Oregon Declares Statewide Rent Control
Johnny PineyroPro Member
Golden Oak, FL · Member since 2018 · 78 posts · 25 votesOregon Declares Statewide Rent Control
Most Popular Reply
Rental Property Investor · San Francisco, CA · Member since 2015 · 18 posts · 31 votes
7yI live in the SF Bay Area, and invest in Portland, Oregon - so I guess I have 100% exposure to rent control now? ;)
Anyways, I recall speaking with a successful syndicator in this area who invests in Oakland CA (and elsewhere in the state - true, Sacramento does not have RC - but has high exposure to rent control) and asking his opinion. He had an interesting comment - your rents aren't going to go down. In other words, what you buy at is typically the floor, and while the growth rate is slower than you'd like it it will always be on a steady uptrend. By the way in Oakland / San Francisco you can't increase more than like 2%, so it could be worse.
As regards Oregon, the number right now is 7% + CPI. They could always ratchet that down, but to me 9% YoY increases is a respectable number if you're a buy and hold investor. I can't speak to trying to make a quick flip, not my business - presumably it's not as good a situation as you can't wholesale evict now or massively raise rents, and or change the dynamic of the building in under 2 years. But that is my 2 cents from an "investment" perspective, I suppose, that's worth considering.
I believe the "evidence" is pretty strong that rent control doesn't work (of course, I'm preaching to the choir, and will say later why I think RC is actually good from a messaging standpoint). If you scan multifamily listings in Oakland (which I do periodically) I'm always struck by a) deferred maintenance, and b) tenants who are stubbornly stuck in place and whose units are really run down and living in bad conditions. I'm less talking about the other known "evidence" which is that it has the opposite effect you desire - rents for actual renters on the market (I recall my wife and I trying to find an apartment in San Francisco in 2011 and 2012, and there being lines out the door and having to bring pay stubs plus your letter of reference from your parish priest - j/k on that last one, but it did feel that way). Capitalism works in such a way that individual initiative and desire to put capital at risk is what drives things forward, and many of the really beautiful buildings in Oakland (to me) appear run down because that equation has broken down. In fact, most of the "housing distortion" you see in these markets I think can be identified from the regulations that were trying to solve a real problem but just got in the way and either made building new apartments more difficult, or maintenance and improvement of neighborhoods more difficult.
OK - so why isn't it the end of the world in my view?
I link the above image with the caution, there's risks to using data at such a high level. "Real Household Income" and "Real Median Rents" spread across the entire country doesn't capture the intricacies of local markets, of rising income in the SF Bay Area (or Portland, OR, etc.) driving higher investment and rent.
However, the point remains. Rents have been rising (in general) at a much faster rate than wages. That's not sustainable. At some point, you price out the majority of people. Cities are not wrong to be worried about this. I believe it's right to ask if it's OK to wholesale "move" communities (which are often poor or minority communities) that are in the path of progress. For me, it's hard - especially when dealing with the elderly, etc., and one must admit that the optics are not great. At the same time, as a capitalist, you want free reign to do what you please with your $. Also, there is a number (I don't know it) at which rents will naturally be capped and you go higher and you spark moveouts. Laissez Faire economists would say that that number is good, you probably push through it, and it sparks all manner of innovation - new buildings, ADU investment and building, investors putting capital at risk to take advantage of the opportunity which sparks more supply which drives prices down. But the messaging of vastly rising rents and gentrification are hard, especially in a democracy.
Which (sorry for the long-windedness) leads to my final, more philosophical point - landlords are not a loved minority. I think the investor group is quite easy to demonize, and many groups do a good job doing so. It's rarely a losing point for a politician to speak to voters (the predominance of whom are not landlords) and say that landlords are causing the trouble. If rent control takes the steam out of the kettle, so to speak, and reduces the antagonism towards landlords, it's probably a good thing. The number 1 thing we should be concerned about is stability. Social stability, economic stability, political stability, etc. Do I want it to be this way? Not really, I think one should have the freedom to pursue what you want without such constraints, but to ignore reality is a bad strategy in general and much worse than 'rent control' could come down the pipe. i was reminded of this recently when looking @ a property in Berkeley, CA and being told that in that great city you are less the "owner" of your building and more the "caretaker" while the city gets to decide precisely what you're allowed to do with it (by the way - capped rent increase in Berkeley is 2/3 of regional CPI, and if you don't follow a HUGE checklist you can't raise rents at all!).
Ray Dalio has a great read on the rise of populism which I think speaks to the concern about both the concentration of wealth and more. I'm not saying RC will end it, and I actually suspect that in Portland's case they passed this legislation at or close to the end of the cycle and rents will probably moderate out just as new supply hits the market making this whole thing a moot point. But at the end of the day, I think everybody benefits from a calmer environment and more stability. RC seems to me to be counterproductive in the long run but perhaps in the short run (speaking very specifically to Portland now) a RC which caps rent at 7% + inflation isn't the worst thing that could happen.
21 Replies
- Rental Property Investor · Johnson City TN · Member since 2016 · 386 posts · 271 votes7y
@Johnny Pineyro It makes those markets less appealing to me. What I read about Oregon seemed to have carve outs that most rent increases would fall into anyway, but the door has been opened. I think it will have a lagging effect on investors and discourage capital investment.
- Commercial Mortgage Broker · San Diego, CA · Member since 2009 · 70 posts · 69 votes7y
All else being equal, any statute that limits property rights is going to reduce the value of that property. In this specific case, limiting rent increases will reduce future cash flow and decrease the value of investment property. Economic theory would also suggest that it would put downward pressure on the supply of housing because the policy decreases the incentive to construct and maintain units. In the longer term, theory holds that this should cause the cost of rental housing to increase.
- Prohibits landlord from terminating month-to-month tenancy without cause after 12 months of occupancy. Provides exception for certain tenancies on building or lot used by landlord as residence.
- Allows landlord to terminate tenancy with 90 days’ written notice and payment of one month’s rent under certain conditions. Exempts landlord managing four or fewer units from payment of one month’s rent.
- Provides that fixed term tenancy becomes month-to-month tenancy upon ending date if not renewed or terminated.
- Allows landlord to not renew fixed term tenancy if tenant receives three lease violation warnings within 12 months during term and landlord gives 90 days’ notice.
- Limits rent increases for residential tenancies to one per year.
- Limits maximum annual rent increase to seven percent above annual change in consumer price index. Requires Oregon Department of Administrative Services to publish maximum annual rent increase percentage.
- Declares emergency, effective on passage.
- Golden Oak, FL · Member since 2018 · 78 posts · 25 votes7y
All good points Nick and Greg. Tim will tell if the intended beneficiary actually ends up better or worse off. Historically, rent control backfires.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Nick Schoch:
All else being equal, any statute that limits property rights is going to reduce the value of that property. In this specific case, limiting rent increases will reduce future cash flow and decrease the value of investment property. Economic theory would also suggest that it would put downward pressure on the supply of housing because the policy decreases the incentive to construct and maintain units. In the longer term, theory holds that this should cause the cost of rental housing to increase.
- Prohibits landlord from terminating month-to-month tenancy without cause after 12 months of occupancy. Provides exception for certain tenancies on building or lot used by landlord as residence.
- Allows landlord to terminate tenancy with 90 days’ written notice and payment of one month’s rent under certain conditions. Exempts landlord managing four or fewer units from payment of one month’s rent.
- Provides that fixed term tenancy becomes month-to-month tenancy upon ending date if not renewed or terminated.
- Allows landlord to not renew fixed term tenancy if tenant receives three lease violation warnings within 12 months during term and landlord gives 90 days’ notice.
- Limits rent increases for residential tenancies to one per year.
- Limits maximum annual rent increase to seven percent above annual change in consumer price index. Requires Oregon Department of Administrative Services to publish maximum annual rent increase percentage.
