Oregon state wide rent control law 2019

8 Replies

I read a good article about this, which changed my thinking. As a landlord, I am against rent control. The strongest arguments suggest that rent control produces unintended consequences of making housing stock more scarce in the long run.

The Oregon law allows a 7% annual increase, plus inflation. That approaches 10%. For my portfolio, there are few instances where I will ever have to raise rents above a 10% level. The only example is when I bought a building with a bunch of low rents.

The backers of this law really want to protect tenants in hyper inflating rental areas from shocks of their rent doubling.  I still am against this law, but for most of the Oregon landlords, they probably can achieve market rates with this law and not have to subsidize their tenants.   

Rent control is a dangerous trend these days, and my State is toying with this outdated idea as well.

im against all laws and regulations that remove my control over MY asset and remove MY money . One of the reasons I never vote for people with a d after their name . Sorry Oregon

The temperature in the Portland area in my opinion is that many people are trying to adjust but validate. The majority are saying the same that @Brian Ploszay shared about it really not being that bad if it's capped 7% and CPI adjusted. The rationale is that they almost never have to give rental increases that large.

This is totally true and understandable, but I think we are only fooling ourselves if we think that this is the last rent-control bill at the state level. These rules typically only get stricter and I feel like this is just the tip of the iceberg.

Originally posted by @Neal Collins :

The temperature in the Portland area in my opinion is that many people are trying to adjust but validate. The majority are saying the same that @Brian Ploszay shared about it really not being that bad if it's capped 7% and CPI adjusted. The rationale is that they almost never have to give rental increases that large.

This is totally true and understandable, but I think we are only fooling ourselves if we think that this is the last rent-control bill at the state level. These rules typically only get stricter and I feel like this is just the tip of the iceberg.

Although Neal i can see people panicking thinking they better raise their rents 10% each and every year before the state does something more strict.   there by just raising rents even higher and making things worse.. those that can afford houses and have credit will buy instead of risking continual rent increases this will be a benefit to those that build homes or flip homes.  Is my wild no real knowledge guess LOL  by the way i am finally out of the ground on those houses on IVY / Cook what an ordeal getting that through the city.

I have 49 units in Oregon starting my investing 22 years ago. I reward long term tenants with below market rents. But now I have to restore my 25% below market rents to market in 10% annual increments to restore my property value.  

The issue isn't the 7%+CPI. The issue is removing no-cause "evictions." After 1 year, you can not remove a tenant without cause (some exceptions). The majority of multi-family properties have been sold on pro-forma numbers for the last 5 years. Just about everyone I talk to is 4-5 years behind in rent. If there is no upside with pro-forma numbers anymore, the value of those properties has to fall. It erodes the equity of those who "love" their tenants and therefore kept rents low.

@Mike Nuss   There's always opportunities!  I think the next 6 months are where we are going to see things settle out to the new normal.  We'll start seeing lower and lower comps when people learn to do the math on what they are buying and they'll quit overpaying.