The biggest news in the Oregon real estate and property management industries comes in a proposed bill that would enact statewide rent control. If Senate Bill 608 receives final approval, Oregon would be the first state to enact statewide rent control. The bill received approval first in the Senate by a vote of 17-11 and also from the House of Human Services and the Housing Committee by a vote of 6-3. It now moves on to the full House. A floor vote could come as early as next week according to Committee chair Alissa Keny-Guyer, D-Portland.
Senate Bill 608 Details
Senate Bill 608 will affect both homeowners and renters throughout the state. The bill itself caps rent increases at 7 percent, plus the annual increase in the consumer price index, inflation. This bill exempts buildings less than 15 years old and also prohibits landlords from evicting tenants for no reason after they have lived in a unit for 12 months or more. This bill includes an emergency clause, which means if Governor Kate Brown signs, as expected, this bill comes law immediately.
Landlords would be free to raise rent without caps if a renter leaves of their own accord. Subsidized rent would also be exempt if Senate Bill 608 becomes law.
Background on Rent Control
Currently, only four states have cities with rent control in place and many states prohibit it. Rent control remains a controversial topic, as some research shows strict rent control to reduce the supply of rentals, which drives up rents in the long run. The proposed cap would be much higher than typical of cities with rent control. Many California communities with rent control report rents only rising by the rate of inflation, or a fraction of it, each year. For Western states, the annual increase ranged from just under 1 percent to 3.6 percent over the past five years.
The Bulletin reports that there were cases when rents rose by hundreds of dollars and in some cases doubled overnight across the state. The bill comes as an effort to stabilize rents and give rents predictability. The intent of the bill is to provide renters with stability while limiting the impact on the supply of rental homes. One concern comes from economic research that shows rent control reducing investment in housing. In other instances, rent control saw landlords converting rental properties into condos or redeveloping the property, resulting in higher rents due to diminishing supply.
Bend currently requires landlords to give tenants 90 days’ notice of a rent increase if they have been living in the rental home for more than a year.
Oregon Statewide Rent Control Bill
Where do you stand on the issue of statewide rent control? As a homeowner, landlord or property owner, does the impending statewide rent control bill in Oregon play into your future plans to purchase or sell rental property real estate? We’d love to hear more about your thoughts on the issue of rent control and how you think the passing of this law will play out in the Central Oregon real estate and rental markets.
If you have an investment property or are considering investing in a rental property, let Tuttle and Tuttle help you understand how this will affect you. Contact us today to start the conversation.