- Declares emergency, effective on passage.
should be good for us who build housing for owner occs rents are going to keep going up up up and soon renters will realize they are throwing money away and will come to us to buy our new construction since mortgage payments equal rent in many instances. at least that is my theory.
- Golden Oak, FL · Member since 2018 · 78 posts · 25 votes7y
Jay,
Rotation out and into SFR is what does happen. I would say you are in a good position to benefit.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Johnny Pineyro:
Jay,
Rotation out and into SFR is what does happen. I would say you are in a good position to benefit.
Frankly i had no idea this was coming state wide.. my good friend is a lobbyist and he did not mention it.. But i am not in the rental business.
I just closed on a 90 lot subidivions i will be building over the next 2 years or so.. so keep those rents going up !!!
- Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes7y
I just heard about this and a 7% annual rent increase seems pretty high still. From what I can tell anywhere rent control exist the effects are short lived for renters and within 5 years the values and rents seem to sky rocket. Idk if it scares off builders or these areas combine with much higher demand but the stricter the controls the higher valued the sqft formula gets imo. 7% annually compounded is not going to be cheap rent in a matter of months. 2k a month turns into $2600 a month in 48 months with my head calculator.
- Member since 2019 · 3 posts · 0 votes7y
I have 49 units in Oregon. Started buying 22 years ago. It amazes me how misunderstood how devaluing rent control can be on property. To help explain this to my tenants, I made a 13 minute video.
- Rental Property Investor · San Francisco, CA · Member since 2015 · 18 posts · 31 votes7y
I live in the SF Bay Area, and invest in Portland, Oregon - so I guess I have 100% exposure to rent control now? ;)
Anyways, I recall speaking with a successful syndicator in this area who invests in Oakland CA (and elsewhere in the state - true, Sacramento does not have RC - but has high exposure to rent control) and asking his opinion. He had an interesting comment - your rents aren't going to go down. In other words, what you buy at is typically the floor, and while the growth rate is slower than you'd like it it will always be on a steady uptrend. By the way in Oakland / San Francisco you can't increase more than like 2%, so it could be worse.
As regards Oregon, the number right now is 7% + CPI. They could always ratchet that down, but to me 9% YoY increases is a respectable number if you're a buy and hold investor. I can't speak to trying to make a quick flip, not my business - presumably it's not as good a situation as you can't wholesale evict now or massively raise rents, and or change the dynamic of the building in under 2 years. But that is my 2 cents from an "investment" perspective, I suppose, that's worth considering.
I believe the "evidence" is pretty strong that rent control doesn't work (of course, I'm preaching to the choir, and will say later why I think RC is actually good from a messaging standpoint). If you scan multifamily listings in Oakland (which I do periodically) I'm always struck by a) deferred maintenance, and b) tenants who are stubbornly stuck in place and whose units are really run down and living in bad conditions. I'm less talking about the other known "evidence" which is that it has the opposite effect you desire - rents for actual renters on the market (I recall my wife and I trying to find an apartment in San Francisco in 2011 and 2012, and there being lines out the door and having to bring pay stubs plus your letter of reference from your parish priest - j/k on that last one, but it did feel that way). Capitalism works in such a way that individual initiative and desire to put capital at risk is what drives things forward, and many of the really beautiful buildings in Oakland (to me) appear run down because that equation has broken down. In fact, most of the "housing distortion" you see in these markets I think can be identified from the regulations that were trying to solve a real problem but just got in the way and either made building new apartments more difficult, or maintenance and improvement of neighborhoods more difficult.
OK - so why isn't it the end of the world in my view?
I link the above image with the caution, there's risks to using data at such a high level. "Real Household Income" and "Real Median Rents" spread across the entire country doesn't capture the intricacies of local markets, of rising income in the SF Bay Area (or Portland, OR, etc.) driving higher investment and rent.
