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Oregon Enacts Statewide Rent Control

by Scott Donald, Irvine, June 2019

 

Oregon legislators passed a new law limiting rent increases and restricting no-fault evictions, making Oregon the only state in the nation with statewide rent control.

 

The new law is prompting lawmakers in other West Coast states to considering similar reforms.

 

Landlord Restrictions

 

Senate Bill 608 restricts rent increases in most circumstances to 7% plus the annual change in the Consumer Price Index. Rental units have a 15-year window from when they were built before they’re governed by the cap.

 

Under the new law, landlords may force tenants to move without cause with 30 days written notice during the first year of occupancy. After one year, landlords must show cause for an eviction, such as failure to pay rent or damage to the unit. They may also evict tenants if they wish to move into the unit themselves or conduct major renovation. In those cases, they must provide 90 days notice and pay the tenant one month’s rent.

 

Landlords have two ways to increase rents to market rate if prices are too low. One is to gradually increase rents by the limit each year. Another is to reset the rent to market rate when a tenant moves out.

 

The law is one in a set of actions taken by Oregonians to address the state’s housing shortage. Last November, voters approved Measure 102 to let local bond measures pay for private, affordable housing. Oregon needs about 150,000 more homes to meet residents’ needs, according to a report by Up for Growth, a national coalition that promotes higher housing density close to workplaces, stores, and transit.

 

Washington State

 

In Washington, lawmakers are debating eviction reform bills in the House and Senate. Representative Nicole Macri said in an interview she would “definitely consider” introducing an anti-rent gouging proposal next session. The deadline to introduce new bills this session has passed.

 

Rep. Macri, who represents several Seattle neighborhoods such as downtown and Capitol Hill, said she’s heard stories from constituents about rent increases of 20%-100%. Oregon’s passage of rent caps and eviction restrictions has been “incredibly helpful” for conversations in Washington, Macri said.

 

California

 

Assembly Bill 1482 is making its way through the California Legislature. The bill caps the amount that landlords can raise rent annually to 5% plus inflation, not to exceed 10%. It also prohibits landlords from evicting a tenant in order to raise the rent.

 

The legislative analysis of the bill points out that the cost of housing in California is the highest of any state in the nation. Additionally, the pace of the change in the cost of housing has far outstripped that in other parts of the county. In 1970, housing costs in California were 30% more expensive than the U.S. average; now California housing costs are 250% more expensive. Only 28% of households in the state can afford a median priced home.

 

The bill would apply to nearly all of California’s 5 million rental units, containing 14.7 million people. The bill would exclude dormitories and deed-restricted affordable units, and would only apply to units with existing tenants.

 

Meanwhile, another proposal Assembly Bill 1731 would prohibit second homes and investment properties that are on the California coast from being listed on home-share sites such as Airbnb and VRBO if the primary owner is not present most of the time.

 

The measure was originally intended to apply statewide but is currently shaped as a five-year pilot program that applies only to San Diego County. If it wins approval, AB 1731 could be extended to other California coastal zones in the future.