South Portland city councilors emphasized Tuesday that any rent stabilization they may enact would prioritize the protection of tenants, but they agreed to consider the impact it may have on local, responsible landlords.

Councilors met in a workshop to begin their exploration of rent stabilization a week after enacting a six-month eviction moratorium and a 10% cap on rent increases. Those measures were prompted by staggering rent increases, up to $598 per month, at Redbank Village Apartments.

Landlords and real estate agents at the workshop urged the council to consider smaller landlords. The eviction moratorium excludes the owners of 10 or fewer units, a number many have argued is too low and unjustly penalizes responsible landlords.

“Landlords by and large actually keep their rents very low,” said Brit Vitalius, principal of Vitalius Real Estate Group in Portland. “I don’t know in my 16 years in this industry now, selling apartment buildings, if I’ve ever seen an existing landlord jack the rents more than 5 or 10% on a current tenant. It just doesn’t happen. When a building sells, that’s when there’s a jeopardy in play and that’s what happened at Redbank.”

JRK Holdings of California purchased the 500-unit Redbank apartment complex for $143 million in November.

Councilors said their priority is to protect residents from becoming homeless. However, they said they would like to work with landlords in the process of drafting a rent stabilization ordinance.


Councilor Jocelyn Leighton said her goal is to tailor an ordinance for tenants “to keep them in their homes so that they’re not sleeping in their cars, they’re not sleeping on the street, and have that sense of security.”

“Having said that,” Leighton said, “I think it’s important to understand how this impacts landlords … I need to be thinking about them as well, and that (this) is their income and that’s how they’re going to have stability in their life.”

Councilor Susan Henderson emphasized the need to target large real estate companies or “investor-owned housing” like JRK Holdings, and mitigate the harm to smaller, local landlords.

“Investor-owned housing has caused very grave harm to individuals and put people on the street,” Henderson said, and otherwise caused housing insecurity.

“You can read that there’s a trend (with) investor-landlords; their sole purpose is to make a profit,” she said. “They’re at a distance and they don’t care if they drive people out. They’re happy to drive people out if their new tenants can pay more rent.”

Councilors said there will be multiple discussions before any law is drafted, which could include the formation of a new committee or involving the city’s existing Affordable Housing Committee.

With the eviction moratorium expiring Nov. 27, the city has roughly five months to workshop, draft, and pass a rent stabilization law if they are intent on having some form of continuity.

Any avenue the city takes to stabilize rents has risks, according to Planning Board Director Milan Nevajda.

“There are all kinds of ways people can challenge these laws and we just need to be aware that this is an element,” Nevajda said. “We are going to experience some of that with this law, potentially, and we need to be drafting policies to try and curb as much of it as possible.”

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