Many landlords are very concerned over the effect of the new Oregon law; 608. The Real Estate holding company I am with is now looking at what to do next in response to what we perceive could be the adverse affect of this new law. The Law basically does two main things. It now caps what the landlord can raise the rent to 7% plus the CPI in a 12 month period. It is feared that that may just be the beginning of the suppression of rent increases. Will it end up later changed to 3% or lower? With the new CPI report it is probably going to be around a 10% cap for 2019. But this is not our company's main worry right now. The real worry is the new rules on Tenancy Terminations. The Fixed Term Lease Agreement is after the 1rst year is no longer truly a Fixed Term Agreement. I won't go into the details of this new law. Anyone who is looking to invest in properties in Oregon, might want to look closely at what the potential risks for landlords now is. The members of our company are now reviewing this law closely, and will decide when to start getting out of the Oregon rental property market. As of now we will no longer seek to purchase additional properties in Oregon. We believe that in the near future the new law will have a very chilling effect on the housing shortage crises in Oregon.
Gooberment control of a market having an adverse effect? Shocking.
Sad, those that don't understand, in an effort to help maintain an inventory of affordable housing have seen the need to further burden those that could solve the problem with more needless regulation. Like you I know many large apartment developers that are just quietly slipping elsewhere. It used to be just the tri county Portland area but with the new law it has forced there hands statewide. The help for affordable housing lies in less restrictive zoning, less burden from regulation, a viable freeway system, less expensive permits and development fees, and an attitude promoting sensible development. Unfortunately the decision makers here don't agree.
Whenever there is an annual cap for a rent increase, the intelligent response from landlords is to always raise the rent by the maximum amount unless that would be higher than the open market. You can not catch up in year X if you did not raise the rent during the prior years. Tenants are going to love the unintended consequences.
And it will dampen the number of units built in specific sections of the market.
Later, after a mess has been created, the rent controls will come off.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing