PORTLAND, OR—Senate Bill 608, a measure that caps how much landlords can raise rents and stipulates how they may evict tenants, was passed by the House yesterday with a 35-25 vote after previously passing the Senate. Governor Kate Brown is expected to sign the legislation, making Oregon the first US state to cap how much landlords can raise rents.

The bill prohibits landlords across the state from raising rents more than 7% per year, plus the annual change in the consumer price index. It carves out an exemption for rental properties that are less than 15 years old.

As long as landlords cite a reason—such as violating the lease agreement or not paying rent—they could still remove tenants from properties. There are other carve-outs in the bill that allow landlords to evict tenants, such as a need to upgrade buildings or plans to demolish it.

Landlords could also evict a tenant if a family member is moving into the unit under certain circumstances, but they would need to give tenants 90 days' notice. Landlords can terminate tenancies only with 90 days' written notice and payment of one month's rent, with exemptions in some cases. A landlord can also refuse to renew a fixed-term lease if the tenant receives three lease violation warnings within 12 months and the landlord gives 90 days' notice.

Oregon's measure prohibits landlords from terminating month-to-month leases without cause after 12 months of occupancy and limits rent hikes to once per year.

Landlords would be free to raise rent without any cap if renters leave of their own accord. Subsidized rent would also be exempt.

If any landlord were to violate the terms, they may have to pay the tenant up to 3 months' rent and damages.

Democratic lawmakers spoke of constituents who were “living on the edge, one rent spike away from being homeless” and that housing displacement was a devastating reality for too many Oregonians.

However, the National Multifamily Housing Council has a different take, saying rather than improving the availability of affordable housing, rent control laws exacerbate shortages, cause existing buildings to deteriorate and disproportionately benefit higher-income households.

Housing issues have often been at the forefront in US history. For example, high rents in World War II production cities such as Portland led to problems with maintaining a stable workforce and optimum production for the war effort. In the process, landlords were seeing big profits.

One study of 40,000 housing units in 20 large defense industry cities showed that from 1939 to 1942, the operating income jumped 31% for an average apartment house unit and 45% for an average small structure. In response, the Federal Emergency Price Control Act of 1942 gave the Office of Price Administration/OPA authority to designate defense-rental areas throughout the country “where defense activities have resulted or threaten to result in an increase in rents for housing accommodations”.

By 1943, the OPA had designated 370 rent control areas, regulating some 11 million rented homes as well as 350,000 hotels and rooming houses. In Oregon, this included the cities of Astoria, Corvallis, Medford, Pendleton and the Portland-Vancouver metro area, according to the Oregon secretary of state Dennis Richardson.

When asked about the biggest challenge facing the multifamily industry in 2019, nearly half (48%) of all respondents in a Capital One survey pointed to rising costs in their markets as the top concern. Rising interest rates were seen by less than a quarter (22%) of respondents as the biggest hurdle for the industry, down significantly from 52% of respondents who said so in 2017.

Pointing back to the industry's strong fundamentals, just 16% cited supply/demand imbalances as their top concern. The survey also found that while 70% of respondents believe the economy is approaching the end of its current cycle, professionals remain optimistic about industry fundamentals.

Multifamily professionals expect the political climate in Washington, DC may have a negative impact on the industry in 2019, with 43% of survey respondents viewing the current political climate as a detriment to activity in the multifamily industry and just 28% foreseeing a positive impact. The survey was given to more than 100 multifamily professionals at National Multifamily Housing Council's annual meeting.

Instant Insights /

Oregon to Become First in US with Statewide Rent Control

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