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Portland rent board approves modest rent increase for 29 Paris Street Unit 3, denies base‑year adjustment
Summary
The Rent Board granted a narrower increase than the owner requested after finding the application did not justify changing the base year or including mortgage/debt service in the net‑operating‑income calculation. The board approved an increase of $117.08 per month after subtracting banked allowable increases.
The Portland Rent Board on May 28 approved a limited rent increase for Unit 3 at 29 Paris Street but denied the owner’s request to change the application’s base‑year calculation.
The owner, identified in the hearing as Anna (applicant/owner), had asked to raise rent on the vacant two‑bedroom, one‑bath condominium to $2,000 per month, citing a $12,000 condominium basement stabilization expense and subsequent special assessments. “In order to recover the cost and to obtain a fair rate of return, I’m requesting to raise the rent to $2,000 a month,” Anna said during the applicant’s presentation.
The board’s decision rested on two linked findings: (1) the application did not show that net operating income (NOI) in the base year was insufficient to provide a “fair rate of return,” and (2) the board treated the condo association charge as a recurring assessment rather than as a one‑time capital improvement amortized by the landlord.
Why it matters: owners seeking rent adjustments under the Rent Stabilization Ordinance must use the city’s maintenance of NOI methodology. The board said the applicant’s submission relied on debt service (mortgage) in a way that the board’s NOI calculation does not permit. As a result the board denied an adjustment to the base year that would have raised the starting point for future allowable increases.
What the board decided: After discussion and math checks, the board replaced the capital‑improvement line on the NOI worksheet with the condo association’s documented monthly assessment of $135.00 for the basement stabilization work, and it calculated the owner’s shortfall in 2024 NOI. The board then subtracted existing banked allowable increases the owner could still use (the board’s math on banked rent for this unit was approximately $303.00) and approved a residual monthly increase of $117.08. The board voted to approve that increase (majority vote).
Board members stressed process points rather than intent. Commissioner Matthew Lacks (chair) and other board members said the NOI approach is designed around cash flow and does not include mortgage principal or debt service as allowable operating expenses. Board member Kristen (last name not provided) summarized the board’s position: the city’s NOI methodology focuses on operating income and not debt service.
Other details and next steps: The applicant was told the board would issue a written decision form outlining the calculation and that the owner may still pursue allowable CPI or turnover increases within the rules for banked rent and annual timing. The board noted the owner may reapply if future, documented capital costs arise that meet the ordinance standards (for example, qualifying major renovations).
Ending: The Rent Board’s written decision will be mailed to the applicant and placed in the public record. The board said staff would follow up with a decision form that shows the math and the amount the owner may lawfully charge going forward.