However, the point remains. Rents have been rising (in general) at a much faster rate than wages. That's not sustainable. At some point, you price out the majority of people. Cities are not wrong to be worried about this. I believe it's right to ask if it's OK to wholesale "move" communities (which are often poor or minority communities) that are in the path of progress. For me, it's hard - especially when dealing with the elderly, etc., and one must admit that the optics are not great. At the same time, as a capitalist, you want free reign to do what you please with your $. Also, there is a number (I don't know it) at which rents will naturally be capped and you go higher and you spark moveouts. Laissez Faire economists would say that that number is good, you probably push through it, and it sparks all manner of innovation - new buildings, ADU investment and building, investors putting capital at risk to take advantage of the opportunity which sparks more supply which drives prices down. But the messaging of vastly rising rents and gentrification are hard, especially in a democracy.
Which (sorry for the long-windedness) leads to my final, more philosophical point - landlords are not a loved minority. I think the investor group is quite easy to demonize, and many groups do a good job doing so. It's rarely a losing point for a politician to speak to voters (the predominance of whom are not landlords) and say that landlords are causing the trouble. If rent control takes the steam out of the kettle, so to speak, and reduces the antagonism towards landlords, it's probably a good thing. The number 1 thing we should be concerned about is stability. Social stability, economic stability, political stability, etc. Do I want it to be this way? Not really, I think one should have the freedom to pursue what you want without such constraints, but to ignore reality is a bad strategy in general and much worse than 'rent control' could come down the pipe. i was reminded of this recently when looking @ a property in Berkeley, CA and being told that in that great city you are less the "owner" of your building and more the "caretaker" while the city gets to decide precisely what you're allowed to do with it (by the way - capped rent increase in Berkeley is 2/3 of regional CPI, and if you don't follow a HUGE checklist you can't raise rents at all!).
Ray Dalio has a great read on the rise of populism which I think speaks to the concern about both the concentration of wealth and more. I'm not saying RC will end it, and I actually suspect that in Portland's case they passed this legislation at or close to the end of the cycle and rents will probably moderate out just as new supply hits the market making this whole thing a moot point. But at the end of the day, I think everybody benefits from a calmer environment and more stability. RC seems to me to be counterproductive in the long run but perhaps in the short run (speaking very specifically to Portland now) a RC which caps rent at 7% + inflation isn't the worst thing that could happen.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Arie Van Gemeren:
I live in the SF Bay Area, and invest in Portland, Oregon - so I guess I have 100% exposure to rent control now? ;)
Anyways, I recall speaking with a successful syndicator in this area who invests in Oakland CA (and elsewhere in the state - true, Sacramento does not have RC - but has high exposure to rent control) and asking his opinion. He had an interesting comment - your rents aren't going to go down. In other words, what you buy at is typically the floor, and while the growth rate is slower than you'd like it it will always be on a steady uptrend. By the way in Oakland / San Francisco you can't increase more than like 2%, so it could be worse.
As regards Oregon, the number right now is 7% + CPI. They could always ratchet that down, but to me 9% YoY increases is a respectable number if you're a buy and hold investor. I can't speak to trying to make a quick flip, not my business - presumably it's not as good a situation as you can't wholesale evict now or massively raise rents, and or change the dynamic of the building in under 2 years. But that is my 2 cents from an "investment" perspective, I suppose, that's worth considering.
I believe the "evidence" is pretty strong that rent control doesn't work (of course, I'm preaching to the choir, and will say later why I think RC is actually good from a messaging standpoint). If you scan multifamily listings in Oakland (which I do periodically) I'm always struck by a) deferred maintenance, and b) tenants who are stubbornly stuck in place and whose units are really run down and living in bad conditions. I'm less talking about the other known "evidence" which is that it has the opposite effect you desire - rents for actual renters on the market (I recall my wife and I trying to find an apartment in San Francisco in 2011 and 2012, and there being lines out the door and having to bring pay stubs plus your letter of reference from your parish priest - j/k on that last one, but it did feel that way). Capitalism works in such a way that individual initiative and desire to put capital at risk is what drives things forward, and many of the really beautiful buildings in Oakland (to me) appear run down because that equation has broken down. In fact, most of the "housing distortion" you see in these markets I think can be identified from the regulations that were trying to solve a real problem but just got in the way and either made building new apartments more difficult, or maintenance and improvement of neighborhoods more difficult.
