Oregon Gov. Kate Brown has signed a bill making Oregon the first state in the country to enact statewide rent control.
Gov. Kate Brown signed the law, which puts annual limit on rent increases of 7% plus inflation, on Thursday. Brown called on the legislature to focus on funding new housing initiatives.
“This bill is a critical tool for stabilizing the rental market throughout the state of Oregon,” Brown said. "It will provide immediate relief to renters struggling to keep up with the rising rents in a tight rental market.”
Brown said the legislature should authorize $400 million in housing-related investments for affordable housing development, rental assistance, and homelessness prevention.
The law also exempts new construction for 15 years, and landlords may increase rent without any cap if renters leave of their own will, according to The Oregonian. The rent increase restriction also exempts subsidized rent.
“The bill also requires most landlords to cite a cause, such as failure to pay rent or other lease violation, when evicting renters after the first year of tenancy. Some ‘landlord-based’ for-cause evictions are allowed, including the landlord moving in or a major renovation. In those cases, landlords are required to provide 90 days’ notice and pay one month’s rent to the tenant, though landlords with four or fewer units would be exempt from the payment,” The Oregonian said.
The Democrats in Oregon’s legislature supported the bill, which passed quickly through the state’s house and senate with a Democratic supermajority. But tenant groups from the multifamily housing industry opposed the bill. Doug Bibby, president of the National Multifamily Housing Council, said the bill “will worsen the imbalance between housing supply and demand.”
“There is no doubt that housing affordability is a crisis in Oregon. However, SB 608 will worsen the imbalance between housing supply and demand by allowing for rent control across the state,” said Bibby. “While the intent of rent control laws is to assist lower-income populations, history has shown that rent control exacerbates shortages, makes it harder for apartment owners to make upgrades and disproportionally benefits higher-income households. That is why Oregon and a majority of other states have laws in place that explicitly prohibit local municipalities from implementing rent control laws. Reversing course is counterproductive and will not solve the crisis. Oregon lawmakers should focus on holistic solutions that encourage more housing supply, facilitate public-private partnerships to tackle many of the existing barriers, and increase direct assistance to renters,” he said.
Brown urged lawmakers and the Oregon Housing and Community Services Department to report back on how the bill is working during the 2021 legislative session, which includes its impact on the rental housing supply.