What the New Rent Control Bill Means

A new statewide rent control bill signed into law last week means tenants won’t again be hit with the nearly 15% rent hike the state allowed this year. 

Senate Bill 611 saw housing and tenants rights advocates pushing for greater consumer protections to prevent displacement, while landlords and property management groups argued any increased regulations would make the state a less attractive place for developers who might otherwise add to Oregon’s much-needed housing stock. Some critics, like Rep. Kim Wallan (R-Medford), suggested presenting any kind of rent cap would trigger many landlords to automatically raise the maximum amount of rent allowed each year.  

But BIPOC legislators in particular pointed out the unsustainable housing landscape that regularly prices out families and the elderly, and which has a destabilizing effect on children forced to repeatedly move. 

Rep. Andrea Valderrama (D-Portland)“This was a bill that our largest BIPOC legislative caucus ever has prioritized on our legislative agenda, something we see as a need for our Black and brown communities,” Rep. Andrea Valderrama (D-Portland) said during a June committee hearing. “I believe that children should have the opportunity to stay in their schools, and families should have the opportunity to continue to live in their communities; and when rents are increased out of their price range and displaced out of communities they’ve built roots or wanted to build roots in, that that is not possible for that education, for that community building, and for those families who are our neighbors.”

Tightening the Equation

A statewide 2019 rent control law specified an equation for maximum rent increases in a given year: 7% plus inflation. That means that this year, landlords are allowed to increase rents for existing tenants by up to nearly 15%. (According to data from Zillow, median rent in Oregon is $1,767, so the average renter could see increases of up to $265 a month.)

Sen. Wlnsvey Campos (D-Aloha)SB 611, introduced by Sen. Wlnsvey Campos (D-Aloha) this year, originally set the cap at 8%, or 3% plus inflation -- whichever of the two is lower. The bill has been amended so the cap is now 10% or 7% plus inflation, whichever is less. Landlords are also restricted to one rent increase a year. 

Landlords who try to increase rent beyond the cap would be compelled to pay tenants the equivalent of three months’ rent plus damages. 

“This is a homelessness prevention bill,” Cameron Herrington of the Oregon Housing Alliance said during a public hearing last month. “It will create stability for renter households in all parts of our state by protecting tenants from extreme rent increases while allowing landlords a fair, reasonable and predictable ability to increase rents as and if they need to in order to cover expenses.”

Notably, any rent control law only applies to buildings that are 15 years or older. 

‘Dynamic Of Dignity And Respect’

Responding to arguments that rent caps could stifle development or property owners’ profits, Herrington pointed out, “Unlike homeowners who can predict and have some reliability around what their housing costs are going to be year to year, renters are often at the mercy of landlords’ decisions whether or not to raise the rent.

"Because of this, rental housing is a unique kind of market that requires reasonable, well thought-out regulation, such as this bill.”

Not all landlords opposed SB 611. Austin Folnagy, CEO of Magyar Property Management and Investment LLC, saw the bill’s potential to “promote a dynamic of dignity and respect in the relationships between tenants and landlords.”

Folnagy cited a study from the Oregon Law Center that found nearly 2,155 evictions are filed each month, the vast majority due to late payment or increases in rent. 

“If we were to break this down over the course of a year, that would be essentially evicting all households within Klamath County each year,” he said. “For those who remember the 2020 fires that happened, the Almeda fire, that was nearly 2,800 structures that were destroyed. So just imagine something like that happening every month, because with increase in rents we are creating displacements of renters and tenants and working families within our communities.” 

Senator Jeff Merkley (D-OR)SB 611 might also provide some minor relief from the outsized influence of private equity firms that increasingly buy up housing stock and rapidly increase rent while aggressively filing evictions. It is a practice Oregon Sen. Jeff Merkley has fought by introducing the End Hedge Fund Control of American Homes Act late last year, calling such practices “predatory.”

Hedge fund influence can drive up market rates, and previously, there were no regulations in place for the rent landlords can ask of new tenants, which is seen as a motivator for no-cause evictions – for example, a landlord seeking to charge more than a 15% increase in rent could simply serve a no-cause eviction to a current tenant, then rent the unit out at a much higher rate to the incoming renter. SB 611 specifies that if a landlord serves a no-cause eviction with a 30-day notice, the rent they charge the next tenant is capped at a 7% increase plus inflation. 

Despite compromises from the original bill, many housing advocates praised SB 611.

“We not only need to be building more housing and making housing more affordable, we also need it to be possible for people in their current housing, with their current contract and relationships, to remain housed, to be in their schools, in their community, and SB 611B will help us do that,” Kim McCarty of the Community Alliance of Tenants said. 

The bill declares an emergency and will take effect immediately.