OK - so why isn't it the end of the world in my view?
I link the above image with the caution, there's risks to using data at such a high level. "Real Household Income" and "Real Median Rents" spread across the entire country doesn't capture the intricacies of local markets, of rising income in the SF Bay Area (or Portland, OR, etc.) driving higher investment and rent.
However, the point remains. Rents have been rising (in general) at a much faster rate than wages. That's not sustainable. At some point, you price out the majority of people. Cities are not wrong to be worried about this. I believe it's right to ask if it's OK to wholesale "move" communities (which are often poor or minority communities) that are in the path of progress. For me, it's hard - especially when dealing with the elderly, etc., and one must admit that the optics are not great. At the same time, as a capitalist, you want free reign to do what you please with your $. Also, there is a number (I don't know it) at which rents will naturally be capped and you go higher and you spark moveouts. Laissez Faire economists would say that that number is good, you probably push through it, and it sparks all manner of innovation - new buildings, ADU investment and building, investors putting capital at risk to take advantage of the opportunity which sparks more supply which drives prices down. But the messaging of vastly rising rents and gentrification are hard, especially in a democracy.
Which (sorry for the long-windedness) leads to my final, more philosophical point - landlords are not a loved minority. I think the investor group is quite easy to demonize, and many groups do a good job doing so. It's rarely a losing point for a politician to speak to voters (the predominance of whom are not landlords) and say that landlords are causing the trouble. If rent control takes the steam out of the kettle, so to speak, and reduces the antagonism towards landlords, it's probably a good thing. The number 1 thing we should be concerned about is stability. Social stability, economic stability, political stability, etc. Do I want it to be this way? Not really, I think one should have the freedom to pursue what you want without such constraints, but to ignore reality is a bad strategy in general and much worse than 'rent control' could come down the pipe. i was reminded of this recently when looking @ a property in Berkeley, CA and being told that in that great city you are less the "owner" of your building and more the "caretaker" while the city gets to decide precisely what you're allowed to do with it (by the way - capped rent increase in Berkeley is 2/3 of regional CPI, and if you don't follow a HUGE checklist you can't raise rents at all!).
Ray Dalio has a great read on the rise of populism which I think speaks to the concern about both the concentration of wealth and more. I'm not saying RC will end it, and I actually suspect that in Portland's case they passed this legislation at or close to the end of the cycle and rents will probably moderate out just as new supply hits the market making this whole thing a moot point. But at the end of the day, I think everybody benefits from a calmer environment and more stability. RC seems to me to be counterproductive in the long run but perhaps in the short run (speaking very specifically to Portland now) a RC which caps rent at 7% + inflation isn't the worst thing that could happen.
I agree with your last point rents have basically peaked.. so other than the eviction rules.. the raising of the rents is moot in my mind.
unless you were asleep at the switch last 5 years and did not move your rents to market. Rents in Oregon were incredibly stable from when I first came here to work in 92 until about 2012.. I rented for 9 years.. ( apartment I used 9 nights a month). And those rents did not move more than 100 bucks in all that time. And with all the new product coming on line you set the floor right there. And for sure in a market like ours were renters many times are qualified to buy homes as rents rise they say the heck with that and go buy a home..
- Real Estate Investor · Springfield, MO · Member since 2017 · 1k+ posts · 2k+ votes7y
I think there's some truth to say that rent controls will reduce some enthusiasm for investment dollars in Oregon, but one has to ask, "As compared to what alternative(s)?"
The rent control limits increases to 7% above the CPI...so if CPI is 2%, land lords can still go up 9% per year. At that rate, within 8 years rents will double. Incomes likely will not. So market forces, if left to their own devices, will be an effective "rent control" by rapidly reducing the available pool of tenants. At some point, the current 10-20% yearly bumps become unsustainable and rents will fall as the number of renters decreases.
