New Oregon law bars massive rent increases

By Don McIntosh

Tenants might outnumber landlords four to one, but in the Oregon Legislature, landlord money has long held sway. Landlords won a statewide ban on rent control in 1985, and tenant advocates have never since then had the clout to repeal it. But this year, a Democratic majority turned the dial in renters’ direction with a new law signed by the governor Feb. 28 that took effect immediately.

The law makes Oregon the first state in the nation to enact statewide limits on residential rent increases. Unfortunately for renters, the limits they set — 7 percent a year plus inflation — are more landlord-friendly than any other rent limit in the nation. The limit is so loose that it wouldn’t have prevented the overall rise in rent that turned Oregon from affordable to unaffordable in under two decades. Still, the law will prevent massive rent increases like the kind that have taken place when new investors buy low-income housing and jack the rent up 50 or 100 percent. The new law also gives tenants much greater security by ending “no-cause” eviction.

Backed by the governor and top Democrats in the Oregon House and Senate, Senate Bill 608 moved swiftly through the Oregon Legislature, passing the Senate 17 to 11 Feb. 12, and the House 35 to 25 on Feb. 26. Every single Republican in the Legislature voted against it, and so did four Democrats: State Senator Betsy Johnson (Scappoose) and state representatives David Gomberg (Central Coast), Caddy McKeown (Coos Bay) and Brad Witt (Clatskanie).

Public testimony was strongly in favor of the bill. In two lengthy hearings, 147 people testified in favor of it, and 65 against. Those in favor included union members, leaders and staff from Oregon Nurses Association, United Food and Commercial Workers Local 555, SEIU, Oregon AFL-CIO, and Oregon AFSCME.

Supporters said Oregon is suffering a severe crisis of affordable housing: About two out of every five Oregonians lives in rented housing, and rents have been rising faster than wages all over the state, not just in the Portland metro area.

WHAT THE LAW SAYS

The new law says residential rent — during a tenancy — can increase no more than 7 percent plus the increase in the Consumer Price Index (CPI) each year. It also ends “no-cause” evictions once a tenant has rented for a year; in other words, a landlord has to have legitimate grounds in order to evict a tenant. The law has exceptions: The rent increase limits don’t apply to newly built units for the first 15 years. And the bar on no-cause evictions doesn’t apply in cases where landlords are sharing the house or duplex they live in, or when they need the unit for themselves or immediate family to live in, or when they’re demolishing or repurposing a dwelling, or when they’re selling the unit to a buyer who wants to live in it. The law only limits rent increases while a tenancy continues; once tenants move out voluntarily or are evicted for cause, landlords can raise the rent on the unit by any amount. SB 608 also leaves in place a state law that bars local jurisdictions from passing their own rent control ordinances.

Opponents seemed not to have read the bill, and many threatened dire consequences based on theoretical arguments against the concept of rent control.

“No one in their right mind would be a landlord under this legislation,” said Medford Republican state rep (and landlord) Kim Wallan. Wallan said she’ll buy her future rental properties outside of Oregon.

The bill’s chief sponsor, State Senator Ginny Burdick (D-Portland), told the Labor Press those kinds of “sky-is-falling” arguments were unpersuasive: Portland has faced no landlord exodus despite two years of de facto rent limits under its “relocation” ordinance, which requires landlords to pay relocation equal to three months rent if they raise rents 10 percent or more a year.

“7 percent plus CPI in my opinion is very generous,” Burdick said. “I happen to be a landlord, and I have never raised the rent by 10 percent on a tenant.”

Tenant advocates were told 7 percent plus CPI was the best they could get. If the limits had been lower, the bill wouldn’t have had majority support, despite Democrats’ 18-12 majority in the Senate and 38-to-22 majority in the House.

The legislative battle actually began in 2017, with a bill that would have lifted the state-wide pre-emption on local rent control ordinances and ended no-cause eviction. It passed in the House but failed in the Senate because of opposition from Democratic Senators Rod Monroe and Betsy Johnson. That led former state rep Shemia Fagan to challenge Monroe in the 2018 Democratic primary; she beat him 61.9 percent to 24.7 percent. Fagan said she was frustrated when Senate Democratic leaders left her out of the crafting of the bill, but says her win still had an effect on other Democrats.

“Seeing me primary one of their longtime incumbent members who was otherwise pretty liberal on everything else.… was a big wake-up call to them that they probably didn’t want to be voting against this on the Senate floor.”

Fagan said she would have liked the bill to set a statewide limit and lift the pre-emption so cities and counties could go lower, but there weren’t enough votes for that in the Senate.

“Sometimes it’s incrementalism and the art of the possible. That doesn’t mean we’re going to stop pushing,” Fagan said.

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