2022, at $1,790,000. On July 11, the asking price was lowered to $1,599,000, a $191,000 cut.
  • A home on Dogwood Drive was listed on July 16 at $1,200,000 and then promptly lowered to $995,000, a $205,000 cut. 
  • A home on Nansen Summit was listed for sale on May 26 at $1,495,000, increased to $1,595,000 on July 8 and then dropped again to $1,495,000 on July 12.
  • A home on Koderra Ave listed for $1,370,000 on June 20 dropped its price to $1,275,000 on July 7, a $95,000 cut.
  • A house on Streamside Dr. listed for $1,369,000 on June 13 and dropped its asking price to $1,299,000 on July 7.
  • A house on Upper Dr. listed at $2,300,000 on June 2 dropped its asking price to $2,250,000 on July 13.
  • Even a smaller home on Aquinas St. that was listed on June 23 at $899,900 dropped its price to $875,000 on July 13 and a house on Oriole Lane listed at $625,000 on May 7 dropped its asking price to $585,000 on June 19, a $40,000 cut.

In June, Lake Oswego home prices were up 6.3% compared to last year, selling for a median price of $985K. On average, homes in Lake Oswego sold after 7 days on the market compared to 5 days last year. But there were just 70 homes sold in June, down from 132 last year.

The Wall Street Journal reported today that the U.S. housing market overall is rapidly cooling as record prices and high mortgage rates weigh on home sales, locking out potential buyers. Across the country, sales of previously owned homes fell for a fifth straight month, dropping 5.4% in June to an annualized rate of 5.12 million. That was lower than the number of sales recorded in all of 2019, before the Covid-19 pandemic became widespread in the U.S.

The average rate on a 30-year fixed-rate mortgage rose to 5.51%, mortgage-finance giant Freddie Mac said on July 14. That was lower than the 13-year high of 5.81% set in June, but still a big jump from the 2.88% rate a year ago and high enough to dissuade many potential homebuyers.

Maybe all this is a sign the overheated housing market, including in Lake Oswego, is slowing down.

 

 

 

 

 

 

 

 

Lake Oswego’s Demolition Tax: A Sheep in Wolf’s Clothing

NOTE: I initially titled this “A Wolf in Sheep’s Clothing” to convey the duplicity in Lake Oswego’s demolition tax. I changed it to “A Sheep in Wolf’s Clothing” because I think that better conveys that a demolition policy pitched as an aggressive effort to preserve older homes is, in fact, nothing of the sort as it is unlikely to prevent any demolitions. Instead, it will just raise citizen costs. )

In 2019, sixty-seven home demolition permits were issued in Lake Oswego. Alarmed at the erosion of Lake Oswego’s traditional neighborhoods, particularly First Addition, a hue and cry went up to preserve some of what was still left.

The result, establishment of a $15,000 tax if a single-family dwelling or duplex was going to be demolished, was portrayed by many as an impactful effort to slow demolitions, but it was nothing of the sort. In the end the demolitions have continued and the tax was little more than a pure and simple money grab.

Although Article 24.06 of the city code notes that  “The demolition of residential structures in the City of Lake Oswego has reduced the diversity of housing stock and decreased the availability of affordable housing within the City,”  the article goes on to make it clear that  “The tax is strictly for revenue purposes, to provide funding to maintain City park properties and facilities.” The original goal — raising $400,000 annually for parks maintenance.

The demolition tax is a questionable way to raise money from citizens.

As Judge Glock, the Chief Policy Officer at the Cicero Institute, recently observed in City Journal, “Though largely hidden from the public, fees and charges account for most of the growth in government over the past 70 years and have become the top source of revenue for state and local governments.

Two factors drive this new reliance on special charges. First, governments are expanding the “businesses” they run—hospitals, universities, airports—and forcing users to pay more for them. Second, governments are using charges to avoid voter opposition to, and constitutional restrictions on, raising taxes.”

Earlier this month, the City Council redefined what constitutes a demolition vs. a remodel, but didn’t change the tax. And again the tax was publicly positioned as a preservation move. “The primary idea in my mind is to maintain the existing housing stock that’s there and keep the character of the neighborhood (by disincentivizing demolition),” said City Councilor Daniel Nguyen. 

But all involved have to know that a $15,000 tax will not discourage demolition of a home in Lake Oswego or preserve affordable housing. It will not prevent what theLake Oswego Preservation Society describes as “Charmicide”, people moving to an area to live because of its charm, then demolishing the existing building stock to build something different thus removing the charm that attracted the new residents in the first place. 

