What if landlords had to pay tenants to move out?

by Anna Sobrevinas10 Feb 2017

Portland, Ore., has a housing problem – there are more than 1,800 homeless people in the city. City Commissioner Chloe Eudaly has found a solution – and it passed last week, according to Realtor.com.

A renter herself, Eudaly campaigned for a rent freeze but failed. She had more success, however, with what she called “relocation assistance.”

Under the plan, if a renter is forced to move out because his or her landlord raises the rent by 10% or more, the landlord will have to pay the renter between $2,900 and $4,500, depending on the size of the original lease. That amount is designed to cover the first and last month rental fee for the renter’s new apartment, the security deposit and moving fees.

“This notion could spread, especially to more progressive cities,” Michael Vraa, a tenant advocacy attorney told Realtor.com. “The vast majority of cities and states do not have rent control, and there is no legal limit on how much landlords can raise rent. In other words, one year your rent could be $2,000 … the next, $3,000.”

Opponents of the ordinance have threatened to sue the city council. Representing landlords in the area, Multifamily Northwest and its attorneys claimed the law would only lead to bankruptcy for small-time landlords, who are only keeping up with increasing maintenance fees.

It could also backfire and hurt the very people it is meant to protect, landlords argue.

“Rents will go up higher than ever because landlords will now do routine 9.9% raises every year versus the traditional practice of increases every three to four years,” Nathan Miller, a landlord and founder of Rentec Direct told Realtor.com.

The ordinance is temporary, and is predicted to expire in October, when Portland projects its “housing emergency” will end.


Related stories:
Breaking even in expensive markets taking even longer than before
Morning Briefing: Seattle, Portland price rises modest compared to these cities

COMMENTS

  • by SBHarkness | 2/10/2017 6:23:35 PM

    Talk about a garbage law. I guarantee you the unintended consequence will be that landlords raise rents the 9.9% yearly that they are permitted to do rather than wait until it becomes financially necessary for them to do so. Landlords have expenses too, and being forced to pay someone to move out??? Ridiculous! There is a segment of our population that believes they are owed something for just being alive. I got news for you, YOUR NOT, despite what Bernie Sanders told you.

Poll

Is TILA-RESPA a good or bad thing long term?