SALEM — Oregon on Thursday enacted the nation’s farthest-reaching law limiting rent increases and restricting no-fault evictions, providing immediate protection to roughly 1 million renters across the state.
Senate Bill 608 took effect with Gov. Kate Brown’s signature just after noon Thursday, making Oregon the only state in the nation with statewide rent control.
“This is a groundbreaking piece of legislation as we are the first state in the nation to enact this level of protection for our renters,” Brown said Thursday. “The bill is a critical tool for stabilizing the rental market throughout the state of Oregon. It will provide immediate relief to Oregonians struggling to keep up with rising rents in a tight rental market. But it doesn’t work on its own. It’s going to take much more work to ensure every Oregonian … has access to housing choices that will ensure that they and their families can thrive.”
A key component of the new law is that most landlords can’t raise rents by more than 7 percent on top of an inflationary increase tied to the Consumer Price Index. That amount is set at 3.3 percent until Sept. 30, when the Oregon Office of Economic Analysis will determine a new inflationary increase based on the annual 12-month average change for the West Coast.
That’s bigger boost than some tenant advocates had wanted.
“Seven percent, plus CPI, could be too expensive for some tenants, but for a long time, some landlords have been giving 20 percent, 40 percent, 100 percent increases, so the sooner we can take those off the table, the more predictability and stability tenants have,” said Danny Moran, spokesman for House Speaker Tina Kotek, D-Portland.
The rent increase limits protect tenants in roughly five out of six of rental homes in Oregon.
There are an estimated 602,178 renter-occupied homes and 1,445,270 tenants, according to estimates by the American Community Survey.
Rentals built in the past 15 years aren’t subject to limit. Kotek, who authored the bill, added that condition to encourage construction of rental units. The clock for the 15-year period begins with the certificate of occupancy, according to the legislation.
By legislative standards, the legislation passed at lightning speed.
“I have never heard of a bill moving this quickly before,” said Jim Straub of the Oregon Rental Housing Association. Straub has been the association’s legislative director for 10 years, is the grandson of Gov. Bob Straub and a longtime observer of state politics.
The Legislature convened Jan.22, the Senate passed the bill Feb. 12, and the House followed suit on Tuesday, Feb. 26, sending it to the governor.
The law was a top priority for Kotek this year.
“We wanted this bill to move quickly in order to protect those tenants, which is why the bill has an emergency clause” to take effective immediately, Kotek wrote in an email to the Oregon Capital Bureau earlier this week.
“The Legislature was very close to passing significant tenant protections in 2017, and I consider this bill unfinished business. There is also more work to be done on housing this session, including addressing housing supply.”
Legislative leaders in both chambers agreed that no amendments to the legislation would be entertained, an unusual practice in the give-and-take process at the Capitol. Allowing amendments could have killed the effort, according to several people close to the process.
Senate Majority Leader Ginny Burdick, D-Portland, said the bill was a good balance between the interests of landlords and tenants.
“There was a lot of effort to get the first draft in good shape,” Kotek wrote to the Capital Bureau. “This wasn’t a new topic, and the approach was reasonable and balanced. The House (Committee on Human Services and Housing) took time to hear hours of public testimony, and (a majority of) members of the committee ultimately decided that none of the proposed amendments reflected the intent of the bill.”
While attention has been focused largely on the rent limits, the bill is just one of several this year that seek to increase the housing supply in Oregon, Kotek said.
Some legislators want to allow multiple units on land traditionally reserved for single homes. They also want to budget millions of dollars to subsidize new homes for low- and middle-income families.
Oregon needs about 150,000 more homes to meet residents’ needs, according to a recent report by Up for Growth, a national coalition that promotes higher housing density close to workplaces, stores and transit.
State economists and housing advocates have said the discrepancy between supply and demand means rents and house prices are higher, people pay a higher percentage of their income toward housing, more people are homeless and more people are at risk of becoming homeless.
Deborah Imse, executive director of MultiFamily NW – an association of landlords that own about one-fourth of the housing rentals in Oregon – said her organization is scrambling to provide details to members about how they can comply with the new law.