In April 2022, Lake Oswego homes sold for a median price of $858K, up from $600,000 in April 2018, according to Redfin.  And many new homes built to replace older demolished properties have sold for considerably more. 

For example, a modest older house in First Addition that sold in 2020 for $586,000 was demolished and replaced with a 3,922 sq ft house (described as “A confluence where good ol’ American farm style meets sophistication.”) that sold for $1,965,000 in February 2021. Zillow puts the current value of the home (below) at $2,111,200.

A $15,000 tax on the demolition of the old house in this case was surely irrelevant. just as it will be for any future demolitions in Lake Oswego. Drive or walk around First Addition and the proliferation of large homes that have replaced smaller ones is evident everywhere. And market forces mean the trend will continue.

Monogram followed this approach when it bought an old home at 937 9th St. in Lake Oswego  for $600,000 in March 2021.

Former home at 937 9th St., Lake Oswego, OR

Monogram demolished the older home and built in its place a 3-level 5-bedroom 4-bathroom 3,862 sq. ft. home (“Legendary Traditional Monogram Design with spacious modern living spaces”) on the market for $2,250,000 as of May 27, 2022.

937 9th St., Lake Oswego, OR

A 3-bedroom 2-bath 1,008 sq. ft. home on 9th St. in Lake Oswego (below) that was built in 1948 on a 7,500 sq. ft. lot will likely meet the same fate.

The property sold on Oct. 29, 2021 for $775,000. If Monogram follows its practices with similar properties, the house will soon be demolished and replaced with a considerably more extravagant structure.

The fact is, the quaint First Addition of old, platted in 1888 and 1925 and once praised by the American Planning Association for its “housing variety and affordability (and) small-town atmosphere,” will soon be no more. And the demolition of older homes throughout the city is going to continue, with or without the demolition tax.

 To believe otherwise is willful self-delusion.  

 

Lake Oswego’s Charming First Addition: Going, Going, Gone.

Looking for a charming modest affordable home in Lake Oswego, Oregon’s First Addition neighborhood?  Fuggetaboutit.

This delightful 1,380 sq ft 1960 bungalow with an adorable backyard playhouse, (described as “The Very Best of First Addition Lake Oswego”) could be an option, but it is probably doomed, even though it is listed at $864,000.

In our disposable culture, it will likely be replaced by a hulking, extravagant bloated McMansion built as close to the lot lines as possible.

After all, the modest house that used to be next door sold in 2020 for $586,000 and it was still torn down. A newly built 3,922 sq ft house on that lot (described as “A confluence where good ol’ American farm style meets sophistication.”) sold for $1,965,000 in February 2021.

Zillow puts this property’s current value at $2,038,000.

The construction of some of these McMansions may be driven by the desire to outdo the less wealthy (or the less indebted), reminding others of the Ozymandias line: “Look upon my works, ye mighty, and despair!” And real estate agents probably love them. The commission on the sale of a $1.5 million McMansion is most certainly much larger than on a $400,000 cottage.

Whatever the motivation, the quaint First Addition of old, platted in 1888 and 1925 and once praised by the American Planning Association for its “housing variety and affordability (and) small-town atmosphere,” will soon be no more.  

 As Washington Monthly recently put it, “The modus operandi is always the same: Take a totally usable older house that is the same style and size as neighboring dwellings, though perhaps needing a rehab, and knock it flat, along with every mature tree on the property—there will be no room for them, owing to the enormous footprint of the planned structure. Then construct a particle-board chateau that has at least 75 percent more square footage than the neighbors, complete with a quarter-acre driveway for the obligatory Range Rover.”

Drive or walk around First addition and the proliferation of large homes that have replaced smaller ones is evident everywhere.

Massive condos are taking root in First Addition, too.

Blazer Homes built six 3,376 sq. ft. townhomes on 4th St. in First Addition in 2018. The most recent sale , on March 3, 2022, was for $1,445,000.

With dreams of another big payoff, the company recently bought an adjacent lot on 4th and plans to build similar condos on the site.

Their expected price? About $2 million each. 

And the beat goes on.

Lake Oswego businesses are big winners in Paycheck Protection Program

ppp

Lake Oswego businesses have stepped up to take advantage of the federal government’s Paycheck Protection Program. As part of the program, the government provided up to $659 billion in financial support to banks to make low-interest loans to companies and nonprofit organizations in response to the economic devastation caused by the coronavirus pandemic.

A ProPublica analysis shows 210 Lake Oswego businesses in zip codes 97034 and 97035 have had loans approved by lenders and disclosed by the Small Business Administration (SBA).

