Illegal Private Property Impound (PPI) Towing in Portland, Oregon

March 7, 2017

Hon. Mayor Ted Wheeler

Hon. Auditor Mary Hull Caballero

Hon. Commissioner  Chloe Eudaly

Hon. Commissioner  Nick Fish

Hon. Commissioner  Amanda Fritz

Hon. Commissioner  Dan Saltzman

RE: Illegal Private Property Impound (PPI) towing in Portland

Dear Mayor Wheeler, Auditor Hull Caballero, and Commissioners:

I am writing to call your attention to where the City’s Private Property Impound (PPI) system operates in violation of state law and specifically to the detriment of low-income apartment residents and immigrant populations.

Given the state of the City’s ongoing housing crisis, tenant protection concerns and rising costs, I believe that a new urgency exists regarding this issue, which I have previously brought before Council from time to time over a number of years.

I am also concerned about the erosions of citizen protections against towing abuses and unfair trade practices that have taken place since and despite the towing reforms enacted in the 2007 legislative session through changes in how the City’s PPI program has been managed: generally, backing off from enforcing state law; creating a citizen-unfriendly problem-resolution process; and, providing no opportunity for citizen input into the system itself.

The prices that the City has authorized the towers to charge vehicle owners reflect both the lack of competition among the PPI towers and the erosion of pricing protections and other abuse protections that the City once afforded the general public, but which have since gone away, and without an open, public process.

Immigrant communities are also disadvantaged in the lack of clarity in what “Citizen Rights” might or might not apply to them, as they are not U.S. citizens and may not be fluent in English.

There is nothing in City PPI towing ordinances that addresses vehicles operated by persons with disabilities. They have, for example, the same amount of time to redeem their vehicle or to arrange transportation as does a person without disabilities.

The City’s PPI system was built over time around an arrangement that certain Portland towing companies reached with each other and with certain commercial property owners and management companies whereby the towers provide their “goods and services” at no cost to these certain customers in exchange for the privilege of towing vehicles from the subject property, despite the fact that the practice is forbidden in statute.

ORS 98.854 (Prohibitions placed on tower)

(1) A tower may not:

(h) Provide consideration to obtain the privilege of towing motor vehicles from a parking facility. For the purposes of this paragraph, the provision of:

 (B) Goods or services by a tower below fair market value constitutes consideration.

The former Towing Coordinator defended this arrangement, arguing that since the towers all provide the service for free, the fair market value of the towers’ goods and services is “zero.”

The towers recover their costs and manufacture their profits by imposing a pricing scheme onto the public, who stand at further risk of losing their vehicles to the towers if they are unable to pay the fees demanded at the time the tow is made. Towers pay their employees on a commission system and use other tactics to ensure that their drivers are towing vehicles aggressively enough.

Among the ways in which this practice operates to the detriment of the public is that the system contains no incentives for towers to compete with one another by offering to do the job more efficiently or for less money, since they have all agreed to provide towing services to this certain class of customers for free.

Among the actions taken by the 2007 legislature was to add ORS 98.854 Prohibitions Placed on Tower to ORS Section 646.608 Unlawful Trade Practices:

ORS 646.608 Unlawful Trade Practices

(1) A person engages in an unlawful practice if in the course of the person’s business, vocation or occupation the person does any of the following:

(ddd) Violates ORS 98.854 Prohibitions placed on tower

The City’s current approved PPI rates for Class A and B vehicles might define the Fair Market Value (FMV) of the towing goods and services that these towers are providing for free if it was clear who the willing “buyer” might be, since it is clearly not the general public and certain property owners and managers are getting their towing goods and services for free.

The City’s PPI system also appears to be in violation of Oregon’s Anti-Price Discrimination Law:

ORS 646.010 to 646.180

Anti-price Discrimination Law (Illegal Contracts)

ORS 646.010¹ Designation and scope of ORS 646.010 to 646.180

ORS 646.010 … to 646.180 … shall be known and designated as the Anti-price Discrimination Law; and the inhibitions against discrimination in those sections shall embrace any scheme of special concessions or rebates, any collateral contracts or agreements or any device of any nature whereby discrimination is, in substance or fact, effected in violation of the spirit and intent of ORS 646.010 (Designation and scope of ORS 646.010 to 646.180) to 646.180 (Illegal contracts).

ORS 646.040 Price Discrimination

(1) It is unlawful for any person engaged in commerce …(who) in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities, or services or output of a service trade, of like grade and quality or to discriminate in price between different sections, communities or cities or portions thereof or between different locations in sections, communities, cities or portions thereof in this state, where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them.

