Oregon Passes Sweeping Rent Control Law

by | Mar 11, 2019 | Rental Property Management Tips

It’s official: Oregon has become the first to adopt a statewide rent control measure. Because of an emergency declaration, rent caps go into effect across the state immediately.

The measure was passed over the objections of landlords and despite dire warnings from experts that rent control will only exacerbate the lack of affordable housing.

The complex law provides for a cap on rent increases of 7 percent plus an inflation figure currently set around 3 percent. That cap will apply to most rental stock, except for buildings issued a certificate of occupancy less than fifteen years prior.

The law also limits evictions of tenants and requires cause to evict in many cases. Landlords may be required to pay one month’s rent to longer-term tenants when leases are terminated. Violation of the new law can result in a payment of three months’ rent plus any additional damage a tenant suffers.

The bill moved through the legislature in record time with little room for amendments. The governor touts the new law as a win for tenants who now will have a more stable housing market to choose from.

That may be optimistic. Researchers who have studied the impact of rent control, including Stanford University and the CATO Institute, warn that rent control has a negative impact on supply, driving up both rents and occupancy rates. That makes it significantly more difficult for low-income tenants to find housing.

California recently rejected a referendum on rent control. There, policy analysts predicted individual city governments would lose tens of millions of dollars in tax revenues, and a similar sum in regulatory costs necessary for enforcement if the rent control measure passed.

Researchers have suggested that targeted subsidies to the neediest renters is a better option than a blanket cap on private rentals.

Doug Bibby, President of the National Multifamily Housing Council, a Washington, D.C.-based association representing the apartment industry, agrees that rent control measures create a supply imbalance, the reason why most states — including Oregon — have prohibited cities from enacting rent control.

Robert Pinnegar, CAE, President and CEO of the National Apartment Association, has stronger words, calling the move “reckless and ill-advised” and warning of “predictable negative consequences for housing affordability in the state.”

“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 says.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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