The largest loan recipients, 21 businesses receiving loans of $1 million or more, are:

Location: LAKE OSWEGO, OR

Business Type: Corporation

Loan Amount: $5-10 million

 

Location: LAKE OSWEGO, OR

Business Type: Limited Liability Company(LLC)

Loan Amount: $2-5 million

 

Location: LAKE OSWEGO, OR

Business Type: Subchapter S Corporation

Loan Amount: $2-5 million

 

Location: LAKE OSWEGO, OR

Business Type: Corporation

Loan Amount: $2-5 million

 

Location: LAKE OSWEGO, OR

Business Type: Limited Liability Company (LLC)

Loan Amount: $2-5 million

 

Location: LAKE OSWEGO, OR

Business Type: Limited Liability Company(LLC)

Loan Amount: $2-5 million

 

Location: LAKE OSWEGO, OR

Business Type: Limited Liability Company(LLC)

Loan Amount: $2-5 million

 

Location: LAKE OSWEGO, OR

Business Type: Limited Liability Company(LLC)

Loan Amount: $2-5 million

 

Location: LAKE OSWEGO, OR

Business Type: Partnership

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Corporation

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Limited Liability Company(LLC)

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Subchapter S Corporation

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Partnership

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Limited Liability Company(LLC)

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Corporation

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Corporation

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Corporation

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Subchapter S Corporation

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Corporation

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Subchapter S Corporation

Loan Amount: $1-2 million

 

Location: LAKE OSWEGO, OR

Business Type: Corporation

Loan Amount: $1-2 million

 

A complete list of all Lake Oswego recipients of $150,000 or more is available at ProPublica, an independent, nonprofit newsroom that produces investigative journalism.

Note:
This data comes from the Small Business Administration, and includes lender-approved loans under the Paycheck Protection Program of at least $150,000. The federal government released data on loan approvals of less than $150,000, and that data was used to calculate summary figures for states. Organizations with lender-approved loans of less than $150,000 do not appear in this data. Other loan programs, such as Economic Injury Disaster Loans, are not included in this database.

Oregon’s new K-12 instructional mandates will erode quality education

Oregon’s already underfunded and overwhelmed K-12 teachers are getting ready to deal with the addition of  more labor-intensive, complicated and questionable  instructional mandates imposed on them by politicians.

_MG_7334

It began with the passage of legislation in the last session requiring all Oregon school districts to teach about the Holocaust and genocide beginning with the 2020-2021 school year.

Claire Sarnowski, a freshman at Lake Oswego’s Lakeridge High School, came up with the idea of mandating Holocaust instruction after hearing Holocaust survivor Alter Wiener tell his story. Sarnowski approached state Sen. Rob Wagner, who agreed to introduce a bill.

It all sounded so simple and straightforward at the outset, but the final legislation was a classic example of mission creep.

The legislation went far beyond mandating that students be taught about the Holocaust and genocide. Employing the coercive power of government, teachers are going to be required to address a slew of  social justice topics: the immorality of mass violence; respect for cultural diversity; the obligation to combat wrongdoing through resistance, including protest; and the value of restorative justice.

Do we really need teachers encouraging a hodgepodge of demands from children, resistance to authority and protest by K-12 students rather than learning and dialog, particularly when adults are using students as part of a cynical political strategy?

Tom Nichols, author of The Death of Expertise, wrote in The Atlantic  that too often faculty and administrators are engaged in “a shameless dereliction of duty” when they embrace student activism.

“Student activism can be an important part of education, but it is in the nature of students, especially among the young, to take moral differences to their natural extreme, because it is often their first excursion into the territory of an examined and conscious belief system, ” Nichols wrote. “Faculty (and administrators), both as interlocutors and mentors, should pull students back from the precipice of moral purity and work with them to acquire the skills and values that not only imbue tolerance, but provide for the rational discussion of opposing, and even hateful, views.”

Oregon teachers probably aren’t too enthused about another little – known new classroom instruction mandate either.

Starting this year, Oregon schools are required to teach tribal history and the Native American experience in class.

Senate Bill (SB) 13, enacted in the 2017 legislative session, called upon the Oregon Department of Education (ODE) to develop a statewide curriculum relating to the Native American experience in Oregon, including tribal history, tribal sovereignty, culture, treaty rights, government, socioeconomic experiences, and current events.

“When Governor Brown proposed SB 13 during the 2017 legislative session and subsequently signed it into law, it was because she deeply values the preservation of tribal cultural integrity and believes that honoring the history of Oregon’s tribal communities is critically important to our state as a whole, and to future generations of students,” said Colt Gill, Deputy Superintendent of Public Instruction.

