Real Estate

Oregon enacts nationÕ first statewide rent control law

Rent control and eviction measures go into effect immediately

Oregon just became the first state in the U.S. to enact statewide rent control.

The law, which places an annual limit on rent increases of 7% plus inflation, was signed into effect on Thursday by Oregon Gov. Kate Brown, who signaled that this won’t be the state’s only step towards addressing affordable housing.

“This legislation will provide some immediate relief to Oregonians struggling to keep up with rising rents and a tight rental market,” Brown said in a statement. “But it does not work alone. It will take much more to ensure that every Oregonian, in communities large and small, has access to housing choices that allow them and their families to thrive.” 

Brown is also calling on the state legislature to authorize $400 million in new investments “aimed at ending homelessness for Oregon’s children, providing permanent supportive housing for the chronically homeless, housing Oregon’s veterans, and accelerating the growth of housing supply by tripling the existing pipeline of affordable housing by 2023.”

And while those measures are under consideration, the rent control law goes into effect immediately, according to The Oregonian.

The law also contains other rent-related restrictions, as well as other eviction protection measures, which The Oregonian details:

The rent increase restrictions exempt new construction for 15 years, and landlords may raise rent without any cap if renters leave of their own accord. Subsidized rent also is exempt.

The bill also requires most landlords to cite a cause, such as failure to pay rent or other lease violation, when evicting renters after the first year of tenancy.

Some “landlord-based” for-cause evictions are allowed, including the landlord moving in or a major renovation. In those cases, landlords are required to provide 90 days’ notice and pay one month’s rent to the tenant, though landlords with four or fewer units would be exempt from the payment.

As the Oregonian notes, the bill moved quickly through the state’s House and Senate thanks to a Democratic supermajority in both houses.

And while the Democrats in Oregon’s legislature supported the bill, the multifamily housing industry appears not to.

Both the National Multifamily Housing Council and the National Apartment Association blasted Oregon’s new law, claiming that it will actually have the opposite effect on affordable housing in the state.

“There is no doubt that housing affordability is a crisis in Oregon. However, SB 608 will worsen the imbalance between housing supply and demand by allowing for rent control across the state,” Doug Bibby, president of the National Multifamily Housing Council, said.

“While the intent of rent control laws is to assist lower-income populations, history has shown that rent control exacerbates shortages, makes it harder for apartment owners to make upgrades and disproportionally benefits higher-income households,” Bibby continued.

“That is why Oregon and a majority of other states have laws in place that explicitly prohibit local municipalities from implementing rent control laws. Reversing course is counterproductive and will not solve the crisis,” Bibby added. “Oregon lawmakers should focus on holistic solutions that encourage more housing supply, facilitate public-private partnerships to tackle many of the existing barriers, and increase direct assistance to renters.”

Robert Pinnegar, president and CEO of the National Apartment Association, echoed Bibby’s sentiments.

“Today’s regrettable action by the Oregon State House of Representatives on SB 608 will lead to unintended, but pre-eminently predictable negative consequences for housing affordability in the state,” Pinnegar said.

“Rather than focusing on the onerous regulatory environment that constricts the diversity of housing needed to meet the surging demand for rental housing, Oregon’s public officials chose to slide backward by enacting a failed policy that has historically proven to hurt residents and housing supply alike,” Pinnegar added. “The National Apartment Association and the National Multifamily Housing Council will continue to promote sustainable, responsible solutions that lead to more apartment construction, and oppose reckless and ill-advised policy approaches like rent control.”

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