Erosion of the Public’s Rights and Resources

Prior to 2007, the City would not permit PPI towers to charge fees for mileage, dollies and photographs, etc. but does so now. These prices also include a hidden $ 20.00 signage fee, the result of an arbitrary formula created by the former Towing Coordinator, intended to compensate the tower for the costs of any signage the tower might have placed on the subject property, with no upper limit as to when the signs – if they exist at all – are fully paid for.

During this period, in order to increase profits, PPI towers and their client property owners and managers have added at least one towable “offense” that at minimum is a violation of landlord – tenant law. Some apartment complexes have adopted a “No Back-In Parking” rule that subjects tenants and guests to immediate towing without further notice simply for failing to park their otherwise-in-compliance vehicles nose-in.

Tenants routinely sign rental agreements where they specifically agree to have their vehicle towed without further notice, and without being fully informed of their rights.

Apart from creating towing opportunities for drivers working on commission, the No Back-In Parking rule appears to exist only so that drivers can troll a parking facility more easily, with no other benefit accruing to either the tenant or property owner/manager.

ORS 90.245 Prohibited provisions in rental agreements

1. A rental agreement may not provide that the tenant:

(a) Agrees to waive or forgo rights or remedies under this chapter; ….

2. A provision prohibited by subsection (1) of this section included in a rental agreement is unenforceable. If a landlord deliberately uses a rental agreement containing provisions known by the landlord to be prohibited and attempts to enforce such provisions, the tenant may recover in addition to the actual damages of the tenant an amount up to three months’ periodic rent.

ORS 90.262 Use and occupancy rules and regulations

1. A landlord, from time to time, may adopt a rule or regulation, however described, concerning the tenant’s use and occupancy of the premises. It is enforceable against the tenant only if:

(a) Its purpose is to promote the convenience, safety or welfare of the tenants in the premises, preserve the landlord’s property from abusive use, or make a fair distribution of services and facilities held out for the tenants generally;

(b) It is reasonably related to the purpose for which it is adopted;

Applicable State Laws

The City’s PPI resource pages omit several key applicable state laws, specifically:

ORS 98.854 Restrictions on Towers*

ORS 646.608 (1 [ddd]): Unlawful Trade Practices

ORS 646.010 to 646.180 Anti-Price Discrimination Law

ORS 90.245 Prohibited provisions in rental agreements

ORS 90.262 Use and occupancy rules and regulations

*While ORS 98.854 Restrictions on Towers is technically referenced on the City PPI page (ORS 98.850 to 98.864), the link takes members of the public to a page listing 91 statutes by title, of which ORS 98.854 Restrictions on Towers is buried 81 titles deep. Most of these titles are unrelated to towing.

Towing from Private Property

Private Property Impounds (PPI) are tows from private property requested by a property owner or business owner in the city of Portland.

Role of the Towing and PPI Program: Improper tows, fees charged, signs, tower conduct (i.e., rudeness)

Complaints & Appeals

Find a car: Police Records (503) 823-0044

Oregon Department of Justice: Consumer Protection, Towing

Consumer Hotline: 1-877-877-9392 ~ OR Consumer Complaint Form

Applicable State Laws:

Towing: ORS  ORS 98.850 to 98.864

Landlords, tenants and vehicle removal: ORS 90.485

The City has for years published a monthly listing of all PPI tows taking place; however, that practice ended in November 2016. No reason for this change is posted on the site.

October 2016: PPI Tows  November 2016: PPI Tows

663 vehicles were towed under the PPI system during November, the majority from low-income apartment complexes. Each tow drains some $ 200+ dollars at minimum from the tenant’s cash resources and imposes significant hours of time and much stress on the end recipient of the program’s “free” goods and services.

In conclusion, I want to note that the Legislative Assembly stated its intent regarding involuntary towing in the 2007 session in ORS 98.850. I hope that the City considers these facts and those stated herein and acts immediately to suspend its Private Property Impound towing program and to focus some resources on assisting those members of the public whose vehicles were towed in violation of Oregon state law.

ORS 98.850 Legislative findings and declaration

(2)The Legislative Assembly declares that:

(a)Statutes that assist members of the public in avoiding involuntary loss of use of motor vehicles and in expediting recovery of motor vehicles and the personal property in the motor vehicles promote the safety and welfare of members of the public.

Sincerely,

s/Sean Aaron Cruz

Executive Director