Meanwhile, investors/developers might seek other markets, but how many markets are growing rents at more than 9% per year? "As opposed to what alternative(s)" theory says they will only go elsewhere if elsewhere is better. Significantly better returns are required, since it involves packing up shop, setting up somewhere else, establishing new relationships, learning markets, laws and zoning rules, etc. Inertia has to be overcome. I'd guess maybe an increase of at least 3% higher than whatever Oregon yields would be tempting. 9 + 3 = 12% rent growth year over year. Also, sustainability is a factor. Could a market increasing 12% per year sustain prolonged growth?
Are there a lot of other markets seeing 12% yearly rent growth? Maybe. Mine certainly isn't. We're at about 4-5%. So I don't see rent controlled Oregonians fleeing to the arms of free-market Missouri.
I still don't like rent controls, but this one is pretty "light" as far as those go. The main concern I have is it opens the door for future meddling with markets. If 7% limit doesn't achieve what the powers-that-be desire, how much lower will they go?
My crystal ball is murky. We'll see where this leads.
- Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes7y
@Arie Van Gemeren nice post and a beautiful property you have there. Any Portlander would salivate for a multi in NW!
Having sat in on some of these advocate’s meetings we can be sure tenants aren’t happy with 7%+ rent increases and so the fight goes on.
What really scares me is renter registration because along with that comes inspections. People like me who have allowed rents to stay low and have not upgraded to a $2 a sf higher end rental rate are at risk. The same people who don’t understand why rent would ever need to go up more than CPI are the ones who think these “old buildings” should be like new.
So, we have inspections and rent control and it is well known that the advocates hate mom and pop landlords (those folks that have a few or more and self manage) because they see them as the big discriminators and should be shut down. They believe they can control property managers.
It is the property manager’s job to maximize rents and people I know aren’t worried because they stay at market rate. Like they say “no good deed goes unpunished”.
- Golden Oak, FL · Member since 2018 · 78 posts · 25 votes7y
Great analysis Arie. I cannot agree with you more.
- Rental Property Investor · San Francisco, CA · Member since 2015 · 18 posts · 31 votes7y
@Jeff S. thanks! I'm sure I overpaid for it, so live and learn, but I guess if your time horizon is 30 + years everything looks OK, right? If I learned anything it's that maintenance costs on these older buildings in PDX are almost always more than underwritten!
I thought of your comment regarding self-management earlier today, glad you mentioned it. It seems to me the new legislation is absolutely negative for investors who self-manage their properties (I'm assuming MF, not SFR). As you said, not a concern if you have a PM - we work with Uptown Properties - but the complexity of following the "rules" and the harm that can be inflicted on your business if you mess it up has always made me scared to do anything w/o a PM (plus I'm out of state, so forget it).
Those that were lenient on their tenants and kept rents below market might be punished (but then again it only takes 2-3 years at close to 10% rent increases to get to market, presuming you're not THAT far below). Regarding asset prices, I realize the SF Bay Area is a unique animal (geographically constrained land, bound by oceans and mountains, and it has Silicon Valley as well as difficult development requirements - it's a unique ecosystem, that's for sure) but it doesn't seem to me that rent control has negatively affected prices that much. It's why people (I don't know who they are, but they exist) buy MF Properties in San Francisco at a 1 cap. Crazy, but I have heard of it happening. To go back to my syndicator friend I mentioned - they would buy ideal properties in prized locations and wait. Eventually, units would turnover, and rent would go from $850 to $4000 just like that (the hard thing for smaller investors, of course, is surviving until that happens, but if you have deep pockets and time it works well).
So my opaque crystal ball says - probably a decent idea to outsource liability on tenant management to somebody else, and I don't think it has a huge impact on asset prices in Portland (I could be wrong! - but my sense is with close to 10% allowed YoY increases it's not an issue for now). I can't speak to the rest of Oregon. In my mind, Portland has many similar advantages to San Francisco - geographic constraints to spreading (rivers, mountains), difficult development requirements, a young workforce and better than national average population growth projections, and a "coolness" factor with tech workers and millennials that one can't simply create by declaring oneself a tech hub.
- Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes7y
@Arie Van Gemeren I am at the other end of that 30 years you are talking about. Have watched values in Portland and suburbs since the late 70's and know close-in might drop 20-25%, outlying can easily lose 60%, if you can find a buyer. Gas prices have a big impact too so if the renters in your place don't own a car they have lots of money to pay high rent. Walking score in Portland is a big deal-like how far is a Starbucks?
I could see renting out my house and renting in close-in NW. It would be very fun to live there.
- Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes7y
again, the rent increase limitations are not the most ominous or intrusive parts of this bill. I’m not sure why that aspect is the most debated. I suppose it’s because it’s the most easily understood part of the bill.
It’s largely counterproductive in limiting further restrictive legislation if that’s all we focus on
- Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes7y
I noticed that this is also dumbing down the whole debate with many people commenting “hey this bill is ok 7% + CPI”. No problem lol
👍🏻👌😀
Let’s just ignore the bigger issues that are going to cost us more money then some nonexistent rent delta in a flat market
- Rental Property Investor · NJ/PA · Member since 2016 · 555 posts · 149 votes7y
Haha. NJ has tons of rent control with cpi rent increase yearly, like 2%. One tenant is paying $600, while market rate is $1400. Good thing about nj is high appreciation.
- Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes7y
At least they got in the news for taking private property rights.
Nevada is considering not letting landlords consider previous failures to pay rent in selecting tenants no late fees for 3 days, capped at 5% hand delivered pay or quit by a constable and the pay to stay doesn’t have to include any late fees, just past due rent
Just change the name from Nevada to Eastern California already
Nevada law prohibits property owners from refusing to rent to someone based on factors such as race, religion and familial status. For low-income housing projects, SB256 would expand that list to include applicants with “a prior history of an inability to pay rent.”
SB256 would also prevent a landlord from charging a late fee until the rent has been late for three days. It would restrict the amount of the fee to 5 percent.
Those who are late on their rent currently have almost a week to pay or leave. Nevada law also allows landlords to remove delinquent tenants shortly thereafter without having to go to court. SB151 would change this. It would increase the amount of time delinquents have to pay or quit to 10 judicial days. It would no longer be acceptable to use certified mail to deliver a pay-or-quit notice. Those notices would need to either be delivered by hand or posted by the constable, potentially creating further delays.
- 7yMike NussPro MemberReal Estate Entrepreneur · Portland, OR · Member since 2014 · 451 posts · 327 votes
@Arie Van Gemeren thank you for adding some positive outlook to opportunities and wholesome reasoning to the statewide bill. I view it very similarly to you. One of the best ways to limit risk is by having A properties in A locations like you've done. I live in a similar walkable neighborhood in NE. I absolutely love it and don't plan on a different life style in a long time. If I were a market renter I would have no problem paying increased rent to stay so walkable in a romantic location. You're in good hands with AJ and Chris at Uptown. Good luck with your investments!
@Jeff S. excellent point on the small landlord. We've discussed this mindset before, but it's just so dang obvious when attending those meetings over and over in person.
The bigger concerns are the vacancy control portions of the "rent control bill". No cause terminations after one year of residency will be difficult so as @Jay Hinrichs said.....don't be the landlord/manager that hasn't paid attention in the past 5 years. If you're behind now, there will be an opportunity to catch rents up while there is an arbitrage in the market, but your equity/value has been effected.
The bigger bigger concern are the changing security deposit and screening criteria laws in Portland paired with the new state level for cause termination ordinance. That stacked legislation (and relo in Portland) creates an environment that's easy to be unsuccessful in. However, it also creates an environment where a well educated person can do very very well in.
- Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes7y
CALL TO ACTION The screening criteria and security deposit ordinances proposed by Commissioner Eudaly (30.01.086 and30.01.087, respectively) are scheduled for public hearing this week:Public Testimony will be heard on Thursday April 4th at 2:00 PMPORTLAND CITY COUNCIL
City Hall – 1221 SW Fourth Avenue
For additional information visit:https://www.portlandoregon.gov/auditor/26997
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