The legislation stated that the required curriculum must be:

(a) For students in kindergarten through grade 12;  (b) Related to the Native American experience in Oregon, including tribal history, sovereignty issues, culture, treaty rights, government, socioeconomic experiences and current events; and (c) Historically accurate, culturally relevant, community-based, contemporary and developmentally appropriate.”

Sounds admirable, but like the Holocaust legislation, it’s a classic example of mission creep.

First, the curriculum won’t be a limited add-on to current lesson plans. Instead, it will roll out as an extensive, complex set of 45 lessons in five subject areas, including English, social studies, math and science, for fourth, eighth and 10th grade classrooms.

It’s also a new responsibility for the Oregon Department of Education, which has never before been responsible for creating curriculum, and one more subject matter mandate imposed on already overloaded Oregon teachers.

Furthermore, it has the potential to become a tool for indoctrinating students in progressive social justice trends du jour.

According to OPB, The South Umpqua School District, which serves 1,500 students from Myrtle Creek, Tri-City and Canyonville, is already planning multiple days of teacher training sessions that will “expand beyond the tribal history and culture lessons to delve into racially sensitive topics, such as cultural appropriation, implicit bias and microaggressions.”

The basic idea of cultural appropriation is that a particular group, nationality or ethnicity who developed a practice should be the only ones allowed to practice it. Others insult the originating group if they practice it as well.

Too many Oregon adults have already disrupted lives by screaming cultural appropriation. This is not what we should want Oregon children to embrace.

burritos

Two white women were forced to close down their Portland pop-up burrito shop, Kook’s Burritos, in  2017 after being accused of cultural; appropriation.

“…the worst aspect of cultural appropriation is that it is inconsistent with the cultural development and enrichment that a free society promotes,” wrote Mike Rappaport in Law & Liberty. “In a free society, people from different cultures bring their practices to the wider society and they are followed by others in that society, making possible a richer and improved culture.”

Author Cathy Young made a similar point in the Washington Post, arguing that cultural appropriation protests ignore history, chill artistic expression and hurt diversity.  “Appropriation is not a crime,” she wrote.  “It’s a way to breathe new life into culture. Peoples have borrowed, adopted, taken, infiltrated and reinvented from time immemorial.”

Filling the heads of Oregon children with the frightening specter that they are burdened with implicit bias would be unwise, too.

Implicit, or unconscious, bias is the idea that the assumptions, stereotypes, and unintentional actions we make towards others are based on identity labels like race, religion, age, gender, sexual orientation, or ability. Because our implicit associations are stored in our subconscious, we may act on our biases without even realizing it.

The problem is that the implicit bias concept is of questionable validity, based on unproven suppositions and oversold as a solution to diversity issues. But buying into the concept of implicit bias is easy because it feels open-minded and progressive.

However, “almost everything about implicit bias is controversial in scientific circles,” Lee Jussim, a professor of social psychology at Rutgers University, wrote in Psychology Today. “It is not clear what most implicit methods actually measure; their ability to predict discrimination is modest at best, their reliability is low; early claims about their power and immutability have proven unjustified.”

Research suggests that implicit bias training can raise awareness, but there’s not much evidence it actually changes behavior. As John Amaechi, a psychologist and organizational consultant, puts it, the implicit bias concept has become “a ‘get-out-of-jail-free’ card for too many.” Implicit bias training, he says, is too often a “simply a way that organizations can achieve a level of plausible deniability” that they are addressing diversity issues.

And then there are microaggressions, well-intentioned comments or minor slights a speaker may not perceive as negative.

Several years ago, University of California President Janet Napolitano went so far as to tell faculty that saying “America is the land of opportunity” or “Everyone can succeed in this society, if they work hard enough” or even  “America is a melting pot” were microaggressions. That’s because they delivered an inaccurate message that the playing field is even or that people of color are lazy and/or incompetent and need to work harder.

Teaching Oregon children about the horrors of microaggressions will turn them into perpetual victims hypersensitive to casual remarks. In other words, into carbon copies of a lot of today’s misguided college students.

What might be better would be to require that students spend 9/11 every year watching the videos recorded on that terrible day in New York City. Hours of it, the scenes on the street, the footage inside the buildings, and the aftermath. Then, a discussion about the heroism of the average American and the fact we have enemies who want to destroy us.

 

The Race to Space

cassini2saturn

Come to a presentation by Todd Barber, the senior engineer at the NASA’s Jet Propulsion laboratory and the lead propulsion engineer on the Cassini mission to Saturn.

When: Feb. 17, 2017

Where: Lake Oswego City Hall Council Chambers

380 Avenue

Lake Oswego, OR

Time: 7 PM